Stock Market Investment Guide

From the level of 14,000 in Sept 2008 the Indian markets fell to a level of 8,000 in October 2008 because Lehman Brothers of USA went bust. Between October 2008 and February 2009, the Indian market bounced around 8,000 and 10,000 levels three times. By March 2009 the Indian market broke through the 10,000 levels and was 12,137 before the election results were announced. i think we are in a new range of 14,000 to 16,000 till budget day - sometime in July. If the budget is good the market will head towards 18,000... if the budget is not so exciting the market will head towards 14,000. I do not believe the market can head towards the 10,000 to 12,000 range till there are some MAJOR political and social shocks.
My concern over companies like DLF is they have huge land banks bought at prices which may not be publicly visible and the estimated selling price of the finished, constructed product may not be what they initially thought. Basically, the value of assets may not be as high as investors expect and the profitability from those assets may not be as great as investors expect. Not my preferred sector.

There are many ways to bring your hard earned money from all the corruption and deals that you have done. One easy way is to tell your Swiss bank to remit the money to your foreign bank account in India. Of course the problem with that is that you will attract all the smart smooth-talking private client wealth managers and they will reach your house before your money from your secret numbered Swiss bank acocunt gets to you. Which means that before you can even touch your money it will have vanished in fees and bad advice. The other way of bringing your money back to India is to tell your Swiss banker to buy you P-Notes and use your hard earned money to punt in the Indian stock markets. The risk there is that you will end up buying stocks of your friends who also have Swiss bank accounts and knowing how intelligent they are (just like you) they will fund ways to use your money to siphon it into their own Swiss bank accounts. By the way, pl do not invest in Quantum Long Term Equity Fund because you will fail our KYC norms. Best wishes.

ICICI is a fairly aggressive bank that has, in the past built a business based on maximizing market share. That scares me. Bankers are not supposed to go around the company boasting how many accounts and clients they have. A banker's job is to ensure that they have collected money which they had lent out. I am not sure whether ICICI Bank [Get Quote] is reformed now - like a teenage child that matures and gets more steady. I would prefer putting my money in a relatively more stable financial company like HDFC.

Nothing is safe. There is risk in everything one does in life. Buying equity shares - either individual stocks directly based on equitymaster research or investing in Quantum Long Term Equity Fund - is also risky. They key is to understand the risk and to "price" the risk correctly when trying to estimate your potential gain or potential loss from such an investment. But yes it is a good time to buy into the stock market.

The real estate market is in an excess built and over capacity mode across the country. Many people with great political connections used foreign money to buy raw land; used their connections to convert this useless land into valuable zoned land. They then sold this at a huge profit. They used these profits to buy more land at higher prices and hoped to play the same game. However, in most cities their there is too much construction and excess supply of apartments, homes and office space at available prices which people cannot afford to buy or rent. These real estate companies have used money from the public banks to bail them out of their problems. While the banks - under guidance from the government - can give more loans to the developers to keep them afloat, consumers still cannot afford the high priced product. Therefore real estate developers will have to sell their available square feet at lower prices (there is no shortage of buyers at lower prices) and this reduction in selling price will hurt their profit margin. This is the logic why I do not really like real estate stocks. However, the money power of real estate developers is very tempting to most politicians and this money power may bail out these stuck real estate developers and their battered share prices.