@neeru3855 just read your question regards keeping a cool head. I find that the easy part.
Once you do due diligence and pick your company and actually invest(the toughest part) you just need to settle into the role of owner of a 1000 Cr+ company.
You just need to make a long term goal and investment thesis… for eg I want deepak to turn into a specialty chem company who does PAT of 500 cr in spec chem alone and who handles the cyclical nature of the rest of their business well by conducting capex in the right manner.
In between quarters you let the company ie your employees do all the hard work and let them present their work and commentary to you every quarter/year end to make sure the long term goal is on course.
I usually check the stock markets only when I’m in cash so that I can buy companies in my portfolio/watchlist on dips based on technicals etc(though I do a check on my portfolio every day just for fun post market hours lol) and this actually makes me happy on days of bloodbaths and sad on days of upper circuits haha.
As long as everything looks good via management commentary and quarter results aren’t abnormally bad then take any dips on the chin/add more if your long term thesis is intact.
If your thesis breaks due to actual results then sell(for eg my sbi cards thesis of low NPAs for small tickets dint work so I sold). I’ve given up second guessing daily rises and falls.
Big institutions suffer from liquidity issues and hence sell when there’s excitement post good results and buy when theres dread post bad results etc… so daily movements don’t matter.
Even big technical breaks like 200 dema can end up being false flags due to low liquidity etc so unless my conviction is already faltering I just choose to not act(though I do get a bit more wary and try not to add more on days of technical breakdowns).
The moment you have a crazy long term goal of 5x in 5 years for your company the small falls inbetween seem like nothing and you can’t help but stay cool/be annoyed if you don’t have cash to buy more lol. Currently I welcome dips in granules/alembic/deepak/laurus especially since long term I can’t see any better wealth creators with a clear path for growth atleast as far as my own personal conviction goes. I’m now experimenting with sub 1000 crore mcap companies but I’m implementing the same process but with less capital.
One of My favorite bets super long term is ITC and if it stays under 200 for 5 years il be happy so that I can invest continuously in sip form so I cheer dips and rangebound movements there too.
It’s all about a change in mindset. Train yourself to hate bull days and love bear days is what I’d recommend 
I think you mentioned you cashed out of ITC. Its a bit strange that you cashed out of your favourite long term pick. Not sure if you entered again
It makes up the entirety of my wife’s portfolio. All her savings are in it and Every month/quarter she now sets aside 80 percent of her PAT from her business into it. We Don’t have any FDs or any other sort of debt instruments(apart from PPF) for our respective businesses and hence why I “de risked” my side a bit and decided to make it an exclusive small/mid cap portfolio (plus the opportunity cost of pharma/chem imo is too high to ignore currently… and it’s honestly become a passion of mine now)
Over the next 5 years we ll have an unhealthy amount of ITC shares since she ll be continuing to SIP into it every month. After we discussed stock markets/credit debit cycles/debt instruments etc and the ITC discussion came up(dividends +FMCG other long term growth) all she wants to do is SIP into it so I don’t need to.
For us the quickest way to financial freedom is ITCs Dividend giving us a healthy income via dividends in 5 years for our expenses alongside my portfolio hopefully compounding our net worth in the background which would take a little pressure off of our own businesses by then.
That being said when I have no ideas the first place I put my money in is ITC after my PPF lol.
So for the foreseeable our plan every year will be PPF + SIP in ITC + Small /Mid cap portfolio for both of us combined
Edit: me and my family are so obsessed with ITC that my parents and sister have most of their life savings in it too haha. My dad trained us from the early 2000s to invest in ITC
when last you mentioned about ITC in your thread you didnt sound so confident when you sold your part. (maybe my bad in percieving) Good to see the confidence come back again on ITC. If you take your and your wife’s portfolio as a single entity then what percentage of your both’s portfolio is in ITC? Also, honestly as much as I understand and track businesses chances are ITC will not remain a sub 200 business for so long as you desire 
Thanks
I coudnt understand what you meant by this line. Do you mean that you or your dad have been buying ITC shares since early 2000? If yes, then thats a great investment journey and long term investing example!
