Hi Sir, I hope you are doing well. In order to learn Forensic analysis of Financial Statements, which boom will help in learning the same…
Thanku sir I have ordered that…I just started porfolio for trial basis before putting all money and some of my stocks are already running quite good to 30%…is this what is called first luck 
or I have found something good…some stocks are Sharda motors (I felt undervalued when bought) , Likhita infrastructure , mahindra resor and club , netweb.
2 Likes
Good Day @hitesh2710
A very broad question.
As a investor - I have done my study in Pharma, Chemical sectors and there are 3-4 companies that i know well in terms of business and steadily understanding the demand/supply cycle, market cycle, capex cycle much more.
Question is that :
Firstly : Pharma, Chemical sectors for past 2 year : Has done nothing due to excess supply pressure, destocking and pricing pressure : there was a headwind which was unanticipated and these stocks have no momentum in them.
Secondly : There are other stock in sectors that are doing pretty well but i have no knowledge of it : and they have run far too long.
So as a investor what best choice should one consider?
- Sit with the known ones.
- Jump off the fence to look for opportunities
FOMO is the big elephant : if considered to jump on opportunity look out, the known/read stocks will definitely jump for a run…
5 Likes
Chemical stocks, most of them seem to be in bottoming out phase. Whether its for longer term or just a tradeable bounce is difficult to make out at this point of time. In the initial phase of a bull run move, there is a lot of to and fro movement, range bound movement, which is often frustrating to an investor/trader. The feeling is that there is no momentum. Once stock price rises strongly with big volumes and clears previous resistances convincingly, momentum will return.
It’s up to us whether to enter early and wait longer or enter late (but with slightly higher risk as if the move fails, you have to be nimble enough to get out) and be satisfied with lower returns.
In pharma sector its not possible to paint all stocks with same brush. Lot of large caps have crossed their all time highs. Some stocks esp the bulk drug companies are in bottoming phase.
Regarding the second group of stocks you mention, currently there is strong momentum still present in the fancied names and sectors. If you can catch the moves and exit in time, there is still money to be made. But one has to be mindful that once an upmove comes to an end and correction begins it is often painful.
Best choice for an investor would be to go for a combination of two approaches, which is keep riding momentum stocks and look out for suitable exits, plus look at stocks which are showing bottoming formations and offer low risk entry points. Often these latter stocks and sectors are the ones that could turn out to be fancied sectors of next bull run.
I have seen a lot of investors indulge in the endless (and often useless) debate of Nifty having gone up too much. It can still go higher from here. Predicting market levels in the short term is quite difficult and futile. These kind of investors are prime candidates for FOMO.
52 Likes
Hiteshbhai,
Greetings from Kerala.
I am completely new to this group. In the last two day, I have gone through several posts in this group and am impressed with the details and quality of your response to so many questions. I wonder if you would be kind enough to share your thoughts on these two companies:
Netweb Technologies
Concord Control Systems
I look forward to your insights.
Regards,
James
Dear Hitesh Bhai ,
Please share your views on Wokhard LTD after recent devlopment.
Thank You In Advance.
Dear Hitesh Sir
I want to know how to find a reason why a strong fundamental stock with good valuation falls and sometimes correct 10-15 % from there high. How a retail investor should be cautious from these type of events.
Please share your views
Thanks
One should always be prepared for a 25 to 30 per cent fall even in the best of companies when the market corrects. A good company will bounce back.
2 Likes
Wockhardt has been discussed extensively in the relevant thread on Valuepickr. You can go through it. I have nothing more to add.
@jmpullat I don’t track netweb or concord control.
1 Like
Stocks can correct on their own or with overall market corrections without any rhyme or reason by 10-15-20% and that’s how markets work. Sometimes there will be corrections in stocks post strong rallies. Other times it will be a range breakdown and is often followed by quick rebounds. Trying to figure out reason for each and every 10-15% drop is a futile effort and would lead to frustration. If I am expecting a stock to go up multiple times from my buy prices, I should be ready to suffer many such drawdowns over a period of time.
Simple reason for all these things is "For every buyer of a share, there is a seller and they both think they are smart. "
43 Likes
Dear Hitesh ji,
Thank you for your valuable insights.
I have come across information from various sources indicating that market cap and the size of the opportunity are critical factors in identifying multibagger stocks. According to the Motilal Oswal study, it suggests that stocks achieving 100X returns typically have a initial market cap ranging between 500 and 1000 Crores.
I am curious about the role of market size in determining multibaggers. For example, Chola Investment, with a market cap of 1 lac crores, aims to expand its loan book tenfold over the next decade which may result in multifold returns. Given the significant market opportunity in the NBFC sector, how does the company’s large market cap impact its potential for achieving multibagger status? (I am not asking company specific inputs however, to understand the bearing of market cap on future return, I cited this example)
If initial market cap is indeed crucial for achieving multibagger returns, what would be the ideal range to target for investment?
Furthermore, I would greatly appreciate your insights on which sectors or industries you believe the next multibagger opportunities will emerge from. Your perspective would be highly valuable to us.
Thank you for your insights.
2 Likes
Hi Hitesh Sir,
Do you invest in US stocks as well?
Didn’t find any threads in Valuepikr for the international stocks
Do we have any forum where investors discuss on the lines of Valuepikr for the international stocks?
Thanks in advance
1 Like
You are right in the assumption that market cap versus opportunity size is a very important factor in unravelling multibaggers. But it is only one of the important parameters to look at and consider. There are a host of other factors, most important among them being growth in sales and profits.
I tried decoding the multibagger mystery in the following video. https://youtu.be/-3BpExbdZ8A?si=0Ty-o_Reo9-yUiA9
Personally I think there is no fixed market cap limit to look at. If opportunity size is big enough, market cap will not matter much.
Coming to sectors that offer good chances for uncovering multibaggers, at the current elevated market levels, it makes sense to behave in a contra manner and try to look at sectors that have been in a corrective mode since long and are showing some signs of green shoots on fundamentals and or charts. Some of the stocks in cyclical sectors like chemicals, textiles, cement etc might be worth looking at.
45 Likes