Index Investing in Nifty 50

jamit_05

Well-Known Member
#21
Your benchmark of out performance should be prashant jain, s naren of the MF world and not fixed deposit. The kind of stocks chosen are good but with those you may may not outperform fds but I am sure you will not outperform MF. Instead try large cap MFs for such index stocks because they have similar stocks and others and are well diversified.

For direct bets I recommend hpcl, Bajaj fin of the world a bit more aggressive and certain to outperform. In your universe I like pharma and private banks(though my fav. Indusind is missing) only. My personal choice and I may be proved wrong and I have no ego.

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Private banks are great. Yes, Axis, Indusind... and I really look forward to buying them. Will surely post about it.

Towards the month end, I will get into ONGC... entry price 227.40 Lows of 2012;
 

TracerBullet

Well-Known Member
#22
jain.er

Have a look at these scrips and BUY triggers. One decent downleg in Nifty and most these will trigger buys.

Pharma
1) Cipla 369 (I doubt, but hv my fingers crossed)
2) Drreddy 2750
3) Lupin 1280
4) Auropharma 464
5) Sunpharma 550

IT
1) HCLtech 630
2) techm 410
3) wipro 475
4) infy 932, 720
5) tcs 2115



PSU
1) CoalIndia 240
2) ONGC 188
3) Bhel 90

Bank
1) SBIN 151
2) Bank of Baroda 102
3) Axis 366
4) Yes 595 ???
5) hdfc 928 ???

Do you still doubt that such a portfolio will perform less than twice as well as FDs?
But why did you not buy them when they were falling? Why be anchored to their price lows after they have recoevered? Few years back you had an active thread, there also you looked at long term lows as entry point. Were you able to get them and beat MF performance on your overall capital ?

I dont say MF is supreme. With skill, perhaps some concentration, or not, people may be able to beat them. I dont have those skills/knowledge but i follow few people in another site who do well.

But Your premise is that earlier lows of 7k will be visited again. If this does not happen, you will be left out. With this strategy you will get all falling stocks ( maybe some filtered through discretion) but you will not get any stock in strong long term trend, atleast not until it falters and falls missing out on the growth in between

Anyway, good luck
 

jamit_05

Well-Known Member
#23
But why did you not buy them when they were falling?
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But Your premise is that earlier lows of 7k will be visited again. If this does not happen, you will be left out. With this strategy you will get all falling stocks ( maybe some filtered through discretion) but you will not get any stock in strong long term trend, atleast not until it falters and falls missing out on the growth in between

Anyway, good luck
This method of buying will give few, rare, entries into really good ones like hdfc, tcs, asian. Agreed.

To exemplify, as per 52w low buying criteria:

* Asian has not touched 52w low in over a decade and half!
* HDFCBank gave an entry only earlier this year, the one before that was in 2009!
* TCS in 2009 and 2016
* ONGC gave entries in 2009, 2013 and NOW :)
* DRReddy gave an entry in 2008 and NOW :)

This raises an important point: If a good NIFTY50 stock does give a 52w entry then it is an opportunity.

In the same breath, buying rule will have to be relaxed for top 10 companies, like Asian, HDFCbank, TCS and a few others. Else, one stands to lose the growth.

Thanks tracer.
 
#24
This method of buying will give few, rare, entries into really good ones like hdfc, tcs, asian. Agreed.

To exemplify, as per 52w low buying criteria:

* Asian has not touched 52w low in over a decade and half!
* HDFCBank gave an entry only earlier this year, the one before that was in 2009!
* TCS in 2009 and 2016
* ONGC gave entries in 2009, 2013 and NOW :)
* DRReddy gave an entry in 2008 and NOW :)

This raises an important point: If a good NIFTY50 stock does give a 52w entry then it is an opportunity.

In the same breath, buying rule will have to be relaxed for top 10 companies, like Asian, HDFCbank, TCS and a few others. Else, one stands to lose the growth.

Thanks tracer.
The 54w low strategy is the best. Dont ever listen to anyone who says otherwise. Its all about patience and discipline. No one will shoot you if your not in the market all the time.
 

jamit_05

Well-Known Member
#25
The reason why the pharma sector, in entirety, is on a sling down...

A news snippet to put things into perspective:

"MUMBAI: The Brexit impact on pharma industry will be around Rs 400-500 crore, with companies facing issues in regulatory and approval process going forward. Major companies including Aurobindo, Wockhardt, Sun Pharma, Glenmark, Dr Reddy's and Lupin have operations in the UK, and would be adversely affected with Brexit."

As soon as growth seems possible again, pharma sector will make fresh highs.
 

jamit_05

Well-Known Member
#27
Entries are the easy part. Exits are a topic of ponder.

To take benefit of LTCG profit booking will happen after a year. Then at year end, which stocks would one exit?

Let us classify the kind of stocks we would have:

Type 1) Stocks that have made fresh high every 5 years for the past 20 years.

Market sees these stocks as growth stocks. Institiutions expect their respective EPS to grow with each passing year.


Type 2) On the other hand, there are PSUs, Cyclicals, Commodity stocks and mediocre businesses that do not make fresh highs as regularly. Ex. Tatasteel, Bhel, Ongc, Reliance, Sbin and several more. It would not make much sense to hold onto them and expect multifold return over the years.

Generally speaking, stocks are to be classified as growth or stable stocks. Stable stocks will be considered for profit booking after a year of holding, whereas growth stocks will be sold conservatively.
 
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jamit_05

Well-Known Member
#28
The idea is to churn: Buy low, and sell when in profit but only if buyback is available. This is feasible in most scrips of Nifty 50 because prices do not go down beyond a point. As soon as, these blue chips lose 30% or so, institutions rake in the stock.

Tracer mentioned that buying at 52w low will give fewer entries. I realized this as an important point, because one pillar of Index Investing is to be diversified over most scrips in the index. Relaxing the buying rule is the solution.

Buying blue chips at 30% correction gives entries into most stocks around the year.

Sectors of pharma, IT, Banking, Cement, Energy, Auto, FMCG would be covered under this rule. Am leaving out some scrips, on individual basis. Sure, some may correct 50% (or more) from all time highs. There will be draw-down. Whereas, some have not corrected beyond 18% in the last decade!
 

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