There is no one size fits all kind of strategy in investing. We have to try to figure out what our niche is and then design a strategy to fit that niche. And even then at times we will continue to feel that something is lacking. Atleast that has been my experience. But instead of lamenting and moaning about those things, idea should be to move ahead and try to find a better way of doing things. This is often easier said than done.
What you say is the free shares concept. I have seen many investors practice that concept. It can be a good way to go about things.
@Ravi89 I have not been tracking MAS since a long time now. But these companies dealing in microfinance etc and catering to needs of SME etc are bound to suffer in challenging times like in Covid. Because those are the very sectors and segments most affected and will take longer time to recover from their woes due to smaller size and limited resources.
Bhageria q3 results have been very good in terms of topline growth. There has been very good y on y growth and q on q growth in topline. Margins though still remain under pressure. That has been a factor affecting a lot of chemical companies. But if the company can continue to show impressive topline growth, margins should be expected to fall in place at some point of time and once that happens the swing in bottomline can also be noticeable.
I think these are times when one should do deep digging in such names and try to figure out if and when margins will improve. If we can get that call right, there can be a lot of money to be made. It remains in my watchlist.
@PratikS Guidance regarding technicals and how to go about it has been mentioned previously on this thread. Basic idea should be to read some broad based technical analysis text book like Edward and Macgee, or John Murphy and see what interests you. And then take it forward by reading more on the selected subject. Technical analysis is a vast subject and one has to choose which part of it is to be pursued. Or else if one wants to go the full distance and learn it all, then its a long process and will take a few years of reading and then observation. You can also watch videos of momentum masters like Mike minervini and/or David Ryan.
I think you are referring to replacement cost theory. If we are getting a cyclical company for less than replacement value during cyclical downturns, it often turns out to be a value buy.
Cement companies are conventionally valued on EV per ton basis. And once the capacity of the company crosses 20-25 MTPA, the valuation per tone goes up a lot because of benefits of economies of scale.
Usually the hunt for value has to be done at market bottoms. At the current juncture after a lot of run up, there are very few sectors where value buys are available.
SCI results as you say have been very good on first glance. For me it was a good techno funda bet when I got in around 90-95. Then some excitement related to divestment led to some rallies which often fizzled out. It has not been an easy ride. I had begun with a decent sized allocation, but seeing the time taken for divestment, have reduced allocation, but remain invested with lesser allocation. It remains a test of patience.
Do you track Jubilant Ingrevia ? It has come out with a good set of results. Though on the last quarter there was some pressure on the margin due to increase in RM cost and freight and the stock took a bit of a beating, this quarter from the numbers and also from the management commentary, it appears that they are able to pass on the RM hikes.
IMFA is a company which creates a lot of wealth if one knows how to ride the cycle. However fact remains that it is a cyclical and will remain a cyclical. From bottoms it can go up multiple times but during bad times fall will be equally swift. No matter what changes in the company, the business segment characteristics do not change. Currently we are in a cyclical upswing and hence things do and will appear rosy. That’s the nature of all cyclicals.
@Bhavya_Vyas Laurus remains a company trying to find back its mojo. IB real estate seems okay but true picture will emerge once all the merger/amalgamation formalities will be over. Not tracking others.
Hello Hitesh sir,
Do you still hold Force Motors? Looks like inverted H&S pattern didn’t play out as expected. It is trying to hold on to the current level (~1200). How does the story looks like going forward?
I got stopped out of force motors once it broke below its 200 dema. The fall from 1650-1700 was very severe and almost one sided. Going forward, I think it will take a heavy dose of good news or data points for it to make a comeback.
@Bhavya_Vyas I dont track saregama or music industry.
MM fin q3 fy 22 results seem to be on track as per management guidance. I think the reduced provisions and maybe write backs of earlier provisions are boosting net profits. I got stopped out of my position and hence have exited, but overall the results seem to be okay. And with economy likely to be on track going forward, a lot of these financials could show strong growth. If they manage to show profitable loan book growth, these could provide decent returns.
Its a tough ask to predict when markets are going to make a new high. But since the rise from 7500 to 18600 has been steep, markets were anyways expected to take some kind of breather. And that actually is healthy for the market. In the process a lot of excesses that were earlier built up are now getting cleaned up. A lot of the high flying stocks with crazy valuations are correcting, some even inspite of good results. And those companies where earnings are not meeting expectations are getting hit hard, and deservedly so.
I usually do not look at market levels in my investment process. My main focus has always been on stock selection and allocation. The current market is somewhat of a blessing for stockpickers. Companies with good to very good results are also not showing breakneck rallies which used to be the case in the past. So there is enough time to study companies, listen to concall (wherever conducted), do some other forms of research and then take a call. Only case I would be worried would be if I see some sort of falls which portend larger corrections. As of now things seem to be pointing to healthy correction, but I would be on the lookout for signs of trouble as and when they emerge.
The exercise investors need to do is to find out companies which have good earnings visibility over next few quarters (or years in rare instances) and try to figure out good entry points if there is good conviction.
The only point of differentiation about investing in say FY 22, as compared to earlier few quarters is that investors will need to temper their expectations and try to play on the safe side and focus on capital protection while chasing returns. In a way its the time of combine a little bit of solid defence while playing shots. And be careful of shot selection. Try to avoid playing too many lofted shots. Risk aversion as far as possible.
What are your thoughts on the recent correction in Schaeffler India? Although the company has been reporting great numbers in the last few quarters, the stock has corrected by 15% from it’s all time high, after the split happened. And this is in the absence of any news.
My guess is, at 45 times earnings, it is correcting like most other growth stocks? Or perhaps the market thinks there is a lack of certainty in the company’s future prospects.
Would you adhere to a stop loss in such cases or stay invested?
Thanks for answering our queries patiently, as always.
Schaeffler has had a phenomenal run from 1200 to 1900 once it crossed its previous ATH of 1200. (split adjusted prices). Its normal for prices to correct post such rallies. Results are around the corner on 16th Feb and I think that will dictate further price trend.
In current markets we have to understand that most stocks that had undergone strong rallies previously are taking a pause and retracing some of the gains to varying extent. Companies that have strong growth visibility will outperform going forward and those that were going up only on narrative are going to have a difficult time unless they start delivering numbers.
@Kailasa_Tiwari I dont track Sail, or any other metal stocks.
how do you read promoter buying especially in this market. In the case of Mastek Ltd., the promoter has bought in last two week 14000 shares at 37 crores.
Risk aversion as far as possible.