Looking at the high CASA ratios and the problem the other NBFCs will face in getting funding post the ILFS fiasco it seems Equitas is well placed in terms of funding. The only thing to note is how well they manage their asset quality.
I would like to see their loan book growth with improving asset quality before taking a call. I would still maintain that financials have lost favour with markets and I feel (I could be wrong in this feeling too but its an educated guess) the whole sector will need some more time to be back on market favorite list.
The sector which is going to emerge as a market favorite in next bull market would manifest itself. The stocks in the sector will first of all not show too much weakness in relation to market correction. These sectoral stocks will also correct but will bounce back quickly and the drawdowns in these stocks will be less as compared to others. And once bear market nears its end or bull market starts these sectoral stocks would start moving first and rally hard.
But all this will happen once the bear market nears its end. At current juncture I dont have much idea where in the bear market we are.
Deepak Nitrite seems on a strong wicket. Its planned expansion of 1400 crores is on track and the prices of phenol seem to be very strong.
At current juncture it seems earnings momentum in deepak nitrite would be quite strong for next couple of years atleast and thats what charts are reflecting. There seems to be strong buying in the zone of 265-275 and it seems to be facing some supply near 300-310 zone. It currently seems to be in strong hands. Need to see how it behaves if the ongoing correction extends further.
Currently I am sitting on 30-35% cash besides around 10% allocation in ITC. This cash has been raised by booking losses in financials to varying degrees. Problem is the rest of the 65% of portfolio is also bleeding profusely.
No way out except to grin and bear the pain and do something when a favorable opportunity presents itself in terms of buying or selling.
I read a couple of Elliot Wave guys prediction and it seems they too are as confused as the rest of the market participants. Some guys feel there is an upmove left which can take nifty above 12000 plus and the fundamental argument which supports their view is that earnings cycle has just picked up.
The other view is that we have made a major top and are headed down. How much down is again a matter of debate. I concur with this view but looking at the kind of bloodshed that has happened in past few trading sessions, a counter trend rally may be on the cards. How strong and durable it can be needs to be seen. The bearish fundamental argument is of course pretty well known… FII sellling, weakening rupee, rising crude and so on. And if thats not enough there is State elections in December followed by May Loksabha elections.
May be a naive question (and thanks for your reply on Equitas). There is clearly an emerging scenario where the Indian equities are not necessarily cheap. The Crude is confidently rising towards 100 dollars(Especially after the Iran sanctions come to effect in Nov) 2.Rising interest rates 3. Rupee depreciating 4. Some negative revelations from top Financial institutions and finally the forthcoming general elections. Except for an anticipation of good earning season ahead, there are more dampeners. Would not even a long term investor make a clear exit and enter when these cycles turn or all the negatives are discounted. I know this may sound as trying to time the market but my whole point is; Are there phases when one should invest in non-equity assets( Those options are topic of altogether another discussion). I am not sure if dividends help during a low or negative equity return period.Thanks
I have put across some guidelines Portfolio Analysis - Shailesh how to build and change portfolio during different times ( market levels , interest rates etc ) … based on my 17 odd years of experiences in managing my finances … Hope it is useful and addresses your question.
HIteshji
Today you wrote that "I read a couple of Elliot Wave guys prediction and it seems they too are as confused as the rest of the market participants. " May we know which site you find such news about EW? Many times we find that the wave will move nicely up to 3 to 4 waves and then it violates the whole cycle.
Along with EW are you also using Candle Stick patterns indicators like Hammer , H and S, Ascending triangles , Engulfed pattern etc?
Sir,
Crude is inching higher. May remain at elevated levels for sometime. Do you track Selan exploration? This has not run up much. Is it a good stock to buy to play on the crude price rise. Invested at 220 levels? Planning to add more if it comes to 200 levels.
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.
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
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?
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.
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
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
