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View Poll Results: Stocks as a percentage of my net assets are -
0 - 25% -- I'm like the most conservative Indians. I love FDs. 224 31.95%
26 - 50% -- I have a few stocks. 313 44.65%
51 - 75% -- I'm an active trader. 114 16.26%
76 - 100% -- Hey, I'm an i-banker!!! 50 7.13%
Voters: 701. You may not vote on this poll

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Old 10th August 2016, 20:25   #3316
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Default Re: Do you play the stock market

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Originally Posted by ghodlur View Post

I would not endorse Smartcat's suggestion of buying stocks who dole out dividends. My view is buy stocks of companies whose products are used on daily basis. For eg. buy stocks of consumer durables (Bata, Colgate, ITC etc), Future group, Home finance (LIC hsg etc). The demand for the products will always be there and stocks will appreciate over time. Do not try to time the market, buy blue chip stocks and forget about them for the next 3-4 years. The returns will be rewarding. My personal views Smartcat.
You are right - investing in "brands" is also a great idea for beginners. You simply cannot go wrong with it if you hold on for many years. And this is something that is easy to understand too - Buy What You See - Peter Lynch style.

Finance companies and banks are "brands" too, but their volatility might not make them suitable for beginner investors. That is, they might bail out just because it is down 25% in 3 weeks, and never get into stocks investing again.
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Old 10th August 2016, 22:46   #3317
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Default Re: Do you play the stock market

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Originally Posted by Dieselritzer View Post
Currently I don't have much responsibilities towards my family in a financial sense, thus i want to leverage this period and invest as much as i can.
Was in the same place as you many years ago. I still remember that feeling of liberation when all our loans were repaid.

However the fact is that one's financial responsibilities never really get over. For instance, for the past year or so my wife & I have been discussing just how much more money we need and whether we can retire now in our mid-40s. The question always seems to boil down to unplanned expenses such as a large medical bill which could possibly push us into poverty. Moreover the thought of dipping into our investments makes us paranoid. So we eventually get back to the daily grind.

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Originally Posted by ghodlur View Post
I would not endorse Smartcat's suggestion of buying stocks who dole out dividends. My view is buy stocks of companies whose products are used on daily basis. For eg. buy stocks of consumer durables (Bata, Colgate, ITC etc), Future group, Home finance (LIC hsg etc). The demand for the products will always be there and stocks will appreciate over time.
The High Dividend Yield strategy was particularly prevalent in the 90s and earlier for those in retirement who wanted to invest in stocks, yet get a periodic income. This has largely been supplanted now by Dividend Payout on Equity MFs and to some extent by Monthly Income Plans.

Looking at dividend yield as a sole barometer is fallacious for multiple reasons. Some companies simply do not have a culture of paying dividends. For instance, Warren Buffet's Berkshire Hathaway has never paid a single dividend. Then there is the asset stripping that the Indian government periodically does when it forces PSUs to pay a sizable dividend year after year, no matter the condition of the company or its capex plans. It is no surprise that in India some of the highest dividend yields are for PSUs and in particular, PSU banks until recently.

Going by sentiment towards a brand may not work that well either. Sometimes the most profitable and better managed companies in a given segment are the ones who are lesser known.

To give my own example, some 5 years ago on a friend's insistence I opened an account with IDBI Bank. When I visited the branch, I was impressed by the experience and the professionalism of their customer service. I thought to myself that this is the model other PSU Banks would eventually be forced to adopt and I immediately plonked a substantial amount on IDBI shares. What could go wrong? Well, the King of Good Times sure had other plans for me.

IDBI's price was ₹118 then, it is ₹70 now. Instead if I had invested in Yes Bank, my ₹250 would have grown to ₹1,250, i.e. 5X the initial investment in the same 5 years.

