How do we ensure a balanced discussion - with adequate checks & balances?


(Donald Francis) #1

Posted byAdministratorat Monday 12:07

Hi,

ValuePickr Core Team is back from another set of Management Q&As…excellent updates to share on companies like Atul Auto, Astral Polytechnik, Alembic Pharma, Gujarat Reclaim. Donald will share in due course. If there are others who can write good English and good at editing other’s work, please put your hands up - in the service of our community:))

Good to see Mahesh keeping up the interest in Relaxo in his usual style. Mahesh’s diligence and great ability to keep defending a stock idea is admirable. ValuePickr Forums is developing a very focused readership- thanks to the quality of discussions, participation by passionate investors like Mahesh and others. Too much of details however, can take one away from the real crux of the matter. One runs the risk of losing objectivity (falling in love with one’s idea). Worse, gullible new investors can be completely swept away. While we generally keep away from active Moderation, sometimes we need to intervene in the natural flow of discussions. We believe it’ our SOLEMN DUTY to protect gullible investors with adequatecautionarystatements - and RESTORE objectivity and balance.

ValuePickr Core Team has very different views on Relaxo from Mahesh - and thought it prudent to highlight why

1). Relaxo is nowhere near a quality business like some of the other companies mentioned above.

2). Relaxo is a simple CYCLICAL business to understand. Its margins have BIG DIRECT correlation with RM price volatilty - in this case - Rubber & EVA

3). It is NOT a BRAND PLAY as it tries to portray itself. All “BRANDS” have PRICING POWER. Currently Relaxo does not enjoy any pricing power.

4). The only reason it started doing well in past few quarters is because Rubber prices have been falling. and the only reason it was not doing well (both business and stock performance) before that was because Rubber prices were rising.

5). The volatility in RM prices is extreme, its Asset Turns have been falling as company has been increasing investing in Capex without corresponding rise in Sales - in short becoming more inefficient with time.

6.RISKS in Relaxo are very high for normal, beginner investors. If you are savvy enough, yes you could have ridden the cyclicality in Relaxo when it was quoting at 300+ 2-3 Quarters back. Certainly this is not the time - NOT for beginners, and we suspect NOT for savvy investors either - Valuations for this type of a cyclical company with decreasingefficienciesare looking to be extreme and UNSUSTAINABLE.

IN SHORT, STAY AWAY is our advise. DONT GET LOST IN THE DETAILS. FOCUS ON THE RISKS. There is simply NO MARGIN OF SAFETY.

This is the considered view of ValuePickr Core Team.We will shortly request some astute and street-smart investors(who know how the Indian market operates) to share their views on the same.Why did they miss Relaxo at 300+ by the way? And what do they think of entering at current 2x levels. (~600)

Request Donald also to use his network for further scrutiny/advise.How do we maintain a BALANCED viewin a Forum that prides itself for intensive data, investigation & analysis -something that ValuePickr core readers perhaps look for?How do we prevent overdose-overwhelming our main motto - of separating the wheat form the chaff?

Encourage thoughts from everyone.

Posted bySaurabh Srivastavaat Monday 12:16

I spoke to a friend who is in a reputed fund and he indicated that the company had refused to meet them. The fund does not invest in a company unless a management meeting happens.

This came as a surprise since Donald had met them earlier and hence unlike Hawkins and other companies this one did not seem to be closed to folks.

Posted byVimal Dixitat Monday 13:33

Hi,

ValuePickr Core Team is back from another set of Management Q&As…excellent updates to share on companies like Atul Auto, Astral Polytechnik, Alembic Pharma, Gujarat Reclaim. Donald will share in due course. If there are others who can write good English and good at editing other’s work, please put your hands up - in the service of our community:))

Good to see Mahesh keeping up the interest in Relaxo in his usual style. Mahesh’s diligence and great ability to keep defending a stock idea is admirable. ValuePickr Forums is developing a very focused readership- thanks to the quality of discussions, participation by passionate investors like Mahesh and others. Too much of details however, can take one away from the real crux of the matter. One runs the risk of losing objectivity (falling in love with one’s idea). Worse, gullible new investors can be completely swept away. While we generally keep away from active Moderation, sometimes we need to intervene in the natural flow of discussions. We believe it’ our SOLEMN DUTY to protect gullible investors with adequatecautionarystatements - and RESTORE objectivity and balance.

ValuePickr Core Team has very different views on Relaxo from Mahesh - and thought it prudent to highlight why

Appreciate it.

Posted byDhwanil Desaiat Monday 14:21

Previously Vimal Dixit wrote:

Appreciate it

.

Hi Vimal,

I can not agree with you more. It is indeed good to have conviction in one’s ideas and equally valid to put forward one’s argument on why perticular investment idea is worth a look. However, as you very rightly suggested key to success in value investing is going to be revolving around making investment in quality businesses at vaulations that provides significant margin of safety.I also feel the same way for Relaxo that though it is a well known brand in footwear, it may be too early to conclude that it is a brand play. Typically a company having “moat” on brand will have pricing power which will help it protect its margin despite rise in RM prices most of the times. I do not feel that Relaxo still commands that kind of a moat. I think, you have taken a good initiative to bring all the fellow boarders to err on the side of conservatism.

With respect to your appeal on sharing the work on editing/rewriting, I can take up some work if the team thinks I will be able to deliver the content in the right perspective. I am not sure what kind of comfort the valuepickr team will seek, but you may have look at my blog to judge it for yourselves.

Best Regards

Dhwanil Desai

__http://www.valueinvestinginpractice.blogspot.in/

Posted byMahesh Shahat Monday 14:37

Good to see Valuepickr Admin. coming out with its candid views on any company… I really appreciate this thing as it goes a long way in making the forum authentic and credible…

However, without objective discussion, to get into any sort of conclusion is not the right strategy and direction and purpose of any forum… I have been updating promptly rgdg. all the developments w.r.t. Relaxo as I have always done for my actively tracked cos. (even for PI Ind.)…However, the risks in case of Relaxo is high because of its illiquid nature and this fact I have been mentioning in my each and every posting wherein I have repeatedly asked to look at Relaxo from only long term view i.e. minimum 2-3 years…

All companies are prone to changes and its our active discussions on varied aspects rgdg. a company which helps us keep track of the changes…

When discussion on Relaxo had started in this forum in 2011, the discussion as also management interaction of valuepickr team at that time led us to believe its a cyclical play…however, to look at the company only from the old-discussed angle is not at all right as there are many changes that have happened on ground which are not atall discussed after 1H2011…

With rgds. to quality business, Relaxo is definetly a play on rising footwear demand on Indian consumers as India is having one of the lowest expenditure on footwear per year…I will refrain from getting into details of compared 4 companies as I think its not proper to compare one business with another as each business is different and its the peers in the same business which needs to be compared rather than different businesses…

With rgds. to RM-derived Cyclical business part, yes Relaxo to an extent is influenced by RM prices but its key raw materials are EVA and Rubber which together constitue more than 45 % of RM costs…to go further deep,its the EVA which is the major raw material contributing 33 % to RM costrather than Rubber as is mentioned…This is why I am saying that active discussions have to take place in order to understand a company fully and in a better way

With Rgds. to it not being a Brand play…again I am saying that this conclusion is derived from the old impression the forum has and on ground all indications are that its transforming itself into a Brand play…It has recently appointed Lintas (Linopinion) to establish its brands in marketplace; now, if company would not have been serious on Branding such heavy expenditure on branding would not have incurred…

Share prices discount future and yes falling Rubber and EVA prices have played a part in the stock doing well oflate but these are not the only reasons…

I partially agree with the 5th point…

On 6th point, I will refrain from guiding asto whether the company is a good buy or not and I have always maintained that the stock is prone to wild fluctuations and it only need to be considered from a 2-3 years point of views not less than that…Now, if I see 3 years down the line when its topline could be 1250-1300 cr. if not more, then a current mcap of 700 odd cr. although not extreme cheap but doesn’t look extreme expensive either…I will refrain from boasting phrases like ‘Extreme & Unsustainable’ as such phrases doesn’t look decent on either side – whether positive view or negative…

Lastly, I have utmost respect for valuepickr forum and I have seen many high quality participation and discussions take place here…I welcome candid views from all segments of financial community and if Donald can help in that it will be great…However, I will request one thing to actively participate in the discussion and understand the company completely before making any singly-directed contradictory and boasting remarks as it really hurts

If I have violated any rules of the forum or have caused any harm or ill-feelings to anyone on valuepickr forum I apologise unconditionally.

