Jan 19, 2011

Market Outlook for 2011: Be and Make (19-01-2011)

Dear all, I am very happy to achieve the targets from 2008 consistently. In 2008, stayed with cash and in 2009, gave the call to deploy all the cash to equities and in 2010 also, as predicted markets stayed in the ‘Predicted range’

Let’s go to the past,

In 2008, exactly predicted that ‘worst is not over’ Please go through the link you will get the Be and make's 2008 Market outlook In this link, you can get the views of Be and Make that worst is not over in our markets and need to stay with cash.

In 2009, exactly predicted that ‘It is the time to build the portfolio’ Please go through the link Be and make's 2009 Market outlook in this report, you can get the views of Be and Make that ‘It is the time to build the portfolio’ and deploy the cash whatever you have. Most of the analysts don’t have the dare to give the long at this time. Surprisingly, the stock market rallied after this call, one after another good news comes in.. Like election results, global recovery etc,.

In 2010 also, the prediction “The broad range for the market for 2010 would be 4200-6200. If you bought around the 4200 levels then you can fetch nearly 50% if markets reached the 6200 levels.” Was proved and the markets almost traded in the same way as I expected. Please go through the link: Be and Make's 2010 Market Outlook

Its all about the past… if we want to stay in the game we need to perform consistently then your question would be, what about the 2011?  Yes, I am coming to the point.. In 2011, it seems to be very choppy and investors need to have cautious look.

In my view, 2011 would be very choppy there are so many concerns are there like
  1. Rising Inflation
  2. Rising Interest rates in India
  3. Lesser Foreign inflows when compared to past couple of years
  4. Rising commodity prices globally
  5. Increasing Fiscal and Trade deficit in India
  6. More sovereign debt crisis in EU
  7. Chances of breaking of EU
Still there are more to talk about, some of them may happen and some them may not happen. Along with this there are so many positives in for India. Concluding all this information I can say that ‘Valuations are not attractive’ at the current levels. There is another 10-15% correction left in the market from the current levels which can drag the sensex to 18000 levels for sure and the corresponding level for nifty it would be around 5480. If the problems in EU increased then the levels would be slighter lower and are around 16100 levels of Sensex and 4850 of Nifty. Whereas the upside is also very attractive that is in the 2011 markets are going to touch the new highs, if EU crisis comes to end. So, we can not exactly predict what will be bottom for the market. 

If you are having the cash then stay with the cash or in profits right now, then book the profits in some shares at least 30% should be the cash. If you are not in profits or not having cash then you have no other option and just stay with the shares with degree of risk.

Then which stocks you should buy? It is up to you to choose the good stocks as per your risk appetite. Once, the markets drifts to the said levels you will get more opportunities in your hand. I will update my site at that time if you want to have my stock picks.

With thanks
Be and Make

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