If I look at my mutual fund portfolio now, most of them are invested in stocks that I would personally never invest in. A big chunk is ICICI Bank whose clutches I somehow managed to escape from, then there is Info Edge who runs Naukri.com, etc.
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Old 11th August 2016, 00:06   #3318
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Default Re: Do you play the stock market

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IDBI's price was ₹118 then, it is ₹70 now. Instead if I had invested in Yes Bank, my ₹250 would have grown to ₹1,250, i.e. 5X the initial investment in the same 5 years.
High dividend yield strategy helped me bag Manappuram Finance 12 months back because it was available at 6% dividend yield. Now it is up 3 times in 1 Year. Not bad for a 90s investment strategy eh?

See, there are lots of routes you can take to get to Goa from Bangalore. One route might be fastest while the other might be scenic. As an experienced investor, you should be open to all investment styles, and understand the relative advantages and disadvantages of each investment style.

But for beginners, I do feel that investing in consumer brands (diversified portfolio) is safer than getting into "growth investing" and risk having the next JP Associates/Suzlon etc type stock in the portfolio. If a beginner takes the "growth investing" route, he will eventually end up having a portfolio of stocks that gets the highest amount of attention on TV.

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Originally Posted by nowwhat? View Post

However the fact is that one's financial responsibilities never really get over. For instance, for the past year or so my wife & I have been discussing just how much more money we need and whether we can retire now in our mid-40s. The question always seems to boil down to unplanned expenses such as a large medical bill which could possibly push us into poverty. Moreover the thought of dipping into our investments makes us paranoid. So we eventually get back to the daily grind.
You mix your experience with investing in growth stocks, but pick only stocks that have high dividend yield, then you will achieve that dream of yours. No need to "dip" into investments because dividends take care large part of your expenses. You pick the right company, and dividends keep going up every year. However, you need to get rid of all your liabilities, buy health insurance and keep a decently large sum of money in debt Mutual funds or fixed deposits for unforseen emergencies.

Basic thumb rule I adopt is -

- Minimum dividend yield of 4%
- Minimum Dividend payout ratio of 15% for financials & 20% for non-financials
- A credible 5 to 10 year history of dividend payouts.
- Minimum RoE of 8% for financials and 15% for non-financials
- Debt to Equity ratio of less than 1
- No losses in any year in the past 10 years
- PE Ratio of less than 20
- Minimum market cap of Rs. 100 Cr.
- I don't bother about profit or revenue growth, but I do look at book value growth rate.

Since you are used to growth investing, you can increase the RoE requirements. But you will soon notice that these rules automatically get rid of the losers (PSU banks for example) and overpriced stocks.

Last edited by smartcat : 11th August 2016 at 00:23.
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Old 11th August 2016, 09:49   #3319
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Default Re: Do you play the stock market

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However, you need to get rid of all your liabilities, buy health insurance and keep a decently large sum of money in debt Mutual funds or fixed deposits for unforseen emergencies.
Health insurance usually doesn't cover those most in need, especially parents and other older people. This is also not something one can fully prepare for nor can one readily ascribe a figure to. I have one neighbor who had a rare form of cancer requiring multiple surgeries, chemo, hospital stays, etc. over consecutive years. His two children, one in India and one abroad, lost all their savings, their extended family pitched in, still they came very close to selling the house they lived in. In the case of someone else, I was astonished to hear how much a kidney transplant costs.

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Originally Posted by smartcat View Post
Basic thumb rule I adopt is -

- Minimum dividend yield of 4%
- Minimum Dividend payout ratio of 15% for financials & 20% for non-financials
- A credible 5 to 10 year history of dividend payouts.
- Minimum RoE of 8% for financials and 15% for non-financials
- Debt to Equity ratio of less than 1
- No losses in any year in the past 10 years
- PE Ratio of less than 20
- Minimum market cap of Rs. 100 Cr.
- I don't bother about profit or revenue growth, but I do look at book value growth rate.
Actually if one looks at IDBI Bank from 2006 to 2011, it would have met most of your criteria.

Not to detract from your approach or your success, but what may work for the goose may not work for the gander. There is no one simplistic model which will always work and as I said earlier there are some great companies out there that have never paid a dividend or are very stingy with dividends, for instance Apple.

