A Brief summary of the Micro/Small/Midcap Carnage


(yourraj) #67

To add to the list …
Some MOre stocks on the BARGIN
GTN Textiles Ltd.


Balasore Alloys Ltd.

AbanOffshore

GVK Power and infrastructure

Dilip Buildcon

BCL Industries

Himadari speciality Chemicals

I often heard to find Great company at Great price with Great management i think admist of this carnation we must find such a pick PROVIDED ONE HAS MONEY to BUY … The seasoned advice by the vetrans to keep at least 20% of cash in hand to invest in such senerio.
Food for the thought is weather we should sell any stock if say stock falls to 10 …20…30…40…50…60…or 90%
or kept married to it like the OLD CAPTAIN they Prefer to sink with the SHIP.

Stock often moves in ups and down this the way market moving to the next greater high . OUR NOTIONAL GAINS or LOSSeee

Neuroscience says that chemicals released in the brain in response to happiness include endorphins, dopamine, serotonin and oxytocin. Medicine has created drugs to target these receptors in the brain. However, there are natural ways to activate these parts of the brain. Dopamine targets the reward center and embracing and moving towards a new goal will stimulate these receptors.

Researchers found that the neurotransmitter dopamine activates the reward system and is associated with positive emotions, exuberance, and desire. On the downside, the dopamine reward system may also be associated with addictions, in which people develop uncontrollable urges to repeatedly engage in pleasurable but harmful behaviors, such as taking drugs, gambling excessively, or compulsively viewing pornography or frequently tarding in the stock market .

My humble submission is to stick to your OWN valuation like @valuestudent pointed out in the snips till you reach your Goal This might be seems to be stupid and arrogant .LIKE we have “JAB OKHALI MAIN SIR DE DIYA TO DARNA KAYA” The uttimate risk of investing in the share market is 100% loss of your capital.

RISK Is diffrent for each one us .No Doubt that Preserving Money is mpre important than Growing MONEy .The SHIPS are safe at the HARBOR bu they are not meant t park at the COAST… If i have made mistake in selecting the stock why should i create a PANIC …

TATA don’t need your money to grow .BUT you CAN choose thier stock to GROW your money … I don’t know WHICH of SON /Daughter will take care of me when i became dependent at the OLD age BUt i am sure that i have made sound decision to Choose Investing as my passion …

I don’t know which stock will outperform from the list but i am sure that i can’t control the uncontrollable .events just like this carnage of beating the stocks .But i am Sure that if i keep on beating the dead horse it won’t get up and start running .But mastering the art of doing NOTHNING or SITTING on the Lines will help me to grow as long as i have spare some money which i don’t need in next few years eventually invested in the stocks …

lastlly i would reqest as we indian are very good at giving advices and suggestion and i am no exception :grinning: the fellow VPS to Please share the micro level data and emerging oppertunities in this kind of time …than putting up superficial Macro level view point which can create a general PANIC …
My humble appologies if someone get hurt
regards


(shreys) #68

At this stage, my humble submission is that it’s fruitless to place much emphasis on election outcomes. Despite election results contrary to market expectations, indices get accustomed to the new reality fairly quickly. So, other than a knee jerk reaction I don’t expect conditions to get much worse on that front.

A lot of retail investors I know were almost fully invested before the steep drawdown commenced. The correction has made them perforce long term investors.

Whether this meltdown in stock prices is the dawn of a bear market or a healthy bull market correction, only time will tell.
In case it’s the former, high quality or low quality, expensive or cheap, visibility or no visibility most stocks will be bludgeoned.
I too, have incurred substantial notional losses. What helps is to not look at the portfolio at all. The red spilled all over leads to reckless decision making- Booking losses even when it’s not warranted.
Hence, to me, it seems that it may be a good strategy to hold cash and observe. And, say to ourselves- All is well


(Mukesh Tolani) #69

As an Investor, I find this is the most important & beautiful period of our long Investment journey.

We haven’t actually witnessed yet a bloodbath of 2008 likes., but this correction in itself is a teacher in many aspects., & will surely benefit us in many ways.

