Hi @Nimit,
Do you have any updates on the corporate governance issues related to Refex?
It will be foolhardy for me to affirm if this is a correction, retest or start of a long way down but to me it was long time coming. Particularly with the last six months bull run (>35% jump in small caps), in my opinion another 10% fall would in fact be good for the overall health of the market.
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Its hard to know, my portfolio is down north of 3%. Added few on the names I was confident on, and few of them, Iâm hesitant as they might be falling knife. Kotakâs report likely triggered this. Iâm sure the markets will shrug it off and move on as long as earnings donât disappoint in the next few months. Music has started slowing down on frothy areas. Looking back, I missed taking profits 3-4 stocks, which could have given some psychological relief in this fall nonetheless those are quality names and should recover in the long run.
This tweet was so prescient.
https://x.com/jitenkparmar/status/1701110943852138996?s=20
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Not tracking, I maintain a blacklist where I keep such stocks which I have read and rejected due to governance issues.
I ignore minor governance issues when investing in small caps but not the ones like refex, uflexâŚ
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Sorry. I am trying to learn reading charts. Whatâs the difference between EMA & DMA ?
Emotion of greed was absolutely prevalent. I also was experiencing it.
I will narrate an example. During the last few years thereâs only one IPO, I had subscribed to. A government company with zero NPAs, very decent growth coming at 0.8-0.9 P/B. I put in a big application. Got full allotment. Stock listed at discount. And went down 30% from there. Results declared were good. At a point it came to 0.6 book and sustainable+growing dividend yield of 7%. I did add during these falls and it became a decent sized bet for me. IPO was at 26 Rs and went down to 18 levels. Dividend for last year was 1.40 Rs. My expectation was a dividend and at some point maybe a 40-50% appreciation.
Somehow this stock got fancied and has gone all the way to 90+. P/B upwards of 2.5 and div yield less than 2%. The stock gave me 2.5X, much more than I deserved and expected.
âBhaav Bhagwaan Cheâ is the stupidest thing in my view. At both ends the pricing was absolutely wrong. There is no such thing as efficient markets.
Example like these, and there are many more, tells me about the euphoria in the markets. And markets were ripe for a correction. Reasons will be attributed now. But the real reason, is huge pockets of overvaluations.
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Everyone would have an opinion and no one can really say for sure.
My opinion is that this is just a minor blip/ profit booking in a structurally strong bull market.
I wonât call it a reversal of trend unless market goes below previous high of 18900.
I believe there will be some more blips like this but the ultimate destination Nifty is headed to is atleast 24000 in 2024. I have arrived at this approximate number using both fundamental and technical indicators in valuing Nifty. And this rising tide will take all stocks up along with it.
In fact, our portfolios will be much higher by this Diwali in Nov than where we are today!
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Anyone tracking Infollion Research Services Limited ??
@LarryWink Here is my quick take on the way markets move. 1) 80% of the time market is on an upwards trend while 20% of the time the market is on a downwards trend. 2) Percentage fall/day in bear market is about 3x times that of Percentage rise/day in bull market. 3) On an average the market returns are around 13-14% p.a. for the Indian stock market. There could be divergence to these rules in the short term but in longer term things will converge around these rules.
Using these three rules you can see if there has been a divergence from these rules in recent times. Triangulate using your assumptions to estimate if you see market as going up or down.
I wonât comment on individual stocks that you hold but like the fact that you follow the dictum âbuy on dipsâ.
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Anyone tracking newgen software? Can it be a long term bet?
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Thread on the company exists.
Hi Guys,
I am new to this Forum. I was checking different threads and wasnt able to find much information about two industries. Anybody currently tracking Pyramid Technoplast & Refex Industries.
Thanks
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Dark horses from the Warehousing space
Companies with decent land holding are venturing into the warehousing space. I found some well-known companies (E.g., Mahindra Logistics, TVS SCS, etc.) as well as five dark horses (small/micro/tiny caps).
- TransIndia Real Estate (Countrywide)
- Anant Raj (North India focus)
- GKW Ltd (East India focus)
- Lakshmi Automatic Loom (South India focus)
- Shreeji Translogistics (West India focus)
While I have always been bullish on the logisticsâ industry, I realized that the warehousing space is more fascinating.
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UP and Bihar focussed Small Cap Dark horses
I am trying to identify companies which have most of their presence/stores/branches in the interiors of UP and Bihar. The well-known companies/banks always avoided these regions due to various reasons.
I found the following companies: Aditya Vision, V-Mart, and Utkarsh Bank. Are you aware of any other dark horses?
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V-mart is good company to study as valuation is attractive but they are getting competition from other brands like zudio which is run by trent
@avneesh @ajayt001 @StonePitbull @Nickp @ChaitanyaC @jitenp @vikas_sinha
Based on my interests into small caps news/threads, hoping to learn more.
Many news on small caps is more or less summarized at The below VP discussion comparing PPFAS flexi funds vs small cap funds. (which is largely based on recent presentation by PPFAS funds)
PPFAS supports large caps and gives reference to an IIM-A study⌠suggesting small caps didnât outperform large caps from 1995-2019.
