My richdreamz portfolio - visit my portfolio to learn together!

[mahesh1980]

@Investor_No_1 , it is true that we need to consider inflation. As @Vijay_Kiran has pointed out rightly, correct asset allocation will be the key.
As far as age is concerned, it does not matter. The reason for this argument is

1. We are taking out 2% of the corpus each year (and not a fixed amount like 50,000/-, in which case inflation will bring down the purchasing power of the amount with time) and in the meantime, the corpus size would have proportionately grown accounting for inflation.
2. @Vijay_Kiran , it is true that while doing the above calculation, it has to be assumed that no big financial obligations are pending.
   Regards
   Mahesh

[richdreamz]

Hi Akshat -

@akshat_investor

There is no right answer to this question. Mahesh and others have provided quantitative aspect of it.

Qualitatively, It really depends on ones personal circumstances, risk taking ability and start by answering some basic questions.

• Why they want to achieve financial freedom

• What are they going to do afterwards

• How are they going to achieve this clinically?

Let me address some psychological related aspects and tell you my situation as I can not generalise or speak for others.

Luck:

As I wrote earlier, I was lucky to get to 30x my normalised annual expenses at 32 plus years. I was saving and investing in MFs for few years and when I wanted to try direct equity, as they say, ignorance is bliss, I invested 60% in a stock which went up 5x in 2 plus years and so become 30x. Had I invested in a junk stock, my story would be completely opposite - so, I was lucky.

I started working at 21 years and for all those years I was just accumulating a large part of my salary and a few years later by reading articles in Rediff, valueresearchonline.com, I started SIPs in MFs. This SIPs coincided with post GFC crash. So, I was lucky. The returns were really good from these MFs.

Why I took risk at 30x:

Responsibilities:

• I had no responsibilities in terms of sibling care or parent care. All are financially independent. I had zero financial liabilities.

Family:

• My wife is a post graduate who left her career to take care of kids. My dad’s demise made it difficult for her to do job, take care of kids, support my mother emotionally. So, even if I quit job for full time investing or trading or whatever, she can get back to job in worst cases and I had her unconditional support in doing whatever I want to achieve or interested me.

This aspect of family life is really important. A supportive and understanding spouse is a multibagger of 100x than a handsome or beautiful spouse. So, all young people out there, choose your spouse carefully. It can make or break your life.

Risk:

• Armed with a false confidence of 2015 bull top I QUIT. For a more conservative person, a 60x is appropriate and for someone with a lot of responsibilities a 100x. So, it’s all subjective BUT do not be in a hurry to quit. Make sure, think through a lot. Have a lot of buffer. Err on the side of caution.

Adjust, flexibility:

• Most important factor is, when times are tough be OK to eat rice, dal and sleep. Do not get bogged down by materialist comforts and go into depression etc. Basically, do not take yourself or what others think of you seriously - in the timeline of earth’s existence, you are a mere blip. Your wife & you must be able to run the family with 10,000 INR per month or 1,00,000 INR per month.

So, basically -

• SAVE

• Work hard and get promotions, high increments in early part of your career or do an MBA from top 10 and FOCUS on your goal from DAY 1 of your job.

• INVEST WISELY, regularly like a CLOCKWORK.

• Learn continuously

• Choose your spouse carefully and come to an understanding and plan TOGETHER so both are on same page.

• Luck plays a critical part, give its due, it is not all your hard work.

• Finally and the most important aspect: It takes TIME. BE PATIENT.

There are so many 20 plus people in this forum whose knowledge is 10x times mine at that age and are investing well - all the best to all of you, keep rocking.

[akshat_investor]

Thanks alot @richdreamz for such an elaborate response and special thanks for mentioning personal pointers, i too believe having a supportive family is the key, luckily i have that. And however hard we may try luck and right time is needed to make it big. i resonate with your idea of 30X ~ 60X annual expense, i have 50X in my mind so it provides me some assurance of my calculation being in right direction. Thanks once again and wish you all the success and good health !

[Vijay_Kiran]

@richdreamz

This aspect of family life is really important. A supportive and understanding spouse is a multibagger of 100x than a handsome or beautiful spouse.

