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News Analysis


14/07/2016
Yes, these were the words of VP of Portfolio Management of one of the leading global investment banks few years ago while extensively reviewing our product MySmartStocks. He mentioned, ‘Mihir, I could give you millions of Rupees and you could invest in any capital investment assets but not knowing when to exit can significantly affect your returns… And I am very impressed to see that your product actually delivers five different types of exits on your investments!’ Take an example of angel investor who invests in a start-up with ultimate trust leading to an exit or to the extent venture capital investors with seed capital or series of investments although they are well thought, structured and with defined exit timelines. Essentially, the investments in capital markets and exits largely tend to be emotionally driven. Let us explore the context of current exit which can help you survive without greed or fear. While this is a season of exits across the globe, there is one more exit worth noting about Indian capital market. What our intelligent product MySmartStocks has detected this time I call it 7-star constellation exit (like a Big Dipper or Plough!). To put in perspective, the attached image explains the comparison of last two occurrences (one on 4-Mar-15 and now on 14-Jul-16) when globally known Indian capital market indices (Nifty 50, Sensex, Nifty 100, Nifty 200,Nifty 500,…) call for same-day Best Return exits. What is noteworthy this time that seven different known indices have called it same-day quits with Sensex at 27967 compared to earlier when only three such indices called it same-day quits when Sensex was highest at 30024. What does this mean? Indian market is definitely near-term high. Time and time again, every capital market across the globe goes through periods of consolidation and this appears to be one of them. With Sensex TTM PE ratio at 20.51 and 7-star constellation exit, both major and broader market can experience sideways or downward movement. 1Q earning announcement season has started with surprise from Infosys with only 7.4% rise in consolidated net profit not meeting analysts’ expectations along with future earnings warning as against Reliance Industries reporting 18.1% net profit growth numbers on y-o-y basis with improved gross refining margins of $11.5 per barrel of crude oil. I call this a game of weights on good vs. bad earnings when they are part of major indices like Nifty and Sensex however there are only two ways this settles finally- a) Earning season surprises the market and it helps indices resettle a reasonable valuation or b) Market goes through a period of consolidation Of course when you know of exit, windfall of profits does make everyone very happy but ignoring such exits can really cost you a lot. Don’t believe it then you may want to read a real case study of Rs.66,600 mistake. Market is not only exuberant but also ripe for consolidation. Long term investors may not be deterred by intermittent exits however reviewing your portfolio or have an expert review the same is definitely on the call for value unlocking. Happy Investing! Mihir Sandesara MySmartStocks.com – While others analyze the Past…We forecast you the Future!


Source : MySmartStocks.com