This is indeed pathetic and stupid journalism…totally unnecessary.Thanks for updating. I don’t use twitter.
Few small/micro caps worth looking at :
Gmm Pfaudler
Sonata Software
Suven Lifescience
Caplin Point Lab
Salasar Techno Engineering
PSP Projects
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Appreciate your hardwork and quick turnaround. I am not totally against buying a few select stocks to keep in your watch list. However, I would prefer to keep an active watch list (in some websites such as screener, etc) and keep tracking them on a regular basis (rather than actually buying them). I am of the view it does not make sense if you cant at least buy 4% - 5% weightage of one’s portfolio as the risk is always the same. Just my view, no, offence to the approach elucidated by the seniors / your approach too.
Coming back to the shortlisted ones, i would saw all are better names and if i am not mistaken, except Atul all are MNCs (Pfaudler being the MNC JV with GMM). However, note that all these stocks are illiquid. That being said, by the time, one have developed the conviction the prices might have gone up or down. Where we buy the desired quantity staggered manner, please bear in mind that one cannot unwind the position easily on an adverse news (or as the case may be). So, I would pick a bit more better known names and liquid ones from the small cap universe. Also, note the none of the above names enjoy double digit sales growth on a 3 year basis. Just my two cents.
Regards,
Matt
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I have seen quite a few post of yours. Indeed very helpful. But your writing style is so precise and short that your posts look like that of an operator giving hot tips on SMS. 
I have ranked up almost 50 odd mid/small caps against PEG, Sales growth 3 years, profit growth 3 years, ROE, ROCE, Dividend Yield, recent YoY growth of sales & profit. Ranked each ratio as 1 or -1. Like sales growth 3 years > 20% gets +1 and less than 20% gets -1. After that did a cumulative sum of all individual ranks like ( +1+1-1+1+1-1=2). Then selected top basis cumulative rank. Voila 
Here is what I came up with. I know this is a gross method, far from being statistically accurate, but still helps filter the cream (debatable) out.
Some of them, clearly deserves attention, but few are avoid due to recent carnage and headwinds. Hope fellow boarders will like this excel ranking.
| Rank | Stock |
|---|---|
| 1 | Automotive Axles |
| 2 | PSP Projects |
| 3 | Tata Elxsi |
| 4 | Piramal Enterp. |
| 5 | Sterlite Tech. |
| 6 | Salasar Techno |
| 7 | Avanti Feeds |
| 8 | Caplin Point Lab |
| 9 | Mangalam Organic |
| 10 | Bharat Rasayan |
| 11 | V I P Inds. |
| 12 | GMM Pfaudler |
| 13 | Valiant Organics |
| 14 | L&T Technology |
| 15 | Sonata Software |
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Thanks for a very important point raised by you. I never looked at liquidity as a factor. I guess, low volume is the main identifier, right.
Also , as my core portfolio is large cap heavy and I am only looking at a tail/tracking list so would avoid mid-large or large-mid caps. I am trying to skim small/micro specific to this situation.
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Haha. I will take it as a complement “Operator message with Quality scripts only”.
The list you shared Comprises of many stocks from my Watchlist and current pf.
My views on few of them :
PEL : Bet on Management Ajay Piramal
Tata Elxsi vs LTTS : LTTS much better although Elxsi is also vood bet.
Gmm Pfaudler : MNC, a little high valuation. Good bet
Sterlite : Optical Fibre Sector Leader with sector tailwinds
PSP : Best bet in this sector although sector headwinds
Sonata : Good financials and Dividend play
VIP : Stock ran much in recent after A long long consolidation. Valuation on higher side but good bet.
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I believe PSP Projcts is a really good pick but we have to wait for the sectoral tailwind here. I would love to hold this in my portfolio but in a right time might be after the general election was over we will get a clear picture about this sector to enter.
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Interesting article on Buy on Dips and mistake of combining value with momentum. While each strategy makes money, combining two can be dangerous. For true value investors, intrinsic value is so very important. PE, down from High, 52 week high low etc has no meaning.
Buying the dips is always fraught with danger, unless you are an expert like Warren Buffett, who can distinguish between legitimate business facing temporary distress from value traps and frauds. Most retail investors cannot do that, and that’s why they should not try to catch falling. Yet we see more and more retail investors buying Yes Bank, comparing it to Warren Buffett’s purchase of American express. But there is a huge difference between the two. When Buffett bought American express, he would have done extensive due diligence, on the contrary, most retail investors know a fraction of what institutional investors know, who are on the selling side. They forget to ask the most important question - what gives them the edge over seller of the stock?
Is buying on dips OK for index funds or mutual funds. Is it better in some way than latching on to say a yes bank, tata motors or sun pharma?
My view is a stock can be a value trap or fraud or have extreme headwinds. An index or a MF is inherently diversified. So dips are due to macro headwinds or overvaluation which gets better with time.
I agree. The index will eventually climb higher, but a individual stock may never climb back to your buy price. So, the risk is much lower with index, provided you do not go all out in the first dip.
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One more reason to add to volatility ahead🤔
From what I know, he just went to local stores and saw customers still using Amex card and stores still accepting them. So at the consumer level there was no impact of the oil scandal. Obviously he knew the business very well much much before the scandal so that would have given him confidence to go ahead and bet a big part of his portfolio.
Even Index Investing can yield negative or zero returns over a decade. Need to exercise extra caution , while investing in small caps. 2008 to 2018, return is Nil
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Today all newspapers and analysts predicted a massive gap down and fall of atleast 200 points in nifty. However market in my view has changed in last 1-2 years. Buy the Tip has changed to Buy the Dip. Market ending in green was a big surprise…
I see today’s rally as driven by shorters squeeze, and that is no surprise, market squeezes shorter just when they feel most optimistic about their prospects. That’s why the rally was led by Yes Bank and DHFL (though it may also be because they will benefit most from liquidity easing)
They don’t. All of the indices which have been around for 10 years had returns between 5-24 %, although the poor or great performing indices may or may not have an index fund or ETF.
If index investing yields negative or zero returns I think there will not be a market.
The market will still be there, and the best example, and the longest bear market, is japanese equities, it’s index is still trading below the 1990 peak.
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I have heard this comment before, although I have no knowledge about economies and markets I don’t think our country can be compared to Japan as we also have many local factors that drive our economy along with the global factors. Prices may rise and fall with FIIs, but indices over long-term have delivered and will deliver which may or may not beat the inflation.
I bought 3 books not stocks. This was to keep myself out of unnecessary activity which is injurious to financial health.
- One up on Wall Street
- The Intelligent Investor
- Security Analysis
I am not a reader, but will slowly develop the skill as it will add some value and more importantly make me more patient.
Coming back to portfolio, I added HDFC bank as its numero uno private bank. I also bought tracking positions into 3 mnc small caps - GMM pfaudler, Kennametal and Merck.
Will post performance after a while. Nothing special as its just following the market ups and down. Just as good as index so far. No alpha as we call in investing parlance
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