Tuesday, February 21, 2012

Will RBI Get a Chance to Reduce Rates ...?

After a long period of underperformance ,our market outperformed in the last two months mainly because of overseas fund flow. We all know based on the current fundamentals many stocks are over priced , but it is also a fact that -  movement of Stock market is always  based on expectation and not on reality. A major reason for the robust fund flow may be due to the reduction in inflation and a possible rate cut .But is a rate cut  possible in near term ?. If the recent price trend of many industrial commodities is any indication ,a decision may not be very easy. I really afraid ,  will RBI get at least one chance to reduce interest rates. Price of items like Cement,Steel..etc are showing signs of upward movement again and I feel many other items will follow this trend after the state elections are over. A really worrying factor is that the government is not planning or taking any steps  to control inflation on a long term basis and they are solely depending on  adjusting interest rates to control inflation. In our country , at a time of bumper crops we are wasting wheat in one part and the same time people buying the same item at a price of more than Rs.20/ Kg at the other end of the country .No sincere efforts to debottlenecking   the storage and transportation facilities , no efforts to increase productivity,no tax reforms ..etc.  All these issues are came to light only at the time of high inflation and everyone forgetting these issues when there is small dip in it.I don't think ,only vote bank based schemes will  save our country for a long time. Suppose there is a recovery in western economies earlier than we anticipated there is every chance for a spike in fuel prices again. Stock prices of many companies from interest rate sensitive sectors move even more than 100 % in past two month on expectation of a rate cut going forward. But I believe it is prudent to book at least partial profits in such stocks and shift the amount to agricultural commodity related stocks which will always perform better in an inflationary situation.

28 comments :

  1. please specify then the agri commodity stock

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  2. Hi Valuepickji,

    How is RS Software for a investment with a 2 year view?

    regards,

    Rathnakar

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  3. Dear VP ji,

    Please give some investment ideas related to agri commodity stock.

    Regards

    Gobind

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  4. hi sir, what's your view on coal india,ITC and Gmr infra at current price.??????? please suggest.
    regards,
    sankhajyoti

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  5. DearGuhan and Gobind

    We have already discussed stocks from Sugar and tea sectors

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  6. Dear Rathnakar

    Not tracking R S Software

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  7. BUy ITC on any dip below Rs.200 for long term, not tracking the rest

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  8. Hi Valuepick,

    Since your last recommendation AHLCON has moved from 198 to 279 ? What is the story behind it?

    Nikhil

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  9. Hello Valuepick,
    What are your views on HCL INFO, HDIL, ROLTAS and YES BANK?
    I can manage High risk. Please suggest some stocks with a period of 2 years

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  10. hello value pick ....

    The anjani cement stock u have suggested dsnt have volumes ..it is not moving too..
    I jus want to ask do u really think its a good buy since its around its 52 week high..
    @hope to see ur reply

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  11. Dear angadkat

    Out of the mentioned scrips I am tracking only YES Bank and more than once shared my views on this one , no change for the same

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  12. Dear Rishab

    APCL's latest quarter performance not upto expectation ,skip for the time being if you have no plans to wait for long term

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  13. Hello Mr.VP,
    Greeting.....
    What is your stand on Neuland? I feel disappointed by seeing this qtr result. I have 500 shares @ Rs.125/-
    Similarly any change from your stand on TCPL? I have 1000 shares @ Rs.52/ I am eagerly looking forward to your reply.
    With Rgds,
    Thillaisiva, Chennai

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  14. plz comment on my holds in bambino agro. results are improving but attention is needed.

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  15. Hello Value pick....do you see some correction in the market coming in? also if Prakash industries should be brought now or can wait till 45-50 level...request you to please respond.

    warm regards
    Reshma

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  16. sir what do you think about the milkfood is it worth as it show excellent turnaround in last quarter

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  17. Sir ,Tasty Bite has started SHOWING SOME POSITIVE SIGNALS....would you recomend a buy on one of your favourite stocks ,with sharp decline in essential vegetables like onion & TOMATOES WHICH DO FORM A MAJOR PART OF THEIR EXPENSES.....SIR ALSO PLS TELL US ON THE PROGRESS OF THEIR EXPANSION....THANK YOU....
    WARM REGARDS .AMITABH

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  18. Sir

    Between Kaveri Seeds and Britannia which will be a better investment with 2 years plus perspective.

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  19. Dear Thillai Siva Pandian

    Due to adverse market condition Neuland's plans to raise funds for debt repayment could not materialised which is really a negative factor.

    Hold TCPL

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  20. Dear Reshma

    Really a difficult question.As I mentioned in the above post this rally is purely depends on fund flow from FII's over and above fundamentals. So the question is whether the fundamentals will improve to justify the valuations or FII's start selling before it happens.UP election results,Outcome of RBI meet,oil price and further trend in inflation ..etc is expected to decide the way forward.
    Better to stay invested upto 60 % and keep balance in cash.

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  21. Dear Aditya kumar gautam

    Milkfood is a big company in this sector , but historically this company never showing steady performance .If it shows profit in one quarter next may be in big loss. Considering this risk one may take limited exposure around Rs.100/-

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  22. Kaveri or Britannia depends on your risk profile

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  23. sir tell me the sector which has been brooken most in 2011 and the stocks from the same which i want to buy to hold for long term for the appriciation of 100%. thanks.

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  24. HI VP I ALSO RECARCH MANY COMPANY FROM VERIAUS SECTOR I FIND JK CEM JK TYER KESORAM GILLANDRA THIRUMALAI CHEM ALLS HAVE A GOOD KWALITY ASSETS AND HAVE A BIG EXPANTION PLAN LOSES COMES FROM INT & DEP I ALSO HAVE ESCORTS I THINK ALLS CAN BE MULTIBAGGER IN COMING PERIOD ARE YOU SUJEST ME THAT I AM RIGHT OR WRONG
    THANKS & REPLY ME.

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  25. Dear AMITABH
    TBE is expected to perform well going forward

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  26. Dear TK

    I think Sugar sector was the worst performer in 2011

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  27. Dear Narayan

    Gain in stock market not depends only on Asset quality but on the attitude of promoters too

    ReplyDelete

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