The idea about rereading books is to first read books which get you hooked in terms of feeling that you can learn and implement stuff from the book in a practical way. Basically the book worth rereading is the one which you feel adds a lot of value to your own growth and development as an investor. For me the Intelligent investor was a tough book to read and I laboured through it. Couldnt think about reading it again.
Similarly on reading the books like One Up on Wall Street, Pat Dorseyâs book I felt that there was a lot in those books that I could learn and apply practically easily. Among other books I liked and read again (and sometimes again) were Zebra In lion country by Ralph Vanger, Common Stocks and Uncommon profits by Phil Fisher, Joel Greenblattâs The Little book that beats the markets.
Read a wonderful book Masterclass with superinvestors. by Saurabh Basrar and Vishal Mittal of Altais advisors.
One of the few books that profile some known and some unknown superinvestors of India.
The book features personalities like Ramdeo Agarwal, Ramesh Damani, Hiren Ved (alchemy capital) Shyam Sekhar, Bharat Jayantilal Shah, Rajashekhar Iyer, Govind Parekh, Vijay Kedia (names I could recall easily from among the many superinvestors profiled in the book.
It gives an insight into the journey of these investors and their big winners and their investment sytles. Most of the guys have different approaches to investment but still all of them made it big by making some bold big bets when they had the cards in their favour.
For me the key take home message was to have confidence about making it big in the markets and follow the learning curve diligently. These investors all focussed on getting their information by going through annual reports, attending the AGMs, in some instances doing scuttlebutt etc.
The book is easy to read and interesting because it features people with different investing styles and hence avoids being boring and repetitive. The relevant topics have been well covered with all investors.
My favorite chapters were those dealing with Rajashekhar Iyer and Hiren Ved. Both came across as very savvy investors and have a great track record behind them.
The fall of price is approx 85-90% from avg price but if you see volume, itâs almost negligible (fall is with very low avg volumes)
Is it a kind of speculative in nature? Because what I have observed is whenever the price moves with less volumes itâs generally speculative and reverses the movement.
The fall as you say seems to have happened with very low volumes. But many a times thats the case. Because there are no buyers and sellers are desperate to sell, they keep on selling in panic mode at any price. At some point of time value emerges and there would be buyers who would be ready to buy in big volumes.
Ideal thing to do would be to wait for a retracement of these kind of rises and then consider buying if any. Usually after falls of such magnitude there is no V shaped reversal. There is a lot of consolidation needed before stock price can take off.
SirâŚ
How to identify whether in this case market makers sold or investors soldâŚ
SHP doesnât show that much difference quarterly or 6 monthly.
So it gives me speculative nature feeling here.
Hi @hitesh2710 . General question. Did the recent run up (in index as well companies outside index) surprise you. I understand that market is expecting NDA to come back. But where are the earnings?. Auto ( commercial and passenger) numbers still showing flat/degrowth.
And overall such a strange market this. Just a few months back (After the IL & FS and the liquidity issue in the bond market) people feared about a systemic level problem. Nobody wanted to touch NBFC/Bank stocks. So is the story is in US market. After the apple warning, everyone started talking about recession etc. And now this. To me this looks scary.
(Btw had someone invested in quality names and didnât do anything during the IL&FS panic, he would have come back to the same level by now.)
Its very difficult to make out whether investors or speculators sold off in any particular sell off. I dont know what purpose it serves to know these kind of things.
We have to take our own call on any buying selling irrespective of anybody else doing buying/selling.
On the day of the state election results even though the BJP lost heavily the market made a smart U turn after going down and amidst huge volatility emerged stronger at the end of the day. On that day I was convinced that probably a bottom was made. And even after that there were a lot of people who were sceptical about markets . I had guessed that we probably had a bottom but the kind of rise we have had in the past few weeks is somewhat unexpected.
I also posted some time back about nibbling and gradually accumulating into quality small cap stocks. I still feel next few quarters could be hugely rewarding for small cap investors. Earnings momentum also is there in select few small cap stocks. Problem is that one has to look hard to find out these companies. Its not like 2011 period where such companies were lying around for anyone to pick up.
Regarding NBFCs only a select few high quality names have made it close to their previous peaks. Just look at the stock prices of DHFL, Ibulls Hsg, etc.
