Hitesh portfolio

Q&A: Questions & Answers Portfolio Q&A
7517

@hitusohi1

You need to decide what kind of investor you are. What kind of analysis will you excel at. If its TA (technical analysis) then learn and practice TA. If FA (fundamental analysis) then do the same for FA. Or if you can learn and practice both, go for a combination of TA plus FA.

And finally avoid learning from YouTube. Because anyone can be a YouTube guru these days, and you don’t know their track records. While if I follow books written by a well known guy like Peter Lynch, or William O Neil, or other such luminaries, I know whom I am following because these kind of people have a long track record of well documented success.

@Monika_Chaudhary
Answer remains same as before. Its better to learn first and then attempt going full throttle. Bull markets induce big mistakes.

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7518

@Shakti_Srivastava

Investing based on pure fundamental analysis will involve analysing companies based on their fundamentals. And long term fundamental investing is a different kettle of fish as compared to momentum investing.

Rest of the problems have been answered in earlier posts to @Monika_Chaudhary .

If anyone wants to invest on their own, and create big wealth, then the path will entail a lot of learning. It has to be done with passion and dedication without any shortcuts. And that will not involve getting influenced by investment gurus, or fear of missing out.

At the fear of sounding like a broken record, I will re iterate that there is no alternative to reading proper investment books and following good investors. ( these are different from investment gurus, or sometimes even different from following celebrity investors. ) Even on valuepickr, you can identify good investors whose style matches your own and try to follow their posts and post relevant (not flippant) queries.

Personally for me, investment mainly consists of stock selection (which I learned from reading and re reading books like One Up on Wall Street, William O Neil, The Next apple, Zebra in a lion country, Five rules for successful stock investing etc) and allocation, by following and reading about Warren Buffett, some great contemporaries of mine on Valuepickr (allocation part) , and market temperament by self analysis during bull and bear markets .

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7522

@1Pranav

You are right in the supposition that this question does not belong to this thread. This is not a thread to give opinion on other websites or advisories. In the future let’s avoid these kind of queries on this thread.

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7524

Hello Hitesh Ji,
I have been following your ideas for some time now and frankly I think your kind of investing/trading suits me. If I am not wrong, Your have mentioned that you identify 1. 52week high/ ATH Companies having consistent growth 2. Find favourable chart patterns 3. Look for volume and then take postions.
My specific question is how do you look at Volume ? Is it only though the plain and simple volume bars available at Tradingview ?
After certain analysis I am not able to decipher relevant data because generally during high trading days a lot of bulk deal happens and quite a few number of times I have seen operators have taken position and exited at the same instant/ day or within few days.(As available from Screener data). Fundamentally this doesn’t add up because one would want to hold till the rally lasts.
I would like to know the whole about volume analysis from a trader perspective who wants to ride the rally.

7525

@AMLAN_KUSUM_MOLLAH

For analysing any company based on technicals the parameters of importance for me are Price action, Patterns, Volumes, in that order. If I get patterns clearly based on price actions, then I look at volumes. Usually at the time of breakouts from any kind of consolidations/compressions, volumes should ideally be higher than previous few days average volumes. And on retest of above breakout zones, volumes should be much lower than that at time of breakout.

Regarding bulk deals, operators play etc, these will not be a major factor in most breakouts. Its only in a few situations where bulk deals etc come into play and we have to take call based on that.

The so called operator play is a much maligned word often used to explain flimsy logic. I would be worried in stocks where circuit limits are 2% or 5%, where reading volume play can be a tricky proposition. In highly traded stocks, there will of course be intra day operators doing their stuff. But I dont try to complicate my analysis too much by trying to look at too many variables and even within the few variables that I look at, trying to go too deep into the analysis of the parameter.

Technical analysis ( and for that matter fundamental analysis) is often quite simple. It’s analysts that try to complicate it. Most of the times a stock idea which can be explained within 5-10 minutes with a few sentences write up (whether based on TA or FA or a techno funda picture) tends to work the best.

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7526

Hitesh Bhai, what are you technical views on Gail India. Stock hit all time high and thereafter its just roaring, making new highs each day

7528

@ram1984

Gail stock price underwent tight consolidation between 80-115 between January 2021 to June 2023 nearly 18 months within a range. It broke out above 115 in July 2023 and then consolidated another 5 months above 115 and then crossed its previous life time high of 133 in December 2023. Since then it has had a strong run and closed the month at 162.

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The important aspect here is the kind of consolidation/compression it experienced before the minor breakout above 115 and major breakout above 133. This provides a nice launchpad for strong moves.

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7531

@hitesh2710 Sir mein investing ke bare mein thoda bahut hi janta hu lekin mein Jo bhi company study karta hu concall padhta hu vo company mujhe acchi hi lagti he ya to fir really company is good or I am not able to find red flag in company so please share how to find red flag in company and also share what you make convince that yes company is good and worth to invest.
Recently I study about Gujarat themis,AGI greenpac and tega industries and I find this company is good for investment sir please guide.

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7533

@hitesh97

If you know very little about stock market then it is time to start reading a few books and try to learn a little more. The list of books which are good for learning investing have already been shared earlier in this thread.

