A see-saw rally for retail investors

K Ramachandran, a mid to long-term retail investor, regrets selling Grasim Industries and BHEL very early even as the Sensex scaled new highs. He bought 400 shares of Grasim couple of years back at around Rs 350 and sold it at Rs 425 when it had just begun its biggest upmove.

On Friday, the stock is quoting around Rs 1,300 levels! However, Ramachandran is happy with the 20 per cent returns that he earned from Infosys and Wipro within a span of two months.

Though there are several investors such as Ramachandran who are ruing an early exit from the market, what with the Sensex hitting 8000 in just 55 trading sessions, there are another bunch of investors who are laughing all their way to the bank.

The biggest gainers of the rally have been investors who slept over their investments. Rohit Kachroo, 33, an international business manager with a packaging company, is one such investor who prefers to buy scrips and sit through good and bad times.

"I think good companies will do well over a period. So it is better to stay invested in large companies which have strong businesses," says Kachroo.

He bought shares of Reliance Industries, Larsen & Toubro, BHEL, Hindustan Lever and Bharat Forge apart from a couple of mutual funds schemes in June 2003.

All of his shares have performed remarkably well in the last two years, more than doubling his portfolio easily. "But I do not keep count since I have no intention to sell right now" he says.

And then, there is another class of investors who burnt their fingers in the last two booms. Interestingly, several reminiscences of the past bull runs "" read junk stocks "" have seen a phenomenal rise in the recent bull run. Pushpa Hariharan, 50, invested aggressively in the IPO boom in 1994 and again during the IT boom but was left with worthless pieces of paper in the crash that followed. But from those junks, some stocks such as Spicejet (erstwhile Modi Luft), Moser Baer (bought during the IPO), Kamat Hotels and have come out with flying colours.

Hariharan, who had sworn never to invest in equities ever again, is slowing gaining confidence in stocks once again.

"I had incurred huge losses after the 1994 boom. But thankfully some of those stocks are back in the reckoning now. I have sold some of my shares at decent prices. Now I invest in mutual funds," she said.

The heightened volatility in the market has definitely boosted day trading. Bharat Mathuria, a day trader is among those who like to take home some profits at the end of every day. Mathuria speculates with a corpus of Rs 5 lakh and is quite optimisitc about the market and feels that the fundamentals are good.

However, he expects a correction up to 5 per cent in the market. " Many scrips in the B and Z group are overpriced but in the long run, cement, technology and steel will rule the roost, he added.