🔷️Perfect Time to buy cyclical stocks is when no one wants to buy them even if bussiness is promising and Available at good valuation than past.
🔷️Same situation is seen in Auto & Auto Ancillary stocks.Currently no one wants to bet on this sector as many headwinds are there for this industry.There has been almost 18 months of down cycle for Auto industry And can continue for next few qtrs also But sunny days.
🔷️Most make the mistake of buying cyclicals Stocks at the top when everyone wants to buy them and end up loosing money As valuation becomes expensive with regards to growth and than there is correction in stock sooner or later.
🔷️ As a stock market investor, how can You make use of the economic slowdown which we are witnessing in India right now?
🔷️Current situation gives opportunity to Add Quality Bussiness at very attractive valuation but only for those who has time frame of 3 to 5 years or more.
🔷️Few Quality Names To keep on Radar – Ashok Leyland,Maruti,Tata Motors,Escorts,TVS Motors,Hero Motocorp , Jay bharat Maruti,PPAP Auto,Automotive Axle,Jamna Auto,Jbm Auto,Olectra Greentech,Munjal Auto etc. Today all this scripts are available almost at 50% to 75% discount from 2 years high & once market moves which we feel 2020 mid or max 2020 year end party would get start for all MIDCAP & Smallcap & Auto sector would ride the boom in next phase.
🔷️The sector that is generally affected the most in an economic slowdown is the auto sector. And hence newspapers have been full of slowdown news about this sector for the last few months.There is huge discounts on four wheeler to clear huge stock by auto companies and Even BS VI Norm would be applicable mostly from Jan 2020.
🔷️Most important When Will India recover from the economic slowdown at some point?
🔷️Will sales of passenger & commercial vehicles increase again sometime in the future?
The answer is a clear YES – History tells us this. Inspite of Asian currency crisis in 1997, Tech Bubble Bursting of 2001, Global Financial crisis in 2008, European Debt Problem and Taper Tantrum in 2013, China debt bubble in 2016.
🔷️Indian economy has grown rapidly at an average pace of 6%+ over the last 30 years. Though the current problems we are facing like US-China trade war, Bank & NBFC NPA Troubles, consumption slowdown are unique problems these times, India has always come out of economic problems and done better.
🔷️In fact, at this point we are in a better overall situation – Inflation is at historical Lows, current account deficits are under control, crude oil prices are low and don’t seem to be increasing in the near future, Indian forex reserves are abundant, political stability is the best in several decades.Rising dollar is very serious issue.
Disc – All views expressed are personal and only for study and Educational purpose. Consult your financial advisor before investing or taking any position based on above article.