Some argue PPFAS might criticize small caps due to not having a small cap fund, even though historically small cap funds have given around 20% returns over a decade.
However,
historically, when a lot of money pours into small caps, they tend to go down heavily with a slight market correction. Small cap funds usually follow a pattern: 2-3 years of a rally and then 1-2 years of a gloomy period. This aligns with Howard Markâs book on market cycles, indicating weâre currently at the peak/getting to the peak of a small cap funds rally.
My query is regarding small cap stocks for a retail investor(who is 93% small caps), how one can wade through these situations.
1.If we can not time the exact top, what could be time frame to run, Diwali-23 or July-24? what time frame do you feel is comfirtable before it gets gloomy?
2.What can be prudent approach, if we are not sure about running away, e.g. can take off partial profit?.
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Fusion Micro - Theyâre a micro finance company with big exposure of loan book in UP & Bihar
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Hello amazing people of VP,
Back after a long hiatus.
I am currently running a SEBI RA firm. Have learned a lot from the community and applying lessons learned here and through investing. I have a better grasp of playing commodities/cyclicals vs highly moated companies as compared to 2020 since I have been doing this full time.
I would like to discuss themes/sectors:
Extreme Euphoria (Price Increase):
- Railways
- Infra
- Capital Goods
- Financial Services
- Smallcap IT
Basically, Govt spending and credit growth were the reasons for the same.
Consolidation/Downward Trajectory (Decent Valuations):
- Chemicals (Agro+Specialty+Commodity)
- Pharma
- Shrimp Companies
- Battery Manufacturers (Since the top two listed players are entering Li-ion batteries as well)
- Alcohol manufacturers
- Textiles
Many sectors/stocks are currently at frothy valuations. Now is the time to invest where there is pain (demand issue at present with foreseeable growth in the next 2 years).
I would highly recommend these 2 videos and basically this channel in itself for great insights into various sectors/industries:
-
https://youtu.be/6xh2LPlBLi8?si=fvgqPTf1MrOpkBCb - Chemical Sector: Pessimism An Opportunity?? A Masterclass Session by Aditya Shah, Sekhar, Jiten Parmar & Ravikant
-
https://youtu.be/O3-Emzv-Xe0?si=i1Mn4Tjvr9pFpYgp - Banking And Financial Services Masterclass | Aditya Shah, Vineet Bhatia, Ravikant, Falak Kalyani
Also, SOIC Channel - https://www.youtube.com/@SOICfinance is gold (for the uninitiated).
What are your views/thoughts on the same? Any sectors you would like to add to the extreme euphoria OR consolidation/current pessimism segments?
Disclosures :
All opinions expressed are personal.
This post is not an endorsement to buy or sell securities.
Past performance is not indicative of future returns. Always conduct your own due diligence or seek advice from a financial expert before making any investment decisions.
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Happy to see you back!
I have tracked Railways, Financial services and Infra from the Euphoria section. From the downward trajectory I have track Chemicals, pharma, shrimp.
My views:
-
Electronics manufacturing: The euphoria here is at another level. I couldnât catch the gravy train here and I feel the FOMO in me. There is definitely govermentâs seriousness in it and the capex being done by each player.
-
Railways - Definitely extreme euphoria specially with wagon manufacturing companies. A lot of froth is because of the expected large tender from railways but expecting similar order in coming years is doubtful because the NRP hasnât been revised and as per current plan the wagon demand till 2030 doesnât justify 50 to 100 PE. Ofcourse the companies are doing more than just wagon manufacturing but I still donât see value in buying them at 70 PE or so. I do hold a position in couple of them and will exit when I see the euphoria ending.
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Financial Services - I donât personally think there is extreme euphoria in it. There is certainly optimism but I am still comfortable holding companies at current valuations. SOICâs recent video on financial sector has good data on the valuations and historical examples.
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Infra - I have exited from all infra plays. It was a short ride but I donât understand this sector to comfortably hold it at todayâs valuations.
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Chemicals - I will start loading agrochemicals when there is assuring visibility of profits. I am happy to lose the opportunity to buy the bottom in favor of lower risk.
I donât hold speciality chemicals because they require better understanding of the area and the business (my personal belief) and things change faster. I hold commodity chemical companies because they are easier to understand and track. -
Pharma - I remain in a generic pharma company and tracking two other. I donât think there is too much pessimism here. Other sectors are looking more colorful than this.
-
Shrimp - Similar to agrochemicals, I am happy to buy it when the ride begins! Too much uncertainty here.
Other sectors I want to track - Renewable (euphoria? or fairly valued?), hospitals, wood panel, PEBs (many small caps here)
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On the railways front, EDFC is now complete last week. WDFC will also get commissioned by next year. These are both extremely high volume traffic needs lines. All these will require wagons and wheels and elccy equipment. Once it proves itself in terms of revenue run rate, the North South and regional Freight corridor plans will be evaluated for biz risk and need .
that is another round of froth and upswing waiting.
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