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On Monday, when the whole market was reeling under pressure, there was one sector which was able to keep its head above water both at the level of indices and internal market breadth of that sector. It was IT sectors, it is not the first time that this relative outperformance has been witnessed on the street, in recent months, there have been instances where on the day market has been under pressure, IT stocks have moved upward. The only difference is frequency, magnitude and the breadth of the sector which is involved on the day of outperformance by the sector. Frequency has increased, more I...

One sector which bore the brunt of the winter of capital spending was the capital goods and engineering sector. However, thanks to capital expenditure by the government, segment by segment they are making a comeback. First road and infrastructure, then defence and railways. The million dollar question is what next ? There is a high probability that not one but a host of sectors and their sub segments might be getting added to the list as private sector capex shows signs of revival. This would mean that more engineering and capital good companies would see a better order book. The only differen...

In the stock markets, knowing risk and managing the risks are two different things. Managing the risk is more complicated than it appears as it involves more hard work and at times going against the narrative prevailing on the street. At this point of time, valuations in the small cap segment of the market are extremely high is the risk. How many are thinking of managing it ? Now there are two ways to manage this risk. First keep your exposure low in this segment. Second, if one is still looking for an increase in exposure to small caps then put more checks and balances before buying the stock...

There are some sectors where the macro structure is such that for one or the other reasons the overall growth is higher. This is not to say that growth comes without phases of slowdown, but when tailwinds come they are able to take care of all the slowdown and over a period of time, growth is much better. So, at times valuations are high, take exposure to stocks and sectors where at least there is high probability of growth ensuring that over a period of time, valuations get normalized. When we talk of market size it is not only India but in some cases global markets also. Second, look at busi...

At a time when everything on the street appears good and green, there is a case of being selective and cautious. Cautious in terms of not going overboard with taking exposure to a certain stock, selective about what one is buying. The reason, even if it is in a raging bull market, the street never stays in this all good and green mode forever. When the street starts to become selective and gets into correction mode, it is stocks where there has been improvements in the business operating matrix tend to weather the storm better. So as an investor, one needs to look at every sector and company a...