Sir, May have he link for the same. I tried to find it out, but not able to get it
Formulating a strategy on selling, or sitting on the sidelines especially in a roaring bull market is a tough aspect.
Fundamental exits are well defined in terms of extreme overvaluations (where growth for next 2-3 years are captured in the valuations) or change in the growth expected. e.g A company you expect to grow at 25% CAGR for next 2-3 years starts quoting at say 70-80 PE ( it happens in FMCG kind of companies off and on because runway for growth for even next decade is visible) or in another situation where we have bought a company expecting 25% CAGR growth starts growing or commenting about growth at a tepid 10-12% CAGR. But this happens at an interval of atleast a quarter when usually management comes around and comments on prospects for next quarter or few quarters.
Technically I have simplified my processes. In frothy moves I usually look out for signs of stretching of upmoves in form of very high weekly RSI levels exceeding 90, or some kind of divergence in RSI, or stock price reaching twice its 200 dema ( this is usually a crude measure but often works) .
In cases where my techno funda picks, or technical picks fall due to any reason, I usually keep a mental stop loss of around 7-10% of my buy price.
In stocks that I hold for the long term where my fundamental conviction is high, I give a long rope and often prefer to sit through temporary pains.
Having listed all the above basic rules I have for myself, selling decisions are often dynamic and sometimes I prefer to think on my feet and take a call. Most important rule in the stock market is that it follows no rules.
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Hi Hitesh,
There is a situation with regards to shipping cost going up due to tension in red sea area. Which sectors/stocks do you see impacted on account of this disruption. Would you factor in such disruption in your sell decisions right away or one should give more time as it may settle down in a matter of days/weeks?
Thanks
Last time Lancer containers had an amazing run
Now they have double the containers number as compared to 2021
Very well said @hitesh2710 sir… Selling part comes with their own Risk Reward. There is no single rule to follow.
Red sea crisis is the latest in a series of geo political events. We have had many such events in the past and these kind of things will continue in future too. If we get ruffled by each and every such event, its difficult to take a call on investing. I tend to give these kind of events a miss.
There can be trading opportunities in some sectors, if someone is nimble enough, but I don’t know how long this issue is going to last. Main aspect of investing is to control the things that you can control All these external factors are beyond anyone’s expectations and control But if my focus is on a specific company or a group of chosen companies with clear cut investment thesis and bought at attractive valuations, these kind of situations will not be a major factor for me, unless they affect my chosen company directly.
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Thanks for the update on snowman. Putting up a weekly chart of Snowman. It has broken out of a range/double bottom pattern with potential targets marked by dotted lines at 115. All time high price is 134, and we can see a rounding structure on weekly chart. Ideal way to play this breakout is to wait for a retest of the breakout zone of 70 and keep an eye on 10 WEMA which currently is 62 and rising. However if the stock price keeps going up , then this situation will not arise. disc: not a recommendation. not invested but in watchlist.
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Thanks for your views @hitesh2710 bhai. There seems to be something happening at the group stocks. Attached is Gateway’s chart.
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I was reading this book Zebra in lion country as suggested by you. I did not understand this whole page can u please explain it in some other terms like a 10 year old boy? 
P.s finished one up and pat dorsey. Also NEET Pg is postponed now so I have plenty of time to give to these books.
I think you need to be a bit serious about reading and understanding. I can take a glass of water to a thirsty person, but after that he has to pick up the glass and drink the water himself. I cannot put one spoon of water after another spoon in his mouth.
These are books written for average investors like a lot of us, and you being a doctor (as you mention) should not find it difficult to understand. If not at the first attempt, then try multiple times. We are on a self help forum, not a personal tuition class.
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Thank you so much for your response I’ll try again.
Though I read it a few times! But I’ll try again.
I had 1 more question regarding the banking sector right now. There is one part in one up on wall street where Peter Lynch says if the earnings line is way above price line then the stock is undervalued. Now I can’t find a graph which directly shoes this trend but the PE ratio graph compared to EPS on screener can be used as proxy I feel.
Here I saw HDFC Bank, SbI and many other banks are trading below their average PE. What is your view on this?
P.s sorry if I’ve treating the forum as tution class.
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You cannot get stuck on only one part of a chapter of a book to make an observation. Try to see the complete picture.
Read the chapter on Banks/financial companies in Pat Dorsey’s book. It seems you have not read it with full understanding. So maybe another read may be in order.
While analysing any bank, PE is not the first thing you look at. Price to book value, ROA, ROE, NPA, NIM etc are important aspects in analysing banking (and even other financials) stocks.
Try and go through a couple of good threads on bank stocks on VP. Or read annual reports of a few banks and then go through concalls to get a better grasp of the subject.
The way you are trying to analyse banks based on a few data points on screener and a few lines here and there from Peter Lynch’s masterpiece comes across as very frivolous efforts. Investing is not as easy as you think, but then it’s not as difficult as you make it out to be. It needs patient and dedicated learning.
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You can ask chatGPT about it, if it is difficult to comprehend on your own
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Thanks for the kind inputs:
Just FYI:
In recent interview with promoters - (Gateway Distriparks) told they would like increase the stake in the company and as when they have free cash it will be utilized to increase the stake in the company. According to them the issues are handled & they see a good runway.
There is an stake increase even after 2023
Hello hitesh bhai one question is generally when there is a tailwind in particilular sector the companies which have moat or advantage or existing untilized capex does well. My question is what is allocation in a sector that one should look . Themes like railway or green energy or chemicals did well in 2020/2021/2022 respectively. Most made 3-10 × depending on company to company. How would you look at to allocate / conservatively agressive approach to portfolio while deciding allocation on portfolio level to tailwinds in a sector ( stock selection ) in that sector
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Allocation in general is a very subjective aspect. It depends upon the comfort level and mindset of the investor. But speaking for myself, whenever I am sure about a sector having tailwinds, I allocate anywhere between 10-30% by creating a basket of stocks from the sector. So a conservative guy can take it up to around 10-15% and aggressive person can take it up to 25-30 % or more.
It will also depend on the prior experience of the investor while playing this kind of game. If someone like me who has enjoyed rides in these sectoral runs has to allocate, I would be aggressive, as I would not have too many inhibitions and I know a bit about the game. Same may not be true about someone who has been burned while playing this game, or someone who is playing it for first or second time. After a point it all boils down to experience and skill.
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This helps i was just thinking about this . Last 2 years i did play capital goods and railway theme well made multibagger returns. But allocation was reateicted to high single digit with 1/2 stock
Having a relatively high exposure while wind is in favour may help the portfolio move better.
No regrets happy with the journey & learning
Thanks for guidance
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Hello, Hitesh sir,
Is the pattern in Manappuram Finance indicative of a bullish cup pattern?.
From technical point of view in cup and handle pattern what’s the good entry point
Do we wait till it forms handle or do we wait till it hit all time high
Manappuram had all time high of 220 previously
I’m eager to hear your expert insights
Thank you,
Mahesh