If you have to read only a couple of books , then read One up On wall street by peter lynch, How to make money in stocks by WIlliam O Neil, Five rules for successful stock investing by Pat Dorsey. And read them multiple times till you grasp the full meaning of the book.

Learning only by asking questions on valuepickr threads will be counter productive. You will first need to read a few books and digest them.

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7534

Hello @hitesh2710 Sir, what is your view on general market direction as we move to start of new series. I observed divergence on RSI on all 4 major indices (Nifty, BNF, Mid and Small cap), do you see a big impending correction coming along soon on technical basis or any fundamental related to earnings disappointment? What variables you look into while getting a feel of general market direction?

7535

Hi Hitesh,
For Breakouts, do you give any importance to Loose Bases vs Tight Bases? The Book “How to Make Money From Stocks” specifically mentions that the breakout should be from a Tight base, if not there is a likelihood of it failing.

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@Parth_Suthar

General market direction is a difficult thing to predict. We have had a superb bull run during the calender year CY 23.

In the past whenever there has been a strong run up in the form of a Santa rally, i.e a run up into Dec and or January months, there has been a correction of varying degrees during the first quarter of calender year i.e during Jan -March period. So if a correction is to occur that is the time frame to look out for.

The thing is , that a lot of investors are expecting a correction ( some are expecting a steep correction) in January and some of the folks I talked to are sitting on decent amounts of cash as a percentage of overall portfolio.

Against all these views currently markets are in a breakneck rally. We are seeing strength across a variety of sectors. Many a times the last leg of the frothy rally is where a lot of money is made. This often happens because a lot of folks have moved into cash and hence selling pressure has reduced and rallies can take on astronomical proportions.

Personally I too am getting a bit worried about the pace of rally in the markets. But rather than getting into cash I have started looking out for bottoming formations in good companies and there are some such companies. I keep posting charts of those companies that interest me on the 52 weeks high threads. ( no need to name them here) . I prefer not to have too much of a fixed view regarding general market direction, mainly because its very difficult to consistently predict these things and be right most of the times. There will always be some people who keep predicting and will blow their trumpets when they get their calls right once in a few predictions.

I would like to be on the lookout for signs of loss of momentum, or extreme froth in our markets during next few weeks and months.

@sandesh Breakouts from tight bases will provide best results.

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7538

Dear Doc,

Further to you previous post, Your market prescriptions are always on point, and I appreciate your tablets in studying the froth into the unpredictable world of Mr. Market. Now, with the recent market rally resembling a rooster on Red Bull, I wanted to know your comments on following, :

1.Fighting Froth:
How an experienced person would navigate through when he/she sees a confirmed froth, is a partial cash diet the way to go or is it time to go full “cash me outside”?

2.Fundamental Fortitude:
How to look at the names which are fundamentally strong and there is a clarity on the future prospect ? Asking because when the correction police crash the market party, they seem to target everyone, even the strong and sober. or should we be finding names which can moonwalk when the market’s dance floor gets slippery?

3.Perfect Timing:
As you might say, Timing the market is like trying to high-five a ghost—chances are you’ll miss. So, if we can’t pinpoint the market’s peak, what could be the ideal timeframe(time phrame of continous losses) to consider being on a cash side? Is there a magic loss percentage, or should we wait until the correction police start handing out parking tickets to overvalued names?

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7539

@LarryWink

Fighting froth. Froth these days carries a little different meaning and connotation. Earlier the oft repeated example of froth was when your Paanwala starts giving you tips on what to buy, its peak of froth. Or when we have wild moves in kachra stocks, its froth. To me, it simply means stock prices running way way ahead of their fundamentals. And valuations reaching astronomical levels and still being justified. We have seen similar things happen during the chemical boom in stocks like Clean Science, Tatva Chintan, or few years back in Kitex when it used to command historical valuations accorded to Page Inds.

Currently we are in a frothy overall markets where a lot of things are taken for granted. Especially post the State election results, it seems a foregone conclusion that we will have a stable govt at the centre come next election. But this is only one cog in a wheel. There are various other factors to consider and it is assumed that everything including inflation, interest rates, economic boom, exports, global stability etc will fall in place or has already fallen in place.

For me the simple explanation to the bull run in small and midcaps is that we had a severe bear market in this spaces from 2018 to 2020, and post that we had the start of a multi year rally. But as we know with markets its not about anything that is balanced. It always has to be extremes. So currently the pendulum has swung to the extreme of optimism

But in frothy (often termed as bubbles ) market, a lot of money can be made in quick time if you are nimble and agile and know how to ride momentum. So we have two choices Either to sit out this period of frothy environment or join the ride with an eye on the kind of risk that is entailed. It depends on the investor’s mindset The cautious guys who might feel that they have made enough returns and do not want to take any chances can very well sell out and prefer to sit on cash. It can often be frustrating to sit on cash while you see markets continue to go up and stocks you sold continue to go up. But that’s the price that is to be paid for peace of mind. Momentum guys can enjoy the party with an exit plan ready.