Hope sanity prevails.

Rgds.

Posted byManish Vachhaniat Monday 15:05

Previously Administrator wrote:

ValuePickr Core Team has very different views on Relaxo from Mahesh - and thought it prudent to highlight why

IN SHORT, STAY AWAY is our advise. DONT GET LOST IN THE DETAILS. FOCUS ON THE RISKS. There is simply NO MARGIN OF SAFETY.

If the core team do not agree with the Mahesh Shah’s views, why there was no participation from them at that time only and all of a suddenexpressing caution on that. It doesdiscourage the active participant like Mahesh.He has always cautioned about the high risks involved in this stock.

I do agree on the other hand that Relaxo was sigle handedly discussed by Mahesh and there was no active participation from other valuepickrs.

In short a right balance has to be brought to the discussion where active participation and expression of views may lead to a broader picture on the stock rather than an individual’s perception.

Posted byMahesh Shahat Monday 16:10

Previously Saurabh Srivastava wrote:

This came as a surprise since Donald had met them earlier and hence unlike Hawkins and other companies this one did not seem to be closed to folks.

Hi Saurabh,

Even I am surprised at this as I have spoken to CS couple of times before and he has been very open to discussion on varied aspects…Yes, Dua family might not be reachable but CFO can be approached with ease thats what the feedback I have been getting from the financial community…

Even in Management Q&A which DOnald and his team had done before, they also had a good impression of the management and there was no issue on that front…I think Donald can provide more feedback on this.

Posted byMahesh Shahat Monday 16:39

Previously Manish Vachhani wrote:

In short a right balance has to be brought to the discussion where active participation and expression of views may lead to a broader picture on the stock rather than an individual’s perception.

Hi Manish,

Even I like and encourage widespread discussion in a forum which can collectively help us to evaluate a company in the right way…Anyone can be wrong or miss some aspects including me and thats where the widespread participation helps…This is the main reason why I regularly update even the minute develpment with rgds. to a company as I feel it my duty to inform all members of the developments so that more discussions and participation can take place and each development can be evaluated in the right way…

Secondly, as I have said before too, it is necessary to evaluate a company in the present tense rather than the way we have seen it in the past as it will not be the correct evaluation method…Just to give an example of other widely discussed company on this forum, PI IND., if we would have done management q&a in 2007 and discussed the company at that time and then went for a silent inactive participation period, and then, post 2009, post the launch of Nominee, we would have kept the same impression in mind and refrained from discussing the company or would have challenged its moat then it would have been a wrong thing…In case of PI Ind., when I started discussion on it in this forum in March 2011, till 4 months there was no one participating except Vinod who rightfully raised doubts on further appreciation possible after sharp run-up in its share price…Then, post June 2011, when Donald started participating, there was widespread participation and the forum arrived at a logical conclusion on the company…We discussed the stock at the right time when the company had evolved after a decade of efforts in CSM space and Nominee Gold was already launched…

The thing I want to say is that it is necessary to discuss any company based on the changes that have already happened or happening…Financials reflect the changes after they have happened…A company takes its own time for evolving and we need to evaluate the ability of the company to evolve into what is anticipated…Rerating process is always gradual because in the beginning there is always widespread scepticism…PI Ind. is a great example of this very fact…This is not to say that there is any sort of resemblance between PI and Relaxo…Not atall as management of PI is much more credible and efficient than Relaxo’s but each company’s business model is different…PI depends on CSM order-book and agri-segment boom bust to perform and its relationship as well as execution of long-standing relationship is crucial as these are concentrated orders…Similarly, Relaxo depends on end-consumers, relationships with distributors and effective advertising, branding and promotion to perform…Each has its own space in the portfolio and that individual investor has to decide…PI Ind. is definetly a safer bet than Relaxo…

However, to come again to the main part, i.e., discussion, I request all valuepickr members as well as core team to start looking at Relaxo afresh and discuss Relaxo from all angles…whether negatives or positive…

To be more transparent from my side starting now, if I am permitted, I will be regularly posting key raw material prices updates which so far I have avoided discussing here because of lack of participation… In the next post I will do that.

Rgds.

Posted bysrinivasanat Monday 16:41

Wow…what happened admin? Why throwing caution to the wind? Mahesh he did not compel anyone to buy. To quote Mahesh’s cautionary statements here. Please note I have not gone through all of Mahesh’ posts, as Iam currently not interested in Relaxo.

1)“Having said this I must say here that extreme caution needs to be exercised while investing in cos. like Relaxo because fluctuations could be wild and its best not to invest critical money (i.e. money that one is going to need in coming 3-5 years) in such company. The story is promising and all indications are that the company could transform into a great brand-play thereby commanding higher valuation multiples on the bourses however anything can go wrong too.”

2)"History has taught me one thing ‘there is never a good time to buy a good company and never a bad time to sell a bad company’…Although entry points and exit points are a good strategy but i am not good at it…this is because when i am into a company i am there for long term and unless the basis of research change, the story remains compelling.

Having said this I must say here that extreme caution needs to be exercised while investing in cos. like Relaxo because fluctuations could be wild and its best not to invest critical money (i.e. money that one is going to need in coming 3-5 years) in such company. The story is promising and all indications are that the company could transform into a great brand-play thereby commanding higher valuation multiples on the bourses however anything can go wrong too."

Anyone can make mistake with his/her stock picks. This includes Peter Lynch, Donald,Ayush, Hitesh, Mahesh and all of us. No need to pick out any single person for one’s own losses. We all know Relaxo footwear is not part of Valuepickr portfolio.

I like Valuepickr as open, free, honest, flexible, humble, share market knowledge repository. This is an encyclopedia of stock market knowledge.

I would also request Mahesh, if possible, to add his disclosure in his picks like his positon in the stock, his clients/HNI position in the stock he analyses(long or short).

