BSE SmallCap India Analysis. How Long a Bear Market can Last?

I once listened on TV Channel that bear market last for only 1 or 1 and half year max. That time more than one year has passed. I thought may be bear market will die soon and If Not then its days are numbered.


Google Finance showing S&P BSE SmallCap index from Apr 2003. I checked how long correction in this index stayed.

Here are two corrections (Only long and big corrections):

1. Jan 2008 - Mar 2009: 1 year 2 months
2. Oct 2010 - July 2013: 2 years and 10 months
3. Jan 2018 - ? : 1 year and 6 months has passed. If this is the end? Only time will tell.

BSE SmallCap and BSE MidCap go together as we can see in this chart. 

BSE SmallCap and Midcap from 2003

In this chart, you can also see the data I have given. The data is roughly taken from the chart itself. So, broader market correction can last longer than 1 and half year and no need to find cushion in this idea. In next bear market, you know you should sell if you sense long bear market. Earlier you sell, more money you save and that is like earned money. If you can deploy one bull market money in next bull market then you can earn wealth ELSE just work without pay.

Most of the Retail Investors invest in SmallCap or MidCap. So, thinking only about 30 stocks (Sensex) or Nifty 50 is no use. Broader market earns us money. Even to biggies, broader market earn money. Only rarest of rare may be investing only in Sensex Index or Nifty ETF.

Is Price Pattern any indication of something wrong in Stock!

I was looking at Gitanjali Gems price over longer term. I see price pattern is very unstable when seen over very long term.

Price pattern of PC Jeweller over very long term is looking good:

I also see from very long Gitanjali Gems has not been rated by any rating agencies. So, are these indications to red alert us!

Recently PC Jeweller has corrected a lot and reasons are Vakrangee news and Nirav Modi. PC Jeweller has been given A1 and A from Crisil.

Saurabh Mukherjea again talked about those 3 themes and added more ideas

Saurabh Mukherjea has recommended to buy three themes which I mentioned in a post as summary and given link to read more. He again emphasized those three themes and given more clue to pick stocks from those space.

His three themes are in short:
Black to white plays, financial savings plays and elite consumption play.

This time he added that many Black to white play are not direct play but indirectly they will benefit hugely. He added that replacement market is very much unorganized and that can be a good pick. He given example of headlight suppliers. He said that headlight supplier of Car etc has many small players who don't pay taxes and those will be at disadvantageous position in GST regime.

For example, the market for replacing car headlights, market where I reckon half the suppliers of the replacement for headlights, half the suppliers are black.

The leading headlight supplier is listed and therefore worth looking at. Similarly, the replacement market for almost every organized product you care to imagine in our country have a heavy black component and that black component actually you can almost literally see it month upon month coming under pressure in the wake of GST implementation.

Read the masterpiece here - Saurabh Mukherjea of Ambit Capital has idea of sectors you should use to pick stocks

Microcap Investing: A very risky ride even for an astute investor

A story about how even best of the investment research can go wrong.The investor research about the stock for 1 year. Visited fair, researched about the market share, checked on forums and many more. But bad management made it all wrong.

Read:
Microcap Investing: How even Astute Investors Can Get Taken for a Ride

“Lesson for my fellow investors is, to repeat the quote from legend, ‘if the management does not have integrity, then their intelligence and energy will kill you’.