There are always opputunities in Market. But if we see in long term, we should check weather ist is one time opputunity or lasting for long time.

An excellent topic started by basant with excellent points made by all participants...

Let me chip in by somewhat disagreeing with siddharta and vivekkumar.

Siddharta has said that "We can not consider Software, Auto or Banking as Commodities. These all business are highly innovative and no other company can easily rech  efficieny in these business or no other company can easily copy their product in any economic cycle. "

I would disagree on this.  Most of the So called Non Cyclical Industries - Banking/Software/Auto has some commodity as its input. It is only that this is not realised. So, these non cyclical industries have problems when the commodity that they "use" gets expensive...

Take Banking - Leaving aside all things like brand value, service, branch network etc, Bank is living and dying by price of commodity called money  and money supply is worldwide regulated by Central Banks. So in rising rate regime, Banks lose money and falling rate regime, banks gain. And there are variants of same, but Money is a commodity. Fact.

Then Software - Stripping aside all the illusions, Software Industry in India works on labour arbitrage.. and they use a commodity called Software Programmer. There is nothing to suggest that a TCS Employee is more intelligent than a Polaris employee. What helped biggies is efficient processes in marketing, sales and business operations. If economy grows at 10% for 10 years and rupee soars against dollar , IT cos will be in same situation as cyclical industries. Fact.

Then Auto - Take Two Wheeler Major TVS Motors latest Quarter. All its huge brand image dint help it - the co is now having very low margins and they make less than 800 Rs on every bike that they sell !!! Why, because, Auto makers take commodities like steel, rubber etc as inputs. Branding only helped Hero Honda and Bajaj to earn more, but all that is only as long as the input costs are restricted to some sane levels.

So While it is many times true that Cyclicals dont give returns in long term, it is not as simple. I believe that what matters most is the price we pay for a stock - be it cyclical or non cyclical. And next most important thing is the number of players and extent of monopoly/competition.

Expecting more debates on this topic. I feel there are some sectors where there is very little of cyclicality in terms of raw materials used.  There are some rare sectors and companies, where the inputs are NOT Commodities themselves and such sectors do not suffer from the cyclicality... Any guesses?