Further, as I expressed yesterday I want to increase my India exposure. All I have are those 2 names and then a closed end fund "India Fund" (IFN) in the portfolio. With India Fund also down 6%, I am also increasing my exposure in this name. I also hope this one falls more so I can buy at better prices. What is inside the India Fund? You can find out here. I like this name, because aside from smallish bank exposure it holds stocks that I cannot buy here in the US as ADRs.
My thinking is when/if China ever does fall (stock market), it will have a psychological effect on other emerging markets so I can get some more Indian stocks at that point (along with Brazil). Right now the names are still extended, but not quite so much as 24 hours ago.
I am also adding 2 new names to the portfolio, both Indian stocks
1) Tata Motors (TTM). Tata Motors is down 8% today after a huge run. I have been watching this stock for over a year and I was surprised it was able to run like this. After peaking around $22 back in Jan of this year the stock fell 3 times to the $16 level throughout the year - April, June, August. In the last month it's made a hectic run from $17 to $21 or nearly 25%. The stock has pulled back to sub $19 from a high of $21 yesterday, an intraday drop of nearly 10%, so I am establishing a position here with a 700 shares buy, $13.2K, or 1.15% of the fund.
Tata Motors is part of the Tata Group (think General Electric of India) with their hands in everything. Unfortunately the more exciting parts of the Tata Group are not available to buy here in the US, and the automotive arm has some serious competition but again, this is a basket buy, and not a huge position.
2) A name I am more excited about because it plays on two favored themes, metals AND India is Sterlite Industries (SLT). This stock is also down about 8% today - it was as high as $24.50 at peak yesterday and now is down below $21; a drop of 14% in 24 hours from its peak. So I am initiating a purchase of 750 shares in the 20.95-20.99 range; this creates a beginning position of $15.7K or 1.4% of the fund. I also have a limit order for another 750 shares just above $20.00 so I hope the stock will fall there in the next day or two, so I can double this position. There is a gap in the chart (when a stock opens higher than any point it traded the previous day) from about 4 days ago at that level ($20) so that is why I have a buy waiting there. I'll post more about Sterlite Industries in a separate entry but essentially its a copper stock located in the heart of India. While copper prices fluctuate and can effect stock valuations, the fact it sits inside a booming country can provide some buffer.
Other than Freeport (FCX) [another mostly copper play] I have been underweight metals as most of the stocks are mega caps in this space, but that has not stopped them from making huge runs. In this next go around, I fo want to increase my metals exposure.
Again, overall these Indian stocks have run up tremendously - I am building up the positions some, but am hoping for further pullbacks to buy in larger scale.
Long HDFC Bank, ICICI Bank, India Fund, Tata Motors, Sterlite Industries in fund; long Sterlite Industries in personal account
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