@Investor_No_1
If I were to add it to my portfolio above it would be approx 60 percent … ITC has a habit of falling by a huge amount every year either due to tax rumors/post dividend/general fatigue. Whenever it does we ll be adding. Not expecting it to remain below 200 for 5 years either but one can dream :).
And Yes, my dad had a friend who worked at ITC early 2000s. Convinced him to invest. So he started investing in it every year since then and it helped him to an early retirement. Passed on the habit to my sis and me though I diversified a bit(and infact sold all my holdings in March pre crash… before buying post crash and selling again since my wife decided she wanted to take on the ITC mantle). I find comfort in ITC so I’m glad she did.
There is literally no safer place for money imo. Their huge amounts of free cash , dividends and FMCG future is just a gift from the stock markets. If I was a passive investor I’d just put all my money into it too.
It’s a shame I’ve become almost too active now and I’m chasing 5x over 5 year baggers in the likes of laurus/deepak etc haha… but I’d hate myself if I dint atleast try since I can literally see their near to medium term futures laid out in front of me
The news of the vaccine from Pfizer is going to lead to a small bull market in beaten down sectors like finance/travel etc. It’s probably going to take a lot of eyes of pharma for a while so expecting a slowdown in my portfolio in the short term though in the medium/long term fully expecting pharma to outperform with earnings rising. This was to be expected as people move from safe sectors ie pharma/it/agri etc back to the usual sectors since there’s some hope now. Feels like I’ve hedged my bets perfectly though so not too bothered. If the world recovers from corona my business goes back to functioning at 100 percent and if it doesn’t my portfolio will go back to functioning at 100 percent. So feels like a win-win scenario. It may be time to start diversifying into finance/travel etc though. Will not be touching my current portfolio allocations for the next few years but if the vaccine news isn’t a false flag then it may be time to deploy future fresh cash into the likes of finance(idfc), travel(vip), construction(psp), events(nesco) and begin the process of diversification.
In finance do have a look at Federal bank it is still trading at a huge discount to its peers, I have it in my portfolio and at Fortis hospitals; change in promoters hasn’t played out yet and IB Real Estate where Embassy group will be taking over in the next few quarters
@Malkd As you have mentioned above regarding false flag but due to winning sentiments of Trump thought of talking a position on finance stocks as trump may win and market would rally as never before but as Joe bieden was leading I squared off all my holdings for bajaj finance and M&M Financial services … And rest is the history both of them are top gainers today 
Now whats your take on further investment purpose coz rally may continue up to diwali
Thanks
Thanks @d.investor … will have a look at all 3. Cheers
@Dhanesh_Chauhan … I think those people who bought financials/travel etc early in April and held on to now are the real winners for this new bull rally since those joining late could end up getting trapped in sector rotation since There’s a danger of overpaying now since even if the vaccine is successfully deployed it’ll take a year+ for the majority to get it… that’s if it is fully effective. So there’s still uncertainty and that uncertainty doesn’t look priced in at current valuations for many companies in those sectors though there are a few gems. People buying now on the back of yesterday’s news may end up paying for earnings that may not come to fruition for a few quarters. So patience may be needed even now and if things worsen there could be a fire sale again. The smart money for me is still in pharma, chem and agro since they have no risks attached since most (atleast the ones I own) were not dependant on covid for their earnings. If covid goes away they could do even better… if it doesn’t they’ll do as well as management commentary expects.
Yes Absolutely @Malkd I believe that there may be a huge profit booking and short selling from the top OI coming in picture and I think that may be even good opportunity for a new rally for market 
@Dhanesh_Chauhan I think companies that are already doing well but will get a boost post covid and aren’t already highly valued are the ones that will offer the best combo of safety and explosiveness.
The 2 best bets for me are Deepak nitrite and ITC.
Deepak because their basic chem and perfomance products will fire when corona gets a vaccine and they already are doing really well with spec chem and Phenolics(IPA won’t get affected anytime soon since sanitizers could be here to stay for a while)
Itc because it’s near bottom and survived a cigarette ban through a lung based pandemic and avoided taxes during one of the biggest crisis the government has faced. Cigarettes will come back with a bang as everything opens up and health worries of corona get forgotten. Plus the bonus of hotels firing again alongside the tremendous FMCG story thats playing out.
