The Sensex opened the week with a significant positive gap of 242 points but profit-taking towards the close saw the Index pare gains.
And on Tuesday, it opened more than 100 points down, but ended with marginal gains.
The market opened higher on Wednesday, but soon sliiped into the negative region.
In such volatile times, what strategy should you adopt? Which stocks to buy, sell and hold?
In an hour-long chat on
rediff.com on Wednesday,
stock market expert Pranav Sanghavi, replied to many such readers' queries. Here is the transcript:
Riyas asked, Hi pranav, Are RIL, L&T, SBI, IDFC, RPL stocks worth to buy at CMP? Shall i wait for further correction in the market? Thanks.
PRANAV SANGHAVI answers, at 2008-08-27 15:45:24I think the markets will come down a bit. It would be a good time to buy in parts at that time on every dip. But I repeat once again what I have been saying ovr the past few months, that one must invest with a long term over view.
sameer asked, Hi pranav, Please correct me if i my understanding is wrong. "bonus share" does not have any benefit to the shareholder, i meant the bonus share does not help the investors to increase his/her wealth. It is almost same as stock split option, and the only difference in stock split is that the face value of stock is divided by the ratio of the stock split, so the face value gets reduced value. Is my understanding is correct? Please advise. Many thanks to you.
PRANAV SANGHAVI answers, The one fundamental difference is that in a Bonus issue the capital of the company actually goes up where as in a stock spit the Face Vale of the stock goes down but the capital remains intact as the number of shares increases. Bonus shares on a longer term do add value as when the stock price moves up post bonus the aggregate valuation of original shares plus bonus shaes will be higher than the previos shares held. Also, the company is showing great confidence in it's ability to deliver higher profits so that it can service a highe equity.
SRM asked, Bajaj holidng and investment at 550? shall i hold or sell?. If I hold, shall i buy more to average it? Thanks
PRANAV SANGHAVI answers, You could hold on but with a 6 to 12 month outlook.
Hari asked, Hi, Aban offshore is traded at its 52 week low price. Will it yield good return if i buy now and hold it for 1 year period.?
PRANAV SANGHAVI answers, They are the largest player in the offshore drilling business and also have made some aquisitions recently which should bear fruit in the coming time. I would surely look at the stock with that time frame.
Gav asked, I am holding the following shares in my portfolio, punj lloyd, IDFC, Unitech, Suzlon, Pantaloon retail, GUJ NRE Coke, GMR Infra, Canara bank. Shall i hold it for 1 year period.
PRANAV SANGHAVI answers, Yes you could hold on to these with a 1 year outlook.
RR asked, Is Adani enterprise good company for invetment? I like to buy Adani shares. Please advise. Thanks
PRANAV SANGHAVI answers, I would look at other frontline stocks currently rather than Adani Ent.
Bala asked, I am just curious, As there is no value to the shareholder due to bonus share news, why people are rushing to buy those bonus share issued companies shares. Kindly help me to understand. Thanks a lot.
PRANAV SANGHAVI answers, I just explained a bit about Bonus shares earler please refer. On a longer term a company that issues bonus normally will be valued higher say 3 to 6 months down the line after the bonus issue provided it is a quality company.
Bala asked, One more questions, What is your take on Jindal Saw? I am holding 30 shares at 600 now?
PRANAV SANGHAVI answers, I think you could surely hold on to the stock with a 6 to 12 month outlook. Even though it is a steel commodity stock which are cyclicalin nature. If it comes down substantially in the short term you could average it further.
afrose asked, Hi, Please suggest your top 5 picks as of CMP? Thanks
PRANAV SANGHAVI answers, I would still go with stocks like RIL, SBI, L&T, NTPC etc. But I would buy on a stronger dip of say around 4 to 5% atleast.
chandan asked, what are 12 year prospects of SUZLON and SESAGOA?
PRANAV SANGHAVI answers, I think considering the businesses they are in Suzlon especially should be doing well. Sesa would depend on how mch of its resources have deplted over te years.
sultansurti asked, How's idfc at current price ?
PRANAV SANGHAVI answers, I like the stock and would look at it on ever dip.
san123 asked, hello Sir, I want to buy 100 shares of Reliance infra, shall I buy at current levels and what will be its prospects after 1 yr
PRANAV SANGHAVI answers, The company has just completed a buy back program from the open market and I don't think the stock will appreciate tremendously from here. I would wait for a correction to look at the stock.
marlia asked, What is your take on TNPL? Are you bulling on this stock for 1 to 2 years period.? Thanks
PRANAV SANGHAVI answers, You could look at the stock with a 1 to 2 yea outlook surely.
RanaD asked, I have bought 20 shares of SESA GOA @ 175. What are the prospects?
PRANAV SANGHAVI answers, I like the stock and I think over a period of 6 to 12 months I think the stock should give decent returns to investors.
manju asked, How is idea cellular, Indian Hotels, Hotel Leela & IDFC. Pls suggest me whether to hold or exit. I have purchased recently...
PRANAV SANGHAVI answers, I would surel hold on to the stocks you have mentioned. Indian Hotels especially looks underalued.
ashok asked, what about gujarat nre coke ltd
PRANAV SANGHAVI answers, It is a hold. The demand for coal is not going to die down soon and Guj NRE will only benefit from it.
CMukherjee asked, Hi,what is your prediction for RNRL and RPL stocks?
PRANAV SANGHAVI answers, As I have been saying earlier, RNRL stock price will depend on the outcome of it's legal battle with RIL. RPL should move once the commercial production draws closer an there after its quarterly results.
venu asked, My portfolio is IDFC,IFCI,DENA,SBI,india cements, DLF, ADlabs,Welspun Gujrajat,RELCOM,RIL, Facor alloys, BSEL infra & Teledata. I want to modify the portfolio. Please suggest me which one to sell & which one to buy further. Thanks Venugopal D R
PRANAV SANGHAVI answers, I think you have a decent mix of stocks in your portfolio. You could switch Welspun, BSEL and Teledata to frontline quality stocks like NTPC, L&T etc.
jyoti asked, what should I do with reliance petroleum
PRANAV SANGHAVI answers, Hold with a 1 to 2 year outlook.
venusmail asked, Hi Pranav, Is it right time to enter in Voltas, Sesa goa, KS Oils and Karuturi Global? and please name 2 public sector banking stocks which are below 100 rupees
PRANAV SANGHAVI answers, I don't follow the other two but yes Voltas ans Sesa can surely be looked at on every dip.
arindam asked, Sir, Could you tell me the name of one Mutual fund scheme so that I can invest Rs. 1000 per month for next 10-15 years in view of my son's education.
PRANAV SANGHAVI answers, I won't receommend a single name but look for large cap diversified Mutual funds offered by SBI, DPML, HDFC, Templeton etc.
RAMUJIRAO asked, Dear Sir, RCOM 500 SHARES @ 550. Holding for more than a yr, pls give your feedback on the same
PRANAV SANGHAVI answers, With the new rules set out by TRAI for the telecom sector, RCOM will take some time to recover fully. I think that beyond 6 months the stock should do well.
G SURESH asked, Hi.......I hold 200 bombay dying at 600 & 2000 ispat at 29 I am nor sure whether to hold it for long term or selloff.......Kindly guide me
PRANAV SANGHAVI answers, Bombay Dyeing could be held on to. Ispat could be switched for a better qulity stock even if it ins in the steel sector.
Lipika asked, What would u suggest about Ranbaxy? I have 50 shares @505. kindly advice..
PRANAV SANGHAVI answers, With
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