Synopsis
Reduce, Re-use, Re-purpose, Re-cycle. These words are not only useful for the environment but there are times when they become equally applicable in stock markets. Especially in some sectors where the valuations are not only high but there are headwinds which are probably not visible to all. Real estate, a sector which after remaining in the dump for ages has done extremely well. Now given the fact that there was too much money which was chasing the Indian paper, in a short period of time valuations have reached extremely high. Valuations for business which is an asset heavy business, where regulatory tangles are very common and has a history where things have turned bad very quickly without even the best of the management realizing it. So, probably it is time to have re-look at the real estate stocks in one’s portfolio and reduce, reuse and repurpose this part of the portfolio.
While the sectoral selling with IT and financial services stocks is very common because they form a large part of Nifty and sensex. But in the last two weeks, there are two other sectors, Auto and Real estate where signs of basket selling or sectoral selling were clearly visible. The more noticeable part is real estate, because unlike auto, real estate has a different operating matrix, a southern India based real estate company has a higher
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