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Wednesday, January 23, 2008

Brokers are scared too-restrain from giving any tips

Stock Brokers and brokerage houses usually give trading tips to general public occasionally (such as BUY, SELL or HOLD particular security. This week’s Sensex fall has thoroughly scared not just retail investors but brokerage houses as well. Yesterday BSE SENSEX reached a bottom of 15k and obviously it was best time ever to divert all your funds to stock market and grab quality stocks as they were available at such a cheap price. However I observed that not a single broker dared to give a BUY call on any of the securities yesterday (22nd Jan 2008) and only one call was issued on 21st. (Probably they are busy buying now and once they are done they will release a BUY call so that everyone starts buying and prices go up)

If I were in their shoes I would have given BUY call on almost all fundamentally strong companies. This has reassured my belief that it may not be a best practice to trade purely based on calls given by brokerage houses and rely more on one’s personal analysis and instincts while trading.
Above: Screen shot taken today (23rd Jan 08) morning from Rediff Money which showed that no broker tips were issued on 22nd Jan 08. Below: Image taken same day evening showing newly issued BUY calls.

Updates: Now recommendations have started flowing in, a little late, in my view.

5 comments :

Rajesh Kumar said...

It was quite a different story on the day of the crash however. There were 2 flashes on one of the channels. The first one read, 'A technical correction was due, says Enam' (approx wordings). The second one said,'Good performing stocks will continue to attract buyers'(again approx wordings).

In essense, they had safe guarded themselves somewhat. If it goes down, it is technical correction. If it goes up, it is good stocks getting attention. Either way, whatever happens has already been predicted by the broker. How cool!

Shrinidhi Hande said...

Well said

snramesh said...

Good blog & interesting articles to read.
Wonder if you have narrowed down and could share your stock picks please, since I have not seen any recom at your end in this year.

rgds
Ramesh

Shrinidhi Hande said...

Thanks Ramesh.

Will reply in detail later.

Shrinidhi Hande said...

Ramesh:

Most of my holdings are in IT and Pharma stocks,with small fraction scattered around other sectors.

Most of them running in loss as of now. I am holding tight with long term perspective and confidence that market will return to 21k level in near future.

Market being choppy I dont want to give any specific recos at this stage. In general, if a fundamentally strong scrip is available near its 52 week low price it will be a good decision to grab some and hold tight. Infy, Aurobindo pharma, JP Associates, JK Lakshmi, TVS Motor, Ashok Leyland are few that look good.

If you're uncertain invest in Mutual funds and leave it to the judgement of fund managers.