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  • Raghvendra Narendra Dhoot
    Raghvendra Narendra Dhoot    Group moderator
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    Raghav's Picks presents the Alpha (Sensex Beater) Portfolio
    The Sensex after 1 year from now

    On the 10th of August 2007 , the BSE Sensex closed at 14868.25.At the current Sensex EPS (trailing 4 quarters) of Rs.740, the P/E of the index works out to 20.1

    Going forward, what could be the EPS of the Sensex, one year from now?

    A few simple economic equations & conservative assumptions can throw light on the same:-

    Assume that the GDP grows @ 8% over the next one year

    Expected GDP Growth – 8%

    Assume that the inflation remains around 4% over the next one year

    Expected Inflation – 4%

    Nominal growth rate of the economy

    8% + 4% = 12%

    Assume that the profits of the Sensex companies grow 50% faster than the economy

    12% * 1.5 = 18%

    Expected Sensex EPS, one year from now

    740 * 1.18 = 873

    What has been the Sensex P/E band over the last 12 months?

    Highest P/E of 23.25 on 15th January 2007 , when the Sensex was at 14129.64

    Lowest P/E of 19.06 on 5th March 2007, when the Sensex was at 12415.04

    Average P/E between 10th August 2006 and 10th August 2007 - 21.24

    If we assume that the Sensex continues to trade between the same P/E range, 12 months from now, then with an expected EPS of Rs.873 ,the range works out to:-

    EPS 873 P/E 23.25 Sensex 20297.25 Upside from current levels (%) 36.5%

    EPS 873 P/E 19.06 Sensex 16639.38 Upside from current levels (%) 11.9%

    EPS 873 P/E 21.24 Sensex 18542.52 Upside from current levels (%) 24.7%

    What does the Alpha Portfolio seek to achieve?

    The Raghav's Picks Alpha Portfolio is a carefully selected portfolio of 30 large cap stocks with a pre-determined allocation to each stock. The said portfolio seeks to outperform the Sensex by a reasonable margin over the
    next 12 months in all the possible scenarios outlined above.

    There is no guarantee that the GDP growth /Inflation will move in the way as mentioned above & that the Sensex companies will clock an 18% year-on-year growth in Net Profits/EPS & that the Sensex will trade in a P/E band of
    19.06 to 23.25.These are Macro or "Top-Down" issues which will play themselves out over the next 12 months. There will be quarters when these issues are in favor of the market and there will be quarters when adverse
    global and local factors will bring out the bears out of hibernation.

    The stocks of the Alpha Portfolio are selected using a "Bottom-Up" approach wherein the price performance of the stocks will be determined by the earnings of the stocks.

    Sector Allocation.

    Please click here
    http://raghavs-picks.googlegroups.com/web/Raghav%27s+Picks+A...

    The Alpha Portfolio - Pricing

    The Raghav's Picks Alpha Portfolio is available to all the current paid subscribers of the following newsletters:

    Raghav's Picks Premium
    7777 Equity Calls
    7777 F&O Calls
    7777 Mutual Fund Calls

    All those who subscribe to any of the above services before the 20th of August will also get a copy of the report.

    If you wish to purchase the report as a stand alone service, you can do so at a price of Rs.1000 before the 15th of August 2007.

    After 15th August and till the valuations of the portfolio stocks remain in the BUY zone, the report can be purchased for Rs.1500 .

    The Alpha Portfolio will be monitored continuously and you will be advised to BOOK PROFITS/EXIT at appropriate times.

    How to pay:

    If you wish to subscribe to any of my regular services, please mail me accordingly and I'll send the details of the services along with the payment plans.

    If you wish to purchase only the Alpha Portfolio, you can deposit a local cheque (no cash please) for Rs.1000/1500 in the nearest ICICI Bank branch in the following a/c

    A/c # 0012 01 051820
    Name - Raghvendra Narendra Dhoot
    Branch – C-Scheme,Jaipur

    If you have an a/c with ICICI Bank,you can remit the payment thru transfer cheques/net banking.

    Please mail me the payment details, along with your Name, Email Address, City and Mobile Number on rnd24566@gmail.com after you have done the payment.

    Past Performance of Investment Calls posted


    Please click here
    http://raghavs-picks.googlegroups.com/web/Raghav%27s+Picks+A...

    Disclaimer & Exclusion of Liability

    Please click here
    http://raghavs-picks.googlegroups.com/web/Raghav%27s+Picks+A...


    Raghav @ Raghav's Picks
    • 12 Aug 2007, 3:49 pm