  1. Our ego & false pride, which was rising with the share prices, will now take a necessary beating.

  2. We will understand the difference : between paying extravagantly high for growth stocks & paying a fair amount for quality stocks.

  3. This correction gives us a chance to introspect our rationale behind recent investments &
    a) garner up more shares, if the conviction in the business fundamentals is strong.
    Or
    b) ponder over where our mistakes have been & whether we have been too hasty in our investment decisions.

I still think, we can make the best out of this time., & re-define our investment strategy.


(raj66) #70

this too will pass , stock markets have survived everything from great depression to the 2008 crisis through world wars and oil prices fluctuations , no point in getting disheartened . BTW not one of the above stocks is in my portfolio


(Hitesh Patel) #71

Market meltdowns are always a welcome time to rejig the portfolio. Selling the stocks you dont want to own is not too painful during these times even if the stock is down to a large extent. Because the stocks you want to buy also have corrected. So the pain of selling a loser is not so much and the act of switching stocks becomes bearable.

Practical thing to do is Do some real hard homework.

A. Prepare a list of stocks you absolutely must have in your portfolio. (at the current juncture the results of all companies are by now out and it becomes easier to take a call based on results). List them in the order of priority. Prepare a rough estimate of earnings (if u can) or else put in a few lines what excites you about these companies.

B. Take a hard look at your existing portfolio. Again prepare a list of companies you want to get rid of. Again in order of priority. Get rid of hope stocks and stocks which have not delivered on your expectations

Next step is to be ruthless and cut out the stocks you no more want to own without remorse and start buying stocks you want to own. It could be in a staggered manner or if you feel you are not going to lose much from current levels throw the kitchen sink at it and buy in a single lot.

If you feel like adding stocks which you bought earlier and are trading higher but have delivered robust results there is nothing like it.

The time is right to get out of paralysis and act in a decisive manner.

I have always believed that bear markets have always laid fertile grounds for good multibaggers. We just need to look for them and more important act.

Having said that the markets can correct further from these levels as no one can predict where corrections end accurately. But those who display agility and courage are usually rewarded.


(zygo23554) #72

Holding and will continue to hold. It’s one the very few stocks that has fallen less than 5% so far.

Below 850 it becomes a screaming buy, a buy at current levels as well - I am already in with my allocation and cannot add more unless it gets to a stage of being a no brainer


(shreys) #73

Dear All,
I’d like to begin by expressing awe at the magnanimity with which knowledge, wisdom and experiences are being shared on the forum in general. It’s astonishing that despite being strangers we are concerned about one another. It’s worthy of applaud.
Today, after a reduction of almost 2.5%, the small cap index is down almost 25% from the peak.
There are stocks that have eroded more than 50% of investor wealth from the peak.
To members who’ve witnessed previous bear markets it may not be unnerving. I have no hesitation in admitting that I’m a product of the bull market.

And, I am scared. The thought of never recovering my principal amount sends a a chill down my spine. It’s my first exposure to such sharp falls. And, I wasn’t prepared for it.

Members have astutely remarked that this suffering will help improve our investment strategies.
I’d like to humble share my thought that it’s crucial to make amends to our strategies. But, it’s equally important to salvage ourselves. Such catastrophic losses possess the potential to change our very being. It possesses the potential to make us feel empty, listless, aimless. It’s just the beginning and it’s brutal.

To overcome this gloomy state of mind I tried to search for some help on the Internet. I did find some helpful content. I’ll try to be brief and list some points. Hope it helps.

A) Confront the loss
When we incur a loss, in any sphere of life, we often try to numb our grief, pain. As much as we try we can’t run away from grief. Only when we acknowledge our grief can we overcome it.

B) It is okay to grieve
It’s crucial to find an outlet for our suffering. Grieving is step in itself to overcome grief.

C) Share your thoughts with others
Sharing often lightens the burden on our shoulders. Being supported by family and friends is a morale booster.

D) Have no regrets
We made some investment mistakes. We learned a lesson the tough way. But, forgive yourself. To err is human. Don’t dwell in the past.
Don’t focus on what could have been done. Focus on what can be done. Focus on now.

