Hitesh sir sounds right. More than 16% stocks listed on BSE are closed on UC, seems like penny stocks are buzzing.
That might be due to circuit filter revision took place from yesterday.
@hitesh2710 Good day Sir! What is your opinion on ADANI POWER, it has been hitting upper circuits in the last couple of days and has risen around 71% in a week. It has also broken its major resistance level of 2010, @140. Besides, its market cap is at a decent 64K Cr. Can this stock go on a run from here?
As somebody who participated in the last sugar cycle till 2017-18, I missed this cycle - didnāt even anticipate the ethanol story when everything went down in Mar 2020. Iām also always very cautious where govt is involved, as sugar after some half liberalizations from previous govt has become fully govt controlled more so with ethanol now.
Would like to learn from you:
- How you foresaw the sugar momentum back in March 2021, as I felt sugar stocks based on cycle valuations (including ethanol) were expensive even then. What point would you have sold if your sugar stocks had gone down (as it was a momentum play) ?
- How do you keep cash available (and how much as %) to take advantage of such opportunities ?
- Did you foresee the March 2020 lows (any signal) and closed positions earlier ?
Thank you
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@hitesh2710 Hope youāre well !
I presume the fact that you are tracking small and mid cap indices is based on your experiences from past bull runs?
If yes, could you share what exactly happened in the past and when, so we can get an idea of what exactly is the context? 
Did the small and mid cap indices start going down, much before large caps or was it the other way round, when you were invested at such times, in the past? I also read somewhere that there is usually a gravity-defying rally across the board, before a bull market tops. Is this correct?
As always, obliged to you for all the wisdom you share with all of us.
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What do you think about holding gold etfs instead of cash?highly liquid and do well during crash
I think I had written my investment thesis in sugar stocks some time back. Broadly the main story was on ethanol theme. The first sign was the visible increase in off take of ethanol by OMCs. This was the first proof of the story gathering momentum. But at that point of time there was a lot of disbelief among investors because there were a lot of false starts on the story before and the story never really took off.
Next thing was the price patterns formed by a lot of sugar stocks. Most of them were forming tight consolidations or bullish formations like double bottoms etc.
And then Balrampur Chini crossing its all time high of around 200 was the final proof needed. Even after this point, the second and third rung stocks had not moved much. That was the opportunity to load up.
The thing that caught me by surprise was the magnitude of the upmove. Most of the stocks went up nearly 30-40 up from where I sold off. I donāt have too much by way of regrets on this front, mainly because I had a healthy allocation to sugar names in my portfolio because of my conviction. But as a learning I can take home a message that when a sectoral move begins and goes on, it often tends to go much beyond our imaginations.
And now I get questions from some of our boarders about whether they should buy sugar stocks inspite of this run up. I donāt know how to respond to these queries because I myself am out of it. 
About keeping cash available in my portfolio, I have been most of the times remained fully invested and have often borne the pain associated with it. But these kind of decisions cut both ways, so as long as portfolio returns are good these kind of decisions donāt assume too much significance.
About whether I foresaw March lows, no, I did not foresee the kind of brutal correction we witnessed. I was quite early to sell off my entire portfolio barring a couple of illiquid names, and did not invest for a couple of months post the lows were posted. I think in hindsight it helped me because it gave me a proper mindframe to take clear headed decisions to invest. More so after I guessed that a bottom was already in place. Neither did I anticipate the kind of rally we have been witnessing. So for me the lesson learnt is not to try to forecast too many things and take things as they come.
Of late I have been worried of the frenzy we have witnessed and hence have been trimming my positions where I feel my returns have met my expectations. They can still go higher but at some point of time we have to learn to pull the trigger especially if one is a momentum investor.
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Whenever in the market we feel an aura of invincibility about our investment acumen and skill, its time to take a step back and think hard. Since past many weeks and months, whatever we have bought (of course after having seen the fundamentals and technical picture) has paid off. Making money seems ridiculously easy. This I feel is the time when we need to be at our cautious best and evaluate investment decisions.
Each time during past many corrections the main observation has been about excesses being committed in the markets. The kind of run ups in stocks and the justification given for such run ups we have seen currently is often repeated during most market frenzies. The outer contours of the rallies differ but the underlying theme of greed remains the same.
A sense of complacency is often seem in the investor community. Since so many sharp corrections have been bought and rallies have resumed, even during the last rally this same feeling will be there. We have no clue which rally will be the final rally.
The bigger problem about being in the small and midcap momentum stocks is that even a small correction in nifty can cause significant cuts in these names. Hence one has to be nimble so that most of the gains made are captured.
If we are invested in solid names these issues do not assume too much significance. But at the same time, the run ups too are measured in these names. So one has to choose where one is comfortable. And at times change tracks to get the benefit of different market phases and sectoral fancies.
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Hiteshbhai
After listening to concalls of some of the sugar companies and reading on ethanol blending policy am wandering why are sugar companies are trading at lower multiples inspite of the tremendous run up. I know if we compare them to their historical 5 year multiple they are trading at 2x-3x multiple but if we compare them with broader market they still seem to be cheap.
