StockSastra

10 Best performing stocks of the year 2011

Year 2011 is a very tough for stock market players and there are only few places to hide due to high market volatility. This year is stock pickers market, very few stocks are outperformed the indices and front line indices stuck in a 15% range through out year. The top 10 best performing shares are shown in the following table.

Ten Worst performing stocks for the Year-2011

The worst performing sectors so far this year are Sugar, Infra, Real estate, Banks and airline stocks.
Infrastructure companies are the worst among them lot of them lost more than 80% of their value. when we check top 10 fallen stocks most of them are from infra and real estate stocks. List of top 10 as follows…

Long term association with Stock Markets will de-risk your investment process:

Long Term is the mantra:

If you stay for long term your chances of loosing money will be reduced substantially. Patience is always rewarded. Below chart tells the whole story of the Indian stock market. If you stay above 10 year period your annualized returns will be above 15% (Sure, I hope you stick to our rule no:1 staying with quality stocks ) and your risk of capital erosion is totally eliminated.

As per income tax assessment or calculations 1 year is a long term and that wont attract any capital gains tax. But most of the investors fail to make capital gains in a year and the following table tells us 11 out of 32 years are loss making years in the capital market and even that risk continues if you stay in the market 5 years or so. If the investor extends his time horizon to much long period his risk levels comes down substantially and when the investor opts for very long term like10 to 15 years or more risk is almost eliminated.

Pledge Shares  by promoters acts like time bombs in Bearish Times:

The period from 1993 to 2003 is worst for the Indian stock market and also for people who involved in it. Biggest victims are almost all NBFC companies; Stock broking firms, Morgan Stanley mutual fund, UTI, and GTB. I can fairly assume that the same will repeat every time market crashes, In coming bearish times pledge shares by promoters act like time bombs and destroys promoters and share holders wealth. Recent example is KSOIL which fell to Rs.7 from Rs.50. Never invest in the companies if promoter shares pledged, unless they are very reliable like Tata Group.

The following table tells how the long term investor has an edge over short term player:

% figures are average annual returns if one stays for that long period.

Benchmark index SENSEX has started in the year 1979 with base level 100. When we compiled all the data from the March’ 1979 to March’2011, found some interesting points which are discussed below:

1. Risk can be totally avoided if you are a long term investor.

2. 17% + Returns are assured if you stay for more than 10 years, so one can beat the inflation easily.

3. Dividends are added advantage for the long term player.

4. Because you are a long term player your returns are tax free.

What is the game plan now for investing:

1. Be a long term player.

2. Stick to Quality stocks. Unable to find or confused to find some just invest in Index ETFs.

3. Wait for the dips, allocate more funds when the Index PE trading low and less if Index PE is more.

4. Never take a loan for your investments, because even long term investor getting only 17% -19% returns. So most of the returns will be taken away by the interest component.

If you are willing take the advantage from market, must be a long term player with a common sense approach. One must always remember THE RULE for the investment game “Preserve your capital at all the times” and there is no welfare plan for the people who lose in the stock market.

Ten Best Stocks of the Year 2011

IPOs Issued and Listed in the year 2007:

* Issue cancelled due to poor response / bad market condition