Hitesh portfolio

[hitesh2710]

@ChaitanyaC

I had a torrid fling with derivatives when they were newly introduced in our markets. At that time I did not have much capital to start investing, and neither did I have much knowledge about investing, or wealth creation or any such concept. So I did what a typically novice guy in the markets does, in a an effort to get rich quick. I had got the concept of futures and options very quickly by attending a seminar done by a brokerage house at that time. And I found options to be fascinating instruments back then. The idea of limited losses and unlimited profits by buying either call or put options was very exciting for me.

I tried options for a couple of years and also did some futures trades, but with options, did not get a proper handle on the time decay factor in options and hence managed to lose money even when I got the direction of my trades right. After a point, it started affecting my sleep and I decided to give it up back then.

But now (since last month on prodding by a friend I stayed with in US recently ) with ehnaced understanding of these instruments and technical analysis, have tried my hand at options in my HUF account, to keep investing and trading accounts seperate. Managed to score a big hit last month while I was out on vacation, and got a kick out of it. But I have decided to keep the trades to very limited trades and only if I get the perfect set up, and that too with a small part of my portfolio, which I can afford to lose completely. As compared to earlier, I feel I have a better grasp of options understanding, technicals and position sizing. But I do it now only to challenge myself and have fun and not as a means of enhancing wealth. Wealth part is already being taken care of by hard core investing, based on fundamentals and techno funda investing.

I try to avoid futures altogether as idea now is to have fun besides the asymmetrical pay offs in options. I have a lot of doctor friends who do options selling based on covered selling strategy, but I am still scared to do all that complicated stuff. For me, if there are opportunities to buy either call or put options, in either stocks or indices, I would consider it, but that too reluctantly. Peace of mind is much more important than making those extra bucks.

However I would refrain from advising anyone to go ahead with derivatives as its a dangerous game and can wipe you out. I have seen those examples too in some friends and acquaintances. I would not even be discussing about these in any of my threads, Put this up because I wanted to be truthful to your question.

[ChaitanyaC]

Thank you very much for the detailed reply sir. I am not one bit surprised regarding your current activity in the segment, as we all know what kind of an investor and trader you are, in terms of astuteness, experience and range.

I couldn’t just like your reply and be done with it, particularly because of the preciousness of your time, which you have allotted here.

Thank you again.

[avneesh]

Hi @hitesh2710 sir, I was reading How to make money in Stocks by William J. O’Neil. Need your guidance on these two questions:

1. The author suggests going for heavily concentrated bets and aiming for a 30-40% profit target. Since you have been following this book, what is your take on concentration vs diversification? Does entering at the right pivot points will save us from the drawback of heavy positions?

2. Is there an Indian alternative to Investors Business Daily?

Thank You

[Robin_Nehra]

Hello Hitesh Sir
What are your views on battery manufacturers like Exide, Amaraja etc.? They have good tailwinds wrt EV and renewable energy themes in India and globally. But, both companies have single digit growth in last 5 years.

[hitesh2710]

@avneesh

William O Neil suggested taking concentrated bets as you suggested and aim for 30-40% profit targets. Actually this was one of the many things he advocated. But coming to this specific aspect, I use it frequently. If I don’t have an idea with much higher returns potential at any point of time ( there are often many ideas, but clarity related to the business in the initial phase of investment is not there and story often unfolds a quarter or two down the line) I often go for ideas where my techno funda picture provides visibility of around 30-40% returns. In these cases I often allocate 20-25% of my capital if I am very sure about the business, and the picture is clear for expected returns on charts and in fundamentals. If on a 20% allocation, I expect around 30% returns within around 3 to 4 months, it provides me with 6% overall portfolio returns within 3-4 months from a single position. That’s how I think about it.

Allocation is one of the most understated aspect of investment. After a point, stock selection is often easy, but allocation is sometimes the key to generating higher returns at a portfolio level. Betting hard on sure shot, high conviction ideas can do wonders for the portfolio.

Regarding alternative to Investors business daily, I don’t know of any such similar option in Indian markets. Maybe someone who knows can pitch in.