E) Take care of your health
Loss of health is far worse than the loss of wealth. Don’t let this momentary difficulty ruin your health. A healthy mind resides in a healthy body. Take care of yourself.

F) Be patient
Overcoming turbulent phases takes time. Healing can be a long, long process. But, don’t give up on life. Be optimistic.

G) Distract yourself
Indulging in activities like walking, writing, painting can distract our mind from the loss. There’s much happiness in the simpler pursuits of life.

I’d like to explicitly mention that I’m not a counsellor, therapist, etc.

I just wanted to help as a friend. As someone who’s trying to survive the meltdown.

I do realise that my post may not be congruous with the theme of this thread. But, please bear with me.

Hope it helps.


(Ayush Mittal) #74

Yes! Perfectly mentioned by Hitesh Bhai. Its best to get out of denial or shock and take account of the underlying changes in the company one had invested in (though its easier said than done). Even stocks with decent earnings are down 30-50% from highs so mentally one can switch a stock in which things didn’t play out as one expected it to, to something where the business model is better and things are intact. But don’t buy something just because its down 30-50% from highs…market is always forward looking.

Just 6 months to a year back, there was buying frenzy everywhere. Stocks were rising just on a mention, meetings with star fund managers etc etc. And there were all the reasons like TINA (there is no alternative to invest) etc etc. and there was a rush of liquidity and in just 6 months its totally opposite. Nobody wants to own the small and mid caps as its tough to see daily falls…so its momentum on the downside like it was on the upside. And answer is perhaps in between. One has to be patient and not get trapped in poor companies with stretched balance sheets or working capitals or story stocks and if stocks are bought at reasonable valuations…things will work out well over next 1-2 years


(Mikesingh) #75

With the carnage ongoing in mid and small caps, people often realises the reality.
But who said investment is easy. We often see the same mistakes repeated, investor fail to look at basic concepts of stock and business analysis and even marquee names add to creating an euphoria.
When a famous quote of ’ Buy low and sell high’ comes in to life in situation like that of present. This most importantingly shall be used during phases of utter euphoria
When was last one seen large brokerage houses coming with retail reports and not doing basic maths. Don’t check op cash trend, debt, margins, historial p/e, cash on books or even checking if the actual business exists and what not?
Well it was last you know when.
Wrong it was happening since long, we only realise when someone come and punch us on face.
After such fall in mid and small caps, there are many saying sell house and invest and this is the right time to deploy the all cash.
Actually if you believe them, they were fully invested all time, then there was a good correction after budget and they put in all cash and want to put more now. One should rather laugh.

Time to be realistic, question, not only in times of pessimism but more in euphoria.
Else as they say, every new bull market sees a new set of investors.
About the situation, I don’t know where is bottom,
Or today itself was bottom or it is just the begining of fall. But again when you invest you wait for bargains, if one feels bargain is rightly here, hop on.
Be slow, invest in trenches. It will help in downturn and vice a versa.
Find good businesses and remember no business doubles or triple in two month, so if some does, ask questions.
Be careful, fearful and justful.


(Changu Mangu) #76

Superb words of wisdom from Ayush and Hitesh Bhai.

Dear @shreys

Dont be scared buddy. It will become fine. But I will carefully having considered reiterate, please go and check what was the PE of even Avanti or Ajanta when they were first discussed here… they were 4-5 times earnings (PE)… and growing at 30 to 50% per annum and more… of course, the above mentioned have grown out of small and micro caps since then, but one cannot buy newer small caps at any higher multiple than what was sane as a risk today. Nothing has changed and my hint is clear.

Just make a golden rule to not buy small and micro caps above 4-5 PE and only if growing at 50% plus; and the trouble will not be created and the scare will not be there as such in your financial life. Beyond that don’t trust anyone’s words, even on this forum. I myself barely escaped in Lasa types etc… now I have learnt the lesson forever. Even if Mr. J or anyone personally says in my ear, I will not listen to anyone; so I would only advise, decision is yours; do not pay a big price, in fact, do not even be ready to accept fair price. Below average price is the only protection in small and micro caps.

