BLOG MEANT FOR 28 JUNE 2018 THURSDAY
Dear friends,
Massive fall for markets today. Nifty fell by 98 points and closed at 10671. The fall was mainly due to weak Asian market cues. As of now, European markets have closed positive and the US markets are flat currently.
Nifty is in SELL zone for short term.
The indications for individual stocks for short term only are –
DON’T BUY ZONE – VEDANTA, ITC, TITAN, ASIAN PAINT, HINDALCO, AXIS BANK, YES BANK
HOLD ZONE – TCS, INFOSYS, HDFC BANK, HDFC, MARUTI
WAIT TO SELL – RELIANCE INDUSTRIES, M&M
SELL – SBI
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Question from a Participant –
Could you please let me know why even after bagging few projects, Larsen & Toubro share price is dropping from last couple of months. Having said that, is it still a good choice for long term ?
Answer –
This is a good example to show that Stock Markets is not a straightforward science like Physics etc.
For a company like L&T, getting a few projects does not immediately result in any change in the company’s present situation. These projects are mainly long term where the company will receive revenues over many months and years. Hence, at that moment, you should expect an immediate increase in share price.
For example, if a person is earning Rs.6 lakhs per annum salary and he gets at increment of 10% from next year, he will get Rs.6.60 lakhs per annum. This additional Rs.60,000 will most times not make any difference in his present financial status or lifestyle. But over a period, it may result in him spending more or saving more and that will make a difference in his life.
Similarly for L&T.
Also, when markets are weak and there are negative sentiments (like now), even if there is positive news for a company, the overall negative sentiments will push all share prices lower.
Just like in cricket, when the conditions are difficult to play, even the best of batsmen may perform badly for some periods.
L&T is the leader in its sector and unless there is any major change in that situation, it can be invested for long term.
Patience, faith in your research and discipline will ensure good profits in the future. Not having even one of the above may result in low profits or no profits from Stock Markets.
All the best!
Dr.Bharath Chandra & Rohan
(THE ABOVE COMMENTS ARE ONLY THE PERSONAL VIEWS OF THE AUTHORS OF THIS BLOG. PLEASE DO YOUR OWN RESEARCH BEFORE TAKING ANY INVESTMENT DECISIONS. THE READER OF THIS BLOG MUST UNDERSTAND AND TAKE FULL RESPONSIBILITY FOR THE PROFIT OR LOSS MADE BY TAKING ACTIONS BASED ON THE ABOVE VIEWS)