[hitesh2710]

@Robin_Nehra

Exide and Amar raja are in a duopoly market, and both will in all probability enjoy the tailwinds from renewable energy and EV segment too. I remain bullish on these names, but as of now do not hold any of them.

[sujay85]

@hitesh2710 ji,

Please share your insights on the state of the current market.

Personally I feel that euphoria is there is some pockets but overall we are in optimism phase. There are many pockets where value seems to be present.

It would great to hear from you.

Thanks in advance.

[hitesh2710]

We are in a strong bull market since past many weeks. While the nifty is taking some pause, the small and midcaps are showing a lot of strength and a lot of stocks from these spaces are showing parabolic moves. I am seeing these kind of animal spirits in the markets after a long time.

CNX midcap had posted a top at around 32500 in October 2021 and the zone of 32500 (plus or minus a few hundred points ) has been offering sustained resistance ever since. This midcap index however managed to cross the above mentioned resistance zone in May 2023 and since past few weeks we have seen very strong rallies in a lot of fancied names in the space . Once an index that has been under pressure for better part of nearly 18 months breaks out, the subsequent rally can be fast and furious. That is exactly what we have been seeing in our markets.

Some amount of froth is visible in the markets especially in the fancied sectors like defence, railways, power, electronics manufacturing, just to name a few. A lot of stocks have run up a lot based on narrative alone, even before results have been delivered.

A lot of Whisper stocks are also going up, based on rumours and stories floating around on social media like Whatsapp and Twitter. Investors need to be careful not to get caught up in these kind of names. While the run ups in these names have been and will be swift and very alluring, major mistakes are committed in bull markets. So care has to be taken to be invested in good quality companies even if return expectations are lower as compared to the proverbial cats and dogs running hard in the markets.

Many stocks that were darlings of previous bull markets but had fallen out of favour and had corrected drastically are also showing some signs of life. New kinds of narratives and stories are built around these kind of names.

A good thing observed in the markets of late has been the allround participation in the bull markets. Previously neglected sectors like pharma ( there are some others too, but this one catches the eye easily because of more familiarity with the sector) and some other sectors are also showing strength and this is a welcome sign.

Every strong bull markets brings about a feeling of invincibility in the mind of investors and this time also its no different. So while its the time to keep riding the bull markets, one has to keep an eye open to spot any signs of trouble brewing at the earliest. Capital preservation is often a neglected aspect in strong bull markets.

Personally as of now, I remain fully invested and am comfortable riding the momentum, but will be on look out for signs of any excesses/froth.

[rahil_sayta]

Hi hitesh bhai with strong momentum ongoing and some stocks flying with the overall momentum

Do you track infra companies EPC contractors ( NCC / KNR / prestige properties. Most companies have a good order book and execution remains to be seen. 2015 & 2018 where most have seen a 2-2.5 times price to book. Do you track any and your views

Also a question on HBL with price doing well and momentum being high but on new orders or execution there has not been much development price has moved from 100-180 . Your views on how to play the theme at current juncture for some one wanting to enter the moving train.

[hitesh2710]

@rahil_sayta

Most infra companies have been showing strong momentum since past few months. Some like NCC have broken out above nearly 15 year highs. ( above 142, NCC broke out above 15 year highs. ) I do not track the fundamentals of these companies too closely so not much idea about that. Charts of some of these companies look good.

HBL fundamentals have been well discussed on VP relevant thread. Currently it is more of a momentum play and it has to be played accordingly.

We are in a market where narrative has again started playing an important role. So a company which is perceived to have good future prospects often runs hard even before decent results have come around. And many a times by the time actual good results are declared, stock price has run so hard, it tends to go sideways or often corrects even on better than expected results. But if the prospects for future growth remain bright, after a brief pause or correction, upward momentum is regained.

We are in a market with strong momentum and those wanting to board fast moving trains should be cognisant of the risks involved and then only attempt to board these.

[newone]

Dear @hitesh2710 ji

It would be very helpful if you can give an indication when you notice signs of excess and peak momentum in the current bullish run. If you can also provide details on the signs, that will be good for learning purposes. Thank you

[Nilesh27]

@hitesh2710 ji whats your view on best agro, companies profit is droubled in last 2 years, margines 3× and land is expanded from 6 to 36( 6X) plant and machinery from 1 to 65, but CFO to pat is -93% and cfo to EBITDA is -57%.

