Hitesh portfolio


(Hitesh Patel) #3183

@ramanhp

About the possibility of timing the markets most long term investors dont feel comfortable timing the markets. Part of it is related to discomfort of giving up a winning position and part of it is the ingrained belief that its not possible to be right most of the times while trying to time the markets.

In such situations different people have different options they can take comfortably. There are no one size fits all solutions.

Regarding alternative investment I think of late the market cycles have become so quick that often investment options turn up off and on. So for a shorter period of time one might consider liquid funds or debt funds etc.


(vinamra chaware) #3184

Hi Hitesh , Can you share some points on your exit strategies?
–Whether you keep some fixed Stop Loss say 20%/25%
–Few examples (on charts)
–Any specific parameters may be technical(moving averages,RSI etc)/ fundamental(quarterly no,industry trend) to monitor
Thank you


(ramanhp) #3185

No broad stroke affect. And largely depends on how the capabilities if companies to handle it.


(Balusu Aditya) #3186

Regarding finding the next possible market favorite, I feel the Speciality Chemicals industry fits the description you provided. Do you think we could see a good run up in them once the bull market begins?


(Hitesh Patel) #3187

@BalusuAditya

I think speciality chemical might be a sector to watch. But first we need the market to turn up. As of now its in a downward spiral.

Once all the dust settles and markets consolidate in a small range and stop falling we will need to start watching.

Minervini method entails preparing a watchlist of fundamentally sttong companies with good prospects and strong tailwinds and then apply his technical parameters like stock price neing above 200 dma and 200 dma pointing upwards, stock price being 20-30% or ideally even more above recent bottom, and stocks breaking out of tight base formations.


(ramanhp) #3188

Interesting developments in the API/CRAMS/Intermediaries/ Animal Pharma space. Aided by API manufacturing cut down in China. Does this space look interesting to you as well? I am reading Astec, Neuland,Hikal And Aarti drugs. Will appreciate if you could give some direction on how this sector should be explored better for any future investments. Thanks


(SOHAN) #3189

Hello hitesh sir i want to know relation about price to book and return on equity.how much can we pay price to book to consistent 20 roe companies and consistent 30 roe companies.how price to book changes in bull and bear markets .you can explain with one stock example were you paid less valuations and got benifited and also ond stock you overpaid and learnt some important things on giving valuations to companies


(sandeep kochar) #3190

Hello sir,
market is in correction mode and i want to buy now in SIP mode. Following are on my buying list:
Pharma/Api: Hikal, Aarti Drugs, Dishman Carbgen
Chem/Agrochem: PI Inds, Transpek, Vinati, Orient Carbon
Others: Apl Apollo, balkrishna Inds, Havells, Mayur Uniquoters,shemaro, Borosil glass, Jindal Steel,

Need your view sir…
(I know list is very long and i am demanding very much from you…pardon for that sir)


(Naveen George) #3191

That is a really well thought out model for buying in such conditions. To further reduce risk, I plan to buy in 4 tranches of 25% on each time when the stocks are showing strength.

But how to know when to sell using Techo-Funda methods?
I know that there is an argument for protecting your profits. I Believe it is highly risky as you will never get back your entry price (Example BajajFin for 1000).


(Gary) #3192

Hello Hitesh - I was a bit surprised at this comment on ITC. I personally did invest in ITC several years ago and exited after I figured that their ability to utilize the tobacco cash to create sustainable portfolio is circumspect. In my view, the way ITC throws capital in grand projects (ITC Bharat e.g.) and new FMCG categories (e.g. Fabelle) without any serious consideration to ROI is long term concern for the stock. For example, after all these years of investment, they don’t even have 5 products that are #1 or #2 in the market (Arshirvad, Bingo, Sunfeast, Classmate …?) . ITC seems to be run like a corporate oligopoly that doesn’t always generate best returns for shareholders and therefore I exited after considerable wait.

Would be great to hear your investment thesis on this stock.


(Hitesh Patel) #3193

@ramanhp

As you say API/CRAMS space is indeed looking quite interesting with the Chinese disruption. Problem is we dont know how long Chinese facilities will be out and when they will make a comeback. In such a scenario the focus has to be on niche players or on lowest cost producers or ideally a combination of both.

I think the list should include companies like aargi drugs, hika, neuland, shilpa, and some other such companies. Even companies in the veterinary api space like ngl fine chem seem to be doing well post their expansion.

Pure play export focussed companies in the pharma space should benefit a lot due to the USD appreciation. Unichem looks lnteresting. Post the sale of domestic business it is left with only exports business and is nearly a net cash bargain with around 1400 crores in balance sheet and market cap of same amount. Plus manufacturing facilities for exports come free. The company has been making net losses since past few quarters but I think a strong dollar should bode well for the company.


(Hitesh Patel) #3194

@sanu1802

Your list seems to be a good list to work with. I like hikal, aarti drugs, pi inds, transpek, vinati, apl apollo, mayur and dont have much idea about the others as I dont track them. I used to own hikal but exited during the recent run up to around 180-185 levels. Hikal remains a good company but needs to show a good track record going forward to make it to the greats list.