I do invest in a few stocks and they are sentimental picks based on some brands I like. I invested in these stocks directly as none of my MFs hold them. The stock portfolio isn't doing all that great, but it only forms a small portion of my overall portfolio and I am hoping it will pick up eventually.
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Old 23rd August 2016, 11:34   #3320
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Default Re: Do you play the stock market

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Whats the take on spicejet? I see random comments everywhere and hence wanted to ask here. Currently with a gain of 10% with one block of shares 75% with another block of shares...
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Originally Posted by swiftnfurious View Post
Some days back, I got a buy call on Spicejet from my brokerage firm (Sharewealth). Buy @ 70 and target is 120 with a time frame of 6m-1year. I have generally seen their delivery calls hitting the target and hence bought some at that price.
I got an exit call for Spicejet yesterday. The reason given is that the air transportation sector has lost its sheen and hence my broking firm doesn't expect much upside to the stock. They suggested moving the cash (after selling SJ) to Snowman Logistics with CMP 69 and target 95 in 3 months period.

Made a loss of 15% in Spicejet & switched as recommended. Infact I had a 15-20% profit sometime back in Spicejet, held to meet the target. Part of the game though.

Last edited by swiftnfurious : 23rd August 2016 at 11:35.
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Old 23rd August 2016, 13:26   #3321
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Default Re: Do you play the stock market

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Originally Posted by swiftnfurious View Post
They suggested moving the cash (after selling SJ) to Snowman Logistics with CMP 69 and target 95 in 3 months period.
Have you checked the P/E for the Snowman Logistics?
It is ~70 which is very high, and generally it is better to avoid high P/E stocks. According to http://www.investopedia.com/terms/p/...ningsratio.asp, "the average market P/E ratio is 20-25 times earnings".

Last edited by shetty_rohan : 23rd August 2016 at 13:27.
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Old 23rd August 2016, 22:07   #3322
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Originally Posted by shetty_rohan View Post
Have you checked the P/E for the Snowman Logistics?
It is ~70 which is very high, and generally it is better to avoid high P/E stocks....
Honestly, am not into the technical analysis yet. That's why I follow the 'recommendations' from the experts. I understand what you are saying, but a 30% upside should be possible considering the short time frame we are looking at, especially with the focus on logistics companies after GST voting.
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Old 24th August 2016, 00:48   #3323
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Default Re: Do you play the stock market

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...especially with the focus on logistics companies after GST voting.
Snowman had dropped from 93 to 64 (and now around 70) post the passage of GST and poor Q1 results. Just take a look at daily chart, since the GST push is already over, it may not be best time/valuation to go for it.
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Old 25th August 2016, 11:11   #3324
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I got an exit call for Spicejet yesterday. Part of the game though.
My views may be controversial but I am speaking from 8 years of investing in Indian Stock Markets. The so called experts -your broker - needs to make a living by churning your portfolio. Remember he gets commissions for every transaction. The more you Buy and Sell, the more money he gets. If you cannot find the time to study the markets please avoid direct investing.The next time you get a recommendation to own an airline stock read what Buffett said- "The worst sort of business is one that grows rapidly, requires significant capital to engender the growth, and then earns little or no money. Think airlines. Here a durable competitive advantage has proven elusive ever since the days of the Wright Brothers. Indeed, if a farsighted capitalist had been present at Kitty Hawk, he would have done his successors a huge favor by shooting Orville down". No wonder then that Jet Airways is still below the IPO price of 2005. Indigo is facing challenges post-IPO with price wars.Low oil prices saved Spicejet from going bankrupt. All of us know about KF. Coming to Snowman, difficult to see how 30% is possible in 3 months.100% annualized returns?? Remember the market prices-in such events before it happens? I have always believed that such kind of short term targets are issued to shore up the price and find new investors for a stock that has no takers. Not suggesting that Snowman wouldn't do well over the long-term. You could make decent returns over the long term say 4-5 years.
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Old 25th August 2016, 12:31   #3325
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I would like to learn more about stock markets. I am a total newbie in this world, so any tips, pointers for starters will be much appreciated.

