What you have heard is a biased opinion given by generic branded companies
I think you don’t know about RMPs. In small towns, they have good number of patients and they use cheap generics with very good effect.
I know a dentist who buys cheap generics and these works on patients with good effect. He buys cheap generics at 60 to 80% discount of branded generics and charges customers generic branded medicine price.
This dentist is offered ACs and visit to out of India conferences to start prescribing their medicines but he does not do it.
Majority of raw materials come from China and very good chance likely from same or almost same manufacturer. Both generic branded and nonbranded almost use same quality raw materials.
I had shared my process of analysing companies at following link
Regarding the companies you mentioned, I don’t track any of those mentioned. However I can see that a lot of good detailed work has been done on tinna rubber on its VP thread. You can go through it if already not done so.
Hello Hitesh Sir
What is entry criteria to use for entering into a stock. When a stock crossed 30 Week moving average and sustain for couple of weeks then is it good entry point?
Had some personal experience with my father buying medicines from govt hospital at 66% discount. He was supposed to take medicine for prostate. That medicine didn’t help his prostate problem increased day by day. A friend of mine is in medical line of govt hospital he also told not to buy those cheap medicines unless it’s from some known company.
I started reading Stan Weinstein’s Secrets for Profiting in Bull and Bear Markets recently and found it really helpful. It’s a must-have book for momentum investing.
Let me try to answer this since I have just started reading Stan Weinstein’s book (Thanks Hitesh!) -
The best entry point is when the stock consolides in a trading zone (Stage 1) and then breaksout over the resistance and crosses over 30 Week MA with high volumes. Ideally wait for the 30 Week MA to flatten. A second chance to enter is when the stock pulls back on lower volumes to touch the previous resistance ( now a support). For traders, a better entry point is when the price crosses over 10 Week MA which itself is above the 30 Week MA.
Additionally the relative strength of the stock should be strong.
Repeating something I wrote earlier… “Lets not make this a generic thread on asking anything and everything without making any efffort at understanding ourselves. This is a forum to learn and if possible earn based on that, rather than spoonfeeding. So let’s keep it that way.”
If you want to learn technicals there will be a lot of helping hands available, but you would have to do the hard yards and get the hands dirty. I put up charts I find interesting on the 52 weeks high thread on a regular basis.
I have found that Averaging up works the best, mainly because you are adding in the direction of the trend. So trend is your friend.
Averaging up did not come naturally to me. I usually bought big chunks at the beginning of my investment in a particular company and used to cut positions as stock prices went up in a bid to reduce my purchase price. But after a while I realised that if my picks had to make a difference to overall portfolio, then I had to be concentrated in my winners and not dilute the positions. (unless allocations went out of sync)
Usually it takes a couple of instances of averaging up and the previous mental blocks are released and this thing starts becoming easy to practice.
Averaging down is a tricky thing. It can work if you know what you are doing and know your company in question in side out. Or else if you are very very good at technicals and pick up stocks you own in declines at crucial turning points, from where stock prices tend to reverse direction.
As you know, I am a firm believer in many of the tenets of technical analysis… So averaging down is often difficult. Sometimes I find that in stocks I own, (and am very convinced about the fundamentals) there are routine corrections of say 10-15% and stock price shows consolidation and some signs of reversal at crucial levels . ( important fibo retracements, or important moving avgs, or breakout levels etc) . In these kind of situations, I often increase my holdings.
In one of my major holdings, fluorochem, the fundamental picture was quite encouraging since past few quarters and management commentary was good and actual delivery was even better. I was quite late to the party, having entered at around 2200-2300 ( I was told about it at around 700 few months back by a friend, but somehow managed to miss it because of focus elsewhere, and stupidity) and saw the stock price starting to move up. I kept averaging up as liquidity was also not very good. On 1st June, stock price started correcting from levels of 3000, ( on 13 june I was stopped out of my position in RBL bank, so I was flush with funds and hurting because of being stopped out) . Now on 20 June stock price reached its 200 dema around 2400 and there were signs of reversal exactly at that level, which also happened to be 61.8% retracement level of previous rally. So I loaded up on that day and there was some strong selling, which allowed easy buying… Stock price rallied strongly post that. Even after recently quarterly results there were a few days of weakness, where stock price was available at around 3250, (above crucial breakout level of 3200) on some days. I had bought then also. Fluorochem is one of those rare instances where the technical and fundamental picture is very clear and I was able to use technicals to good use in a company with strong fundamental momentum.
Hitesh bhai
After you have decided on increasing stack in flourochemicals, is recent trend about reduced FII & DII interest and increased retail participation, is a factor that you consider while looking at the counter or it’s just the technical you focus on while you make future moves.
Yes this is a bit surprising for a company having a market cap of 30000cr plus . There are only 7 companies whose MC is more than 30,000Cr and with both DII and FII holding less than 5%.
Hiteshbhai,
Global MNCs like siemens (CMP / 52 WH - 2845/2875), Cummins (1250/1289), Schaeffler (2998/3089) and others like ABB, Honeywell A, SKF are trading near 52 weeks’ high. Their PE got expanded by 50-80%; e.g. siemens 3 yrs PE 49 vs current PE of 83.
This is the link to a recent interview with Ridham Desai, he articulates something interesting about manufacturing / MNC (first 2 mins to 4 mins).
Looking for your views on global MNC. The big dilemma is that most stocks have risen well ahead…Is this opportunity or a trap? What’s the best way to participate in such a situation? Thanks
To what I was reading most of these MNC have already excess capacity so if demand is strong there will be margin expansion and sales growth . P/E may not be right matrix.
Check deepak nitrite graph P/E for 2016 around P/E was 86 somewhere I read in this forum itself.
Now P/E may have normalised but growth played a role in terms of valuation going up.
In my analysis, opportunity size, scalability, and management smarts take the top spot. All this FII/DII holdings come much later on in the equation. And you can recall what Peter Lynch had to say about mutual funds industry and advantage retail investors have against MF industry.
The idea is always to look at the complete picture rather than catch hold of bits and pieces to paint a picture.
In a toss up between very high DII/FII holding and price decline versus lower DII/FII holding and price going up consistently, you can guess where my odds lie.
@valorem The queries you have raised have been answered many times in the past. No use repeating same stuff again.
There are times in market when MNC fancy starts getting built up. Currently we seem to be in such a situation. And most good companies in cap goods space have MNC parentage, so the choice becomes easy.
I don’t want to get into the the debate of PE or its appropriateness. I personally don’t track any MNCs so not much idea about these companies or their valuations, or investment worthiness.