Interesting statement and true. You have hit the nail in bull’s eye

@richdreamz

Your wife & you must be able to run the family with 10,000 INR per month or 1,00,000 INR per month.

This particular aspect is more often ignored by majority. One need to seriously control all the unnecessary expenditure which comes due to society/ family/ friends expectations. A generation has to sacrifice its luxuries in order to make future progeny prosperous.

A decade of cost control will free a man for lifetime from the drudgery of butcher workplace!

Thanks for detailed summary. Many things resonate. Great write up!

[jamit05]

Nykaa quaterly results are out.

Revenue growth is nice.

They have stepped up on the expenses.
Marketing and Advertising expense, employe expense too a leap, meaning growth in revenues will continue.

I liked the result. But, let’s see how the market perceives it. Profit took a beating, which I can accept knowing I am investing in a growth stock.

[richdreamz]

To be transparent I wanted to write this - I was wrong & I have done what I think is right, respect technical charts and exited Zomato gradually at 25% loss. Breaking 100 was psychologically, fundamentally, sentimentally significant and was the trigger for my re-evaluation along with price action.

I have slightly trimmed Nykaa in order to have cash but my conviction here remains as is and the numbers and story match but valuations may take a beating owing to broader correction in tech stocks. Technicals don’t look good here too.

Rest of my positions remain mostly unchanged. They are a bit dynamic, so can’t share fully now.

The charts of tech companies are mauled & in my opinion will take time to repair with bounces in between. Over time, am sure the stocks will form a base and show a technical pattern which then can be looked at.

Any story writing from management not backed by numbers are being punished.

This is the time to be cautious and be very certain before making any investment decisions.

The only solace is, most stocks are down by varying degrees and so can be studied at leisure and bought. The market in not in a hurry to reward!!!

There are good charts in financials and in some pharma companies as of now and results are good too with respect to expectations. The coming days/ weeks price actions should be watched.

All the best guys for rest of the year! If anything, will be volatile and stomach churning!

Disclosure: This is not investment advice as I’m not SEBI registered analyst nor financial planner and I have transaction in the stocks I mentioned in the last 10 days.

[hitesh2710]

I had read about and inquired about nykaa post ipo, to get a feel about the company. It seems the millennials find it exciting and fashionable to shop on it.

But a look at valuations put me off immediately. Plus a lot of post IPO hype and hoopla, typical of a rush of IPOs pushed through by savvy bankers, promoters and VC guys who want an exit.

I have found that companies can sustain high valuations only as long as the narrative holds and the markets are in the mood to listen to the narrative and agree with it. This too has a definite timeline. Once a company does not deliver beyond a few quarters, or the market mood changes, stock prices are in for a grind down initially, as smarter folks manage prices through various manipulations, while they exit. This also often includes establishing various stories/rumours/half truths. Once these guys exit, there’s nothing to hold the price and the rout becomes severe till prices achieve some equilibrium with the business prospects, or even goes well below it.

While paying high valuations, we have to be sure that earnings are going to remain strong, or the narrative is going to hold till earnings catch up.

Contrary to above thought process, there will be arguments about new age business, and examples of Amazon and other faang like companies will be given.

I had a discussion with a close friend about these businesses and first thing I found was that for guys with deep pockets, it might not be difficult for them to give a tough time to cos like say Nykaa.
I had at that time found that cos like Zomato and swiggy might be better new age businesses because as of now I don’t see stiff competition coming up. However, how the latter cos are going to be profitable and then continue to grow profitably is something that still baffles me.

The other aspect while considering any post IPO investment is to consider the possibility of window dressing in financials pre IPO. If that’s the case usually numbers disappoint, and stock prices also go down.

I instead prefer existing listed companies that are continuously doing well, and pay high valuations, or look out for temporary problems in a business in which markets have in the past paid top dollars, because markets have faith in business model, and management.

However the current carnage in recently listed IPOs where there was a lot of froth, will offer opportunity to find out long term winners, as and when possible.

[richdreamz]

Thanks Hitesh for writing in.

The IPO froth you mentioned is very right.

