Turnaround stocks : big profits for bold bargain hunters

Notwithstanding her present economic problems, India is gradually being perceived as a turnaround country on the global exchange. When a big country as diverse as India is turning around from socialism to capitalism, regulation to liberalisation, and protection to globalisation, there are bound to be many companies which have to turn themselves around to succeed in the new era ahead.

Indian companies are, by and large, used to operating in a protective and cocooned socio-political and economic environment. They were typically founded by first-generation enterpreneurs, supported by 'patient' capital and protected by a socialist gover ent. These business enterprises have survived and grown with the help of direct and indirect subsi dies, and by bribing politicians and manipulating bureaucrats. All this is changing fast. One can no longer find an enduring competitive advantage by using the greasy techniques of the licence-permit-quota Raj of the bygone socialist era. One has to fight in the marketplace both type for attracting resources and to market one's products and services. Several companies have to rediscover themselves in today's fast unfolding scenario which lays emphasis on quality, cost and competitive strategy. They need to turn around.

A turnaround situation offers exciting investment opportunities. An early bird gets the worm. Hence the trick is to search the refuse vans and locate the likely winners. Bet on them and wait patiently for your decision to be proved correct. In this book, you will read about the Misfortune-500, five hundred loss-making companies. Using qualitative and quantitative criteria we have selected companies, which are likely to turn around and may report encouraging results in the years ahead. Please note the emphasis on the two words : likely and may.