Indian mid cap and small cap
stocks are showing tremendous momentum on the upside. Stocks form
Infrastructure and industrial sectors which were languishing at the bottom due
to self defeating economic policy of the previous government are showing a new sign
of life.
Although I don’t expect Nifty to
move up considerably from the current levels, small cap and mid cap stocks will
continue to show substantial outperformance. If you see the equal weighted portfolio
of 110 stocks, they went up by 6.38% yesterday compared to a Nifty which moved up
by 0.84%. Today the portfolio was up by 2.03% compared to 0.16% up move in Nifty
I expect that this outperformance will continue for some time as some
stocks are so severely beaten down they may quadruple in price from the level
we entered.
I also understand that right now
fundamentals of these stocks are not attractive and they will take considerable
time to improve, but by the time you will see the number of these stocks
improving the price would have already doubled or quadrupled from these levels.
Equity investing to my mind is to
an extent a leap of faith wherein you jump when thing are ambiguous and people
are scared.
I also like the following stocks
and they can be bought at current levels.
|
Date
|
Name of Stocks
|
CMP
|
|
20-May-14
|
HINDUSTAN ZINC
|
150.1
|
|
20-May-14
|
JINDAL STEEL & POWER
|
288.95
|
|
20-May-14
|
LIC HOUSING FINANCE
|
326
|
|
20-May-14
|
NTPC
|
142.05
|
|
20-May-14
|
RELIANCE POWER
|
87.1
|
|
20-May-14
|
SAIL
|
88.25
|
|
20-May-14
|
SESA STERLITE
|
246
|
|
20-May-14
|
TATA POWER
|
97.2
|
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