Investment Opportunities Ahead

Daer Friends, Don't get confused by corrective rallies in current bear market! Let us accept the fact that we are in a bear market!

The long period of virtuous economic growth i.e. when one positive lead to another and thus creating a very positive environment of all round growth and prosperity, is over. This period resulted in appreciating asset prices i.e. rise in share prices and real estate valuations.

It is hard to believe but it is a reality that within a period of 6-7 months, things have changed altogether. Now, our economy has entered into a vicious circle of downtrend i.e. when one negative is leading to another and thus severely damaging our economy. How long this phase will go on? We don't know!

It is an accepted wisdom in investing to look at company's business, invest and have patience because share prices will adjust to fundamentals, sooner or later. The same is true for Stock Market as a whole. Take care of economy and market will adjust to fundamentals.

The rising crude oil prices is really damaging our economy. In fact, the global economy. If crude prices comes down to a reasonable level of say 80-100 dollar a barrel, then our economy will be again on high growth track and share market will start rising and after some time we may again see a bull market.

I have detailed about factors behind crude oil price rise alongwith a possible solution to bring oil prices down in my blog at :

www.Act4CommonGood.blogspot.com

Please visit my blog and trigger a collective action to restore bull market back by bringing down oil prices.

I would like to add, if oil prices does not come down then forget everything. No theory will work and we will definately have a long bear market. And, the sensex will be in four digits only. Of course, the fall could be gradual but continuous. I will like to remind our FM P.Chidambaram's statement in OPEC meeting last month "If oil prices does not come down, developing nations economies will loose all the gains made in recent past". And, we know that market adjusts to economic fundamentals eventually.

Dear Friends,

The Crude Oil prices after touching an all time high of 147+ dollar per barrel at NYMEX has come down to around 130 dollar a barrel. A fall of more than 10 percent. Has Oil prices peaked out? No one knows!

However, in case oil prices has peaked out, then probably our market has bottomed out. Only coming days will confirm.

If market has left the bottom, then where should we invest? A look at overall global scenario points that when non-OPEC nations were bleeding profusely due to high and rising Oil prices, the OPEC nations were laughing all the way. And, why not? They made windfall gains.

My sense is that OPEC nations will use their additional but enormous wealth to create world class infrastructure in their countries. Hence, the indian companies engaged in engineering and construction activities in OPEC countries, except in a few politically vulnerable nations like Iran, will have mega growth opportunities in coming years. Therefore, these companies could be good investment choice from the long term investment perspective.

One more thing, there will be voting for no-confidence motion against Congress led UPA govt. tomorrow. If UPA govt. survives, then it will be go for nuclear deal. In that case AREVA T&D could be a good long term investment choice as it's parent company is world leader in Nuclear Power technology.

Happy Investing !

P.S. - In my last posts I had left links to my detailed blog about crude oil and it's impact on global economy. Those of you, who have visited it must have realised about the tremendous gains reaped by OPEC nations and will see a compelling logic in my investment idea. Those who wish to check details about it, may visit my blog whose link is available in my old posts. Alternatively, they can go to my profile and check the contact information and find my website's(blog) address.

Dear Friends,

In the recent edition of Business World magazine date 4 August, 2008, there is an article on page 10 about Saudi Arabia's plan to build a world class large city which will be equal to Washinton DC in size at the cost of 100 Billion Dollar (approx. Rs.4,20,000 Crore). I hope, you may find this information quite beneficial for taking better investment decisions.

Wish you happy investing.

Dear Friends,

The Central Govt. has implemented Sixth Pay Panel. Therefore, from current month onwards Central Govt. employees will be getting higher salaries. Further, latest by March 2009 end, they will be getting part payment of arrear as well.

Moreover, many State Govts. like UP, Rajasthan etc. are in process of implementing sixth pay panel in their states very shortly. More so to create feel good factor amongst employees in view of forthcoming L.S. elections in April/May 2009.

All this means, govt. employees will have inflated spending power, particularly by March 2009 when they will get arrears.

From investment angle, it makes sense to assess which category of goods will attract max. out of this money. Broadly, it could be Garments, Food Items, Consumer Durables, Vehicles etc. The sector/companies which gets max. of this money may perform better in market in days to come .

Now, I request fellow members to give their invaluable opinions for the benefit of all.