Team-BHP - Guide: Investing in shares of the automotive sector

Quote:

Originally Posted by SmartCat (Post 4649519)

The core objective of this thread is to get people interested in equities. That will happen only when you associate investing with their passion (cars). If you talk about index and bonds, good luck - nobody will take a second look :D

Hi, need a small pointer - any reco for the online learning courses for stock market - equity research . Thanks

Quote:

Originally Posted by 100BHP (Post 4654426)

Hi, need a small pointer - any reco for the online learning courses for stock market - equity research . Thanks

Zerodha Varsity
https://zerodha.com/varsity/
https://play.google.com/store/apps/d...erodha.varsity (Android app)

ValuePickr Forum
https://forum.valuepickr.com/

The Intelligent Investor
https://www.amazon.in/Intelligent-In...dp/0062312685/

One Up on the Wall Street
https://www.amazon.in/One-Up-Wall-St...dp/0743200403/

Quote:

Originally Posted by SmartCat (Post 4588310)

Motherson Sumi has Eicher Motors for company - both are seeing major selling. Unlike Tata Motors, the financials of these two companies are fine. Also, no point in trying to find a reason for fall in price when the overall index is dropping rapidly.

Motherson seems okay right now but if someone is keen, they can research on possible disruptions in the next 10 years. One example is the modular wiring harness from Tesla. 72% of MSSL standalone is from wiring harness. Tesla's patent states that the new system can carry both data and power. It is similar to power over Ethernet cameras we use where we send both power and data on the same cable. This also allows us to use power and data from different locations instead of running cable from a central point. This may save huge cost for the OEM as we can use access points to distribute power and data across the car. So a new product at the boot (say a camera) can take wiring from any available nearby source and the switch to activate it can be sent as data from the controller kept at the dashboard. The savings for OEM means less business for wiring harness companies.

These changes are applicable to ICE cars too and not just EVs.

What are the advantages?

1) Reduction in amount of wiring harness as you don’t need separate wiring from battery. One can tap the wire from nearest hub (think of a router/ access point).

2) Reduced weight of car
3) Reduction in cost
4) Plug and play upgrades. One can change discrete components without adding/replacing expensive wiring harness.
5) Robots can install the wiring instead of current human labour. Saves money and time. makes it much more robust and consistent.

Tesla may eventually charge a small royalty but it may be well worth it.

Link

Quote:

Originally Posted by Highh5 (Post 4672794)

Has anyone tried Varsity by Zerodha for gaining some more knowledge on trading. If yes, then what would be your recommendation.

Had read up the entirety of Varsity for equities in 2017 and it made a ton of difference in laying the foundations of my trading knowledge. Am planning on re-reading it and also checking out the commodities section before I get into MCX. Been trading for the last 4 years and all I can say is no book or website will give you complete trading knowledge. You learn most of the theory and the rest is a continuous process as you trade on the go.

All in all, Varsity is a 5 star platform for a beginner trader.

I personally had an upward trajectory in my profits post reading through varsity. It is a great platform to strengthen the basics of trading. Another plus is, I have seen Zerodha make updates to the same. So the knowledge base of Varsity is quite up to date with current market trends. The threads at the end of the chapters are quite helpful too. With Nithin Kamath and at times Karthik responding to queries.

Quote:

Originally Posted by SmartCat (Post 4617408)

As long as news flow about production cuts, automotive dealership closures and NBFC issues keeps hitting Economic Times front page, all automotive stocks will keep trending downwards. But Maruti is very different from Tata Motors because they are market leaders and their balance sheet is strong (no debt). Personally, I would prefer buying largecaps at price to earning ratio < 20 (right now, Maruti is still trading at 25 PE).

Any idea why Maruti is rallying? The outlook continues to be bleak for the industry.

Quote:

Originally Posted by SmartCat (Post 4675024)

Two reasons:

1) No reason. Just a random up/down movement mirroring the index.
2) Some rumour about good sales in October (this month).

Exactly my thoughts, I start questioning my auto-enthusiast blood when my guesstimate regarding Auto stocks dont match the stock trends.

But then, the market has been behaving very haphazardly in the last few weeks.

Tata Sons to infuse 6500 crores into Tata Motors to boost investor confidence.

Tata Motors will allot preferential shares and warrants to the promoter at Rs 150 each. The remaining Rs 3,500 crore will be raised through external commercial borrowings, and the total proceeds will be used to reduce debt and also refinance some loans, the company said in its filings with stock exchanges.

On Friday, the company’s shares closed nearly 5% lower at Rs 126.95 on the BSE.

Promoter holding in Tata Motors will go up to 46.4% once the warrants are converted 18 months after their allocation, according to an ETIntelligence Group calculation. Tata Sons currently holds 38.4%. The issue of ordinary shares on a preferential basis will immediately increase the promoter holding to 41.7%, and the balance will come in after the conversion of the warrants into shares.

“This firm support from Tata Sons will benefit all shareholders by allowing the business to focus on longterm strategy, reduce debt levels and provide rating support to the Tata Motors Group,” chief financial officer PB Balaji said. “It is a signal from the promoters to say that we are providing a much-needed cushion in this difficult time.”

Guide: Investing in shares of the automotive sector-tata-sons.jpg

More at ET Auto

Note: Request moderators to move the post to the relevant thread if this is not one.

Quote:

Originally Posted by 2000rpm (Post 4675004)

Any idea why Maruti is rallying? The outlook continues to be bleak for the industry.

Possible reasons I can think:

1) News of revival in sales. We already heard that Nexa has picked up and regular Arena channel could soon pick up. Discounts for Nexa channel auto was reduced.

2) The slowdown has been for a record period of 1 year. The longest ever slowdown we had in the recent past was 11 months. Expecting a pick up could increase demand for MSIL.

3) General market trend is upwards barring few sectors.

4) New launches help cheer investors too. Discounts are reduced due to new launches and footfalls increased.

Bottom line, as someone rightly said, Markets are like a voting machine in the short term and behaves like a weighing machine in the longer term. If we believe MSIL can keep close to 50% market share in the future and if we believe in India and the consumer's spending habit, buy it. Else, stay far away from it. please:

Quote:

Originally Posted by JMaruru (Post 4682102)

Markets are like a voting machine in the short term and behaves like a weighing machine in the longer term. I could NOT understand this. Could you please explain!

It is a very old investing quote by Benjamin Graham, the guy who taught Warren Buffet how to invest.

Voting machine just counts the number of votes and declares a winner/losers based on the candidate's popularity. That candidate might be corrupt or a rogue, it does not matter. But a weighing machine is not like a voting machine. The weighing machine declares the winner/losers (heaviest to lightest) solely based on science/physics.

In investing context, a stock might see a large drop, say 50%. Perhaps that is because it is not very popular (aka voting machine) among investors or traders right now. But if that stock or company has substance (strong balance sheet, fundamentals etc), then it will eventually show up as a winner.