CODE OF CONDUCT: Stock Story-Management Q&A-Recco Process

Forum Guidelines
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Welcome specific suggestions from Members - Your VOICE will make a difference - We need to know/ be aware of propriety perceptions (or lack of) and expectations of the Members/larger investment community.

Posted byAdministratorat Tuesday 23:37

How about a CODE OF CONDUCT - during Stock Story/Management Q&A and possible Recco - for ValuePickr Core Team and any others hand-picked for critical time-sensitive assignments/scuttlebutts/Stock Story/Management Q&As and the like

a) Publish the CODE of CONDUCT to be followed at VP (take in public comments)

b) Enforce the CODE strictly

c) Admin maintains list of VP Core Team and assigned Folks company-specific basis (will remain private but can be produced on a company specific (and time-specific basis for repeat follow-up interactions)

These are some of the suggestions that have been floated by well-meaning senior ValuePickrs and VP well-wishers from the larger investment community.

Posted byDonaldat Tuesday 21:35

This is a PUBLIC Apology.

I failed to disclose I have significant vested personal interest in Muthoot Capital. I have been berated by several senior investors I respect - that this was necessary - given ValuePickr following today.

It was an oversight. I didn’t realise that - what is intended as a concise fact sheet on the company- Stock Story at ValuePickr - to start serious questioning in this thread - may have been seen by some as indirect promotion. The choice of my NO-BRAINER wording was unfortunate - some would say too-clever-by-half - an unintentional mistake.

DO NOT be influenced by the detailed note…that’s just VP-style work to bring everyone on the same page quick-time… leaving us free to concentrate on (missed) gaps. There are still a few serious questions unanswered (as many folks like Vinod MS, Manav Vijay and others have raised- and that’s exactly the purpose of a VP Stock Story - to focus attention on the GAPS…which get captured back again…after due diligence is completed.

I will maintain silence - till we bring out the Management Q&A - that aims to provide the ammunition behind the stock story for all and help answer critical GAPS in understanding. I am still working on capturing back our intense interviews… All I can say Management has been completely transparent in answering all that we could think of throwing at them, and some more.

Please note ValuePickr due diligence is deemed complete only after Stock Story and Management Q&A is thrown open for the full community to digest, absorb and critically examine.

Looking forward to that.

Disc: I have significant personal vested interest in Muthoot Capital. My views are biased. Please do your own homework and consult investing experts before making any investment decisions.

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I think the code of conduct should apply only once the stock in question is included in the VP portfolio recommendations list. All those involved (company specific) in the decision of recommendation should come out with their disclosures.

In the days of quick info distribution even a whiff of a company visit on social media like whatsapp etc is enough to set up a spike in stock price.

Another advice I would give to fellow boarders is not to chase prices in the stocks recommended. Many a times it makes sense to allow the initial froth to settle down and then contemplate an entry.

Coming to specifics, it would need some brain storming to put up specific guidelines on code of conduct. What are the guidelines and how they apply to the core team and admin.

Once these are defined the core team should make it a point to adhere to it strictly.

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I agree with Donald and Hitesh. It is important for every Valuepickr (not only the core members and admin) to adhere to a code of conduct. Everyone needs to remember ValuePickr is a forum which was meant for social collaboration and sharing of knowledge on investing and stocks. It is not a tips forum!! A lot of times, I see prices shoot up on stocks recommended in VP portfolio. Most of the senior investors will know not to chase price, but I am concerned about the newer members. They may get hurt (financially). As Hitesh has mentioned, it is better to let prices settle down before buying. Please remember that there are no dearth of opportunities in the markets.

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Starting a new thread need to have a disclosure as without it the credibility of the initiation of stock idea is questionable.Whenever there is inclusion in the valuepickr portfolio, all involved in the decision making should make disclosures.Also the disclosure should be of (a) significant holding (b) holding © minor holding/start up position. I think the technical recommendations should be spared from the disclosures.

The code of conduct should be such that the initiation of new ideas do not die down. But should be good enough to enthrust the responsibility on the idea initiator. Since the valuepickr community is growing so big and the proportion of the newbies is large, it is necessary that no one with malice intention should be able to take advantage of the loose code of conduct.

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Guys,

We have a structured set of initial Code - sent in generously by Mr M, as below. He is the one who helps us flesh out important VP initiatives by taking the trouble to crisply detail initial guidelines.