I have actually worked out numbers to see if I should sell Nykaa too but the valuations are actually reasonable for a ~ 40% growth with a clear path to double digit EBIDTA margins (currently 6%). Currently, few consumer companies with less than 15% growth are trading at higher valuations and are sustaining them even in this correction - so far.

Having said this, when market gets into crowd behaviour, I think no low can be low. So, to avoid this I have put a vary hard stop loss (5%) on the stock below which I’m selling no matter what and re-enter in future - even if it means at a higher price.

On another note, there’s a marked shift in market mood which you have alluded to and I’m looking to take some drastic steps as the current environment is turning not conducive to the type of stocks I’m interested in and I need time to change my current strategy to include different type of stocks. Fingers crossed!

Again, thank you for writing in!!!

[jamit05]

Hi Richdreamz.

1100PE for Nykaa is wrong.

We need to put it in proper perspective. I need you to give your input on the following.

I asked local cosmetic distributors of Lakme, Loreal, they say their net margins are 3 to 6%

Nykaa skips couple of agents in the distribution channel, since it’s B2C, we could assume that its net margins would be close to 10%. Fairly conservative considering Gross margin is 46%.

Then For revenue of 1100Cr, net profit would be 110 quarterly and 440 annually

For a float of 47.5 Cr shares EPS comes to 9.3
Consequently, at CMP of 1454, PE comes to 150.

[richdreamz]

Amit,

You must be a really brave person to take my advice considering that I have been terribly wrong in my assessment. I’m not sure for which year your estimates are but markets are not willing to look so much into future. It will take time. All depends on opportunity cost, risk:reward structure, portfolio allocation etc.

Markets are clearly saying, “I’m not in a good mood, Show me the money, honey”. So, I would not want to second guess on the numbers here, but my allocation in Nykaa is at a reduced position that will allow me to think rationally and re-evaluate if needed. I find valuations sane with the currently available public information. But that’s me. Also, so many other high quality companies across market caps also fell a good %ge.

With the raised cash as indicated earlier, I’m diversifying into front run financials & export pharma considering that they have been laggards (some high quality financials have barely moved for last 3-4 years!) and tide may be turning around, sectorally. I’m very bearish on IT, particularly, mid cap ones. With my near term track record, taking bets contrary to my positions may actually work better !!! I have given about half my gains of last year back to Mr. Market.

I need some humour, so I’m writing my observations on market (a funny take), purely from short term point of view. I’m sure many of you have so many such observations.

1. Market is a monkey in the short term but a monk in the long term.
2. My respect for stop loss at this point is higher than for my mother.
3. A leader in Cooker industry has been outlandishly bullish in every interview for a long time but numbers don’t show but a 1/3rd player has been outgrowing 2x and is never on media, but the valuations are at >30% discount.
4. After making Ramanujan level calculations and deciding to buy stock A, it makes a top and falls off the cliff while the one you did not buy goes into upper circuit!
5. Market’s fondness for splits & bonuses is greater than my fondness for sweets & biscuits.
6. If Nifty declares 1:1 bonus and index becomes 8500, there will be 2 upper circuits!
7. Best way to find a sector top is the increased number of M&A activities and management guiding for round number revenue projections like 1B USD revenue in x years.
8. I talk about organic food in a bull market & supporting local farmers in a bear market. My wife knows the market mood based on where my loyalties lie.
9. Market falls the hardest just a day after I invested my last penny. My wife then finds her family silver lost & found in a nearby pawn shop.
10. For some promoters, RoI on Twitter by playing messiah is greater than RoI on actually working.
11. Bull market narratives are like my narratives to my wife justifying an iPhone every September.
12. A seemingly bad results are followed by flattish price action over a week but decent results invited a 25% cut.
13. This tobacco giant falls along with the market but when market rises it goes mum! Whoever holding this would have already attained zen like mind status (please, this is fun only).
14. A business media fresher can crash a market by 100 points by war/ fear mongering on TV and then take it up by quoting “sources”. These “sources” are more mysterious than “Victoria secrets”
15. Twitter AMAs (Ask Me Anythings!) are confidently held by a college going student while the participants are the likes of Jesse Livermore, Peter Lynch!
16. Price/Sales in a bull market, Price to Book Value in a bear market.
17. My fear of bear market > fear of my wife.
18. Warren Buffett Quotes in a bull market and Gayathri mantra in a bear market.

