@ranvir, have been following your thread recently and loved it.
How do you look at Marico at current prices?
- While the no of credible banks narrowing and HDFC being one of the strongest bank likely to get advantage of the business shifting to it, the stock price is still going down.Is it because of its exposure to Vodafone idea or uncertainty of performance due to leadership change or some thing else?
Views invited.
Hi…
I think it is fairly priced. There are some headwinds wrt its hair oils business. But things may look up again once a rural recovery sets in. There is competitive intensity from Dabur as well. But businesses do go through such periods.
Dabur was under the Patanjali"s pump from 2015-18 , Nestle had the Maggi Fiasco in 2015. At that time, Marico and GCPL were flying.
Today, Dabur and Nestle are flying while Marico, GCPL are under the pump.
As long as we think that the problems are solvable, which I think is the case at Marico; business cycle- up/downs should be okay.
Things that are looking up are-
Beardo portfolio.
Saffola oats and Olive oil.
Their Bangladesh business.
Regards,
Ranvir Dehal
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Disc: Bought some more of Britannia Ltd.
Regards,
Ranvir Dehal
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Disc: bought some share of VIP industries. By the time, it was 1520 Hrs…could not resist the temptation.
He He He He.
Regards,
Ranvir Dehal
A few Random thoughts-
Chinese Index- Today @ 2943 vs 1 yr peak of 3250.
Korean index- Today @ 1954 vs 1 yr peak of 2240.
These are the mkts - worst hit by CORONA.
Down only 10-12 pc from their peaks.
Off course…their worst reactions came a month back.
Moral- RELAX !!!
Disc: Invested in equities - 100 %…as always.
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@ranvir
Hello sir, Brutal and unprecedented are the words people are describing this fall. Appreciate if you can provide some perspective on how to swim through this fall. Thank you.
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I don’t know if it will be appropriate to write here. My views are that one should not leverage and buy. Stay put if the investment horizon is more than a year. Wait on the sidelines till market stabilize. Deploy fresh money when the Coronavirus cases start to decline the world over. The way the market is behaving it is definitely headed much lower.
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Hi…
This fall has been brutal. No doubt. It may continue for a few more days as well. Can’t contest this. However, I have been a buyer with every successive fall.
Reason-
The theory that Corona will keep spreading, our worst fears would come true, we ll end up in an Italy, Iran or China like situations etc…and only the stock mkts would fall and others would come out unscathed…can’t be true.
If we go into Italy like quarantines, what would happen to Businesses???
What would happen to the employment???
What would happen to the salary hikes ???
The answers are obvious and grim.
So…therefore, how can the real estate prices hold???
They can not. Its just that they are not being flashed on our TV screens.
What will happen to our currency??? Where will the Bond yeilds go???
Will the govts not start their printing presses???
Basically…no one is safe. Except for Gold maybe. ( just maybe )
However, when the crisis ends…Stocks should be the first ones to bounce back. Companies would again hire, pay salaries and the economic activity starts again.
In the mean time, if we r getting a few bargains in the Stock Mkts…why not go for them.
After all , future may not be all that bleak.
A few words of caution-
Try and only buy companies selling staples or items of necessities, having huge cash piles, no leverage, exceptional corporate governance.
These r some of my thoughts.
I reserve the right to be wrong.
Regards,
Ranvir Dehal
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Disc: bought Dabur and Britannia in the morning.
Sorry for late disclosure. Was busy with some hectic activity for obvious reasons.
Regards,
Ranvir Dehal.
Thanks for providing your perspective and updates. In my 6 years for investing, what I experienced today morning was complete capitulation, totally frozen. Buying in such situations is really really difficult.
Yeah…
But the fact remains that Market would only bottom out once the Virus recedes.
Till then, one can only hope for the best.
Optimists can buy the falls.
Pessimists can avoid buying.
If the world survives, equities will outperform all asset classes in the long run . But avoid buying banks…due leverage and interconnected risks.
If trouble mounts…no one is safe - neither cash nor real estate.
But they ll kill slowly. He He.
Regards,
Ranvir Dehal
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Hi…
As most of you know by now…I am an eternal BULL.
I am, in general more bullish than most bulls around.
However…now with the lock downs / Closure of Malls, Schools, Sporting events etc…that too in India, I am getting a little scared.
The profitability of restaurants, hotels, malls, airlines, logistics companies, companies selling luxury products, consumer discretionary companies etc etc may come under heavy stresses.
What will be their ripple effects on Banks, RE and allied industries ???
Its anybody’s guess.
I was around in 2008 as well.
But this kind of JAM on economic activities is even worse…that’s my hunch.