This is up for discussion/debate …and as he says Work-in-Progress…to be progressively refined with Member inputs and our experience down the line.

Please keep pouring-in your thoughts/expectations of the Forum and Members - especially those involved majorly in the Stock Story build-up-Management Q&A-and Reccomendation value chain.

I assume we are talking about code of conduct for those members of VP team who are doing the Management Q&A and closely involved with the Stock story concerned.So for a given stock, VP members who will be involved should be identified (referred as Members here)

Some thoughts (subject to review/debate):

Transparency, fairness and confidentiality are the three guiding principles for the code.____

Effective date:____

Code becomes effective on the date Management Q&A is confirmed by the company or Recommendation is published whichever is earlier (sometimes you publish reco without prior management Q&A) ____

Code____

(a)Confidentiality to be strictly exercised by the members involved____

(b)None of the member shall disclose (âtipâ) any material non-public information about the company to anyone outside that team till it is published.____

(c )He/she shall not shall make recommendations or express opinions on the basis of that material, or non public information on any other site/forum/advisory firm etc____

Disclosure:____

(a) Each member of VP team involved will disclose whether he/she or his associates are invested - long/short____

(b) I think exact quantity etc need not be published in interest of protecting the members. But to give some idea ofmateriality, we can add whether member has just a token investment (like sometime 1 share for tracking) or a substantial position (say > 5% of portfolio) that shows the interest.____

© Itâs possible that member is holding it for long which is very different from one initiating it when he/she got involved with the story. So some sense of timing in that disclosure â Old, Recent, Current will be an indicator____

Timing:____

In general, publication of any Management Q&A and Recommendations on VP portfolio should be doneon Fridayevening orSaturdayto be fair to all. If on working days, it should be late evening.____

To the extent possible, there should not be any prior tips or highlights. Members would finish their diligence amongst themselves and then publish the collective work in one shot.____

Compliance____

Itâs a self regulated group so basically members themselves____

Breach:____

Any member found in breach of the code to be blacklisted in the VP community____

Moderator group can determine the event.____

What action to be taken should basically come from other active members.____

Caution:

All investors/readers will consult their financial advisors, do their full due dilligence in their own interest and not base their decisions merely based on information on VP. Read the full disclaimers.

)----

Other VPs will pool their thoughts. This will be work in process to be successively fine-tuned.

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Hi Donald,

This is in the right direction and will go a long way in ensuring compliance to regulations.

After reading what Mr M has said, isn’t it necessary to publish the management Q&A earlier than even the stock story? The earlier we publish the Q&A the better? Stock story can probably wait till everyone gathers and understands the facts about the company. Stock story invariably will be subjective as the member/s identifies certain aspects as “Bullish”/“Bearish”.

Cheers

Vinod

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In all this ethical/high moral ground positions we are rightly taking - One thing we must not lose sight off - the collaborative efforts at VP are altruistic in nature. Whereas the Collaborators - most of the Core Team and many assigned Members are full-time Investors -We make our money only from the Markets.

We come together in common cause, but have no commercial dealings with each other, we run completely independent courses of our own - most of us have completely different investment styles - what brought us together are real complimentary strengths - that have made all of us better investors, individually and together. This is very very rare in our Marketplace - we are grateful that somehow this has happened - we have attracted the right sort of genuine folks - who make money from markets - but are interested in sharing and working and learning from each other - are completely open about the many styles that work in the market - are always humble and eager to learn from the next guy.

We have often wondered - at how we attract just the right guy with the right skills at the right time - or how we get the industry professionals to open upto us - eager to transfer to us every bit they know of the business they have worked 20 years in - and we have often learned in 20-30 minute conversations what folks get consultants to transfer to you in a month -with less efficacy. We have heard folks say - when we thank them profusely for sparing their time and sharing valuable knowledge (“Gold” in imvestment terms) -“aapke sath man kiya bistaar me batane ko - pichle month woh Fund Manager waale aaye the…unko hum jyada khulasa nahi kar sake”. {Felt like sharing with you complete details, last month the Fund Managers came - we couldn’t illustrate much to them}. Exact words from a Vidharba region Cotton Seeds industry veteran, e.g.