Thanks,

Srinivasan M

Posted byMahesh Shahat Monday 16:43

First mentioning below Avg. Q2FY12 Key Raw Material prices of last year (to assess YoY) :

Rubber - Rs. 210.54

EVA - Rs. 141.66

Now, as already mentioned in previous posts too as also in Q1FY13 update of Relaxo, mentioning below Avg. Q1FY13 Key Raw Material prices (to assess QoQ) :

Rubber - Rs. 192.54

EVA - Rs. 124.16

Now, since already half of current Q2FY13 has passed, mentioning below Avg. Key Raw Material prices till 14th August 2012 :

Rubber - Rs. 178.66

EVA - Rs. 119.66

Now, updating the latest trend —

Key Raw Materail Price Update as at 24thAugust 2012 :

Rubber a Rs. 169

EVA a Rs. 116 in Mumbai Market but in Delhi (Key Sourcing Place for Relaxo) prices have corrected to Rs. 113

It is worthwhile to note here that for the first time EVA CFR offers have stabilised for a long period of time below psychological mark of Rs. 100 thereby market players pegging Rs. 100 to now act as resistence…Right now there are many EVA CFR offers at the rate of Rs. 96 whereas the buying mood is extremely dull…EVA is subject to 20.94 % duties post which landed price are quoted in the marketplace…

High Inventory build-up is observed in Delhi market and therefore dealers are offering EVA at Rs. 113 (landed price after paying all duties)…Market players say that even RIL has reduced EVA prices on Thursday, 23rdAugust 2012.

All prices are per kg. INR

quarterly RM price fluctuations will surely have an impact on quarterly margins but its full impact will only be visible in yearly margins which will truely reflect impact of RM price reduction/appreciation as quarterly margins are subject to RM-mix which changes every quarter…EVA and Rubber combine constitutes more than 45 % to yearly RM cost at present which will change from next year as PU footwear is catching up fast…Also, quarterly raw material cost as % of sales will fluctuate based on amount of work outsourced as more outsourced work will reduce pure RM cost as % of sales and vice versa…Also, more the work outsourced better will be the margins

Feel free to get back to me in case of any query.

Rgds.

Posted byAbhishek Basumallickat Monday 16:51

Although Relaxo seems to be an interesting play, the stock was discussed when the price was much lower. Now, after a run up in the price, it need to be seen whether the value is still there. Everybody wants to create a brand. Very few are able to do it. Also, not sure if only advertisement in TV programs are enough to create a brand.

Posted byMahesh Shahat Monday 16:53

Previously srinivasan wrote:

I like Valuepickr as open, free, honest, flexible, humble, share market knowledge repository. This is an encyclopedia of stock market knowledge.

I would also request Mahesh, if possible, to add his disclosure in his picks like his positon in the stock, his clients/HNI position in the stock he analyses(long or short).

Thanks,

Srinivasan M

Thanks Srinivasan for the suggestion…although in my reseach updates I have already provided disclaimer at the end and so far refrained from disclosing again and again in very discussion that the stock discussed forms the part of my core portfolio…However, now I will do that…

Its safe to assume that every stock I discuss forms part of my core porfolio…I am not an advisor and I don’t advise any clients or anyone for that matter…I voluntarily publish all the research I personally do for my investment as also publish all the news/events/updates that I come across because of active tracking so that members can be aware of all the facts…

To be specific, Relaxo Footwears Ltd. forms part of my core portfolio and so my views may be biased.

Rgds.

Posted byDonaldat Tuesday 13:52

Hi Guys,

Nice to see some balanced discussions, without heat! That’s been the essence of ValuePickr, hope we can keep it that way.

I am consulting a wide range of market practitioners to benefit from their inputs. But first my quick views:

1). I am with Mahesh and his passion. I have only grown with my passion and I know its critical importance. Mahesh is probably more passionate, has infinite patience and is extremely hardworking and responds to each & every query from anyone - from the simplest to the most complex - as far as he can. He also follows up and gets back with answers he may not have. Extremely extremely rare traits.

2). I have also learnt “high passion” needs to be counterbalanced by “higher skepticism”. Counterbalances and a healthy Skepticism is a must even in your favourite ideas. I was blinded by Opto Circuits and only because I am advised by so many well-wishers - I could see Reality in time and exit without Costs, well in time. More importantly advise everyone else following my ideas to EXIT, because of x, y and z. Check Opto Thread in Company Q&A for details. Some Opto veterans I know have stayed on and incurred heavy costs.

3). I can appreciate the Concern of ValuePickr Admin - drawn from Market Veterans across the country - Higher skepticism was absent in discussions where Mahesh participates, and so there was no balance. The fault lies not in Mahesh’s earnestness or passion; the fault lies not even with rest of us all - for usually not being able to participate meaningfully in Mahesh’s stocks.

4). I asked myself - is there a pattern that ValuePickr Admin saw that we are missing. Looked back through Riddhi Siddhi, PI Industries, AVT, Solar, Jubilant, and now Relaxo. I must say there is a case of missing balance. When I asked myself why I did not participate (except PI) …I realisedI could not participate. The fault lies in the style of discussions, once Mahesh takes over …and he does take over:)))

5). Mahesh style is too overwhelming for anyone -beginner or senior. He writes well and at great length. If you raise 1 question with 4 lines - he will answer with 100 lines. He drowns you with huge barrage of details. I remember someone early on (very senior) had commented “Guy is good, but he is a man with a Hammer …he only see the Nail”. He will make mistakes and big ones…if not challenged/guided continuously.

6). The other question I am asking myself - While we pride ourselves in digging up very important details -(ValuePickrs claim to fame), have we managed better quality of balanced discussions in other threads. The answer is a resounding Yes. Mayur Uniquoters, Balkrishna Industries, Suprajit engineering, Astral Polytechnik, Ajanta Pharma, Atul Auto, and some more.

7). At the moment I don’t have all the answers. My Guess is we can create a separate Page on the Company -where Mahesh can pump in all that he wants to - and all those who value his style can drill down to as much as one can gorge on. But Forum discussions, must conform to the Mayur, Balkrishna, Astral style - that allows everyone to participate - most importantly the skeptics - balance.

Fund Managers and sell side analysts (that we get polled by from time to time) are clearly in favour of Mayur, Astral, Balki, Suprajit style. Not sure if Performance is more influencing or the Style, there!!

**That brings up Performance!!!**There might be our answer to what works, and what does not.

Please contribute your considered views. I am trying to get in views by polling other Forum administrators, moderators, and market participants. Will revert.

Posted bySANDEEP SOMANIat Tuesday 14:40

I agree with Donald as far a Mahesh’s style is concerned. Is availability bias at play here?

Posted bysrinivasanat Tuesday 14:51

Donald,

What I see lacking in this thread is participation. I can see why. This stock does not have the approval of Donald. The moment Donald approves it and becomes part of valuepickr portfolio, you will see participation coming in. You will see everyone jumping in and arguing from various angles, because they want to invest. After all Donald is the Sachin Tendulkar of valuepickr. Even though you can have a Dravid, Ganguly, Sehwag, Laxman in valuepickr, it is always Sachin Tendulkar who everybody notices with full attention. Even though Mahesh contributed in PI industries very actively, he couldn’t take it over, because everybody was discussing in it from various angles, even Mahesh was challenged there. (Mind you I never read the full PI thread as Iam not interested in PI Ind). So what I see is, whichever stock is part of Valuepickr Portfolio or whichever stock has Donald interest will be participated actively and can be in one forum. Rest of stock threads can be moved to a different forum. Doesn’t matter Mahesh is discussing it, or Ganesh is.

Thanks,

Srinivasan M

Posted byManish Vachhaniat Tuesday 14:54

Hi Donald,

Nice to hear your views and agree with Mahesh’s style of discussion - very passionate and in great details. But the seniors having in-depth knowledge need to put up their views and raise red flags to keep a right balance in the discussion of the stock. Without much participation, the whole discussion becomes a one man’s perception.

We should not discourage Mahesh - for he discusses the stocks at great depth. On the other hand need to participate more to counter anything missed by him.

