ValuePickr Forum

YourRaj's Portfolio

What is undiscipline ( from the book How the mighty fall )

  • Discontinuous leaps into arenas for which you have no burning passion is undisciplined.
  • Taking action inconsistent with your core values is undisciplined.
  • Investing heavily in new arenas where you cannot attain distinctive capability, better than your competitors, is undisciplined.
  • Launching headlong into activities that do not fit with your economic or resource engine is undisciplined.
  • Addiction to scale is undisciplined.
  • To neglect your core business while you leap after exciting new adventures is undisciplined.
  • To use the organization primarily as a vehicle to increase your own personal success-more wealth, more fame, more power at the expense of its long-term success is undisciplined.
  • To compromise your values or lose sight of your core purpose in pursuit of growth and expansion is undisciplined.
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Cash return is a good measure
I come across this during reading of Pat Dorsey Little book that build wealth and worth sharing . It shows how one can calculate it
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regards

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It is a wise approach followed by investors who want to play it safe. Especially for those who feel a large part of their networth is in the stock markets, they buy stocks that give a virtual guarantee of returns in form of Dividends or periodic Buybacks at premium, coupled with a moderate growth in stock price. They then use the profits from these safe investments and make aggressive bets.

In this way, one can have a perpetual cash generating machine.

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Very simply explained. It’s a basic know how for any new investor. Great.

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How much investor is Paying more than the cash generation by The company and how to calculate it
It is learning for me and I want to share among the VP Most of the Seniors already knows about it yet I am brushing some fundamentals
Suppose a company is having
Three prices CMP is 54 or 120 or 580
Sales :51,103,000 O/s Shares = 512,662
Sales/ O/s Shares = 99.68
price of share =54
Price to sales ratio =0.54 which means investors are paying less than the company making sales so this must be a buy 1 Rs note you are getting in 50 paisa

If CMP is 120 Price to sales ratio = 1.21 it means investors are ready to 1.21 Rs for every 1Rs sale made by the company

if CMP is 580 Price to sales ratio =5.82 it means investors are Paying 5.82 times than the company is generating sales But most of the investors stay heavily invested in the companies even where the Sale is less but the Price is Inflated .
Lesson learnt

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One addition
i had visited my list of old investments and found that Hikal is start performing .The company is agro chemical i had made profit but exited as it touched my target .
It always good to visit your previous and existing stocks before moving to any new stock story . I don’t know will it going to add some wealth or not but when i visited my old rational i found the valuations now is more promising . I had Pi-industry in my portfolio in past but had exited on profit booking as the target achieved .

[i am learning **stocks are not your spouses that you should stick with them life long** . i am not saying that is bad practice but the reason is wealth protection and i am happy if one stock give me 30 to 35 % in one year ]

one may visit the thread to know more about Hikal

Disc: I am not Sebi approved analyst .this is not any buy sell or hold recommendation

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while reading on the website of the The veteran small cap and cyclic industry investor Chuck Royce of Royas funds i came across beautiful lines that is worth

As bottom-up investors, how much time do you spend looking at sectors and industries or examining business cycles?

The starting and ending point for us is the individual company. We’re looking for businesses that exhibit a certain set of characteristics, those that our experience strongly suggests will generate consistent and superior returns on capital over the long term.

We don’t think we can add much to the medium- to long-term investment returns for our investors by attempting to analyze the business cycles of sectors or industries. So while our bottom-up strategy naturally tends to lead us to certain sectors and industries (and also finds us de-emphasizing others), those preferences are not determined by our perception of the business cycle.

Although we try to avoid deep-cyclical companies and look to invest in robust compounders, it’s fair to say that just about every company has some degree of cyclicality in its business. Which is fine. If a portfolio holding or another company held in our database experiences a rough patch in its operational performance due to a temporary change in the business cycle, and the stock price reacts negatively, that’s another example of the opportunity created by volatility.

