Examples of investments at all time highs giving good returns:

The above chart is of TCS which has out performed when the market were not moving any where from 2010 to 2013 end. In march 2010 TCS has formed an all time high which has all chances of prompting to buy with stoploss. The Buy would be around 750 levels and you see over the period of last four years the stock has trebled. If you see the financials its a debt free company, from 2005 to 2010 its EPS has increased from 10 to around 35 indicating that the financials were improving fully and there after also the EPS was increasing year on year and now FY-14 it has an EPS:106. You can see that if a fundamentally strong company when makes a new high its a buy and chances of giving good returns are really high. All the black arrows are the buy points.

the above chart is of NATCO pharma it made an all time high at 167 in 2010 and it is nearly a 9 timer in last four years when the market did not move any where except for last six months. During the three years prior to new high its turn over has trebled and EPS has more than doubles and with consistent increase during all these years signalling that the fundamentals are improving and has a potential out-performer in making and look what has happened.over last four years also its margins were improving and also EPS was consistently increasing.

 The above chat is of Page industries. it made all time high in 2009 at around 500 levels and not its a 16 timer during most of the period the market did not move any where. If you see the financials three years prior to new high the EPS was increasing at the rate of 30-40% along with increase in turnover and improve in margins. These all point towards improving financials necessitating a buy and if you see from then onwards till now it EPS has increased at an CAGR of 38%. EPS has increased from 28 to 147 and you see the price. 

I can give you innumerable examples which has give spectacular returns after they make a new all time high. So all time high is not a point to sell but atleast we should try to buy if the last three financials of last three years(at-least two years) are improving and latest quarters are also promising then its a buy but with Stop loss either technically or as per individuals risk apatite. 

M.Mahiidar

Enjoying Life

Trend is Friend.