Posted bySANDEEP SOMANIat Tuesday 16:33

Why do other valuepickr members stay away from active discussion on stocks recommended by Mahesh? Do they hold any personal grudge? CERTAINLY NOT. I think why most of them stay away is 1) All the stocks recommended by Mahesh have either a very complex business model or complex capital structure 2) There are far too many variables to keep track of in all the stocks recommended by Mahesh.

If we notice, stocks in the core valuepickr portfolio are simple businesses and with very few variables affecting them. Hence, for many of ordinary mortals like us, it is easier to have earnings estimates in these companies as compared to say a PI or Jubilant.

Never the less, Mahesh’s ability to analyze a stock is incomparable and he his truly gifted in that sense. But seems he is far ahead of us and that makes him alone. May be his writings are more suitable for institutional participants.

Posted byDhwanil Desaiat Tuesday 17:00

Previously Donald wrote:

Please contribute your considered views. I am trying to get in views by polling other Forum administrators, moderators, and market participants. Will revert.

Hi Donald,

It is indeed a great pleasure to seedifference of opinionhandled with so much of maturity and openness by all boarders. kudosto the admins for nurturing such wonderful community.I kind of agree that some of the boarders put forward case passionately and in slightly overwhelming manner. As valuepickr provides flexibility to any boarder to start a new thread on any of the investment idea, sometimes boarders present their views based on analysis of only “few” aspects of the investment without focusing on complete picture whichmay be very relevant in taking investment decision. I think it would be very useful if there is some framework that is evolved which comprehensively looks at all the aspects of the investment i.e. business quality, growth, fundamentals, management quality and most importantly “Risks”. In my opinion Valuepickr itself has evloved such a wonderful framework in “capital allocation strategy” thread which only needs to be slightly tweaked to add a few more parameters on risk measurement and margin of safety. Once such framework is in place, any boarder wanting to start a new thread on a newinvestmentidea,shall adher to that framework and put together a comprehensive analysis instead of discussing only bits and pieces of investment thesisor throwing only “opinions” or presenting numbers out of context.This may improve the quality of ideas discussed on this forum significantly and also encourage fellow boarders to do proper homework on all the aspects of an investment idea before presenting it to the boarders. Once the initial investment thesis is comprehensive, I think the views presented by the boarders will be much more balanced.

Though it may sound slightly radical, another step that may further help in making the process “risk-averse” isto designate some of the fellow boarders as “devil’s advocates” who will always start with a hypothesis that “investment rationale” is wrong and raise relevant questions to vindicate their hypothesis. Mr. Peter Cundil did this very successfull with cundlil value fund. This will automatically lead to discussion on “risk factors” in investment.

I am sure many more useful suggestions will emerge from this discussion to help Valuepickrremain glued toits chosen objective of “separating wheat from chaff”.

Best Regards

Dhwanil Desai

Posted bySubash Nayakat Tuesday 17:22

My ten cent here (a pure personal thought).

I have a theory why people love to discuss stocks in valuepickr portfolio. The reason is transparency. Donald has a gut to list all the stocks he/valuepickr team recommended, the recommendation date, and price in a nice tabular manner and update stock performance almost once a quarter. There are no arbitrary addition/deletion to valuepickr portfolio. The performance of the stocks tells the quality of recommendation and the result that can be obtained via collaborative stock picking. So everyone loves those stocks.

My brain get turned-off by the seer size of the posts of Maheshjee’s. What I look in a post in the view/information/wisdom in a concise form, so that I can use the same to arrive at a investing decisions. What I get is a sea of ocean of information, which requires substantial post-analysis, search effort to get any conlusion.

What I look is a balanced and almost impartial view of the stock story. What I get is a almost preaching almost-one sided view of the story.

What I look is recomendation track record like Donald/Hiteshjee have. What I get is Jubilant/LG Balakrishnan.

To me an ideal post is a concise/concentrated/impartial view on the stock showing both positive/negative side of the coin, and reference to docs in internet for getting the long story.

-Subash

Posted byNadakarniat Tuesday 17:53

I have noticed is the passion with which Mahesh does his research. He researches each and everyconceivablefact about a company. It is beyond many to actually find points/ traps that was not considered.

As far as style is concerned, each one has his own style. As long as Mahesh is able to get across I feel there is no issue on that.

I agree with Donald on advisingbeginners about this aspect - one sided discussion. I was really swept by the fact that the company is destined to succeed. We always need healthy skepticism.

Valuepickr needs both the passion of Mahesh and guidance of Donald/ other group members.

Posted byMahesh Shahat Tuesday 18:52

Hi Donald,

Thanks to you and all other members for sharing candid views…

First, it seems imperative for me to share certain facts which I have refrained from doing so anytime earlier on any of the forums as my goal has always been that maximum people benefit out of my skill, knowledge and work…

(1) When I research on a company I try to research it from every angle possible…for doing so, I spend a lot of my personal resources as also take lots and lots of pain to research on a particular company…It takes months to research a company and not all researches are successful and the things I publish are only those which pass from me and become successful…

(2) Reading past 10 years’ (and in some cases 15 years) Annual Reports, collecting transcripts, listening audio transcripts again and again to check whether anything is missing or not, dwelling deep into all the news of past 10-20 years across all sources of media like purchasing/collecting past magazine issues in which even some minor info has appeared rgdg. a company, subscribing to company related online medias, assessing peers, pitching various parameters of peers against company under research, interacting with management and where management is closed or is not directly reachable by my sources and resources, searching clarifications on various issues with alternative sources available, etc. are part of my research works…

(3) You must be remembering Donald when you started covering PI and approached me for its past 10 years ARs, I was immediately able to provide the same as also audio of trascripts because of these intitial works that I do on my researched companies…

(4) When my research work gets complete, I translate my entire thought and my logic on a company into words and present it as simplistically and as detailed as possible so that reader can cross-check varied datas and correct me whereever I am wrong…In such translation I include all the things that I consider authentic and reliable while filtering out certain airy info that I receive…The basic reason of publishing such detailed info as also replying in detail to every query dates back to my history when I started in the financial markets…At that time I found that such detailed info on any company is privy to certain Institutional research guys as also certain knowledgable HNIs because of the resources they can spend to acquire all these info…In my initial years I had to effort a lot to acquire my desired info on any company and most of my efforts failed when I tried to acquire info that I am presenting right now because of lack of resources I had at that time…This is the reason when I was able to acquire such infos on my own, I decided it to publish it and let benefit as many knowledgable guys as possible who are desiring such info on any company…I started many years back with Poly Medicure then came Simran Farms then Riddhi Siddhi then PI Ind. then AVT then Solar then Jubilant Ind. then LGB and then Relaxo…

(5) In these many years of doing deep research as also publishing it publicly, I even learnt a lot…As much varied views I get on a company I was able to keep myself on the right track…and for these I am thankful to all readers like you, Donald and others…

(6) All have seen such detailed works and the detailed many lines replies that I give to each and every query but only I know how much pain it takes to extract these much info and still remain on right track…Yes, I agree that I almost promptly answer almost each and every query and present my research in much detailed way, but, is it my skill…NO…its because of the initial works that I have done on any company and the conviction I have built on my research idea…Many queries that I come across have already been replied by me to myself during my research and such replies to myself are backed by the datas and infos I extract and thats the reason why in my replies I am many times prompt and detailed…

(7) Its the huge info repository that i build for any company which makes me reply in detail…another reason is that i want to make it clear to the reader what i mean exactly in my saying…Few words that can be interpreted in many ways is not the right approach to any reply thats what i feel…