We have often wondered at what all that keeps happening all the time! Much much more than our own individual and total efforts - it is the coming together of needed resources at the needed time (with almost zero advance planning for the same) - that is much more responsible for the kind of results we keep seeing from our sincere efforts.

We need to be GRATEFUL for the wonderful community that has got nurtured by some very high calibre folks guiding us, energising us, warning us when they spot danger signs, so that this unique collaborative research effort continues to succeed.We MUST also ensure no collaborator feels cramped by any code of conduct that we try to put in place. As long one makes the right disclosures needed and maintains the code of silence during specified periods, we should ensure complete freedom and flexibility to operate just the way one has been so far - Remember he/she makes no money from collaborating in our bigger altruistic cause.

As long as one is in compliance with existing Regulations and VP Disclosure and Compliance Norms, we should take care that the CODE does not prove restrictive to anyone’s investment calls before, during or after Code periods - We do not want to lose Collaborators, do we? Or lose the collaborative spirit magic that has brought us together and sees us growing by the day.

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Vinod MS - logically, it may seem that way.

But VP Core Team has always given Market Opportunity the first shot - in terms of what we prioritise over what - that’s a pretty dynamic exercise - and is completely left to the discretion of the Core Team.

See it this way - the Newbie at the Community may need the whole hog - Stock Story, Management Q&A, and then someone to lay out the Gaps and then someone to defend/clarify on that. And then finally the Recco. And even then he/she may not be competent to make the investment call.

Someone more of a Pro - may be able to make the investment call - just by the virtue of his own homework - and some more detailed structured work.

Mr Market may not give you OPPORTUNITIES for extended periods of time. The Core Team has its unique style of prioritisation - which is not Public as of now - may be at some later more mature level - we can try to demystify that - let’s leave it at that!

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Senior Valuepickrs, This discussion in itself is unique to VP and highlight the passion for collaboration and the no-evil motives. I intend to contribute more than I do today to the community and from that perspective, I’d like the code to be simple and fairly easy to follow. Like Donald said rightly, it shouldn’t discourage people from collaborating.

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Yes, this looks good and needed.

Suggestion - on the disclosures compliance - we can consider having the names of the members who visited at the end of the management interview/stock story and their disclosure. So this will make it automatic and will not get skipped.

Ayush

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Guys… Im one of most less active members of valuepickr but from what I have followed this is one of the most close-knit and transparent forums… I dont know what lead to this Code-of-conduct thread but keeping in mind that most members share their portfolios publicly isnt that disclosure enough???

You guys are doing an amazing job helping us newbies understand all the tricks of the trade I wouldnt like to put you in a position where you have disclose everytime you buy or sell the stock. @Donald The way you pushed me to working on the companies myself and not have the I-cant-contribute-much attitude, I really liked it. It should be you guys pushing(moulding) us(the new guys)… not the other way…

Sorry if any of the above didnt come out right but I hope you got what Im trying to convey… Would prefer the forum to be informal and not held up captive by disclosures and formality…

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Ayush,

Good suggestion. Any structured communication from us like the Stock Story and Management Q&As - can have at the end a Disclosure(s) Section, where all involved member disclosures are collected and published one-shot - and more importantly available at a single place

Advantages (like you said):

1). Disclosures become Mandatory - can’t be skipped

2). individual discretion/effort is not necessary

3). Is available at one place -for the record - you don’t have to hunt who said when and what :slight_smile:

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Balkrishna/Others - who are wondering what’s all the huallabaloo about?

No sweat. This is an Investor Protection measure - we are happy to enforce - within reasonable flexibility for our individual efforts. Kind of Self-Regulation efforts.

It was being observed/highlighted by Fund Managers, Senior Investors/Well-wishers of VP that of-late, everytime a Recco from VP comes, stocks invariably jump the same day, a few days before and after. Sometime activity starts just at the news of a Management Visit. Obviously there are leaks from our side too (friends who call and other ValuePickrs and larger community investor friends) who are somewhat in the know of things, before every one in VP community has access and time to digest these sometimes time-sensitive information! And today these things spread very fast fast in our age of instant communications - guys stay clued in - just for this kind of event-based newsflow!

So the Code is aimed at

1). Prevent any misuse/abuse/front-running or other “tipping” kind of accusations against Team VP

2). Ensure a level playing field - that no section of guys at VP or larger investment community has an unfair advantage over others. Everyone should have access to structured info from VP at the same time. Everyone should have time to digest the structured info-sets - before market opens - So Friday evening post-market hours is a good suggestion.

