People start losing patience within 1 year, if share price does not appreciate and you are considering that time frame for accumulation. This wiil defintely improve my patience of holding stocks. Thanks for sharing your thoughts…If possible keep writting regularly.
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The reason i don’t mind paying a premium for a company like hul is i don’t need to get so granular. If i were buying a bajaj consumer i would need to… with hul i dont. They are a behemoth… they have processes set up to handle issues that have been tested by time. Unless there is a major issue regards promoters or degrowth i honestly don’t care 
. The company has been performing well and the stock price has been languishing and its almost fairly valued now at nearly covid valuation with a nice bonus of a 2 percent dividend yield. It just seems like a very safe low risk method of getting returns in the low teens for the foreseeable and is exactly what im looking for currently in a very hotly valuated mid and small cap market.
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This mainly works for me when I’m building a position in a huge bluechip company that is going through tough times. The last time i did this was with itc for more than a year between the price of 160 and 200. Once theres very low downside and no upward triggers in sight is the best time to do this. Especially when i dont have a lumpsum to invest and need to rely on monthly sips based on my business profits. Ive kept a bucket of
HUL, Sbi cards, Kotak (already built hdfc with a lumpsum) and will add to them in that order for the next year or so. If one of them runs up atleast i have the other two to add in. Plus you got me intrigued with infosys and considering starting an sip there too if it falls further after these poor results
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This is very important. When narratives about certain stocks are negative, it gives longer time-frame to build position and if you keep patience your returns will be much better than Index.
ITC, COAL INDIA have demonstrated this. COAL INDIA is a cyclic business so an investor should slowly reduce the position size where as stocks like ITC, HUL can be kept for much longer time-frame.
Large Cap investing needs lot of patience.
Same can happen with Kotak Bank as well. There are no major negatives. Stock is not moving as Market has moved the money to other banks, but over a period, things can change, and Kotak Bank can benefit. But lot of patience is required in such stocks. If there is major financial crisis in Western World, the money will return back to the likes of Kotak Bank. An investor need to wait for such scenario which repeats after every few years.
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Exactly this. Whenever the market looks overheated and i dont want to risk money in small or mid caps i change my strategy to look for blue chips that are languishing. Finding a non cyclical blue chip which has fallen 20 plus percent in a year or has been stuck at the same price for 3 to 4 years is actually very rare. At the same time i dont want to remove money from my PF of small and mid caps so that leaves me with an option of sips only. In this phase i consider my PF to be my main source of returns and the large caps to just be a monthly option to store my cash wherein i dont want returns for even 2 to 3 years. Once i have a sufficient amount allocated i fully expect to beat the index over the long term ie 15 to 20 years which would be the holding period for these kind of companies
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Hello @Malkd
Would love to know your take on Kotak Bank. Please do share.
Thanks
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Hi…Sorry for Barging but heard a phrase from one of the friend regarding the Kotak issue.
He said and I Quote “You need to determine whether Kotak Bank is suffering from Fever or Cancer. If you get that , you will get it”
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Any new update on investing sir? Its been a while to heard a word from you. What is your perspective about market condition these days? Will love to hear your views on market.
@Malkd - Hope all well! been long heard from you. Would be good to know what you have been doing with your investments last few months and what’s the strategy like?
Are you still holding on to ITC, Oracle Finance, Intellect etc. and how much % of your overall family portfolio these names are currently? Any major changes to portfolio?
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Dear Malcom
Your bet on Lux industries is a doubler now in 4 months. Please share if you are finding value in anything in current market.
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I havent posted in a while since theres been no buying or selling in my pf. Now im finally making a decision so posting. Had bought City union bank at its lowest point as a low risk bet at 125 more than a year ago. Got approx a 35 percent return on it but considering it was low risk i bet a lot on it. Considering selling it now since there are plenty more banks/nbfcs at near book value and even in an optimistic case i dont see CUB trading at more than 2x BV considering the state of the markets. Bandhan bank, arman etc all look like good buys where in i can put a lot of money in(by now its pretty obvious im a buy at bottom person rather than buy due to growth etc). That being said i was supposed to invest some money into a restaurant here in goa but of late ive been getting cold feet since the restaurant business is very dicey. Instead of that im considering investing a large amount into barbeque nation which at current price is cheaper than opening a non branded restaurant here lol. Already feel jts at good levels to invest currently at near 1 x sales but considering the plethora of alternatives currently im going to be greedy and wait for it to be available below 1 x Sales or even better nearer to rs 300 which i can only see happening if the market really collapses over the next 12 months(and if there is no respite to sssg next few quarters). So for now the plan is sell CUB post quarter results… sit on cash for a few months and hope i can pick up BBQ nation for cheap and if not i can invest it into the beaten down microfinance sector
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Good to see you back sir…last quarter results is not bad for CUB and I expect this quarter results are going to be good for both CUB and DCB. Sole basis of this assumption is last concall management commentary. If results are good then Mr Market will definitely going to reward it. As long as Barbeque nation is concerned, I will study it and get back to you.
