@hitesh2710 What tools do these guys use to track stock prices / indices?
Your style of investing also involves turning over a lot of rocks. What websites/apps/charts do you use to track results?
Personally I use alerts from screener, investing.com, tradingview, marketsmith, bsealerts
Anything else apart from these that you use?
For example, if one wanted to stumble upon a laurus or an aarti drugs in March/April/May 2020, then he/she should have had a solid market tracking mechanism in place, unless they were just too lucky. What charts/technicals do you follow to narrow down a list of potential big winners?
And how many charts do you look at daily, on average.
Asking because I wanted insights into the process of tracking a lot of companies at the same time, which is one of the biggest mantras of being successful in the markets.
Having spent so many years in markets and having looked at so many companies during the investment journey, the one advantage I have is that I know the basics about a lot of companies, in terms of what they do, what management perception is, and so on.
So if any company comes under radar while browsing VP or from a friend for consideration, I alteast have some clue of what is being talked about. Then next step is to look at its “kundli” as I call it by a quick glance at screener to look at last few qtrs/years results, balance sheet, promoter holding changes, ratios etc. With screener I feel things have become very easy. It also provides a ready chart for having a look at historical price and PE charts.
Once the fundamental filters are passed and a rough idea is there about the merits of investing in the company next step is to have a look at charts. Having said that, it is very rare that an investment opportunity seems to be cut and dried. Most of the times there are a lot of worries in some or other form. With a long experience in looking at charts, spotting patterns is easy. If technicals also support the investment thesis, then taking a position becomes slightly more easy.
Regarding how to screen for potential winners, most of the times its the simple things like looking at 3/6/9/12 month highs or ATH, or some broad patterns like cup and handle, flag, rounding bottoms, etc or fundamentally speaking, monitoring the business of a company and its sector.
Once something seems like a no brainer after all this exercise, I buy and have a preconceived idea whether it is a short /medium/long term investment.
What website/app do you use for your technical charts?
In terms of technical indicators which ones would be your favourites or most useful?
Asking because I have been a fundamental investor for the last decade and getting into technicals only now.
This way I will know which would be the correct path to take, and which indicators to focus on, because there are hundreds of indicators available on sites like Tradingview and Marketsmith, both of which I have subscribed to.
Thanks again for sharing all your knowledge so generously.
I use screener, investing.com and metastock software for looking at charts.
I am not too much into indicators because I think most of the times they are lagging parameters. Sometimes I use moving averages.
I am more in favor at looking at visible patterns . Bottoming formations like double/triple bottom, inverted head and shoulders bottom, some patterns (not commonly ) seen at bottoms like trianlges , commonly seen bottoming formations like rectangular consolidation, rounding bottom etc. Other breakout patterns like 52 week, all time highs, flag, cup and handle etc.
I feel the above patterns combined with fundamentals work quite well most of the times.
Its futile to try to make sense of every daily move in specific companies. Too many factors at play. Results have been stellar and concall today too went quite well. So I think if one has the capability to think slightly longer term than a few days, it should do well.
I have seen similar things many times in the past too where seemingly good results in companies initially attracted profit booking and once this was over, stock started its upward journey. So one needs to think beyond the immediate term.
Over ownership, future already priced in at least for near term. I see this couple of reasons also DII selling.
Capex for this year and next year also could be reason.
Icici direct reports price target of 390 for a year.
So lets hang on for some time and keep tracking all the progress
I had asked similar question to Hitesh Bhai wrt Granules and learned. For granules I bought at higher side on the result day. But became wiser after answer from Hitesh bhai and self analysis this time. I waited for Laurus to cool down from results euphoria and bought when it was trading down
Edit : one more example of over and under ownership and price movement if results are good.
Kotak bank rallied around 10% or so after good results . Though it was not as stellar results as Laurus
Hitesh Sir ,I have question related to High valuation of performers in difficult times. Since companies are fundamentally solid but due to difficult market situation growth is muted or it is not in same proportion as it used to be. Fund Houses ,Investors are not ready to let it go.
Pidilite is one such company. Is it advisable to invest in a company at such high PE levels thinking that 2-3 year down the line it will give good returns. or shall we wait for earnings and only after that jump in the Bus.
@hitesh2710 , Hitesh Sir, there is a huge demand for seasonal flu vaccine shots all over the world and also recommend by WHO. Volumes wise this would be same opportunity like the coronavirus vaccine itself. Are there players in listed space in India that could benefit from this demand?
While dealing with high valuation companies, the one question we need to ask is in which situation would the current valuations sustain in the future and in which conditions would the valuations compress.
I think in case of companies like Pidilite with nearly 4-5 months sales and demand affected by the pandemic, one can consider the FY 20 earnings as depressed earnings year and hence some latitude can be given to valuations if management commentary regarding the next few quarter growth is encouraging.
@dilesh_nair I have answered the queries related to technical analysis and the books related to it multiple number of times so please go through the past few posts and you will get the answer.
