Valuation plays beckon- ithought’s market wrap

Quick Edit:

A slowing domestic economy is a given. Agriculture will see negative growth if the present scenario prevails. The hunt for a safe haven in equity only gets tougher by the day. The very definition of a safe haven is set to change from an absolute one to a relative one. What investors need to do is to identify the safest sector among various options. That brings us back to technology and IT services. With almost all major companies enjoying debt free status, high cash reserves, stable businesses, reasonable valuations and strong managements, the sectors positives far outweigh the negatives of slowing growth. The logic is simple. When every sector faces slowing growth, the one to show greater resilience will be that which enjoys stronger fundamentals. The realization is a matter of time.

Invest Speak:

Reading is a constant in an investor’s daily grind. Perspectives evolve, ideas emerge and conviction grows when an investor reads the right things. In bear markets, reading about value investing is an obvious choice. Reading about the lives of three of the greatest value investors of all time, one noticed that all of them lived to their nineties. They worked till the very end and loved what they did. Investing didn’t lead to their burn out like it afflicts modern day investment bankers. They learned to doubt hype, disbelieve myths, thrive on external panic and carried a cool head through their lives. Wealth creation was a process where there was no place for extreme emotions. These are times to evolve and raise the quality of your investment thinking. Returns will follow you.

 

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