Right now I am also learning about mutual funds investments through fundsindia.com. Anyone using fundsindia?
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Old 25th August 2016, 12:42   #3326
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I would like to learn more about stock markets. I am a total newbie in this world, so any tips, pointers for starters will be much appreciated.

Right now I am also learning about mutual funds investments through fundsindia.com. Anyone using fundsindia?
I will answer the first bit. Do you have the time to study and analyse stocks? Are you willing to learn Finance basics? Only then consider direct equity. Else you are better off investing in mutual funds through SIP. You can check here http://www.moneycontrol.com/mutualfundindia/ If you are interested in direct equity you can look at Peter Lynch's books for a start- Learn to Earn and One up on Wall Street.
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Old 1st September 2016, 01:45   #3327
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Originally Posted by DejavuTrip View Post
I will answer the first bit. Do you have the time to study and analyse stocks? Are you willing to learn Finance basics? Only then consider direct equity. Else you are better off investing in mutual funds through SIP. You can check here http://www.moneycontrol.com/mutualfundindia/ If you are interested in direct equity you can look at Peter Lynch's books for a start- Learn to Earn and One up on Wall Street.
I second your thoughts - Read, understand and apply the basics of finance. It is a thoroughly enriching process. I have been investing for the past 10.5 years. Seen a lot, the euphoric highs, scams (Pyramid Saimira, GTL etc), booms and busts and a lot. In fact, I can write a book with my experiences.
Btw, that is not the point I wanted to highlight.
I still feel like a beginner; want to learn more on the market. I am a big fan of fundamental analysis. Though, I used technical analysis for Currency options and index options.
I have a couple of questions:

1) Please suggest ways to understand the trends in the market.
2) How to identify midcaps which have the potential to become next Largecaps story

Like someone said in a post - There are multiple routes from Bangalore to Goa ; short, circuitous, scenic, smooth etc
In short, "Ekam Satya , Viprah bahuda vadanti"
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Old 1st September 2016, 12:46   #3328
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Idea and Airtel shares are down today due to the anticipated competition in the telecom sector post the news of the Data tariffs from Reliance Jio. The rates seem aggressive (got a whatsapp notification of the rates though cannot verify it is true or not).

Any idea when will Reliance Jio officially start offering services to everybody? In my opinion, one should stay away from investing in the telecom sector for the next few months - the industry is already competitive and a new player coming in will not allow easy profits for existing players.

Last edited by Saanil : 1st September 2016 at 12:47.
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Old 1st September 2016, 12:54   #3329
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Any idea when will Reliance Jio officially start offering services to everybody?
5th September 2016.

Voice calls are Free. No roaming charges across India!
Trying to digest all the announcements!
Seems to be earth shaking for telecom industry.
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Old 2nd September 2016, 15:22   #3330
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Hi All,

The server of my full service online brokerage went down at around 1 PM today when I had a couple of intraday long positions open in the system. I was neither able to square off via my online trading account nor were they able to take my square off request over the phone since their internal terminal was down. As of 3 PM, when per their T&C, the brokerage suspends all margin trading and squares off open positions, the two positions had appreciated by 4% and .6% respectively, leaving me in the black. When contacted, was told by the brokerage trading desk (HDFC) that they are not able to comment what would happen to open positions (all customers) given that their servers are down.

My question is what may happen in such a scenario given that nobody was able to access positions for well over two hours when trades could have been squared off favorably or also for those whose position, at the cut off time was unfavourable to them (unlike me). Its the brokerages fault that their servers were down and as far as I know the stock exchange does not allow intraday positions to remain open after the day is over. In my case fortunately there was a rally which coincided with the server going down and the day ended on a high.

Any thoughts?

Last edited by hothatchaway : 2nd September 2016 at 15:24. Reason: syntax
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