Shifting focus

As Mr Shankar Sharma said on CNBC and it is also apparent that the large caps haven't been as profitable in the recent times as much the small caps and mid caps have been. The large caps especially companies like Reliance, Tata, Infosys, TCS etc have established business but haven't seen much growth in the recent times. There wern't much rise in the earnings, rather there were reduction in earnings of some. In many companies the share prices also haven't gained much. While when we have a look at lower capital companies ie the mid caps and the small caps, we can see that many companies have been growing consistently and posting good results.
Shifting focus from large caps to small and large caps will be quite profitable. Hedging of risks should be done.However putting all eggs in one basket wouldn't be a prudent policy. Proper balance between high risk and low risk stocks should be maintained as per the risk appetite. Diversification protects from the threat of making huge losses due to downfall of a particular sector or similar bad news. Large caps do not have much risk but they haven't witnessed much growth in earnings as well as share prices. On the other hand small and mid caps have been giving multiple returns. Many have multiplied 3x 4x 5x within decent time period. 

Now in the coming time, we might see some small caps turning into mid caps and mid caps into large. The big companies largely are expected to remain stagnant except a few who have entered new horizons and the ones in pharma with good operating efficiency. Speaking about about long term now, one must go for fundamentally strong small cap companies operating in hot sectors like infra, defence, logistics, digital marketing, PEB products which is a gift of the Make in India concept introduced by PM Shri Narendra Modi. These sectors are expected to have a great future ahead.
Finding out gems from a big pile of stocks isn't everyone's cup of tea. It requires knowledge, analytical skills and last but the most important factor which is patience. But it's isn't that difficult too, what is important is sticking to the basics and applying them properly.
In finding out great picks, value investing and fundamental analysis together work the best. They help in finding out good picks. Fundamentals go a long way in deciding the company's future in the longer term which is a period of not less than 18 months atleast.
Long term investment in stocks gives mind boggling returns and is one of the best return giving investment over all others including gold, bonds, property.
Finding out your growth pick and sticking to it, that's what is required in Stock market.
Go long, stay invested.
Details about Value investing and fundamental analysis will be posted on the blog in the coming times which will help in finding multibagger of the future.
Share the knowledge everyone.
Happy investing.