Nifty likely to touch 6800 by October'13

1) In my view, Nifty over next 4 months (i.e. by around October'2013) is headed towards a new high of around 6800-7000.

2) It might well happen much earlier depending on onset/progress of Monsoon and further softening of interest rates by RBI.

3) Nifty progress to 6800-7000 may also be aided by likely further softening of Gold over next 4 months.

4) Final target of nifty in its journey into new territory is likely to be much higher than 6800-7000. But, it is difficult to predict the timing for the same.

Update on Umang Dairy

1)   Umang has declared dividend for financial year 2012-13 in its meeting held on 04.05.13.

2)   Below is a news item on Umang.  

           

"FnBnews - Thursday, May 09, 2013 08:00 IST 
Our Bureau, Mumbai

R C Periwal, director, Umang Dairies, observed, “Umang is in an expansion mode and during the financial year 2012-13 it enhanced capacity of its drying plant from 3 lakh litre per day to 4.5 lakh litre per day. In the backdrop of an overall depressed economic scenario, an increase of 16% in the top line and 17% in the bottom line is good performance. Umang is working on plans to expand its product portfolio and will launch some new products shortly. It is also exploring possibilities of acquisition of some existing dairy company having synergy with its product portfolio.”"

I have following observations on the above. Umang management is behaving like multinational companies. Distributing most of profits to its investors immediately after coming out of BIFR is like multinationals do. 

If Umang’s approach remains like this in future, I believe that Umang shall create wealth for itself and all its stakeholders and go on to become a leading dairy brand all over India. Umang shall become one of the best consumer stocks in days, months and years to come.

Gold likely to fall to $ 1050 and may be much more

In my view, Gold in next 18 months is headed towards $ 1050 (30 % lower from its present level of around $ 1385 (18.04.2013). It might well happen within 6 months (i.e. sometimes between September’2013 to November’2013). It may bounce back to around $ 1450 before starting its downward journey again.

The final low may be as low as $ 750. 

Various resistances on the way down shall be :-

(1) $ 1326

(2) $ 1256

(3) $ 1166

(4) $ 1068

(5) $ 987 (major Resistance)

Stocks worth buying after recent correction

I think that the following stocks mentioned by me in my earlier blogs for long term have become worth buying after recent correction. I still maintain my long term targets for each stock, as stated in the respective blogs posted earlier.

1) Umang dairy                     - Present rate Rs. 42   - (Recent high - 68 on 05.12.12) - (Correction from recent top - 38 %)

2) Interlink petroleum          - Present rate Rs. 24   - (Recent high - 33 on 18.01.12) - (Correction from recent top - 38 %)

3) Winsome diamond          - Present rate Rs. 26   - (Recent high - 41 on 03.01.13) - (Correction from recent top - 37 %)

4) Raymond                           - Present rate Rs. 317 - (Recent high - 484 on 11.12.12) - (Correction from recent top - 37 %)

5) Brandhouse retail        - Present rate Rs. 9.60 - (Recent high - 17.25 on 07.12.12) - (Correction from recent top - 55 %)

Some priceless quotations on stock markets. Must read for every investor.

Here are some of the best quotations on stock markets. These are priceless words of wisdom which are a must read for every investor on regular basis. 

1) “Great investment opportunities come around when excellent companies are surrounded by unusual circumstances that cause the stock to be misappraised.” - Warren Buffet

2)  “Markets can remain irrational longer than you can remain solvent” - John Maynard Keynes

3) "90 % of the people in the stock market, professionals and amateurs alike, simply haven’t done enough homework.” - William J.O’Neil

4) “Sometimes your best investments are the ones you don’t make.” - Donald Trump

5) “No matter what information you have, no matter what you are doing, you can be wrong.” - Larry Hite, Mint Investment Management Company

6) “Stocks are bought on expectations, not facts.”  -  Gerald M. Loeb

7)  “Tis the part of a wise man to keep himself today for tomorrow, and not venture all his eggs in one basket.” - Miguel de Carvantes

8) “The investor’s chief problem and even his worst enemy are likely to be himself.” - Peter Lynch

9) “Buy on the cannons, sell on the trumpets.” - Old French Proverb

10) “The four most dangerous words in investing are: It’s different this time.” - Sir John Templeton, legendary investor philanthropist

11) “Emotions are your worst enemy in the stock market.” - Don Hays

12)  “It is a myth that profits are higher in fast growing industries.” - John Kay, Economist and academic

13)  “A market is the combined behaviour of thousands of people responding to information, misinformation and whim.” - Kenneth Chang

Interlink Petroleum (likely multi bagger in the making)

Interlink Petroleum Limited (last quoted at Rs. 31 on 22.01.13) is engaged in the exploration and production of oil & gas. As per update dated 29.11.12 on BSE, the Government of India (through Directorate General of Hydrocarbon) has considered the following for its Modhera field.

(1)     2P STOIIP (Stock tank oil initially in place) of 2.3835 MMBO may be agreed for Modhera field.

(2)     EUR (Estimated ultimate recovery) for the field would be considered later by GOI after conclusive testing in wells Modhera#1 and Modhera#2.

If I have understood the above correctly, the above field has minimum 2.38 Million barrels of oil on conservative basis as per Government of India and the company may go ahead  for commercial production of the same. Ultimate reserves may be much higher (would be considered later by GOI after conclusive testing in wells Modhera#1 and Modhera#2).

Further, if my calculations are right, this initial conservative estimate of 2.3835 Million barrels of oil reserve amounts to 1222 crores (based on crude oil price of $ 95 per barrel). If these reserves are exploited over a period of around 10 years, it shall result in an annual turnover of around 120 crores and a net profit of may be 45-50 crores. With same kind of turnover and net profit, Selan Exploration is quoting at Rs. 303. Expect Interlink Petroleum to reach the said level once commercial production of oil starts.

Winsome Diamond - Getting out of hibernation

It appears that Winsome diamond is finally getting out of hibernation. Please go through my post dated 22^nd November 2011 titled “Winsome Diamond vs. Gitanjali Gems” for likely targets that Winsome might achieve.

Some more facts about Winsome diamond (Erstwhile Su-raj diamond) :

1)      Winsome is the first Company in Indian Diamond industry to be listed on stock exchange in 1986.

2)      Its stock closed at Rs. 340 on 17.05.94 (see BSE charts).