Buying Strategy - 52 Week Lows !

[saga364]

Hi,

I forgot to post this ...

WEB once said ...
"A short quiz: If you plan to eat hamburgers throughout your life and are not a cattle producer, should you wish for higher or lower prices for beef? Likewise, if you are going to buy a car from time to time but are not an auto manufacturer, should you prefer higher or lower car prices? These questions, of course, answer themselves."

This should answer the reasons for my search of 52 week lows !

Regards,
http://pseudosocial.blogspot.com

 

[kkseal]

Dear Saga,

With this strategy you'll probably end up with the worst stocks (rotten beef & junk cars) in the weakest sectors.

A better strategy would be to look for sectors that are down but have good prospects of doing well in future and then pick the best (fundamentally) stocks within the sector/s. You also shouldn't buy all at once but accumulate during deepish corrections (when you'll probably get these stocks at throwaway prices below their book values etc.).

Textiles, Sugar & Mining immediately come to mind.

Moreover with such a contrarion strategy you absolutely must be a patient long-term investor; trading mentality will only lead to frustation.

Regards,
Kalyan.

 

[toxicexpulsion]

BEML is one of them. a beaten down stock with good fundamentals

 

[kkseal]

BEML is one of them. a beaten down stock with good fundamentals

Yes, ToxicExp, fully agree.

I hold some Will buy more when the deep correction comes.

The Metro Rly projects coming up in some cities will be an added bonus for this company.

Regards,
Kalyan.

P.S.: Must say you have an excellent eye for stocks. Keep posting your picks.

 

[kkseal]

I am also eyeing Guj NRE Coke, Rain Calcining & Ashapura Minechem in the mining space. (If coal mining is opened up to the pvt sector these stocks will shoot up). There is also a little jewel (& potential jackpot) called Deccan Gold Mines.

Already hold Nahar Indl in textiles Waiting for a deep enough correction in S Kumars (which is also a retail story) Amongst the biggies don't like Arvind Mills for it's overdependence on denims (too thin a product line) Prefer Raymonds (leader in menswear Now branching into women & kidswear. Expanded denim capacity. Also has a card clothing unit. All its brands are premium brands commanding better margins. Technologically the best in textile space Has a no. of tie-ups/JVs with foreign companies). Alok Inds is another good company (leader in home textiles, now also branching into apparels). Spentex Inds has become the world's largest cotton yarn manufacturer (acquiring 2 of the biggest yarn companies in Ukraine & one in Egypt + domestic expansion & acquisition).

 

[jatayoo]

I am also eyeing Guj NRE Coke, Rain Calcining & Ashapura Minechem in the mining space. (If coal mining is opened up to the pvt sector these stocks will shoot up). There is also a little jewel (& potential jackpot) called Deccan Gold Mines.

Already hold Nahar Indl in textiles Waiting for a deep enough correction in S Kumars (which is also a retail story)

-------------------------------------------------------------------------- The mining sector is a story that may unfold.Ever since indra nationalised the coal mines it has spawned only the coal mafia.This lobby is very strong in the states of bihar,west bengal,and madhya pradesh.The local population is with the mafia for easy money.Now the govt knows all this but faces a ticklish taskof how to do the right thing without losing it's vote bank.It can act only from a position of strength.So GUJARAT NRE acquires mines in australia and new zealand$$$$$$$$$$.See the move

 

[Agilent]

52 week lows , on the other hand, are far from turning around (or getting taken over) .. because if that was imminent, they wd have already bounced from the lows

AGILENT

Saga
dont get despondent, or cynical

Maybe u did not grasp this ... think abt it a little, and u may get it

AGILENT

 

[taunk22]

hi saga,
i agree to u some bit not fully because if u r buying stock at life time low there is every chance that the stock can make a new low again, thats a big risk.
but if u r buying stocks that r at all time low try to buy fundamently strong stocks which can get u good return in future and also see the order book position of the company thats very important.
if u are a short term trader then u and buy at all time low and sell after gaining 15-20% which would be a bounce back.
happy trading

 

[Agilent]

saga
Seriously, the issue you have raised is not that easy to answer in black or white ...

There are several 52 week lows which may become bargains soon ( when ... depends on individual co outlook).....likewise there are several 52 week highs which are good buys despite their high price (relative to past)

[And of course, u will find good buys in categories which are neither of these]

If you try and answer .... why is a particular scrip at a 52 week low (likewise, or high) ... and look for Fundamental factors .. ie concerning the co's business model or management, or other factors influencing its financial outlook.. you will probably get good clues. You don't need to be spoonfed the answer.

And remember, the stock market is a very efficient indicator of the future , more than of the past. That's simply because insiders are the early birds, universally, and always.

In general , therefore, (and with exceptions of course), 52 week highs have a better outlook ..well at least in the near term .. than 52 week lows.

Does that make yr decision easier ?

AGILENT
PS I can give u numerous examples... the best one which comes to my mind is Clutch Auto ... see chart ... it first made a 52 week high in Oct 04 .... only to go on and on ... now its >100 (I 'milked' it for a while but sold off prematurely)

 

[kkseal]

PS I can give u numerous examples... the best one which comes to my mind is Clutch Auto ... see chart ... it first made a 52 week high in Oct 04 .... only to go on and on ... now its >100 (I 'milked' it for a while but sold off prematurely)

Clutch Auto is a very good one. it's the only Indian company I know of that holds more than 20 international patents!! If it's foray into the US mkts is successful then this one is a surefire multibagger. Last year the mgmt had given a 50% CAGR growth projection for the next 5 yrs. and they're maintaining it so far. It's nearly debt free, so not much equity dilution needed either.