Disclaimer: Holding both.
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Yup. Hence why il be waiting for a few months either way. Hopefully i can squeeze out another 10 to 20 percent from CUB before selling and then reinvest into other companies at their bottom. Bbq nation isnt set in stone yet and im hoping i see low 300s first over the next few quarters(market sentiment, plus headwinds and no visible lower level to guage in technicals may give that opportunity)
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Good to see your insights after a long time sir.
The way mkt and barbeque nation is going down, it should be available in 300 range quite soon
CUBs results were quite good in this current market and it doesnt seem right to sell now after spending more than a year waiting for this exact bet to pay off ie being more conservative as a bank would lead them to outperforming the rest when the economy slows down. At the same time BBQ nation has reached the magical 1x sales valuation almost exactly. While there are no charts to help since this is unknown territory my gut feeling is we are at near bottom especially with results tmrw and usually its their best quarter(plus management sounded pretty optimistic too). I think the best way here is to SIP since the market isnt going upward anywhere to quick. Will initiate a small tracking position of approx 0.5 percent of PF today or tmrw just to have some skin in the game and will scale up over the next year. Very risky bet and purely a gut feeling bet based on valuations since the overal sector wont magically improve anytime soon. Seeing a branded CDR selling at 1x sales just seems wrong and i cant get it out of my head so might as well inititiate a small position. By this time next year hopefully i would have managed to scale my position to 5 percent of PF and then get to enjoy the economy and CDR get back on track
Disc: Im not a sebi advisor and its a terrible investment looking at literally every figure. But ive realised that this is basically my style of investing and i know i have the multi year patience an investment like this takes. So please dont follow me into this stupidity (im not sure if il take the plunge yet either. Greedy part of me now saying to wait for the pre ipo allotment price of 252 which could act as a support but id be very surprised if it ever reached there)
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Have got a couple of messages regarding bbq nation so im just going to post my logic here
One needs to understand how cheap the business is being valuated currently. The premium segment(toscano /salt) is doing great growth and operation margins wise … same with the international business with sssg of 5 percent. Add the cloud kitchens ie delivery and these 3 alone account for around 200 to 250 crore revenue alone. Over the next 2 years the premium segment will contribute to 20 percent of the revenue as per latest concall and overall revenue should go up a lot considering number of restaurants will be 270 fy26 and 335 fy 27(currently 226 and 233 year end). In a bull economic cycle the premium + international + delivery alone would be valued at 5+ sales ie equal to current mcap of the whole company based on the usual valautions in this sector in a bull run. And then you have the main bbq india business added onto it basically for free at current valuations when we enter a bull cycle. Over the next few years as things normalise the sssgs of the india business restaurants ideally should be positive and this current phase of operating deleveraging should reverse if and when this cycle improves. All that considered i just couldnt ignore it and current valuations. Can it drop further? Of course it can in this current market. And tbh since im in sip mode im hoping it does. Just to understand how cheap the valuations are… during covid when the revenues were at a low and the scenario was as bad as could be the pre ipo allotment was done at rs 252. Now with the revenue at more than double and with the uncertainty less than peak covid its available at 20 percent more. Personally id be very surprised and ecstatic if it reaches 250 and hence it seems like a low floor bet at present and i can invest in it during this bear market and hopefully reap rewards from FY28 on wards ie a really long term horizon ( not even mentioned their negative working capital, how they use cash generated from their business for expansion, no frequent discount to have an onpaper higher sssg and their new acquisition in premium icecreams which though small shows intent for future growth triggers)
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@Malkd You look at stocks from a businessman lens, while most others wear Analyst glasses. You presented an alternate view of the business, which I concur with. It could be another ITC moment in a couple of years.
(Easy 2X to 3X), when consumption starts to pick-up.
I’m in the process of understanding the unit economics. In that regard,
I would like to understand what is the annual rental/lease expense per
store basis. What is the range management intend to maintain as % of sales?
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