As China marches towards becoming a developed nation soon, they have begun to take the essential next step of cleaning up the country of industries that are hugely polluting in nature. Traditional steel manufacturing is one such industry that is taking a massive hit in China.Continue reading
Housing for all scheme by the Government is a positive for the economy in various manners. 4 Crore houses to be build by 2022, the creation itself will bring huge business opportunities for the Cement, Steel and home construction goods manufacturers. Once the houses are ready, the occupants will need to have the basic necessities to run their homes, utensils, durable’s, furnishing etc., these businesses will flourish.
In line with this thought, our investment in Visaka Industries, a company that manufactures sheets for houses as well as other home construction accessories. We purchased this stock when it came in our research ranking table in the month of January 2017 at a price of ₹190 per share. It is 8 months since we are holding this stock, apart from the dividend of r₹6 per share, the current price of the stock is ₹672.00. An appreciation of ₹482 or 250% growth in 8 months.
One of the Multi-baggers in our portfolio…..
Crude Oil at its 29 year low, china markets expected to fall another 9% & Currency war heating up with South Korea, Kazakhstan & Turkey likely to follow China and Vietnam in devaluation.
Every time there is a shakeout in the markets, analysts come out to feed more fear by giving out comparisons with previous bear markets. This time again similar news has been doing rounds, 2001 and 1987 bear moves have been reached and the next one that is eyed is 1929 crash. Can this happen?
What is India’s position in this uncertainty?
And the next immediate question, what will happen to my portfolio? Am I protected & where should I press the trigger for exit?
Lot many questions like this will surface in our minds as we keep hearing and witnessing things panning out in the Global arena. As of now, we cannot predict a big disaster, but a shakeout is eminent.
China became the world’s factory; their greed fed into themselves and now has boomeranged. One can only control the external forces to some extent. Anyone having thoughts to have full control of any activity will have to be prepared for a backlash & China has bitten little too large in this manner. They increased capacities to such levels that, the requirements of the whole world, are met by them. They thought that, by having large manufacturing bases, they can bring down cost and be very highly competitive killing all other manufacturers across the globe.
Isn’t it too very selfish?
For someone greedy to this level, will have to face the consequences and that is what is happening now.
As China grew to strength, other economies became dependent on China’s mammoth growth. Oil – Skyrocketed, because it was thought that China had an insatiable demand to support its phenomenal growth. Steel was expected to be of very high demand and huge capacities were created across the globe.
About some time back I met a top official of JSW Chile, he gave me inputs on what China is planning to do and for those ambitious dreams to come true, China needs more than 3 times the existing world supplies in Steel. China will outstrip all other economies in growth and make the whole world fall unto their feet. Xi Jinping, is very smart in his decisions and world will be astonished by his policy decisions. JSW top brass told me that he is accumulating steel stocks across the globe to cash in on the mad rush that is likely to come in a couple of years. I met him in mid-2015, at that time steel prices were at $600 and now it is near its low at $140.
My view at that time was bullish on India, which he was confronting, while it was a knowledge to learn about the correlation of Crude, Steel and other commodities in the Global play, for me it was not justified that China still held strength at that time. Don’t know if I too pessimistic about China, but, back of the mind it was ringing that China is a story that has come to an end.
As I am writing this, there is news that Malaysia is likely to collapse in a day or two, they have become number one in corruption and Global stock markets have tumbled, India has lost more than 4% on the main indices.
Global markets are going to be bearish for some time to come as the pressure of the current fall will take time to recoup.
Should you worry about your investment portfolio?
Absolutely yes, if you don’t have a exit mechanism. If there is a system in place, all the weak stocks will wither and weed out giving space for attractive and vibrant new comers after the turmoil is over.