(8) When I actively track any company and post my initial detailed research on that company in any forum, i feel it my duty to communicate any info, whether small or big, positive or negative, that i receive or come across to promptly post it in the respective forum as otherwise i feel it will be a kind of injustice done to reader of that forum…This is the reason for my constant and frequent updation…

(9) Just there is one simple question I am asking myself today “What am I gaining by publishing such detailed works and replying to each and every query in the best possible way i can ??”…Are the people thinking that I am publishing it to publicise the company I am tracking ?? Or Are people thinking that I am fool enough to believe that doing such thing will rerate the company i am tracking ??? I am a firm believer that every company finds its deserved valuations sooner or later…It doesn’t require anyone to publish the research work nor it requires anyone to participate…Lets’ again take here the example of my published researches so far : Poly Medicure, Riddhi Siddhi, PI Ind, AVT Natural, Solar Ind, Jub. Ind., LGB and Relaxo…Except Riddhi Siddhi and Jub.Ind. where there were management issues have all other companies attained their deserved valuations…The answer is simple YES…Except LGB and Relaxo which I have done research on very recently, all other companies includng Poly Medicure, PI Ind., AVT and Solar have reached their desired valuations irrespective of members’ participation…

Was there any participation in PI till it appreciated by 30 % from initiating my research --NO…Was there any participation in AVT till it appreciated significantly — NO…was there any participation in Solar untill it appreciated 30 % —NO

Does lack of participation signal that companies are not good enough and their appreciation is not proper ----again a clear NO ----PI Ind. we all know how competent it is…AVT is one of the best companies we have and is recently named by Forbes as best 200 under a bn. $ company…Solar was a solid play on rising coal demand…Each company was deserving enough for appreciation and thats why it appreciated whether any one participated or not…

So, even when there was no participation in PI Ind. for so long and AVT then Solar and then Relaxo also then why I was updating continuously…because as an active member of the forum I feel it my duty to particpate actively…

I am ashamed at writing this 9th point as its a kind of boasting thing which I simply hate and I apologise for that…

(10) Unless I know a company and its business completely I never comment on it and thats my reason of lack of participation in any other company…

I was watching Relaxo when it was discussed last year and at that time i felt valuepickr members conclusion was right of it being a cyclical play…But the company was interesting and so I kept it in my radar and closely monitored it…It is when I felt that things are changing I started deep research on it and started updating the forum on it…

(11) Just to cite an example, when Relaxo was discussed last year in this forum, except in Stock Story as also one member’s posting, EVA price monitoring was completely missing and everyone was talking of Rubber prices influencing Relaxo’s financials more even when EVA formed more than 30 % of RM cost and this cost was more than double than that of Rubber and SR combine…EVA is almost entirely imported and its very difficult to keep tab of its price movements …I spent a lot of time and energy to collate the info on EVA and when I found the correct source then only went ahead with my research on Relaxo…

Similarly to gain info on Relaxo’s branding moves, it takes a lot of effort on ground to collect the info and its when I can do that only I proceed with my research…

I know there are many who respect and admire the detailed work I do…However, if such detailed work is acting as a turn-of for active participation, I am really surprised…Why its acting as a turn-of – is it because I am replying in detail to each and every query and countering the counter arguments thats what making boarders insecure…It should not happen as our main purpose is to evaluate a company properly rather than scoring a point…Or is it that such detailed work is unable to get digested…Again this should not be the case as many knowledgable guys like Donald, Hitesh, Ayush and others do more detailed work then me…Remember Donald our detailed PI discussion where you shot questions after questions and that too detaild ones and I replied in equal detail…At that time there was no turn-of…

As much detailed works we will do on our researched companies the better will be for all of us…Afteral equity investment is not a child’s play and it requires focussed approach only then one can succeed…

This is an uncalled for controversy and I think we require to focus our energies more on our research rather then discussing such unfruitful things…The thing that hurt was the posting came from Admin and it was phrased such that it was singularly directed at me…Admin should have avoided this thing and could have instead stated ‘Vauepickr Team’s’ views on Relaxo or "Admin’s Views on Relaxo…If this posting would have been from any member then I can understand but Admin of a forum has a great sense of responsibility…Its like Prime Minister stating certain thing which is bound to get noticed by everyone and when Admin points out at someone its not proper unless that someone has committed any big mistake or has violated any rules…

Lastly, again I am saying that we need to look at Relaxo afresh and it will be in benefit of all members…Active participation will be welcome the benefit ofwhich I can point out in Admin’s post only rgdg. its point no. 5 which today made me collate data on Bata when its scale was 867 cr. in FY07 and I found that if we ignore outsourced component and place it on par with Relaxo’s outsourced component then asset turnover is similar in both the cases…This is the benefit of active participation as we can cross-check ourselves and thats what I like the most…

Its nice to see that for this controversy many participated actively and expressed their views in much detail than they usually do…If we do same for our researched companies this forum will itself become info repository…

I end this controversy from my side and hope this thing is put to rest in interest of the forum…Will try in future to remain as passive as possible by only updating major events (although I think this is not atall proper) in absence of any directive from Donald or Admin…Will continue to reply to any queries members have on my researched companies…

Apologise if this posting or for that matter any of the posting has hurt anyone.

Rgds.

Posted byHitesh Patelat Tuesday 19:01

I dont know what to make of all this imbroglio.

Regarding my views I had expressed it earlier also that I dont see too much brand pull for relaxo products. While in the shorter term with induction of salman khan and akshay kumar etc there could be good growth, having used their slippers personally I dont see them scoring over other similar sized and priced companies too much. In short their products are not offering me value proposition. In fact I found a small brand called Khadim much better than the relaxo slippers.

This might be a one off opinion of an individual user but for a company charging something in the range of 250-300 for a pair of slippers I expected something better.

Regarding Mahesh’s picks etc, I think he always puts up all the risk factors in his picks and readily answers all the questions put up to him. After all it is an individual investor’s decision whether to buy any stock put up by him or not.

Only problem i find is that his initial analysis is too detailed and often by the time I reach halfway, there is loss of focus. But then who said stock research is easy? If you can plod through the whole report prepared by him I dont hink you need to look anywhere else. You get the exact idea about the business and then decide on your own whether to buy or not.

Personally What I favor is the short five minute drill mentioned in One Up (lynch book) where one gets basic idea about the company, pros, cons etc and then does his own diligence and then decides on investment worthiness of the stock.

Regarding technicals etc, it does look good but I dont like the large volatility and swings that the stock price has. I would even bear that if I were convinced about the brand strength and stock story but regarding that I am not. So giving it a wide berth.

Posted byVivek Gautamat Tuesday 20:32

Though one should follow the adage Suno Sabki Karo Manki there are lot of investors who trust Valuepickr boarders as most knowledgable, fair and unbiased. And thats what the good forum n it’s boarders should be.

Mahesh Bhai I believe should call a few of the boarders who are based in Mumbai or when other city boarders are in Mumbai for a meeting and try to explain his perspective in person.

We don’t even have a photo of his n it’s our fervent wish to meet him in person and gather nuggets of wisdom .

Posted byAbhishek Basumallickat Tuesday 21:28

HItesh, Khadim is a Calcutta based company and nearly a market leader here. I say nearly because, there is another similar company called Sreeleathers who are equally aggressive and dominant. In fact, the way these 2 have done, has turned away a lot of dedicated Bata users like me away from them. I have been wearing shoes, chappals from Khadim’s for the last 10 years or so.