Our view is quite simple: stay invested. Buy more of a good thing. Don’t try to time investments according to one’s analysis of the business cycle. In our opinion, very few people do business cycle analysis with consistent accuracy.

his philosophy about the cyclical and small caps selection is based on following tripod,
Small-cap performance to be driven by three factors: a preference for profitability, relatively lower valuations for both cyclicals and value stocks, and burgeoning economic strength both domestic and abroad.

one more learning i took from him is, Companies that help others do business faster, cheaper, and more effectively has been a sort of picks and shovels approach that has frequently led me to industrial and technology companies with very interesting—and in many cases ultimately profitable—businesses. That much hasn’t changed.
Over the last few years, there’s been a lot of innovation in areas such as process automation, robotics, lasers, cloud storage, etc.—all of which need equipment, components, and related technology, which has led to a lot of investments in companies that have successfully helped other businesses to innovate and/or increase productivity.
In fact, companies involved in process automation, robotics, and other areas look very promising to us over the long term as the recent global technology build-out rolls on.

their advice is
Our advice? Ignore the daily noise, stay focused on earnings, and invest for the long run. After all, the market may run on psychology in the short term, but in the long term it runs on earnings.

source: https://www.roycefunds.com/insights/2018/03/pm-rayner-stay-invested

Another pioneer in the small caps selector and Master practitioner is John Neff.His investment style is as i found in the book by Glen Arnold Lesson on investing from Master Investors


It is not the number of books you study which matters but it matter how to implement the learning that you use to develop the art of investing . so keep learning and share your learning . So for that i am sharing a source which is open anyway most of the books are available online in pdf format

PDF Drive is a free search engine which allows you to search, preview and download millions of PDF files into your devices.

for the list of good books on investing one can refer to My Top 5 Investment Basics Books, & why? and Multi-Disciplinary Reading - Book Reviews

Regards

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Hello yourraj bhai.many ace investors are investing in companies when price to sales is 0.20 or 0.25.your views bhai.

Hello yourraj bhai.in this example of buying 100 rs note at 25 rs or 30 rs how can one know that note is actually worth 100 rs (I am refering to company).is price to book value is helpful in knowing value approximately.

Sohan ji
Price to book value is a good matrix to follow .The book value has limitations we come to know only when the company is filling returns may be quarterly or annually .
You question is valid as how one can assertion the note is actually 100 Rs or not . The book value usually carry historical cost of the acquiring the asset less the depreciation. But the replacement cost in current time may be higher.so one need to find out the replacement cost of the existing assets . The value of some of the items which one consider in the balance sheet may be exergated . e.g the inventories may not be taken as 100% it may be taken 60 or 70 of 80 % of the value mentioned .

As Sir WB always says the price of equity of slave of Earning in long term so one must stick to the Basics business main Paisa hai ke nahi Ye business Paisa kaise Banata Hai and Kitni dear Iska High Margin Rahega .
There are three things which drive the price 1 Forgien Money Inflow 2 the Fundamental and 3rd is Sentiments . Out of these three Most important is Fundamental and the environmental forces under which the company is working it may be internal or external along with explicit attention to the eithcal considerations of the Mangment That shape the business and affect the human and company’s behaviour and judgment.
One need to read the fine prints in the notes how the company has arrived at the book value …
It is worth mentioning that many of the company’s competitive advantages that create moats are not typically are accounted for the Book Value and it can be inflated by accounting convention like goodwill .
I highly appreciated questions but book value alone should not gives the credit worthiness of an equity .

Regards

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Thank you youraj bhai.your views on low price to sales ratio companies. example 0.25,0.20 or even less

New addition in the Portfolio Marico Ltd … stock corrected today .it is a debt free , high roc high margins .i am betting for the management integrity .The entry is small
one can visit the thread Marico Limited (NSE: MARICO)

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i come across a template and worth sharing
data source value line company coca cola


analysis






if administrators find the content is not suitable they can remove the content
Disc; this is not the ONLY model for equity Valuation .One should consult their advisors before investing in to any equity .The content is shared for education and learning purposes

Ref : Equity valuation and portfolio management book by Frank J. Fabbozi .Book is a good read

Regards

It was available cheaper than current price few months back. We think this is a a steep discount only because it fell 6% in a single day. I don’t know the name for this bias but sure seems like one.