There are actually many anomalies in the current market. After a certain point selling begets more selling and conversely.

Regarding private messages: I have few private messages in my inbox, please do not mistake my not replying to you personally as my arrogance but I will feel guilty providing any financial or stock advice or valuations gyan personally as any money lost based on my advice directly or indirectly is yours. I don’t want that conscience.

Actually, NO ONE knows anything - it’s your own personal experience over a period of time and “what matters is - How fast you fold when you are wrong and how tight you hold when you are right and for how long.” Personally, at the risk of repeating this so many times, staying in quality at highly concentrated positions & selling fast when wrong based on market conditions etc helped me a lot. There are so many ways to make money in market, just find YOURS.
Whatever I learn, I keep writing here, there’s nothing more I can offer actually.

That’s it folks.

[jamit05]

You aren’t wrong, at all.
Nykaa is a great biz, because

A. It has first movers advantage
B. It has got the execution right, which is a very Big thing. Just like Dmart did.
C. They don’t have much competition in the way they are doing things. Hence, 40% growth in revenues, without giving unholy discounts.
D. The runway is huge! Demonstrated by similar companies in China.

Biz is great. Nykaa could be a 10L Cr Mcap over the years.

But, the big question is, what is a good price to enter right now.

I have two theories:

*IPO price band is around 1100. Since the market is scaring the investors, I feel they will want to book profit. So, 1000 to 1100 is a decent level.

*Second theory is to ascertain what might be the profitability. With 1100Cr of quarterly revenues, and 10% net margins, the biz could be earning close to 500Cr yearly (approx). Worst case, if their net margins are even 5% then 250Cr. Local distributors have 3% net margins, I have asked around.

With 47 Cr shares, EPS is 5.3 takes PE to 250ish

But, going by screener alone PE looks crazy high. Only because of the huge expense for future growth. So, it all boils down to what the individual investor feels about the managements ability to execute.

This all just approximation, educated guesstimates trying to reach a ball park figure. To get our bearings.

Quite clearly, I not an expert, an enthusiast at best.

[jamit05]

The problem partly is, all the new IPO stocks are being bundled together as “New Age Tech Stocks” and are being bashed up.

Retailers are seeing Cartrade, Paytm and Nykaa as same. But, there is a huge difference.

For starters, even their promoters don’t have enough faith.

Promoter , Public holding

Paytm 0%, 90%
Cartrade 0%, 75%

Nykaa 52% , 38%
Dmart 75%, 9%
Route 60%, 13%

See, even promoters have 0% capital allocated. Only drawing huge salaries or esops.

Nykaa, Dmart, IndiaMART are good businesses.
Paytm, cartrade are very iffy. Not really unique biz.

[pcygnii]

My only worry is that Nykaa’s competitors have very deep pockets. I buy skincare products regularly and since some of them are on the expensive side, I tend to look at Nykaa, Amazon and FK. Amazon has been consistently increasing the range that they have- most Korean skincare products that were not available on Amazon a year ago are available now at a slightly lesser price than Nykaa, probably due to seller competition within Amazon. 90% of the times, I end up buying on Amazon due to lower cost/prime membership benefits.

Except for the physical store presence, I still fail to understand how Nykaa is uniquely placed here. We’ve seen multiple domestic companies go down under over the years- Snapdeal, Shopclues etc come to mind. Platform companies also require good human capital which companies like Amazon/FK are able to attract because they pay significantly higher to management/SDEs compared to Nykaa. Additionally, the cost of switching is much lower in e-commerce (compared to say, broking) platform businesses when consumers are price-sensitive which given an advantage to bigger players.

[Jotpreet]

Hi richdreamz!

How are you navigating this volatile market where corrections in small/mid caps are happening left, right and centre? Like nykaa is at its lowest point since listing day. So do you sell and book some loss and wait for a lower price or do something else?

[Investor_No_1]

@pcygnii

Except for the physical store presence, I still fail to understand how Nykaa is uniquely placed here.