So, whenever I see a footwear company, I try to compare them mentally against these two companies. And it was here that I first stumbled with Relaxo. There retail franchise was way way smaller, product quality was either the same or poorer and no brand pull. In my opinion, footwear for the masses is more a retail play than quality play. If I have to buy a 500Rs sandal, I will not do a lot of due-diligence and go and buy from the nearest store/brand which I rely on. So, as a brand the distribution has to be very strong to do well.

I remember, when I first started investing, I invested in a company called Mirza Tanners, which made Red Tape and Oaktrak brand of shoes. They did not do well primarily because they lacked distribution. Same challenge is currently being faced by Cravatex for FILA.

So, Relaxo is not going to be on a easy wicket. But it is worth keeping an eye out for the company.

Posted byHitesh Patelat Wednesday 10:35

I think regarding the performance factor put up by donald there could be another yardstick where some kind of table can be put up where the performance of the more prolific stock pickers can be put up so that boarders can get a better idea about track record of the stockpicker. This would even help the stockpicker focus on his pluses and minuses and provide some kind of performance benchmark for boarders in order to follow the stock pickers. This could include the price at which stock was recommended, the high following reco, any book profit call from stock picker and current market price.

Regarding relaxo what I cannot understand why people are quite bullish on this one post sharp run up to around 550 levels. The stock price languished in the 300-350 range and the business was going as it is back then also. What I consider while putting up any pick is the price at which a stock is recommended so that anyone following him should suffer minimum loss in case of them buying the recommended stock.

In relaxo I think at cmp there is a high amount of risk and upsides would materialise onlly if company shows strong growth. Who knows there might be rebound in rubber prices and EVA prices which again could impact the input prices and thus affect profitability.

Posted byAyush Mittalat Wednesday 12:38

Hi Guys,

Good to see a healthy debate here:))I think this debate is not about Relaxo in particular…no one can say withcertaintythat this stock is good or bad or can have the authority to give the final judgement. Most of the times its all about the future which no one knows…but can try to visualize.

I think the important thing is that Valuepickr has developed and grown into a discussion place for investors wherein Donald has tried to involve people to come up, read, debate and understand the stock story themselves. His whole focus has been retail investor education and developing of new talent along with guidance from seniors. So despite doing good work if we are not able to transfer it to the masses, ourobjectiveis unsolved and the work remains personal.

Mahesh, you have been doing good ground work and perhaps the most indepth analysis and most often the common man (or even experts) can never have access to such details. But at the same time the personalization at our forum seems to be missing. What I notice is that you have been putting up huge amount of information everywhere. I think the quantum of details takes away the charm. Plus due to the style one is not able to discuss things beyond a point. I would suggest you to tweak your model. Perhaps putting up the details at an external location and giving the relevant links or summary will surely make the discussion much more involving and useful. I have been greatlybenefitedby the negative feedback I receive and you will also be able to get the same more if your message is getting communicated properly.

Like they say - communication is complete only when received by the person:))

Regards,

Ayush

PS: Just sharing of thoughts

Posted byRamana Rao Amboreat Wednesday 14:50

I could not post my comments due to some technical problems with my computer yesterday. Admins, request you to delete my prev duplicate posts.

To start with, let me think Mahesh, Donald, Hitesh, Ayush and others for sharing so much useful information for retail investors like me. I really appreciate the amount of information that Mahesh puts over here and passion he brings to the discussion. I sincerely thank him for this.

Having said that, I would likealso sharethe followingcandid views which I am sure would help Admins for any course correction

)- tend to over analyze things and lose focus of the big picture

)- too much data for a common investor to understand andcontribute

-more focus onon numbers,quality of the management is not given enough attention

)- inputs from Management QA sometimes over magnify things (good or bad)than necessary

)- feels more like corporate environment whichsometimes hindersfree flowideas

The goal of every stock discussionresults in only two possibilities - buy or not buy the stock. The question is - is it possible tokeep this process as simple as possible without losing sight of important factors? This in my opinion wouldencourage more number of people to actively participate inthe discussions.

At end of the day, I cannot blame anybody for my portfolio losses. If I have to blame it should be my own personal judgment.

Posted byDonaldat Wednesday 16:52

Hi Guys,

Thanks for sending in the different perspectives. We have a good enough sample now. I have also polled folks from other successful forums, senior market participants, and friends from the regulatory side of the market.

Here is a summarised consolidated view that is emerging:

1). Mahesh is good, extremely gifted. His research expertise should be put to good use as he has chosen to share with the general public. There are enough admirers of Mahesh in the market (not just at ValuePickr), some who have interacted with him (over email, etc.) from over 6 years. The guy is good. His research is strong. He should be encouraged.

2). A closer examination of the research data and posts made - shows an emphasis on huge amounts of data, and news/events around the company or industry, butnegligible emphasis on Valuation. End of the day thePrice you get in, is themost important. If you get the Price entry wrong, all your in-depth research is practically useless. On the other hand if you get the entry price right, you do not need much in-depth data. Getting the big picture right is enough!

3). Once the basic data set is in - like say our impartial/neutral Stock Story is in - most of the discussion should be aroundValuation. If there is Value, it should scream a Value buy out at us. The danger with too much emphasis on data and news & events is that it**drowns the focus on Undervaluation.**While senior investors can come to their own conclusions, 90% of any online community as ours cannot. Most of them look to be free-riders on folks they get to trust. If they get in at the wrong price, and do not get warnings for exit, they flirt with disaster - and in ValuePickr itself there has been atleast 3 instances of disaster!!

4). ValuePickr is a small forum with ~3000 registered users today in last 2 years. The pace has accelerated as new folks are joining the effort -and our dream of bringing together amateur investors, senior investors, industry professionals, Institutional Investors - in a collaborative model is taking firm roots. We have also had some decent success, we have some measure of accountability and transparency built-in, there is some TRUST. Beginner Investors have started flocking to the site. From the stats, you can make out that 90-95% are free-riders.Official ValuePickr Portfoliowas started to bring in the first level of transparency and accountability.

5). We have NOW been advised to bring inhigherstandards ofTransparency&Accountabilitywhich will lead to higherCredibilitynot only of ValuePickr as a community, but lead to higher credibility of its mostprolific contributors. Separating the Wheat from the Chaff- should apply to companies/stocks, but just as well to our prolific contributors.

6). Higher Transparency - Ensure Disclosure of positions while initiating, on regular updates and definitely on exits, or atleast immediately after. Moderators are responsible for compliance by following up with prolific contributors.

7). Higher Accountability - Track record of prolific recommenders must be kept updated. Initiation price, price behaviour within 3 months, 6 months, 1 yr, 2yr, exit calls, price behaviour post exit calls.

8). My friends from the Regulatory side say these measures will go a long way in ensuring that the downsides to small investors are minimal, and enhance the reputation of our community if we can start with strictly enforcing these measures.

9). They have also advised us to HELP the Regulators - by putting up profiles of participants, everyones’s photo is uploaded, introductory thread started, and one-on-one face to face group meetings are encouraged.

10). Having put in confidence-building measures, we should**ensure passion is not killed.**We should find a way -to provide access to complete in-depth data that anyone wants to put up/share with the larger investment community. Referencing Links to a Repository is a good idea, while keeping the focus on Big picture and Valuations, Margin of Safety, etc. in the main discussion flow.

This has served as a good wake-up call for us. Thanks to ValuePickr Admin for being vigilant. Thanks to Mahesh for being sportive. I am sure we can find an effective middle-ground that harnesses your in-depth research strength, at the same time protect downsides to beginner investors. We already have most of the Answers to the solution pieces.

Everyone Please comment. Do you agree that above CONFIDENCE BUILDING measures aregood to enforceat this stage of ValuePickr’s evolution.