If this continues for 1-2 months, NIFTY may be in for 7000 odd levels. Its just a Hunch.
I am now in a real real dilemma as to what future course of action should I be resorting to.
Whats fueling the dilemma even more is that even if I exit in full, I am still sitting on gains from 2014-17.
2018-2020…I am largely flat.
Should I protect them, wait for the dust to settle, eject in totality and hope for lower prices to invest again ???
I have no clear answers to these questions.
Never have I encountered this dilemma before…in my 12 odd yrs of active investing career.
The temptation to exit and hope for lower prices is great.
Will it end up being a great move or will I have egg on my face…I have no idea.
I know, its a 180 degrees shift in my approach from what it was 2-3 days ago.
But my hunches are too strong for now.
I think…I ll do a complete exit from my Non-FMCG holdings and start pouring in the cash with every 500-1000 pts fall on the Nifty…back into the FMCG / staples.
Regards and Apologies,
Ranvir Dehal
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Hi Ranvir,
I assume that in INDIA the situation might not be that worst as in China or Western world.my assumptions are that due to onset of summer and inherent nature of Indians using more nature related products like basil leaves,cloves,haldi etc which is quite effective in terms of diseases related to cold,the Virus won’t have much impact in INDIA.and if that happens the shutdowns will be temporary.
So India facing/domestic business mostly related to food consumption,consumer staples,personal hygiene,pharma,somewhat consumer staples will still be doing good.sectors to avoid aviation,entertainment like movies,holiday stuffs,hotel business etc
This is my assumption.I might be wrong.
Thanks,
Deb
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This is a dilemma which most of us are confronting. There is unanimity that Nifty will break the panic bottom hit on last Friday with negative news flows coming every day. But the silver lining is that the outbreak has plateaued in China and South Corea and hence in a matter of one and half months from now, the world outbreak may also plateau. Hence it is unwise to sell at the moment when the market has come off a lot. It will be ideal to exit the weak ones and pile on to the high conviction bets. The chances are that six months from now, the market will be in a much better position and so will be your portfolio. Don’t leverage, grin and bear the short term pain, take precautions and keep safe. A few thousand deaths and few months economic disruption is not the end of the world. Brighter days are ahead some months down the line. When eternal bulls like you start to throw in the towel, we may be near to the bottom.
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Yeah…
Maybe u r right.
I think, what I will finally end up doing is to convert my Non FMCG holdings into FMCG holdings at tomorrow’s rates.
And then wait and let the story play out.
I am confident that FMCG is not going anywhere.
Others may also not go anywhere, but FMCG gives greater confidence.
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My understanding is that people will postpone the activities like house renovation, construction activities that they planned to start immediately but not the one that’s ongoing, consumer durable unless a huge discounts are offered. Those who got health conscious want to avoid public transport might buy two-wheeler, cars and those who already have one and wants to upgrade might postpone their plan until corona subsides. I see hospitals and allied businesses posting robust quarters as people are being extra-careful due to corona saga. Entertainment, hotels, water-parks, exhibitions, sports will surely see one or two quarters contraction.When things get normal all businesses except FMCG will see a sharp raise in sales as the postponed activities executed at burst. Until then companies that are debt free with cash in hand will sustain the downturn and those are highly leveraged may take a hit.
It may be prudent to be with FMCG, other debt-free well-managed businesses that will get beaten due to a few quarters down-turn will be available at 2012-13 valuations whereas their business had improved over years, brand-recall will give a rare opportunity.
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Today has been an emotional roller coaster for me.
Probably thinking and reading too much about Markets.
Finally…I thought that I have already seen 8500 on the Nifty ( on Friday ).
That’s a good 30 pc cut from the top.
Whats left now??? 8000 or maybe 7500 on the indices. If 8500 is digestible, so is 7500.
On Friday, I my emotions were reasonably under control.
So…why worry now???..is what I am thinking.
Finally…I have decided not to tinker with the existing portfolio and buy more of Britannia, HUL and Dabur on further dips.
Disc: already holing these three stocks. Views are biased.
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Yes, the feeling is mutual.
However, I believe, none other than IndusInd Bank in your portfolio requires any tinkering. You may consider to convert it to conservative banks like Kotak Bank or City Union Bank or take a re-entry to Bajaj Finance or Bajaj Finserv. Also. I believe Jyothy Labs needs a relook at these valuations.
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The question is, whether Nifty has entered a bear market or the recent crash is a bull market correction.
In a bear market, there is price and time correction both. Down trend could continue for some months.
In a bull market correction the picture could turn back to rosy anytime soon.
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