With Ethanol blending policy isnt sugar industry transforming from cyclical industry to structurally stable industry with predictable demand and pricing. Infact it now becomes one of the very few industry where there is huge demand supply gap atleast for 4-5 years, coupled with superior pricing and better working capital potential. Most of the big players have announced their investment plans for eg, BC has announced plans of over 425cr, Triveni has announced plans for over 250cr with payback period of over 4 years, so impact of this plans on revenue will be realised post fy23 onward
Would be great to hear your views on what could be the antithesis. I could think of dependence on government can be risk factor but after listening to industry captains very one seems to be confident of goevrnments intent on making ethanol blending highly successful
In context of sugar discussion, sharing a thread posted by @jitenp on sugar, last year. Sharing it now, as I think it might add value to the discussion. Please delete if found irrelevant.
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@hitesh2710
Sir, You really are a guiding light in this forum. I had a few doubts as well if you could just have the time.
Do you have a core portfolio and a trading portfolio? Core portfolio, wherein you hold on no matter what and a trading portfolio, where you take momentum bets. Or is it just a single portfolio wherein no name is too sacrosanct to sell? What would be your average holding period then & the max. no of stocks you may own at any time? Is the Buffet strategy of holding on for life too outdated?
These are the problems I myself face and have not been able to reach an appropriate conclusion as such.
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Hitesh Sir,
In frothy market conditions like the one we are witnessing now, what is the proper way to deal with fundamentally strong stocks in portfolio such as Asian paint, Nestle, Divis, HDFC bank etcā¦ Regards
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@hitesh2710 Sir,
I want to invest in S&P 500 ETF funds. I want to know how to do easy valuations of such funds?
Earlier I used to have a core and satellite approach in my portfolio. But with imposition of long term capital gains of 10% there is very little difference in taxes for short and long term. So the benefit of having long term holdings for tax purposes is negligible. This was one of the factors in change of strategy for me.
Other thing is the state of current markets. We have a broad based rally going on with frequent sector rotations. If we want to participate in these sectoral rallies, and maximise returns. then fund crunch is a big problem. Sectoral moves like sugar provided nearly 50-80% moves within 3 months. To maximise these kind of opportunities, I tend to be aggressive in allocation towards any sector where I am very convinced both fundamentally and technically.
In such a backdrop, I cannot afford to keep my capital locked up in long term compounder kind of stocks especially looking at current markets. Hence I now look at my whole portfolio as a whole and take appropriate allocation decisions based on the opportunities I see.
I do not use any kind of leverage in my portfolio as a matter of principle. So based on current market mood, most of my portfolio is occupied by momentum investment picks. In fact you can say that the whole market is a momentum market itself, so no need to seperate positions into momentum and non momentum.
I believe in adapting to market moods and based on current mood the above is my strategy. If tomorrow things are going to chage, I will bring in changes to my investment style.
I strongly believe that the first and most important step in investing is to know yourself as an investor. What kind of investor you are. If you have a rigid mindset, not willing to change your style (nothing wrong with it) then there is no point in trying to keep changing styles. But if as an investor you are adaptable and can align your strategies according to market phases and moods, then it makes sense to keep doing it and try to keep getting better at it.
At a personal level after reading a lot of William o Neil, Minervini and other momentum investors/traders, I feel myself identifying with momentum investing. Thatās what I enjoy doing and thrive at. If you start enjoying your investment process, then returns will follow and there is no better thing that it.
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@hitesh2710
Thank you sir for replying. Your insights are pure gems. Personally, for me too the books by O Neil, Minervini & Stan Weinstein have totally changed the way I look at markets.
I wanted to ask you just one more thing. In a market like ours now, there are many stocks with favourable patterns and which qualify on the entry parameters. How do you manage the urge to buy? For me, if something favourable shows up I start initiating positions in that scrip. The result is that I end up with 40 stocks with very small allocations.
Yes, its confusing and I definitely do not want to hold so many. Is this because that my buy parameters are too relaxed or is it just a discipline issue? I still have not got myself to start up with a higher amount in the first go and I usually build positions slowly. Do you build positions in a staggered way or do you go all in?
My momentum investing experience is miniscule and may be time will teach a lot. Did you go through such experiences at the start? Pardon me sir, if I am asking a lot. 
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@hitesh2710 % Capacity utilisation will be still low as per management in SANGHI INDUSTRIESā¦such a debt on higher rate of interest
HI Dilesh,
I am in similar boat, one of the solution i see is to take only the those stock where the sector is strong and supporting and reward is better than risk, and have concentrated stocks. So top down approach could be better. you can watch his videos where he always explains in terms of risk reward and his approach looks good .STOCKS I HAVE BOUGHT RECENTLY (SWING TRADING) š¹ - YouTube
regards,
Chethan
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Hi Hitesh sir, how do you know which particular sector is trending? Do you look at which sector has given the most return in last 1 week, 2 week or 1 month or is there any other way of identifying this?
Also do you look at individual stocks or sector indexes?
Thank you in advance for all your guidance 
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Hi Hiteshji,
I have taken a small opportunistic bet on cement sector ( basket of kcp,orient, Birla, ultra) with a view of recovery.
Do you think it wise to exit opportunistic beers and stay in cash?
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