Wish you all a very happy and prosperous new year

Year 2007 has been yet another blockbuster year for the stock markets. The market saw a spectacular bull run for the fifth consecutive year.
The sensex this year was up by more than 45%. The broader indices (Midcap and Smallcap) this year posted exceptional returns outperforming the sensex returns.

Year 2008 can be challenging and as per analyst predictions can turn out to be a first bear market after 5 years of spectacular bull run. The questions remains whether the year forward can offset the global economy challenges and continue the bull market running streak.

The challenges that remain ahead in 2008 are

1) Impact due to US Credit Crisis.
2) Deteriorating Consumer Spending in developed economies.
3) Rising cost of commodities and crude oil.

Domestic challenges include

1) High crude oil prices which Indian markets has still not taken into consideration.
2) Continuing Rupee Appreciation.
3) High raw material prices.

Although major challenges are attributed towards developed economy like US, Europe and Japan, we cannot rule out the fact the correction in the developed economy is likely to have a repercussion on the rest of the world. Albeit the fact that the Indian economy has come to stand on stronger structural pillars, the growth trajectory is still highly dependent on the developed economy.

In the upcoming year inspite of the economical challenges we are positive on select pharma stocks, Infrastructure and Energy Sector, Select Automobile counter. We caution our subscriber and readers to take a conservative call on Textile and select metal stocks. We are expecting some revival in International Sugar prices and recommend a wait, watch and pick strategy on this counter. We see a consolidation phase in IT arena with more M&A, at the sametime expect this sector to underperform the broader indices.

Coming soon... Watch out our blog for top picks of the year 2008.

Our performance

As of today our blog completed four months, thanks to the continuing support of our subscribers and readers. Our subscriber feedback has been the main driver in Improving the content of our blog.

All of our recommended stocks have ended this year on a positive note. Neyveli Lignite (241%), Alok Textiles (64%), Chennai Petro (51%), Hotel Leela (46%), Dish TV (41%), Orchid Chemical (33%) and TNPL (27%) have been the star performers.

With this we wish you once again a very happy and prosperous new year and like to start the new year with the quote of Warren Buffet, the greatest investor of the era,
"Rule No.1: Never lose money. Rule No.2: Never forget rule No.1"

Warm Wishes,
Srivatsan Srinivasan