Nykaa has built its business in the presence of deep pocketed Amazon as well as Flipkart. Jiomart is also launched couple years back and so we have the Fashion focussed Westside from Tatas.

Nykaa has built something amid all these threats/competetors. It is only Nykaa which showed them the way.

So while I do believe in capabilities of those who run this business, I am no valuation expert so cannot comment on that important aspect.

(Snapdeal was never a leader in any area and I never heard of Shopclues - so these two are not comparable to what Nykaa has built)

Disc: Gradually building position in Nykaa from 2200 levels till transaction today at 1340 as well - hence biased. I can be wrong in my assessments.

[richdreamz]

Thanks @Investor_No_1, you conveyed precisely & concisely.

@Jotpreet I have written extensively on my approach in all my past posts, kindly refer to them.

More generally,

1. The markets currently are way past any fundamentals like valuations etc. This is technical and fear based selling. Any breakdown, the targets are being achieved in a matter of 2 days.

2. We all take pride in talking Warren Buffett, now is the time to put them into action. The seas candy story, the American Express story etc.

3. If you are holding good to great companies in your long term portfolio run by credible managements and have growth visibility for medium term then it’s time to TURN OFF the noise.

4. Media’s purpose is to attract maximum eyeballs in minimum amount of time not to take care of your portfolio.

5. For your technical positions, follow stop loss like your life depended on it. Better type the stop loss while punching the order itself.

6. This is the environment which can make or break a stock market life. I would stay away from F&O if I were a beginner. If you are amateur, don’t be brave, channel your savings into a MF gradually. I want to take the benefit of doubt & a right to be wrong.

7. Strictly stay away from some Twitter posts/ threads extolling virtues of a little known company & how this is the next Infosys type stories. The analysis will appear magnificent replete with all fundamental, valuation aspects etc.

If indeed this is a WW3 scenario, I have to worry about food & my family’s safety, my stock portfolio can come later. I, with a loaf of bread, is more powerful than a billionaire with aircraft and no food.

[Investor_No_1]

@jamit05

There are few such listed businesses, where the management is reliable, high corp gov and growth is high.

@jamit05

then it’s PE also becomes attractive at CMP for a 25% growing large caps.

Interesting points. What would be your thoughts about Trent? Growth seems between Dmart & Nykaa…Westside, Zudio, Star…all capable of growing 30% and more…with focus on beauty & fashion - its growth can even mirror Nykaa’s…? Mcap at 50% discount to Nykaa currently…

Disc: Invested

[richdreamz]

Just to say hello and write some tidbits as a notes to younger myself:

1. My PF is down ~ 20% approx YTD.

2. There is only 1 major change - sold IndiaMart at 5150.
   The optical EPS estimates of 135 for FY24E has an other income component to the tune of 15%-20%. Which means at 5000/- it is trading at 50PE for 12% EPS growth. I think there are better risk-reward stocks.
   I really missed that the reported EPS has that huge component of investment income (from mutual fund) as I read from notes to the accounts. For 20% paying subscriber growth providing 15% revenue growth (assuming 5% ARPU decrease) translating to 12% EPS growth (due to margin contraction), I’m looking elsewhere. Pain: Selling at 48% down from ATH after 1 year is excruciating. How ever, I made 60% plus in ~ 1.5 years holding period.

3. Currently, apart from Nykaa, I do not have any tech companies in my portfolio.

For some one who just started investing, learn from my mistakes:

3. I sold Zomato (already disclosed) after it fell 45% from ATH and it further fell 45% post my selling. Lesson: A stock can fall 50% multiple times. Don’t test the depth of the river with both the feet (IPOs).

4. I sold CarTrade (already disclosed) after it fell 30% from ATH and it further fell 50%.

So, basically, how low can it go & how much it fell from top are 2 most irrelevant basis for investing in a stock.

5. My current portfolio is Kotak bank, Nykaa, Dmart (today re-entered), HDFC Life, United Spirits, Hawkins, Star Health. This covers 80% plus. Return expectations are muted in the short term and 15% in the long term and 18% depending on the market conditions and underlying earnings growth acceleration.

