Dear Friends,
For several years in a row the TED XI stocks have demonstrated tremendous outperformance and the last quarter was no different. The biggest conviction payoff was Hawkins Cooker a company that seems to have got its act together. If the promoters of this company act rationally then there is a long way to go for this stock.
This has been a consumer led bull market and many at TED have got the big picture correct. A strange dichotomy in this market is while several consumer companies have gone on to make a new high several times over the previous one some solid consumer names like United Spirits and Pantaloon Retail have lagged the market clearly indicating that this market is willing to pay for quality earnings only.
The dichotomy also indicates that the consumer stocks have some more way to go because unless there is a mania these stocks would not collapse and if there is a mania everything relating to consumer should go through the roof which is not happening.
But we are playing for earnings and not a bubble because an investor who looks for bubble in the market is like the man who killed the hen that laid the golden egg. It is better to count the eggs each day then to kill the hen in selfish greed but who are we to define what the markets will do we can just participate in the game and maybe at the right opportune time fold the cards and go to the next table something which not many have been able to do.
Regards,
Basant Maheshwari
Edited by basant - 03/Jul/2011 at 6:02pm