3). Lastly, we hope this will dampen the predatory-speculatory-hype creating apparatus that gets active in social media and whatsapp type networks just before and after our Reccos. This in our view is very serious mal-activity and can hurt gullible newbie investors who get caught up in the hype.

The immediate provocation was the 7.5% rise in Muthoot Cap the same day as the Stock Story came out - while we are still far away from a Recco. We were advised to immediately act on our intention of imposing a Code of Conduct - following similar (we suspect more of) speculative activity immediately after our last 2 Reccos.

There is/was a grave danger of the larger investment community perceiving Team VP as something else than what we really stand for!The proposed measures will be good as we are looking to induct more and more folks into our active research-collaboration network. It sets a high standards for us all to live upto, without compromising on our ideals.

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Manishbhai,

Yes - the disclosure code should also apply to anyone starting a new thread. Fortunately, there is no Silence Code necessary here unlike Management Q&A or Recco times:)

To help prevent similar kind of pump-and-dump efforts through ValuePickr as we have seen before and been alerted again by our well-meaning seniors, we need to be extra vigilant.

As our Lead Moderator. this responsibility first rests with you :slight_smile: to enforce disclosure(s) if someone is not adhering to these. Disclosures may be enforced if you spot someone hyping up too much and carrying out 1-sided analysis - like we have done before - even if he is not the stock idea initiator. And then we track these guys - put their names up - for establishing KYC.

Hope these few measures make life simpler - not more complicated for all!

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Thank you for sharing the details Donald, all the huallabaloo is beginning to make sense now. Appreciate core team VP for taking right steps to protect the community.

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Yes we are blessed with the seniors who have good intentions to keep the VP clean & transparent.

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I dont understand how is disclosure going to help stopping Pump-&-Dump thing. Pardon my ignorance & if anybody is implicating the senior members of the forum, I will only ask him to consider this 10 - 20% as ‘Guru Dakshina’… when we are looking at 10 & 20 & multibaggers how does 10 - 20% matter?

The steps to contain the Pump & Dump scenario can be as a mixture of below

1). Ascertain a minimum level activity to keep being a member of the forum. Lets says 10posts in 3months is the bare minimum, in event of non-complaince the member is given a warning and in the next review if he doesn’t get better, the membership is terminated.

I know it is easier said than done & increases the work of mods, but the upside is this rule will force people to post and there will be increased activity in the forum. If its of any help, I volunteer for this work.

2). Senior members will have to place decoys now and then.

We know that when Donald, Hitesh or Ayush(pardon me for missing the other gems) intiates a discussion, the company is most probably worth investing. With the level of your expertise the very fact that you think the company is worthy of discussion leads to conclusion that its worthy of investment. If you just keep initiating threads at times of companies which are not worthy it will serve as a nice decoy and also it will be a learning ground to understand whats wrong with a company.

3). This forum is not tips but for knowledge sharing and education. That should be the only motive. If somebody raises the question of share market movements connected with the posts here, he should be gently reminded of this point.

I am not comfortable asking the unselfish and very generous senior members feel any pressure of disclosure and stuff. Pardon me for that.

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@Balakrishna - The disclosures are necessary - as a measure of transparency. The one with the malice intentions should not take advantage of this forum and hence is is required. We have so many newbies who do not have the wisdom to identify/rate the recommendations and may get carried away. So the good intention should be reflected with such disclosures.

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Hi, suggest we just continue with our usual work of analysis…

its just impossible to control information flow and people acting in it. As long as disclosures as suggested by Donald and Ayush are in place we need not rake our head too much about what is happening out there.

Infact I think disclosures will increase the number of people acting on a stock without analysis. The information that a Donald/Ayush/Hitesh is invested could be more “exciting” for folks to buy immediately than the merits of the stock. :slight_smile:

There are thousands who are not members but just read VP from office/cafe/homes and may be buying/selling/pumping/dumping…we will never come to know who they are.

Cheers and Happy Investing

Vinod

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Completely agree Vinod. This the very reason I think coz of which hitesh bhai has stopped sharing his portfolio.

The only way to keep to check of this is to keeping in the contributors and suspending the fence sitters. Rest all that happens is part of the market movement nobody can control. No point playing with flow of the forum.

:))