-Donald

Posted byAbhishek Basumallickat Wednesday 19:11

I think these measures are going to be extremely good to maintain the transparency and enhance the effectiveness of the forum. Specially, the discussion around valuations is perhaps the most important.

As I mentioned in a post earlier this week, Relaxo was discussed in this forum at levels around 300. But the sudden interest and great discussions initiated by Mahesh at nearly twice the valuation needs to be understood by the numbers. Also, I don’t see much comparisons between companies in the same space in terms of business models and valuations, which would add a great deal in terms of the quality of discussion.

Disclosure: I do not and have not owned Relaxo currently or have done so at anytime in the past.

Posted byTCXat Thursday 00:14

Let’s move on.

Let’s implement these measures as possible. Transparency in Disclosures is a good thing. If moderators can indeed follow-up on closures - ensure exit calls are diligently provided. many times this can be a genuine oversight.

Putting up track record of recommendations is a great thing. If Hitesh is worth following, everyone will get to see that track record upfront and benefit. If somebody’s record is average or so so, then too folks would be well-advised.

Coming back to Relaxo. Is it historically overvalued at current levels? I agree we must spend more time on establishing Margin of safety or the lack of it.

Posted byVinod MSat Thursday 08:59

Hi Donald,

The measures mentioned for increasing credibility and protecting "free riders"are very good and highlyessential in the current circumstances.

Happy to see valuepickr evolve to become a more “mass segment” oriented forum and hopefully this will happen without diluting the quality of posts. Moderation will go a long way to keep this forum as delightful as it is now.

I would love to know more personal details of our “star stockpickers” including Mahesh and if possible meetup with all of them. Transparency and trust go hand in hand. Glad that you are taking care of all the aspects of regulatory requirements in spirit aswell.

A more detailed framework of rules to be followed and stict moderation to implement those will be welcome.

Cheers

Vinod

Posted byManish Vachhaniat Thursday 11:03

Hi Donald,

I agree with the measures proposed by you on transparancy, credibility & accountability. I am happy tolearn about your concern for the novice investors. Let us all make this forum more transparent. Personal meeting with each other or a kind of annual meet at some suitable location would be a great idea.

Posted byMahesh Shahat Thursday 11:43

Good to see all contributing actively and love to read Donald’s balanced and fair views as always.

Atleast I was able to draw such active and detailed participation of members, albeit not on any company, but on giving a thought process on evolving a fair and just regulatory environment on this forum (Just Skidding…Pardon Me).

Just few things I want to state as I have seen this forum evolve into a great knowledge warehouse from the time I connected with Donald on linkedin and he invited me to join this forum till now…

There should be a mechanism involved which alerts the so-called beginner investors at every stage who have least knowledge of any business and are not going to work atall on their own to study regarding the discussed company and are just here to read regarding certain companies and get return by investing into it…I have known, infact via this forum only, few investors like that communicating with them I get extremely concerned and so advise them in my every communication to them to not invest their critical money into stock markets…

(One is a housewife in this forum…One is a Father wanted to earn money for her daughter’s marriage some years down the line…I even remember a guy who contacted me via this forum (who is even today contributing to many posts) and I passed on my mobile no. to him considering the knowledgeable participation I had got in this forum from other members; Based on my success in PI Ind., he used to think I am a tip-giving machine and will come out with new ideas every week ; I had to request him to stop calling often and remain in contact via email…)

Although since valuepickr is an open forum I know its almost impossible to evolve such mechanism but if our goal is to protect those guys then we need to think of something…

Second, we need to frame the rules by not just keeping short-term to medium-term investment in mind but real long term investment also has to be considered…Its afterall from a real long term investment into an able company that real wealth creation happens…Also, there needs to be provision for concept stocks too which might not look screaming buys at particular point of time but can ultimately evolve into a screaming buy few years down the line…Valuations need to be looked at from all angles and not just one angle…If the rules are framed by keeping just free-riders on knowledgeable folks in mind then it will malign the real knowledge-focussed free and transparent structure of this forum…Since 90 % of the members of this forum are free-riders (as is said) then I fear high chance of this happening…

Thirdly, to encourage free-riders will not be in best interest of the ethical community we have evolved in these many years as let there be as many stringent rules we frame and let there be extreme caution knowledgeable members take, afterall its an equity market and there are many issues involved in any business or company which are bound to go wrong even in so-called ‘ideas that scream as Value Buy at a particular point of time’’ and create so-called ‘Disasters’ then who will be responsible for such ‘Disasters’ ?? An option to this can be to create a closed-area in this forum which will not be acessible to free-riders or those who are not going to do any work on their own and are just going to ride on their favourite member’s postings…But, the question then arises how will one identify free-riders ??

There has to be a mechanism evolved which ensures free flow of ideas, updates, views, etc. while at the same time ensuring that participation and audience is not killed for the sake of rules…This is what I have loved in this forum so far inspite of relatively less participation in my every research work except 1 or 2 odd as compared to other forums…

I sincerely hope that valuepickr forum evolves into a better and more pronounced knowledge repository with rising audience and increasing membership rather than falling prey to stringent regulatory environment which, although in the short term will enhance credibility as also membership of the forum, but, in the long run will eventually result in killing the better, innovative research ideas/methodologies as also high quality participation.

Rgds.

Posted byAkbar Khanat Thursday 11:43

Hi Donald,

Fundamentally I agree to proposed measures.

Let us also not forget that someone with a good record of correct calls can also make mistakes. Hence if we do have a record of past performance, boarders need to keep this in mind and not just go blindly based on the halo attached to the contributor making the call.

There is a big role of luck in investments which we often underestimate.

I guess you should move this discussion to another thread instead of Relaxo.

Best regards,

Akbar

Posted bySubash Nayakat Thursday 13:02

Hi Donald,

I agree with your suggestion. Valuepickr should be a inclusive community where folks with different analysis style, investment philosophy, data gathering style should be able to share their view freely without creating problem to other. I would suggest to create a new section called “indepth analysis” where folks with high caliber of analyzing stocks to the extreme detail and coming to conclusion would share their data. Personally I want to learn analyzing huge subjective data and reaching conclusion, and such separate section will give a scope to try our hand on analyzing stocks Maheshjee’s way.

I think it is an exceptional idea to have data about stock pickers and their recommendation history along with their track record (3month, 6month, 1yr, 2yr) and so on. This will take valuepickr to new high.

Maheshjee, sorry for my utterance, but I take strong exception to the “free rider” comments of your. Personally I believe we all are learner, who are learning the trick of stock analysis, valuation, picking, investment decisions by looking at the more experienced, matured seniors. It is just some are a more learned than the other. There is no harm in doing so. I guess the basic idea behind having this forum is to have a place where folks can interact and learn from each other.

Regards,

Subash

Posted byMahesh Shahat Thursday 13:47

Hi Subash,

‘free-rider’ comment is only taken from Donald’s post which says “From the stats, you can make out that 90-95% are free-riders”…and thats what I said in my post that how will we able to identify so called ‘free-riders’…if one who is just following any knowledgeable member’s post blindly without doing his own research or applying his mind is called ‘free-rider’ i suppose…Is any fair and free discussion forum suitable to them ?? Discussion forum is meant for discussion on varied subjects whether right or wrong (which eventually turn or are judged right or wrong by the majority after discussion)…afterall thats what is called discussion…now, if any knowledgeable member, who enjoys exceptional credibility, by mistake starts a wrong discussion then so called 'free rider ’ will follow him there too and what will be the result ??

