Here are some statistics-a price-earning (p-e) ratio of around 18, price-to-book value (p-b) ratio of 4, 20 million shares traded every day with a traded value in excess of Rs 1,000 crore, and a collective market capitalisation that is a whopping Rs 12 lakh crore.

That's quite a stunning set of stats. And for investors who are watching the market keenly as it does its Tarzan-like swings from low to high, and who are tracking p-e ratios and reigning market caps on Dalal Street, these figures certainly signify a mouth-watering opportunity.

And just what do the figures represent? They are the governing numbers for the basket of 30 stocks that comprise the Sensex, the index of the Bombay Stock Exchange (BSE). Over half-a-dozen Sensex companies are listed on American exchanges and many others have an international presence in terms of exports or overseas acquisitions. What else? Well, for one, since the index is a market cap weighted index, they are the most actively traded stocks in the market and account for about half the BSE's market capitalisation. And for another, they represent about a dozen economic sectors and are the top dogs in their respective industries. Plus, Sensex stocks by definition are the most liquid and safe stocks going.

Sensex stocks are chosen scientifically from every industry under the sun, based on daily turnover, market capitalisation, industry segment and other parameters, covering every industry from commodities to banking and telecom and it. In fact, you don't have to worry about underperformers or fading stars, as the selected 30 are reviewed every quarter, with the ones failing to meet key parameters weeded out (see New On The Block).

Window Of Opportunity

If these are such a premium lot, it stands to reason they are also the most expensive stocks going. So, why are we talking about them at all if they are not even affordable? That's because today (July 7) the Sensex is at 10,509 points, that's down 17 per cent from its all-time high of 12,671 points on May 11. At this level, some of these pricey stocks offer the best stock picking bets if you are in a mood for deep-sea-fishing. Aditya Birla Group's Hindalco is down 36 per cent, Anil Ambani's utility major Reliance Energy has seen a 28 per cent erosion in market price while state-owned oil major ONGC has lost 31 per cent since May 11.

If this does not sound like a buying opportunity, we don't know what will. For investors seeking a long-term play immune to short-term volatility, one of the best strategies available would be to buy into these deeply discounted blue-blooded stocks. "The India story is irreversible. It's time to enter into fundamentally good stocks with a two to three year time horizon," says R. Swaminathan, National Head (Mutual Fund), IDBI Capital Market Services. However, play it cautiously. Just being a Sensex stock or quoting at a discount does not make for a buy. Asit Koticha, Managing Director and Chief Investment Officer, ask Raymond James, advises investors to approach financial advisors before buying. "Some stocks may look cheap today but not all of them will meet your expectations," he warns.

Oranges And Apples

Let's first get the facts straight for the lay investor. Index stocks carry different face values and are hence not comparable on the market price parameter. Take, for instance, the stock price of Infosys, Wipro and TCS. The three are not comparable because the face values of the shares are different. TCS at Rs 1,729 is not cheaper than Infosys priced at Rs 3,076 because Infosys shares have a face value of Rs 5 while TCS shares have the lowest face value of Re 1 per share among all it companies. The Wipro stock has a face value of Rs 2. On the other hand, there are many old economy stocks like acc and Bajaj Auto that have a face value of Rs 10 per share. In fact, the lower face value of some stocks makes them more affordable. And you should also note that the dividend is always paid on face value.

Another plus today: the demat facility puts all shares within your reach. If you look at it purely from the price angle, you can buy one share of Infosys, the most expensive share in the Sensex at Rs 3,076 or one share of Gujarat Ambuja, the cheapest at Rs 97.

Your Own Index

But before taking the plunge, get your investment strategy in place. In the market, as they say, something that is reasonable and within reach is not necessarily a good buy. "Buy companies in different sectors and buy in a staggered manner," suggests Swaminathan. If you are upset by the fact that buying into systematic investment plans of mutual funds now entails paying entry loads of 1.5-2 per cent every month, then it's time you started your own investing plan. The time is right to create a portfolio of your own in a systematic manner.

Sector-wise

If one looks at Sensex stocks, commodities (under correction mode) and banking (interest rate uncertainty) look a bit unpredictable. "However, engineering stocks may reverse the tide as they are not directly impacted by either oil or interest rates. Growing infrastructure investment will help improve their order books," says Koticha. In the engineering pack, the Sensex has L&T and BHEL, both available at sharp discounts to their May 11 prices. Similarly, software stocks like Infosys, Wipro and TCS are not much impacted by the uncertainty over oil prices and interest rates. </