[alchemist]

@hitesh2710 Sir, would be able to share your thoughts on ACGL with me? I like that Tata Motors holds a 49% ownership in the company. The story looks good however im not a strong numbers guy and maybe the stock is overvalued? Would appreciate your views on it

[Naresh]

@hitesh2710

Polycab has had a strong run up from levels of 3800 to 4900 in last few weeks and is taking a pause. It remains in a strong uptrend, but while riding these kind of moves, one needs to be careful about following appropriate stop losses. KEI has been in a strong uptrend ever since it rallied post Covid. This week on weekly candle it formed a bearish engulfing candlestick and hence one needs to take that into account. I don’t follow any of the two companies specifically, so do not hold any views related to them.

This also marks the peak of margins for cable companies. While problems in Peru for copper have started pushing the price of copper upwards (which benefits Hindcopper) this will start affecting the margins of cable/wire companies which have copper as primary raw material. Kei’s results also validate that. Thanks for the update on the technical side Hitesh Sir.

[kapilsk_sk]

@hitesh2710 sir can u plz guide me on suven pharma and andhar sugar as d stocks have been stuck since a long time and even when other sugar stocks have been in focus andhar sugar is been hitting 52 week lows …thank you

[Santhavel]

Dear @hitesh2710 ji,

I have been following value pickr since Dec 2021 and this is my first comment. Before I startwith, I would like to thank all the members of this community for their valuable contribution.

In the last three trading days, I see a sudden uptick in the momentum with NTPC with the firm came out with decent set of numbers.
I am not clear whether this rally is driven by optimism or by fundamentals, as the stock now at its multi year high?
On the fundamentals, I only see the regular capex, plans to divest stake in Green energy and the recent one to hive off its coal mining into a separate entity.
Does the power manufacturing companies have any chances of re-rating with more focus turning towards Green energy ?
I would like to hear your views about the future of this power production companies.
Thank you once again.

Disclosure: 15% of my portfolio (Invested from 90 levels).

[hitesh2710]

@Santhavel

NTPC is one of the many Public Sector companies having a dream run. This has been a sector that has been long neglected by the markets and after many years a lot of these PSE are finding investor fancy.

We are in a phase of sectoral rotation. Some sectoral rotations die down within a short time of a few weeks, some last longer for a few months. PSE companies have started their run since past few weeks. ( Defence and railway PSU stocks have had a stellar run till now and its been more than a few weeks run for them. )

When stocks start these sectoral rallies, the reason for moves in individual stocks is often difficult to figure out initially. Maybe in some cases, the reasons come out later on once the stocks are halfway up in their rallies. Regarding NTPC, I only track the stock price movement and the chart structure as I find it difficult to figure out the fundamentals of the company. So not much idea about the reason behind NTPC run up.

@kapilsk_sk I don’t track either suven or andhra sugar.

@alchemist I don’t track ACGL.

@Nilesh27 I dont track Best Agro.

[Raj_A_A]

Hitesh ji,

Gail India results is below estimates Y-O-Y while Q-O-Q results are very good due to low base. How does the techno funda status look like post Q1FY 24 results?

[Anand_Dharsandia]

@avneesh

Is there an Indian alternative to Investors Business Daily?

Market Smith India is the alternative. You can go through following link to understand their commentary:
https://blog.marketsmithindia.com/msicatgory/daily-big-picture/

[hitesh2710]

@Raj_A_A

GAIL above the price of 114-115 gave a 4 year high breakout recently. Post this breakout, stock price went up to around 122 and is now correcting with overall markets. After a breakout, retest of previous resistance zone is quite common in these kind of set ups. I think that’s what is going on, and I would be observing how the stock behaves during the retest. Results wise, GAIL is not a company that is easy to analyse, and business is vulnerable to government policies and regulations also. So one has to play it accordingly. I am purely playing it as a breakout with well defined targets and will apply appropriate stop losses if needed. Anyone contemplating investing in this company should do their own diligence and take a call.