Also, The likes of auto ancillaries that deal in both tractors and two wheelers that have done well through the pandemic and 4 wheelers that will do well post pandemic also comes to mind for eg racl geartech which is still undervalued.
Joe Biden can only mean good things for IT since he won’t be obsessed with trumps H1B visa plans and post pandemic I can see them doing even better due to increase in spending by companies.
Pharma companies that aren’t fully based on corona(I’m looking at you kilpest) and are under the median 30 PE will do well post corona since as the world gets back to normal we ll have the usual health issues coming back too since there’s been a drop in other ailments since corona came around and people stopped travelling/meeting etc. My main worry here is Biden will come up with a healthcare plan for the usa… and I hope it doesn’t affect margins too much when he does. That being said he needs to pass the affordable healthcare act through the senate and I can’t see the likes of Mitch McConnell agreeing to it lol…bad for the American public but good for us and hence why Im not worried at all about pharma so far.
Agriculture including fertilizers look good too since they’ll continue chugging along whether corona goes or not and recent results by fertilizer companies shows tailwinds are definitely present.
I think I’ve overthought financials though. Their results have been good and maybe the npa issue won’t be as bad as first thought especially if the economy comes back on track soon with the vaccine. Either way it’s not a tailwind…but a lack of a headwind here. So I’d rather wait and see.
So a mix of corona proof+ benefit post corona look like the best bets. Hence why I’ve still not gone with the likes finance/construction/travel/oil etc since if corona is here to stay for a while(if all goes wrong) they’ll continue struggling and I’m not comfortable placing huge bets yet since it still feels like a 50-50 in those sectors and I know I won’t sleep comfortably if we go on a run of bad news again. Also my business as mentioned before is purely dependant on the corona vaccine working and will face headwinds if it doesn’t work. So I don’t want to be stuck in a sitution where I have no hope in either my work or my portfolio if things get worse haha so I’m hedging.
another good undervalued company is KEI industries, they have shown resilience even in these tough times and will likely post much better results in the upcoming quarters. please do share your findings on these companies
@d.investor I have had polycab on my watchlist for a while now. Similar to kei regards cables but with the bonus of a nascent fmeg. Should be easy enough to study kei. Will do it. I have been obsessed with vaidyanath for a while now so idfc first has been top of my list and I’ve not really looked at any other bank. Again studying federal should be easy enough. Kovai medical hospital and sunteck/nesco(not pureplay real estate) I am comfortable with so have no issues studying fortis and IB real estate. Will do it over the next few weeks. Will post when done. Breath of fresh air this will be after all the months of studying pharma. Even now all I want to do is buy more laurus even though I have more than my fill so this will give me a nice distraction. Thanks
@raku
Kaveri results were out yesterday. Posted thoughts in the kaveri thread. I really liked them and I envy your MOS at rs. 470 .
@neeru3855
I added even more today during the dip at 510. Maybe reconsider kaveri. Earnings will triumph in the long term hopefully. Management renewed my confidence. Hoping they have a good concall. Haven’t found any info yet if they have one.
Some doubt had been lingering in my mind since quite sometime and thought it maybe good to share and know your thoughts. Ever since GOI introduced taxation of dividends as per slab, does investing in excellent div paying companies, specially ones with payout as high as 80% (meaning they have limited Avenue for growth reinvestment) makes sense…more so if someone is in higher tax bracket as 30% of your hard earned div on thoughtful investment and risk taking would go to GOI?
Would it make more sense to simply trade these and book profits as LTCG taxation is less than dividend taxation…or not invest for dividends at all…thanks
yeah checked the results ,results were spot on and it gives me confidence to hold it long term and it may not be short term bet .Plus growing population and increase income in developing nation will definitely lead to increased food consumption coupled with the fact edcucation level increasing demand for these special seeds will increase which might lead to further revnue growth specially considering they cater to developing nation.
my only concern is how good is the moat specailly for barriers of entry ,read somewhere they are losing market share and my question to you is how hard is to manufacture and devlop these seeds do they require huge capex?
@Investor_No_1
There’s a certain mindset I’ve developed towards ITC and it’s probably because of my dad.
