Cannot trust the opinion of a man whose income depends on it.
That is what you are seeing with your own eyes and hearing with your own ears. Your opinion matters most to what your income / profits depends on 
@Yogesh_s @8sarveshg @theashworld
Do either of you by any chance make a model of the CAPE Ratio (Shiller Ratio) as relevant to Indian Markets.
What does it potentially show if either of you do have it? Best Regards.
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@valuestudent please refer to latest SageOne Investor Memo released few days back & they have it.
Happy InvestingâŚ
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For a person like me who is not able to give as much as time as my main business, need to diverse my investments in form of direct equity investments and indirect investments (PMS/ mutual funds). Hence, someone like me needs to have some sort of trust in such advisors/managers etc. But yes I am agree that one should not blindly follow them, but because they have been in this field for many years (at least compared to me) chances of them having more knowledge than me are more.
Donât take me wrong. I am not defending my PMS advisor. But for someone like me (which I am assuming there are lots more) parking some money in mutual funds/PMS etc makes sense as it divides the risk. In the mean time while also investing directly in equities and being great platform like valuepickr can help us in enhancing our knowledge.
Apologies. I didnât quite understand what you meant. Please elaborate.
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Met a few family and friends over the weekend. Almost all (whom I met) were involved in equities via various vehicles. I was quite surprised that all and I mean all (12 to be precise) were happy with fall. They felt it was a buying opportunity and most of them did really do so.
Out of those 12, 8 have started investing only in the last 2-3 years (including myself!)
Mature investors or over exuberance ??
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âFool me once shame on you. Fool me twice shame on me!â
I think the Indian investor is, slowly, learning from their own experiences and the experiences of others.
Companies who operate in the investment arena are also doing their bit in educating the investors about the virtues of SIPs and sticking to the investment target.
Having said that, the current falls has only been around 5% and spanning a week. What will happen if there is a 2-3 month long correction that goes 10% deep? Only time will tell.
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Definitely exuberance. If every correction is a buying opportunity, when do you sell?. When corrections happens, most of them say they have bought it for âlong termâ. If you hear this word, they donât understand the market.
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Hi Deepak,
What do you mean by this statement.Can you explain further?
Regards
AJ
Fundamentals drive the price of the stock. Prices chase earnings. Earnings are reported every quarter. So, fundamentally you have got to review your portfolio every quarter. Itâs not like you donât have any information between quarters. There will forward looking statements, consensus estimate, industry health, macro and micro view in between, local as well as global. Basically, you should be aware of whatâs going on everywhere. You need to ask this question, how does it impact your portfolio - stock specific, industry as well as overall?
If there is 50% reduction in revenue, are you going to simply say âlong termâ or go back analyze and take a decision to continue with you holding or quit based on fundamentals. Most people don;t quit and loose money. I hear people saying I want to keep this for 3, 5, 10, 20, 25 years. What is the basis to say that?. If you check the facts, 90% of fortune 500 companies doesnât exist today, and 50% of todayâs fortune 500 will vanish in next 10 years.
Unless to pay attention yourself, analyze and decide, your portfolio will either be gone or will remain there with some few plus and minus, not what you wanted.
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You made a very interesting point.
I have been thinking on these lines for the last few days. Here is my thought:
We can classify companies broadly into 3 types based on the information frequency:
- Companies that come out with actionable information every quarter in form of results
- Companies that come out with actionable information at intervals smaller than a quarter
- Companies that come out with actionable information randomly through out the year
Note that I am not counting the macro information. I am not counting the sector information. I am just counting company specific information coming from the company itself.
Companies like FMCG, consumer durables, financials, IT etc fall in list #1 as we dont get any information or indication about their numbers till the quarterly results.
Companies like 4 wheeler and 2 wheeler fall in category #2 as we get to know their monthly sales numbers.
And lastly companies like infra, pharma fall in category #3 as we come to know about ANDA approvals, FDA observations and new infra project randomly thru out the year.
Question is; which of these 3 categories is better than the other in terms of stability to the portfolio? Is more information good or less? Or does it even make sense to think on these lines?
I will be happy to get some inputs on this thought process.
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Interesting classification!. I have never thought on these lines.
I would club annual reports, results, conference call transcripts etc into your first point. This is most important to gauge stability of your portfolio.
There are two types of catalysts -
Publicly announced events - Inflation, interest rates etc. There always a correlation between the these numbers and companies sales/profit. You should have a fair idea about what the numbers would be much before the actual numbers are reported.
Genuine events - Updates on government policy, deals and acquisition, managementâs forward looking statements. These are unexpected events and you need look at if it is good or bad for your stocks.
There correlation between inflation and sales, Historically few companies are good at passing on the input costs to consumers where as few of them always fail to do you. There is a similar correlation of interest rates for banks.
Monthly sales numbers do give trends but mostly they are inline with consensus estimate. It would have been already discounted into price. If market estimates the number will be bad, the price would have already fallen by the time the actual numbers are released.
Personally feel, retail investors should stay away from Infra. They have long gestation period and capital requirement. I never invested in pharma, no ideas about them.
You can go long on those with positive correlation and short on those with negative correlation. You can
have directional bets few weeks before the numbers are reported.
- The rule is if you are fundamentally bullish on the stock, never short it.
- If the stock has good earning growth relative to its peers, it will continue to remain expensive.
- Never trade around or on the day numbers like monthly sales are reported. They are already factored into prices.
- If possible and you understand, use options for directional bets long call or long puts. Risky bet and expire worthless if you got it wrong.
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The Nifty PE is precariously close to 26 now. Today I became 87% cash and hedge (took a bet I would never have thought of⌠bought Gold worth 9 percent of portfolio). Canât take it anymore. Remain invested in only one stock now. Would have sold that too but it is not yet listed post demerger.
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Wow! 87% cash is a big percentage. No doubt valuations seem high and even I have been selling in this rally. However, just to understand your thought process, 87% is such a figure where you are probably expecting a 2007-2008 sort of crash.
P.S- i am not implying or predicting anything. Just want to understand how people are thinking is this current environment.
Hi @v31
Yes. Thought a lot about it before pressing the sell button.
The level it will correct to I did not try to think of today (sometimes I do but it is a more worthwhile exercise in the midst of a correction or a crash).
On the cash percentage, I thought the current upside is now laden with high risk. So if it is to me laden with risk, I thought why risk anything at all.
Gold which I thank @vasuadiga for pointing out to me, and then I started studying it, seemed like a good way to short an elevated market instead of selling the Nifty.
All mental calculations - who is to say what will happen.
True. who is to say what will happen. And yes one needs lot of courage while selling out such a huge percentage cause to build a portfolio it takes years and the rate at which some of the gems are bought are next to impossible to buy again at similar prices.
However, more courage to you and the best 
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Must appreciate your courage to short⌠I do share your concern of the present market valuations⌠I donât have the courage to take the callâŚWhat is pulling me back is the tax implicationsâŚI have been booking profits and increasing share of large caps.
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Thanks Saji. Just to clarify, I went long on gold and didnât short it 
. That to me seemed like a way to hedge against market movements and maybe give me some upside if there is a movement in the direction I believe may happen for the markets.
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Dear CM
You are not alone; Iâve almost similar AA. around 5% in gold and NIFTY shorts as well. It is dangerous; keeping my fingers crossed.
(Most of the times, Market can stay insane long than one can stay solvent âŚ)
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