Subash you are a guy who want to use the research and learn how to draw your own conclusion from that…so ‘free rider’ definition is not appropriate for you…There may be many inactive members or less active members in this forum who are silently learning how to research or how to use research for analysing any company…Now thats where the thin margin of difference lies and so identifying ‘free riders’ is almost impossible and if ‘free riders’ become too many on a forum then it will create ethical issues for knowledgeable contributors who will refrain from contributing atall as otherwise if they are wrong ‘free riders’ will suffer…

Afterall, in addition to forum admin, its founders and its contributors its eventually the responsibility of readers to use the discussions or posts in right respect as a direction rather than to take any decision…Agreed, rules are necessary to have a fair and transparent forum but they can’t be framed by keeping so-called ‘free-riders’ in mind as otherwise it will call for a disaster…

I also note Akbar’s views and he rightly said that if we start a practice of accountability (which is absolutely necessary as per me too) by publishing the track-records of knowledgeable members then the benefit of it will be more responsibility on the part of knowledgeable members in their initiation of threads and all but again the negative of this will be that if many times a member is right and then for couple of times in succession he is wrong then those beginners who are going by track-record w/o much analytical skills will suffer heavily as those guys usually start with low exposure initially to test the success of whom they follow and then gradually increase the exposure…

Hence, Subash no hard feelings as I was only commenting from Donald’s post and I have utmost respect for guys like you who wants to use the research and post in the right way…Afterall its only with this intention I started publishing detailed works years back…

Rgds.

Posted byDinesh Vermaat Thursday 14:46

Hi Guys,

I am late over here.

Probably what I see is there could be two sections;

1). The first one where a prelimanary analysis can be posted. Analysis base on few basic numbers and time spent by the the member could be max few hours may be 4-6 hrs.
2). The second section may be things need to be eloborted can be taken there. Where in depth analysis can be done and people can discuss at lengths.

Also with this we can let people glance over the initial analysis and find intersting may go over the detailed one. Right now we have a mix. And sometimes it is really difficult to go all over.

Just putting some thoughts views are invited…

Posted byDonaldat Thursday 23:59

Thanks a lot Guys. I am overwhelmed at the quality of the folks we have attracted at ValuePickr. The quality and tone of our balanced discussions were exemplary. I am happy to recommend back to ValuePickr Admin - the measures we have identified, take responsibility for slowly bringing in every one of these, incrementally - subject to their Approval.

Okay! Now this is the final piece here in this thread, about Confidence building measures, transparency & accountability. As one of the Moderators, I reserve the right to have the Last Word:)).

1). ValuePickr’s mission is to make everyone BETTER-INFORMED investors. That’s the bottom-line. You can be a novice and become better-informed, by reading just the Stock Story and Management Q&As…and then following the Public ValuePickr Portfolio as a rough guide. Or you can follow one of the many prolific stock-pickers whose style, approach and performance/consistency you like and whose ethical/transparency record you get to TRUST.

2). We definitely DO NOT aim to make everyone a great stock researcher/analyser to good stock-picker to a good Capital Allocator. 90%-95% of the people are not “vela” (idle) or crazy like us - serving professionals, or running an enterprise, or housewives (always hands-full) or retired folks -who don’t have the time, patience or the passion/need for that. They just need to find for themselves TRUSTED advisor(s) with a good track record, which gives them a good base to compound their money smartly. (No Guarantees, but. Ultimate responsibility lies with the reader. He must take professional advise before investing).

3). I am really happy to see some very smart ValuePickrs among this 90% set. Take a guess - the guy who articulated his needs of what he expects from ValuePickr very crisply in about 5-6 lines in this thread somewhat earlier in the thread - great clarity in his thoughts - a very quick learner. He had a decent portfolio (~12-15 stocks) just by aping Hitesh’s picks and a couple of others. He was smarter to include anything Hitesh ever talked about …but may not have loaded up (e.g. Dishman or Dish TV). Then he got smarter - he engaged Hitesh and others to refine this Portfolio…and my…when I looked to check his progress a couple of days back…this guy had a much better, refined Portfolio…more concentrated 6-7stocks…a clearer allocation strategy will be apparent to anyone who looks…What a Guy…I love the real SMART guys like him. I hope his SMARTS rubs off on everyone of the rest 90% of folks. Check the Portfolio Q&A Section. His name is Subash Nayak. I have made a mental note to meet him on my next trip to his city:))More power to guys like him…will mean more power to ValuePickr and its mission. Subash is our biggest advertisement today!

3). A small 5% of ValuePickrs will fall in the crazy passionate stock-picker category…we have that needle to do things for ourselves, put in 100-200% efforts, grow every day …with every stock we churn, learn from others smarter than ourselves. We have the time and the energy and the passion to keep getting better at what we do…and attract more and more like-minded folks around us.

4.This is happening. More and more folks are volunteering to join the effort. Management Q&As are getting crowded. We have resolved to accommodate 1 earnest newbie in every trip…who gets a great chance to pick the brains of astute seniors like Hitesh, Ayush, Gaurav, Nagabrahma…and gets to interact with MDs & CXOs of many hues…experiences our post-mortems post Q&A, in one packed concentrated 4-5 days trip…where he soaks in a game-changer experience in his evolution as a valued member of ValuePickr community. As a bonus, mostly every city offers us a chance to chat up/discuss/refine the findings with a super senior…and that’s like the icing on the cake…after all our hard work!

5). Nothing in life comes FREE. Before anyone qualifies for the same he/she needs to show not just INTENT but consistent EFFORTS of adding value to the community for a few months, at the least. The moderators get to pick the CHOSEN one.

This time round - for our Gujarat - Alembic, Atul Auto, GRP,Astraltrip - the lucky one was VInod MS. Will ask him to share his views in a separately created thread…that may spur many others to jump-start their journey:))…who knows!

Cheers. Thanks again to all of you for making ValuePickr what it is! and what it will become!!

THIS IS THE LAST WORD…This entire transparency/accountabilty/credibility discussion will move to Forum Guidelines thread, shortly

OVER TO RELAXO …Emphasis on Valuation…Valuation…Valuation!


(T Anil Kumar) #2

Hi Donald

I am quite impressed with the way you have handled the whole discussion. Though I am a registered member for last 2-3 months, never bothered to engage in active discussion and was busy with my own analysis. I totally agree with you that once we get the basic information right, there is no need to get lost in paralysis of analysis and if we can get the valuation right, then most of the problem is solved. Will try to engage actively going forward and thanks a lot for all the efforts put by valuepickr team.


(Donald Francis) #3

Hi Anil Kumar,

Yup. You are right. And hope we can get more and more of new and savvy investors to get this mental model right in their heads.

Once we understand the main gist of the stock story …why something is great… or not so great…or average…or risky…we got it 80% right. This is what Hitesh excels in and we all should learn from him.

Then the next part is Valuation! And most of us get caught in valuation multiples. They are indicators and can show you a range …comparison with historicals or Peers is useful…but the best way to think about Valuation (I have learnt) is to think about what someone will pay to buy the whole company.

What kind of Price to Sales will be payable for the whole company? Aboot bought Piramal’s Pharma business at 9x Sales why? Someone bought AP PAper mills also at fantastic Valuations? Why? and then there are our chemicals companies --willanyone pay more than 1x to 1.5x Sales? why not? And Cyclicals with thin margins and RM volatility…direct linkage to OPMs…how much will you pay to buy that business???

These kinds of questions set your Valuation Mental models going:)

Cheers. Look forward to more active participation

-Donald