Thursday, November 10, 2011

Thinking about Investing in Stocks or Mutual Funds?

While I write this, the markets worldwide are seized with panic due to Greece, Italy, Portugal, US Mortgages and what not. However the reason for this post is not to advise you (I am not qualified to give any financial advice). I just want to share one experience:

5 years ago, if you talked to anyone, you would hear that they were very bullish on the following sectors:
  • Airlines in India
  • Companies servicing Indian Infrastructure
  • Real Estate
  • Cellphones and Telecom providers in India.
Well this is where we are today (after the economy has been growing at around 8% per annum since the last five years!) :
  • Airlines in India - Most are on the verge on bankruptcy. Kingfisher does not have money for fuel, Indian Airlines is nearly dead, all carriers are showing heavy losses.
  • Companies servicing Indian Infrastructure - The Infrastructure Index is doing worse than NIFTY/SENSEX
  • Real Estate - All the major players like DLF/Prestige etc have literally crashed.
  • Cellphones and Telecom providers in India - Reliance Infocomm, Airtel, Tata Indicom - well do you still want to hear the story again?
net net - It is practically impossible to take sectoral calls. Just be careful about what you hear and filter the noise.

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