If nothing is available in your selected space in the right range, go make a FD buddy. Or SIP. Be realistic.

Even when we pay 10 PE for these “small baccha” companies the risk of loss can be 50% if they fall to a multiple of even 5.

Few months back Porinju came and claimed on twitter, no bear market till 2062. This type of hype sucks in the novices and they think this Porinju type people must know what is the fact. In fact, Porinju and his types knows very well that not even his papa can predict when the next bear market will hit, but they promote their stocks and push them onto novices and novices get carried away… trusting and believing like sheep. And sheep are then culled. You are young. Lesson learnt. Never ever trust again.

Buddy, no one here is giving you free lunch. Just buy so so low that you are safe. Else, don’t buy. No one is forcing you to. Just become unreasonable when you want to give your money to someone else.

Caveat Emptor.


(phreak) #77

I have the bad habit of quoting Lewis Carroll at inappropriate moments. Having read both Alice in Wonderland and The Intelligent Investor, I know that we fall somewhere between harsh reality and hard-boiled wonderland so here goes nothing, make what you want of it.

Would you tell me, please, which way I ought to go from here?’
‘That depends a good deal on where you want to get to,’ said the Cat.
‘I don’t much care where -’ said Alice.
‘Then it doesn’t matter which way you go,’ said the Cat.
‘- so long as I get SOMEWHERE,’ Alice added as an explanation.
‘Oh, you’re sure to do that,’ said the Cat, 'if you only walk long enough.

– Lewis Carroll, Alice in Wonderland


(shubhams95) #78

Hello,
Thanks for your words of wisdom. I am new in investing as well and I am learning a lot.

I was just wondering,what would be an ideal pe ratio for a midcap stock like ajanta pharma during a bear market, considering a good margin of safety?


(Changu Mangu) #79

Hi Shubham, Let me be honest. Mine are not words of wisdom. They are words of slight bitterness at how the hype was built over the last few years. Fraud analysts giving 20% growth targets. When not achieved, then giving next year 20% growth targets. Shameless guys taking the retail to their troubles. We all must make the switch to rationality. Only then can we survive and thrive.

Currently Ajanta management is themselves guiding a not so bright future for the next year or so, and so the stock is taking a hammering. Do read the Ajanta thread, especially towards the end of the thread with recent updates from last year to now and for the moment the picture is clear. The contributors there have done a wonderful job of flagging the risks the moment they started developing. You would love to read it. Read the condensed version using “Summarize this topic” below the first post, and you will avoid the junk posts and be able to focus on the relevant posts.

Best regards.


(Deepa) #80

Hi Zygo,
I am a new investor (mostly invested in large caps). I am invested in finolex industries and have been following your writings /thoughts on it and it has been a great learning experience. With this recent correction, I am keen on investing in some small/mid caps. Is it possible for you to share your current portfolio or recent investments? - this would be provide a good starting point.
Thanks for all your contributions on this forum. It has been really helpful.


#81

I think it also helps to assess investors’ sentiments periodically to figure where we stand in the stock market cycle (Howard Marks). As an ardent reader of the forum, when I notice that threads like “Equity as a full time career” is getting a lot of posts, or when there is a lot of interest in SME stocks with little history to track, it shows that investors are fearless and looking far ahead into future. Perhaps that’s the time to be cautious/reduce allocations. When threads as the current one are quite active, investors are being careful (hopefully).


(ramanhp) #82

Hello,

Does anyone has the complete list of advanced surveillance list? Thanks.


(Raj) #83

ASM Annexure.pdf (37.1 KB)
This is what I got as a forward. Hope it helps.

Regards,
Raj


(ramanhp) #84

Thanks…alot. If you can get the latest list, share.


(shreys) #85

Dear @valuestudent,
Many thanks for sharing words of encouragement. Your advice regarding investment in small caps will definitely help in future investment decisions. Thanks again.


(rskothari) #86

What is this list? What is ASM?