  1. Fundamental fotitude. When the floor becomes slippery as you so aptly put it, everyone slips to varying degree. The fundamental investor who knows his business well will be able to sit out the pain period during corrections, however painful that period maybe.

  2. Perfect timing. Perfect timing is like a perfect spouse. Its a myth. :grinning: If you know that a big correction has begun, its better to exit as soon as you can. Shoot first and ask questions later.

The problem most investors face when corrections begin is of panic and paralysis. Taking action is often difficult. When you have seen a stock at 500 rs goes down to 450, you always hope it will go back to 500 and beyond. And then when 400 comes, you start regretting and fuming. And still don’t take action. I have experienced this thing in past corrections. And hence during Covid crash, I sold off most of the portfolio even though I was a big late. The way it helped me was that it gave me clarity as to what I wanted to buy and that led me to some big winners.

My strategy during this market has been to start watching out for signs of froth/weakness in my portfolio stocks, and take appropriate action. And I would be okay to sit out some part of the froth rally even if I have to do so. Except for core portfolio stocks (where also exits would be contemplated at an appropriate point) in my techno funda bets, I am happy to book profits with smaller gains as compared to earlier.

Having said and planned all of the above the execution part still seems difficult and is always a work in progress. Sometimes what you plan and what you do is different. I just hope I can put my plan into action and maybe sell at an appropriate juncture. Who said investing is easy. :face_with_raised_eyebrow:

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7540

:joy:…Investing might not be easy, but your humor makes it a hilarious ride…Always a delight to read your flowing writing skills. Your tales of Covid crash antics and executing plans are a reminder that even wizards have a bit of magic difficulty.

And the spouse analogy! Bahaha… I might have to cover it with a sweetened capsule like, “coming from a highly renowned wizardry doc,” when I discuss investments at home. Otherwise, you know the debate would crash way before the market ever does!

Cheers!

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7541

Hi Hitesh,
Another couple of generic questions.

  1. I read in a book that Consolidation/Breakout and other technicals only work during a roaring bull market & most setups will fail in a Bear Market & one should use a Bear Markets to identify potential leaders that could lead when the tides turn.
    If you agree, I Just wanted to understand what is your way of thinking during this prolonged period of dullness. Do you still scan charts, if so instead of looking for breakouts/patterns do you now focus on potential leaders when the tide turns i.e., the strength of certain stocks as against the indexes, sound bases, etc?

  2. Aside, you mentioned before that you go through 100s stock charts to identify winners, just wanted to know if there is a scan or filter you put to weed out a few 100s out of the thousands. Is this filter purely technical (e.g. RSI) or do you start with some fundamental filters e.g. Quater on quarter EPs growth?

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7542

@sandesh1893

1 Most breakouts will work only when markets are in a bullish phase. Potential winners of the next bull market are identified when markets are coming out of a bear markets. i.e There are first signs of revival of a bull market after a bear market. Sometimes some stocks/sectors will start their bullish phase well before the broader markets have bottomed out. These can be big winners during subsequent bull markets.

But current market is one that is a full blown bull market and it makes sense to look out for and ride breakouts where set ups are good. ( I think we are not on the same page here. Your query indicates “this prolonged period of dullness” whereas I find current markets full of fun and frolic. How long this lasts is anybody’s guess but current market is one of bullish phase. )

  1. I am not a method stock picker. I am more of an intuitive/feel based stock picker. If I find that in a company, its easy to understand the triggers, its business, and if the technical set up is good, I zero in on those companies and dig deeper wherever indicated. Sometimes ideas come from technical set ups, sometimes from fundamental angles… Or from fellow investors. If they appear right to me, I dig deeper. Sometimes I have given up on some ideas too early only to see those go up a lot. But as long as you have your fair share of winners, you don’t need to be grumpy.
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7543

Thank you for your response. Point 1. was for my understanding only, We are definitely not in a Bearish phase, just trying to gain some understanding of what should be our outlook in various phases of the market.
Thanks again!!!

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7544

Hi Hitesh bhai,

I completely agree that we’re a full blown bull market phase and totally enjoying the ride. I had one question though as a trade what would you see fundamentally , technically or drawdown figure which would stop you from taking further longs and wait with cash on the side lines? What would be your exit strategy?

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7545

Dear Sandesh,

I want to highlight some imp aspects what I am currently reading from a book Trade Like a Stock Market Wizard by Mark Minervini which may probably help you in dull choppy markets. He identified characteristics of SUPER-performance Stock. The most important characteristic among them is Earning Growth and Quality of Earning Growth. If you can identify a company which is growing Earning 30%, 40%, 50% QoQ with also increasing sales and you board it in first or second base you most probably find winner in choppy dull (Not Bear crash) market also. Ex Aapar, Uasha Martin, Elecon etc. The only thing in bear market is stock will test breakout/ longer duration MAs more often than bull market, but you have to understand underlying fundamentals to ride it properly and adjust temperament according to the market environment.

He also mentioned in the book what Hitesh sir mentioned is most life changing SUPER-performance stocks can be identified during the end of bear market. If you can ride it properly with good allocation you are done.

I recommend you to read and re-read this book. He has done extensive research on SUPER-performance stocks and laid down very simple principals and strategies for us.

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