(Hitesh Patel) #3195

@Gary24

ITC as you mentioned hasnt had a good capital allocation track record. But some of their business segments are likely to have strong tailwinds going ahead. e.g paper, hotels etc.

Cigarette is likely to be the cash generator inspite of high taxes.

The FMCG business needs to start performing in a profitable manner as its been a business with mediocre profitability since a long time.

But I feel all the concerns you mentioned seem to be priced in at the price of around 270-300. How it behaves going forward needs to be seen but since I wanted some kind of parking space for surplus funds and I liked the techno funda picture I had parked funds there. If I were to get a mouth watering opportunity I would sell out of ITC and switch but currently I am watching stocks in my watchlist to take a call. First I want the to see markets stabilise at some level as currently it seems to be in a downward spiral without any respite.


(Hitesh Patel) #3196

@vinamrachaware

Regarding exit strategies I think I am often poor at selling. I still end up selling winners too early and holding on to losers too long. Its a work in progress for me.

In case of companies which I know are not that great, I often sell out once I see a lot of froth and fanfare in the stock price. e.g recently I sold out of Hikal when it ran up from 140 to 180-185 with no obvious reasons barring the entry of Ashish Kacholia. I was too early to exit Bajaj Finance when I exited around 2450 and had to see the stock go up to 2990 but now it seems to be a good place to get in around 1900-2100 and have started accumulating again.

I have seen some guys do quite well following the nifty PE range in their exits . e.g you can go through dhinakaran portfolio. http://forum.valuepickr.com/t/dhinakaran-portfolio/2695

Similarly I think @bheeshma practises the stop loss of I think 7% below his buy price which could work well for someone well versed in the method.

I am still trying to fine tune my exit strategies. But when I feel overall markets are weakening, I often pull the plug and sell a lot of stuff from my PF where I dont get comfort from price behaviour or from fundamentals.


(Bheeshma Sanghani, PhD) #3197

Hi @hitesh2710 bhai

Slight correction, stop loss is not 7% but 15%. However, there has been a change here - I also average down 2 or 3 times if i feel earnings momentum is intact. If earnings momentum is not there, there is no choice but to exit. As long co is growing earnings at a fast clip , i suffer through the corrections. Sometimes however cos price becomes so high that the implied growth rate is an impossible number to achieve in which case the course of action is clear.

Unlike seasoned investors like yourself who have developed a sixth sense about charts, I have no talent here or the temperament so stop loss works for me coupled with implied growth rates in the stock price. That’s the strategy for now and has kept me from being obliterated in the violent market fall.

Thanks!
Bheeshma


(ishikaghose) #3198

For novices like me this is exactly the sort of information which is most useful. The “when to sell” strategies. It is comforting to know that everyone is going through a painful period and we need strategies to decrease that pain since we cannot avoid it altogether. Thank you. Like the 15% stop loss


(Shailesh) #3199

There cannot be one strategy … One has to see what work for one over period of time .

I have problem of buying when prices trend up , but I can buy falling knives -

In 2013 … Many stocks that I bought in Jan / Mar 2013 were 30% to 50% down by Sept 2013 . But most of them like HPCL , Gabriel , Sono koyo , NIIT , Sundaram Fasteners etc were 5 - 20 baggers .

In 2015 / 2016 I had similar experience with Metals stocks . For example Mr Birla had subscribed to Hindalco at 150 Rs so I thought Rs 120 was good price to enter … But stock fell to Rs 66 . I kept on averaging down . It was successful

Yes there are failures - but often I have seen when market is pessimistic … If you 25 - 30 good companies with avg allocation of 5% -10% , there is good probability that you will do better than most mutual funds …

I use my own tool / software which gives me BUY and SELL prices .


(atul1082) #3200

Good thought.can u share which companies u r looking at and the price levels in current market?What’s your view on crude and currency?Only point we need to note is demonetization etc were local issues and the current ones are beyond our control.


(Shailesh) #3201

You may visit Portfolio Analysis - Shailesh for the same .

My view on currency - It weakens once every 3/ 5 years on account of our higher inflation and interest rate vs US and other developed markets , but long term impact of stock market is not much .
Also if you are earning and spending in Rs - it should not matter to you .

If you are NRI then to get dollar adjusted alpha vis a vis US market you need to keep watch on currency .

My view on Crude : Long term I am bearish … This is based on thesis that in long term

  1. Emission norms ( BS 6 ) will improve fuel mileage drastically and hence reduce fuel demand
  2. China and Europe will move to electric car by 2025 ( fully or majorly ) reducing demand for fuel
  3. Oil demand for petrochemical products … which also should reduce as most GOVT will try to ban plastics esp single use plastics … ( non recyclable ones )

(Amit) #3202

And Amazon is jumping into EV charger market with Tesla Competitor, Audi E Tron collaboration.

https://www.bloomberg.com/news/articles/2018-10-08/big-oil-should-be-worried-about-amazon-s-battery-play

Oil will peak around 2025-30 as battery costs falling fast.