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thank you sir
why i entered now
it is mean line basis it is not very good and accurate but you can assured that you are not buying at extreme valuations . You are right It was available quite low a few days back but i missed due to lack of funds as i am fully invested
data Rate star EV-EBITDA


P.E expansion or contraction

Market cap to sales

EPS

i am not good a free hand drawing on computer :thinking:
cash conversion cycle is negative it means they have advances in their hands
Altman score shows the financial stability
the best is THEy are HELPINg STARTUPS if interested you can watch videos at i love their scale up programs .https://www.youtube.com/channel/UCFB0Ayc4tKoAvkNBLVdK40g
for a good company for long term . It has good logistics / good brain behind operations / the Dhaka operation is working very good buy matured . The products are unique and now they are leaders in their segment .MNCS usually ignore the segments in which they are operating

  • Product should be affordable and solve some problem
  • it should be within the reach of customers ( good networking )
  • the companies which help others to achieve their goals
    It is OK to Miss some points but when you realised it is the company which you wont sell unless integrity issues comes on surface …
    regards
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Sir are you following company demergedfrom marico

Sohan ji could you please elaborate do you mentioning the Marico’s Bangladesh unit ?? I have found a good coverage on that You can see it below however it is very old

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Sir I was refering to marico kaya which is in health and beauty sector

Old investment wisdom Time tested Sharing Notes from the Book ARt Of investing : by a wall street broker image

  • Changes and innovations are of continual occurrence.

  • Something good always comes to him who waits with money in his hand.

  • Thousands and thousands of dollars have been lost by the neglect of this simple precaution. “I didn’t read the paper”

  • When so many seductive baits are offered; so many nets and traps, contrived and constructed by clever brains and cunning fingers, are spread for the capture of those having money, is it surprising that the careless and credulous are victimized, and even that the sagacious and prudent should sometimes be taken in? Nevertheless, for the losses they have sustained, investors, as a rule, have themselves chiefly to blame. The mistake made, in nine cases out of ten, has been the purchase of cheap securities. The hope of realizing a little more than ordinary interest, by buying paper at a discount, has proved to be the rock on which unnumbered capitalists have split.

  • By what rule or rules is the investor to govern himself? No formula can guarantee him absolute safety. One thing, however, he can properly count upon, viz., that he must expect to pay a fair price for a good security—one that will return him no more than a moderate interest on his money. If he wants to speculate, and is willing to take risks, that is another thing.

  • The investor may pay too dearly for safety. There are securities which, compared with others that are to be had, sell at prices much above their real value. The reason is that everybody knows them to be good, and investors who don’t want to take the trouble to investigate, or are afraid to trust both their own judgments and the counsels of their friends, are willing to pay extra prices for them. But there are plenty of others that may be had at lower figures, which are just as good. There is no reason in the world why the investor should not get at par all the paper he wants that will yield him six per cent, interest, and be as safe as any property can be under human supervision.

  • Securities, in the long run, must stand upon their merits, and purchasers have merely to follow business principles as taught by the canons of common sense.

  • In seeking investments, and especially long-time investments, there are several things to be taken into account. There is not only the question of the kind of security to purchase, but the question of the time to purchase. There are opportunities to be looked for as well as pitfalls to be shunned. It is during periods and seasons of depression, when securities are forced upon the market, often to be sacrificed—and they are certain to come if waited for long enough —that the shrewd investor finds his richest harvest. That, however, can not be said of the ordinary investor. He usually buys when securities are up and confidence is unimpaired, and becoming frightened as market values go down sells when they are at the bottom, and holds his money to reinvest in something else no better, and probably not as good, when the tide has turned.

  • As a rule, the best time to invest is when others are unloading. In money matters it is never safe to follow " the crowd." Nor is it safe (which, however, is little more than the expression of the same idea in another form) to purchase a security when it is on the " boom." A peculiarity of our money market, conservative as it is popularly supposed to be, is that it is constantly changing its favorites. Its offerings come in waves.

  • One thing the investor would do well never to forget, viz., that there is always plenty of good securities in the market. No one with money need ever fear that others will get all the solid investments, and, in the apprehension that there will not be enough of that sort to go round, put up with an inferior article. Don’t let him choose what is not altogether satisfactory, under the impression that nothing else as good or better will offer. If he does so, sooner or later he will regret it. Something good always comes to him who waits with money in his hand.

regards

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Sohan ji please don’t call me Sir , I had seen to kaya but not closely following it
Regards

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