Portfolio Update Jan 2016

First Portfolio update of Calendar 2016. Sold a holding, averaged another in half and increased cash position to be deployed on further correction for buying Nifty BEES.

You can check the updated portfolio using the marquee at the right sidebar.

Buy Indian Stocks, China stock market crash an opportunity

Chinese stock markets and fear of its hard landing has played havoc on commodities and scaring equity investors globally. But doesn't it feel like it's getting far too much? Oil at $30 with just around a million barrel oversupply when half the world production of 95 million barrels per day is making cash losses at current prices. Similarly doom Sayers are predicting crash in Chinese economy and thus a crash in global stock markets. Lets look at some facts behind Chinese stock markets and if it really can hurt global investors and markets.

Shanghai Stock Market 5 year performance
CSI 300 5 Year Chart
1. Unlike mature markets of Europe, America, India etc, Chinese stock markets have more than 80% retail investors with barely 2% foreign holding. So a 50% crash in Chinese market would affects these foreign investors portfolio by just 1%. BIG DEAL!

5 Trading Advise From The Best

"Most people approach trading to make a lot of money, and that is one of the primary reasons they lose." -  Van Tharp (Trading Coach)

"There is no need to rush into any position, wait for your signal. Rushing into a position and chasing a stock is one of the main reasons that traders lose money. Follow your trading plan not your emotions and impulses." -  Marty Schwartz

"Trading offensively is trying to grow you capital while defense is protecting what you have. Winning trades are how many points you score and losing trades is how many points you give up to the other team. While offense is great for a show defense wins championships." - Paul Tudor Jones

You don't need a bear market to lose money

In past 2 years what I've hated most is people telling me I should be making lot of money as market is going up since then. In fact it hasn't been that very different than my past performance. 2015 specially was quite bad for my equity investment portfolio as I am overweight some commodity companies in oil & aluminium space which had a terrible year in-spite of Nifty Sensex almost flat. That is exactly the biggest problem with general investors. When market goes up they don't participate cursing the market as gone up so much while when it comes down they wait indefinitely to catch the bottom.

You can make or lose money in any kind of market. So you don't need only a bull market to make money while even a raging bull market can make you lose a great deal of money. 

For example in a bull market you lose money if:

Where to invest in 2016?

If Nifty corrects to 7500  - 7600 levels that would be good time to start buying Nifty Bees (Goldman Sachs ETF for Nifty Index listed and traded just like any other stock) as a diversified portfolio of 50 great stocks in India. At 7500 the index would have roughly 7% earnings yield which will also be your fixed deposit yield 1 year forward. With gold & Real estate delivering negative return and thus out of Indian investors portfolio one will not have much choice but to invest in Indian equities. 

Low earnings base of current year, sharp reduction in interest rates, under utilization of factory capacities, govt. spending & reforms, and benign commodity prices will all work together in favor of Indian equities and thus provide floor. A good monsoon next year will add icing on the cake and Nifty could breach 9000 by next Diwali. 

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