The re-rating in the offing……..

The markets are "re-rating the stock valuations" time and again and every time . This time also no exception to re-rate the stocks to make some are as “Market Darlings” and some are “Destitutes”. The history through some light on the market movements and the market participants understand the need to observe the change in the CHOICE.
The political developments, economy and the business environment will influence the price movements. Now the situation for the telecom industry in now a place for fierce competition and the new players (a beeline queue for licenses) are threatening the market share of the existing players. Now the top two players Bharti and RCOM are fully valued at this point in time. The Idea has some room left for price appreciation but the others will survive with +5 % up side and – 20 to 25% on down side.
The power sector also reached a stage where there are more proposals than the start up of work at the ground. The construction work will take 3-4 years for each project and the prices zoomed on the hopes of applications and approvals. In India, the bureaucratic hurdles and political mileage of the oppositions in encouraging a protest is clearly visible in POSCO and Mittal Steel projects. The SEZ policy was well written on the papers than on the implementation. So beware of the negative news that favours the bears.
Now the momentum is in favour of the bulls and likely to stay till the expiry. The fresh buying in the hot stocks of today can become monuments for future.
Try to identify those stocks that can yield better margins in their balance sheets rather than following the trend assuming that it will continue in future also. Just recollect the fate of Sugar industry and remember the fate of Softwares.
"Think differently" doesn’t mean to be eccentric. Try to analyse the history, understand the present and Act for the Future. Good Luck.