Probably in a few months, I’m looking to reduce my time spent on my portfolio drastically by making some changes in the way I invest. This is after realising that: I’m 40 Years now and have seen approximately 6 bull-bear cycles in the past decade plus - 4 minor and 2 major cycles. By the time I’m 60 I will probably see another 10 bull-bear cycles and if I look back, I do not want this as the only major part of my life. I have few other things in my mind which is out of context for this forum and will spend my energies there. This re-arrangement may come at the cost of reduced alpha generation but I’m sure it’s worth it.

Most high PE stocks are showing very dangerous long term bearish patterns. Act based on portfolio value, drawdown tolerance, risk taking ability. Do not give into lectures on twitter by PMS managers on compounding stories. Their aim is AUM (most of the managers, there are of course genuine ones).

My general observation based on past cycles is “a bear market takes 13 months for a bottom and if this holds true we are still few months away assuming this bear market started in October 2021.

Bye for a long pause & take care - rough weather ahead.

[richdreamz]

Based on price action, depressed sentiment (memes), improving narrative & fundamentals, I have re-entered 2 tech stocks over last 1-2 weeks (IndiaMart, Zomato), 2 are fresh entry (Delhivery & PB Fintech) & 1 has continued to be in PF (Nykaa).

I have provided technical charts of 5 stocks with some explanation for each.
I have exited some stocks to make way for the above & I will explain my dilemma in some of these.

Technicals also formed a basis for these decisions. Whether I will stay or exit will depend on fundamentals, mostly.

Nykaa: Not a re-entry but increased position by couple of %ge points between 1325-1400 over last 3 months.

The top line story of the company remained as strong as ever despite some lingering doubts over e-commerce slow down as evidenced in US. But given the relative under penetration in India, from the results of the companies it looks that theory may not be applicable to Indian companies yet. The BPC business is very much profitable while the cash from this business is being invested in Fashion business. I imagine fashion business will turn profitable in 4-6 quarters. I, for now, am not giving much value to b2b business, Nykaa Man, Nykaa International.

For me EV/sales of 9 times FY24E is palatable. Page industries (though strictly not comparable because Page is 85% Manufacturer while Nykaa is 85% online retailer) trades at EV/sales of 10. Both are expensive and are way out of zone for value investing.

In fact, none of the companies I discuss in this post are anywhere near normal valuations.

On this point, each person should be aware of the following:

1. What kind of companies are you invested in?

2. What is your strong point? Is it a) Finding micro caps and ride it till maturity? b) Invest in growth at reasonable valuations, like 12% grower at 20 PE? c) Companies like DMart, Page stature and have the ability to sit for long period of time and digest steep corrections in between as steep valuations give way to corrections on any persistent disappointment. Etc

3. Have a vision & trigger points for a company and wait for them to play out over time and increase allocation as each trigger point plays out.

4. Combine technical & fundamental aspects & invest/ trade or exit as the opportunity arises. Here, the key is be unemotional on losses.

5. SIP in a mutual fund like PPFAS.

I do not have the ability to find the diamonds in the dust and even if I do, I cannot wait to see stocks not doing anything for 5 years and then go up 10 times. I really think, the kind of stocks you choose should more or less align with your own personality/ behaviour.

As I wrote earlier, I waited patiently for technical structures to form and wanted to get in in tech stocks. Whether they will stay or not will depend on how the story is evolving.

Also, comparing Page industries vs. Lux price action (OR) Titan vs. Kalyan jewellers price action is a case study in itself.

Delhivery:

As I wrote in Page thread, I bought this around 495 with good allocation. The research reports have written the story on this company really well but most of them find the valuations unappealing. So has been the story for DMart & Page. The companies that show really high growth & leave the competition in dust will get high valuations. Can’t debate on this much. But <1% of the listed companies deserve such valuations. So, if you pay such valuations for a mediocre company, losses are abound. I made this mistake in Symphony in 2018 & quickly lost 20% then when results were not forth coming. What DMart is doing in offline grocery retail, Delhivery is trying to achieve in logistics where it is using technology & scale to squeeze in efficiencies and then pass on that gains partly to customers/ businesses. I personally think, the competition has been caught napping on its wheels. Let’s see how this story plays out.

