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Goldmine in Mid-caps


It is time to change the tracks especially for those investors who are on a lapping spree of the falling mid-caps and the small-caps now a days just to make up for the lost opportunities of the recent past just because they had missed the bus definitely need to not only change the tracks but also the gears. These are the times when there is no point in chasing the multi-baggers because it would be just like catching flying arrow. Since these are the testing times it would be better to go for the shares with the quality Mid-caps where the fundamentals are strong so that as an investor or else opting for the neo unique business models so that you are very well prepared to wade through the troubled waters.

            This would be a far better approach in comparison to the earlier strategy of picking up the stocks which would prove to be the potential winners in an usual economic rebound triggered by the investment spending. Certain things are visible on the horizon projecting the ground reality that the revival of the economy is just a few steps ahead and the earnings of the companies are yet to bottom out and the market participants are just to face few hiccups and air pockets before the takeoff!!!! With most of the stocks at steep valuation and huge divergence is expected between the performances of the strong and the weak companies especially in those companies which are lagging in the fundamentals which is now already being witnessed in the mid-caps and the small-caps. 

              If we see at the discount on the CNX Mid-cap Index which was trading to the benchmark nifty has a widened gap up to 32% from their earlier lows of say 17% between the last August- September. The market capitalization of the 274 mid-cap between Rs2000 crores to Rs10,000 crores  close to 75 stocks have fallen between 20% to 50% from their respective highs this year itself and about 125 of the stocks are 10% to 20% below their highs and this is never a wise advice for the impatient or impulsive investors who are on the poaching of the potential winners, as the investment should always be more of healthy disciplined habit for being a winner in the long run.