The way I think of it is I’m applying for a job at ITC a decade in the future. In order to apply for it all I need to do is save money from my current work/business and buy as many shares of ITC as possible while working. It’s painful paying 30 percent tax as dividend right now but what it does is … at some point in the future the dividends will be enough to let one quit their job(or in my case shut my business) and retire early.
At that point ITC would be paying me a salary via dividends (increasing at Cagr of approx 14percent per year as per history) and the worries of income tax would disappear since it would be my main salary.
For this to work though you have to invest heavily else the dividend won’t be enough to retire and hence would just be an irritant where you’d need to give 30 percent to GOI.
I’ve also found that dividends in general take a lot of pressure off of running my business since they can take care of expenses etc incase it goes through a bad cycle.
That being said If I had a government job and was salaried and had a pension for my retirement ready I probably wouldn’t be so obsessed with investing in ITC so the situation varies depending on the person.
Their presentation they just released identifies the main pointers of their moat. To set up distribution, get farmers trust, do the initial capex, diversify into being market leaders in so many crops is very difficult. They are currently very well placed due to
- They have gained market share in maize and rice. This de risks the pricing control of cotton. Infact it de risks the market share of all their individual products by diversifying…for a new player to start with 3 to 4 crops involves a lot of capex since nobody would want to start with just 1 product and be at the mercy of the government.
- Their main capex is done past few years. They are projecting growth for the next few years with minimal capex. New players and competitors aren’t so well placed. So for a few years they have an advantage
- They are racking up a lot of cash. They currently have 481 crores in free cash(side note: it’s a 3000 mcap company with nearly 1/6th it’s value available in cash!) They made PAT of 259 crores last year for eg and should make around 350+ this year
. That means they have more free cash available than what they make in PAT in one year! This will only increase next few years since capex will be low. This is going to give them a huge advantage to protect themselves against a bad monsoon/government law/increased taxes etc since they have cash in waiting for such circumstances…again, new players would find the sector itself risky due to the above factors. - They are a bit insulated throughout the year due to vegetables which has taken them a while to get running. With field crops alone it’s boom or bust ie Q1 boom rest of the year bust. This has given them an edge too over their competition since they have cash coming in all year round and de risks an average monsoon a bit
- Their annual report mentioned a biotech facility that they set up to mitigate climate risk so they can produce seeds even in adverse conditions. From what I’ve heard and seen during management interviews not many competitors in India can do the same.
Most of their direct competitors are privately listed so getting info on them is difficult though I do agree that the likes of nuziveedu are also eating their market share but I can’t invest in them lol so Kaveri gets the edge for being listed and a marker leader in so many crops even with the competition present. Management is confident of growth in both topline and PAT for the next 5 years and I’m inclined to believe then. However, for new companies the entry barrier remains daunting.
In short: it’s a horrible sector to set up a business in plagued by government interference, tax uncertainty and dependant on good monsoons. This in itself is a deterrent for new players and tbh is the main deterrent for investors too.
Kaveri has somehow managed to attain steady, safe growth in a sector that shouldn’t guarantee this at all using the above. If they can keep this up for a few more quarters I have no doubt market will reward them. They showed their growth potential back at the start of the decade … suffered for a few years… corrected their mistakes… and now looks set to make that growth they showed sustainable by fixing all of the issues that went wrong.
Note: this being a turnaround story may take years for the market to get on board. I am willing to stay the course to see if my investment thesis works out since I can’t see a lose scenario here with their cash in hand. I wouldn’t recommend this bet to anyone who doesn’t have their own strong conviction to stomach the probable stagnation and drops in this journey. It may be infuriating to own it in the short/medium term.
Malcolm, thanks for your thoughts on my questions. Buying on dips is something I want to master on. In case of Laurus, I know that it’s a wonderful business, and excellent management. Yet, I feared the fall, and exited 50% of my holding at 282, in the anticipation to buy low below 250 (which it never reached).
- Do you follow any technical chart for buy/call positions? Do you buy on every dip? Do you follow market depth on BSE/NSE (buy/sell volume)? If yes, has it been fruitful practically? I have been trying to correlate between stock prices and market depth. I wonder if it would help to buy/sell at right time (if we know how to avoid unnecessary noise).
- What resources do you follow to research a company (apart from ARs, ConCalls, ValuePickr thread)?