PB Fintech: The core insurance business has turned EBIDTA positive ex-ESOP costs. The credit business eventually would follow but I do not know how big credit business can be though the opportunity size here is larger. How ever, insurance business where the renewal premium comes at 90% plus contribution margin is a big thing for me. Currently 25% of the revenue is renewal premiums and is growing at 40% rate. The revenue from this will flow directly to bottom line. Once credit business turns EBIDTA positive, things will take off. The investment for its new businesses will come from the interest from its cash only. Steady state margins would be at 40% and so this will trade at premium EV/Sales to Nykaa. Nykaa cannot have 40% margins.

For investors comparing EV/ Sales WITHOUT taking into account the steady state margins is not the right approach, I think.

IndiaMart: The story from my side is known, after selling this it fell 25% and my PF increased and I was getting 40% alpha and the numbers would start improving from now on. The high cost employee base is now baked in almost and profit growth will now follow revenue growth. The addition of 9000 plus customers in 2 consecutive quarters appeared positive (management guided for 10% slippage in this new addition, though). The allocation here is not much though.

Zomato: NOT happy with the way Blinkit acquisition is done. Absolutely not. This may or may not turn out to be gold mine for Zomato, but I cannot forgive the management for their closed communication on this. But I think market punished this way too much. I like the food delivery business. I will be opportunistic in this stock, strictly following stop loss or if fundamentals deteriorate further or any other big band acquisition. Once bitten twice shy. How ever, I believe the fundamentals & positive narrative would start from here.I also do not like management’s talk of decades long business building narrative. The allocation here is > IndiaMart but lesser than Dmart/ Page/ Nykaa/ Delhivery.

Technicals:

As written earlier, technicals & sentiment also played a role in buying some of the above. Most are forming falling wedge patterns.

IndiaMart, Zomato, PB Fintech: Just peeked out of falling wedges and for the patterns to play out the prices has still have to go up by 10-15% for pattern confirmation. In the interim there could be re-tests to take out last hope people etc.

Delhivery: The price moved out of IPO base and is setting up for a big move in either direction. Let’s see.

Nykaa: The price has been coiled for 3-4 months and will move swiftly in either direction.

I have clear picture of how falling wedge & coiled patterns played out in Bajaj finance, IndiaMart in 2020 & 2021 respectively. I’m not juxtaposing these 2 on the above but the price action from a falling wedge could be good from technical perspective.

Hawkins:

The market is not according even medium valuations for this company despite consistent performance. Probably, market still remembers 2011-2015 period? Also, the market size not being big & market is still waiting for new category from a decade from this company. Entering a new category NOW is really difficult compared to a decade ago. Now, Havells, Crompton etc are aggressive and they have wherewithal w.r.t. financial, distribution. How ever, I expect Hawking to move towards 7200-8100 zone looking at technical picture. I will root for this company, even though I have exited.

United Spirits: Probably some more time & this should sizzle if they can achieve that high growth in P&A segment. Above 1000 this will blast, technically speaking.

HDFC Life: Slow mover & I have lost patience because too many things to understand and so conviction building is getting difficult.

I’m tracking United Spirits still for re-entry.

At the end of the year, I will put past 3 years performance with data to rationally see if I’m doing monkey business & shift my money to MF or if I should keep doing what I’m doing.

Below is how I keep myself motivated by reading the synopsis on each company & if they hold true.

[richdreamz]

There’s evidently froth building up. Once bitten, twice shy. The Zopportunistic bet is sold.

With fast changes in fundamentals of these, it is difficult to differentiate between stage 1 accumulation & distribution.

The frequency & swiftness with which the sentiment in junk stocks is changing in USA is quite astonishing and some of it is rubbing off in Indian markets too. This is concerning and may be a precursor of mini October, 2021.

The order of money flows is no longer the same too! It is becoming difficult to differentiate between fundamental based fund flows versus speculative ones.

There’s nothing wrong in speculation if the rules of the game are known & taken advantage of - which is not easy at all, burned hands & torn shirts are guaranteed if leverage is used without respect & regard.

Earnings, medium term visibility of growth, valuations mismatch must be respected.