Page industries

(Shailesh) #619

It is might be strange … but the fact is inertia & emotional attachment … , Lot of people don’t want to sell seemingly great stock . Lack of sellers keep the price high …

Now we all know story about Warren Buffett and Coca Cola .
Coca Cola has given zero returns from 1998 to 2018 ie 20 year zero returns still WB never sold it .

Even in my own software if I put Balance sheet , PL data , last 10 years of price history of Page … My buy price is 9200 and 100% exit price is 44000 for Year 2018 … so if I had page industries bought at lower levels - would I have sold my entire stock holding … My answer is no … even though I might have near zero return from the stock … It is kinda of strange … but that is reality for most of us …

(gautham1) #620

@basumallick Thanks for the post. But the question is where are those 20 good stocks. ( I am talking about the businesses that we can easily understand, that we really want to own, quality, long term visibility). If you look at some of the businesses like inner-wear, jewelry, footwear, housing finance, consumer finance, private banking etc, the quality difference the leader and the other players is huge. ( with the exception of footwear where we have 2 quality players and banking ) . And that is reflected in the valuation. You wouldn’t want to own the other players in the segment at any valuation (At least for me)
I think the only option is to invest in debt instruments or invest in these companies with low expectation ( and time correction)

(Abhishek Basumallick) #621

If one is absolutely not able to find 10-20 good stocks which one understands and is available at reasonable valuations, then it is better to stay in cash / debt funds, and start expanding one’s circle of competence. Unless the market is at a peak, there is usually always some good opportunities lurking behind in the shadows. You just need to keep doing the hard work of going over many many companies to find the right one. Buying the defensives at ultra high valuations is taking the easy (read, lazy) way of investing.

My Portfolio_Homemaker
(Abhishek Basumallick) #623

Not necessarily. There are times when just sitting on it can give zero or negative returns. Like Shailesh mentioned in the post above, Coca-Cola has not returned anything for 20 years. And that is a long long time to go without returns. As investing is a probabilistic game, It is important to align as many points in our favour as possible.

Another point I forgot to mention is that there are two aspects to investing - the business and the valuation. In some cases, the second or the third player in the segment may have a slightly inferior business model but valuation wise may be much much cheaper. Sometimes, purely from a stock price return perspective, the poorer business can be a better investment because of significantly lesser valuations. Case in point, Berger Paints has done much better than Asian Paints in the last 5 years, even though Asian Paints is a much better and more dominant business.

Thirdly, why would I want to take the pain of studying hundreds of businesses, keep up with the news about their quarterly results, attend concalls, read annual reports etc and get what I would anyway get if I invest in a Nifty ETF? Why not just do a SIP in a low-cost index fund instead?

(thecroc) #628

Hanes was size of Page may be in 1990s , I guess, because it was $4B revenue in 2008.

Hanes was targeting a 2-4% sales growth in 2010.

The companies are in entirely different orbits , and the target markets are in different orbits. Amit Jeswani’s comparison seems like apples to oranges to me. Basically Hanes has lost market share , and also return rations deteriorated as it grew to this size, it lost its moat or ‘aspirational’ status. My takes is - Page is young and future cant be foretold looking at hanes terminal value, as the ‘terminal’ market size for Page is definitely 3 times that of the USA.

Disclosure : not invested in page any more.