My view would be for the current strong rally to sustain in the run up to the election and then maybe a temporary top could be made on good news of BJP winning the elections (if at all they win it. I have no idea who is going to win but the airstrike probably has tilted scales in BJPâs favour)
I made up my mind to buy AB capital when it started falling from 225 odd levels and started buying below 160. With stock falling further I continued adding upto 124. But to my horror it continued its slide and very well went below 100 mark and then uoto 78 !! But as I got my targeted quantity I avoided further buying (Perhaps also due to fear of further fall) !
My question is whether the strategy I adopted was correct one or should I have waited for the stock to hit its bottom and then revert back to start buing it ??
Personally are you comfortable with buying a stock during its downfall or during reversal from its low point ??
How do you decide the entry points for a falling stock or a stock rising from its low point ??
I understand this has been asked to Hitesh bhai, but I would like to add a few points here:-
Psychology plays a very important role when the stock is falling at a speed. We extrapolate the capability of holding a stock during the downfall but our mind keeps wandering and it kicks-in the fear which might force us to take a wrong decision of selling a stock at loss.
If you feel you can stick to your plan, as you did in the case of AB Capital without much stress then you are fine and should continue to buy during the downfalls when you are sure of the fundamentals.
But if you are someone who keeps looking at a price and takes impulsive decision, then it would be better to start buying once the fall has been stopped and some signs of reversal are seen.
For example:- AB Capital, if you open up a chart you will see it is showing some signs of reversal. In such cases you can start buying.
Averaging on the way down is usually not a good idea. Unless we have very high conviction in the idea and there is no reason to disprove our investment hypothesis even though stock price keeps going down. It also depends upon the kind of company we are looking at. If it is a high quality great company I wont mind adding more on falls.
I rarely average on the way down. Even if and when I do so I usually look out for signs that the stock price fall has been arrested and there is some sign of stability in stock price.
Besides this if the stock price keeps falling even in steady or uptrending markets, I would be worried. If it falls in consonance with the general downswing I am okay with averaging albeit somewhat slowly.
And depending upon market type one has to approach the problem. If we have a downtrending market then slow gradual accumulation makes sense. This was so in the period prior to March 2019. Now it seems markets have regained their strength and risk on behaviour seems to be back.
Regarding portfolio allocation to a particular stock if I get my desired quantity and still stock price goes down/sideways I prefer to sit out the time with the allocation I have.
Personally I prefer to buy stocks on the way up or in situations where atleast I see some signs of bottom formation depicted by arrest in fall, and some days of sideways moves and maybe some slight uptick from the bottom with good volumes. But this aspect can be very subjective and would vary from person to person.
Hitesh Sir, how good is juniorbees for investment. Its benchmark is nifty next 50. Is it a good way to invest in juniorbees to make use of midcap correction in index etf rather than stock specific?
Sir, why would you have doubts about investing in junior bees? Returns will be better than Nitty, but drawdowns will also be higher. But, 100% safety of capital.
Thanks Hitesh Bhai for your enlightening response and also to aashu24ahuja for valuable inputs.
After all I think it is upto individual investorâs psychology that whether he is ok in buying the stock during its way down and seeing the price of stock he bought a few bucks down or he is ok in buying the stock during its way up when it will be a few bucks costlier than its price at its low point !!
@hitesh2710 Hi Hitesh bhai,
Does shareholder have the right to ask the company for annual report of a wholly owned subsidiary of the invested company ?
Many thanks
A shareholder of course has the right to ask the company for annual report of wholly owned subsidiary. Usually a brief report is attached along with the standard annual report. Good investor friendly companies also put up subsidiary company annual reports on their website.
Dear Hitesh, Just in case NDA doesnât win and hung parliament comes into force, the most obvious guess on the market is for it to fall down. In such a scenario, where could the bottom be for Nifty index?
I dont know what the outcome of election is going to be. As you say NDA doesnt win then there could be some volatility but over the longer term elections could be an insignificant event.
As for where the bottom could be I wish I knew. And if I knew that one I would go one step further and try to know the outcome of elections.
Having said that I think the focus at all times has to be on the companies we track and own rather than worry too much about where markets are headed. I only go slow in buying when I feel markets are in a downward spiral. Usually post a decent correction markets tend to give sufficient time and signs to pick up stocks. And even if that is not so it would be prudent to buy in a staggered manner during sharp market corrections.
And if I knew that one I would go one step further and try to know the outcome of elections.