GNFC is going to benefit immensely from higher products of some of its products like tdi. Recently i heard that they reaised prices of other products like acetic acid, ethyl acetate etc. So overall quarterly numbers can be good. Might be an opportunistic trade.
Can you provide any links to higher consumptioin of flu vaccines or any data points? We can take the discussion forward post that.
@Xamanus In the respective threads on these companies, I have already put up the investment arguments of the companies quite early on in the thread. Mostly those were fundamental no brainer picks at those prices and valuations. I think I was not practicing technicals too keenly back in 2010-2013.
Hello Hitesh Sir,
I have followed this thread since I joined this forum and have learned a few invaluable lessons.
Can you share your views on the IT Rally and the valuations of the big IT companies (TCS,Infy,HCL,Wipro,L&T etc)
A couple of them seem to be relatively inexpensive considering they have posted excellent results.
There have been a lot of salary cuts and a lot of office expenses have become zero , that maybe the reason why valuations are so stellar. In fact, from october onwards, hikes and deferred salaries are being reverted so next quarter might not be a very pretty picture. Still, IT and pharma have been immune to this chinese disaster.
Hitesh Bhai. How much so ever one may be bullish on a stock, do you recommend any max allocation to a stock in a portfolio, which you generally consider?
Portfolio allocation to a particular company is a function of style of investing, whether concentrated or diversified. And investor temperament.
If after researching a company from all angles, if one is very confident of risk reward equation, business quality and management quality etc, one can allocate heavily to that company. Say someone has a 10 stock portfolio, then ideally each stock weightage can be 10% but based on research and conviction, if the stock is very attractive, I will hazard to go to 20% allocation, twice the routine allocation. Now why only 20% and not 30% is a subjective view.
Above are my views for conservative investors. Personally, I sometimes go as high as 50% allocation, but I don’t lose sleep over these positions and these are for short periods of time. Mostly I have definite timelines and triggers in mind and I often trim positions based of price movements on either side.
This is something one has to experiment with and figure out which is most comfortable style to one’s mindset. There is no one size fits all kind of answer.
The current Laurus imbroglio presents some interesting observations especially in context of impact of social media on us as investors and the psychology of those who post on these social platforms.
First is the impact of negative newsflow. It is common knowledge that negative news tends to gather more eyeballs as compared to positive news. I had read about some experiment a newspaper did aboout publishing only positive news for a period of time and their newspaper sales plummeted. If these guys on twitter and other social media keep posting positive things about companies, then no one is going to notice too much. But if they come out with some negative posts, especially in a cryptic manner then a lot of people are going to read about it and circulate it to a wider audience. I have seen quite a few guys on whatsapp groups who keep posting tweets of some regular twitters about investing gyaan. My take is that if I have to take investing gyaan, there are loads of first class books written by well reputed investors and hence I do not have to read any stuff written by these guys. But such is the nature of a lot of guys.
The other aspect is of reflexivity. If we observe all these negatives comments start materialising after stocks have corrected to some extent. If these guys post negatives about a company when stock price is in a strong uptrend, no one will bother reading about it and the guys who post negatives will suffer ridicule.
The other aspect is that bringing out negatives in a story is quite easy. I remember couple of weeks back, there was a lot of noise about Aditya Puri having sold off his major stake in hdfc group after exiting from hdfc bank management . So there was some post about him knowing best when to exit and hence a lot of effort was made to create panic in hdfc bank shareholders. Those who knew the business were not worried and remained invested. But those who got shaken exited and lost their positions. There were also some posts alleging that some or other form of fraud was created. Again these kind of posts were totally unsubstantiated but that did not stop anyone from spreading the tweets.
Similar such tweet/news/rumour were circulating about the health of Mukesh Ambani when RIL stock price started falling. I don’t want to get into too much details but most of the guys on Whatsapp had a taste of those kind of rumours. Now today, it seems Mukesh Ambani is going to meet the PM as a part of delegation and hence these kind of rumours it seems will be put to rest.
So how to deal with such situations? Best course is to stay away from all such noise. Stay away from twitter/social media etc or if present there, try to follow guys who induct some positivity in you. Or whose posts give you a sense of positivity and joy. But if staying away is not possible then the other option is to learn to seperate the wheat from the chaff. Now how to do it? Ideal way is to know a lot about the business and management. Best way is to go through authentic sources like AR, presentations, concalls.
I have made it a point to stay away from people who spread negativity, or spread unsubstantiated rumours, or spread hatred. Hence I dont use twitter (which according to me is a platform for ego massaging for some people)
Finally I would like to reiterate that anyone investing in a company needs to develop his/her own conviction and hence during times of correction is not swayed by meaningless negative chatter.
We are wired to like negative news and even feel a sense of satisfaction for negative news related to things we dont own.
I have seen this personally as an investor in a few banks namely HDFC bank right during the collapse of March. And with every sale by Mr Puri thereafter he was being compared to someone abandoning ship. Even analysts from large houses have had factual inaccuracies in their reports. Despite the whole world asking us amateur investors to sell we need to have the confidence in what we are doing.
Too many behavioral aspects for average retail guys like me to manage
