An peculiar aspect of the Indian equity market is the herd like behavior of its brokerage community.One a meme (idea) takes root it quickly spreads and soon everybody are chasing the same stocks
To illustrate, in 1999-2000 , the IT sector was the meme.All brokerages recommended IT stocks, their clients bought it,so the stocks rose which led to recommendation upgrades and so on till the bubble burst.
The same cycle played out in various sectors over the years…telecom, realty, infra and so on
Recent memes that have done well in the last one year or so are FMCGs, Private banks etc
Now the meme that is fast gaining currency are Export Oriented Companies.
Like all memes, the underlying premise is simple and sound.Our dear Rupee has collapsed from around 45 Rs/$ to around 60 Rs/$. So export oriented companies should be raking in the moolah and laughing all the way to the bank.
Watch out as this idea spreads and becomes popular and brokerages start recommending names for this play.
How to play this game?Soros would have climbed on to the bandwagon, rode the wave up and got out before the collapse.
But then not all of us are destined to be a Soros !