[JMaruru]

Originally Posted by VindyWheels

Also look at M&M finance, STFC and SCUF. I think all of them will do well in the next 3-5 years.
Hi JMaruru, I do not track Cairn. But if you do not trust the jockey, don't bet on the horse

Cairn, i have got it in coz of the steady production from their oil wells in rajasthan and also the low PE of the stock.

How do you find M&M finance? Looks like they had a bad last quarter. Would the business do well, considering bleak monsoon prospects and their business potential mostly in rural hinterlands.

[faustus77]

Originally Posted by VindyWheels

Hi Faustus, I do not like holding companies and do not track those. Why don't you invest in Bajaj Finance if you like their business? Also look at M&M finance, STFC and SCUF. I think all of them will do well in the next 3-5 years. No idea about Maharashtra scooters too, but would like to hear your investment rationale - what is interesting?



Hi JMaruru, I do not track Cairn. But if you do not trust the jockey, don't bet on the horse

VindyWheels
Hi
I buy and hold for a long time. At this moment of time I would like to exit the smaller non performing deadwood(but wont sell at a loss hoping to get a better price) which isn't a part of my core portfolio.
Last week I bought CPEETF and will add more earliest possible. Next on my list is Nalco.
I have been thinking of buying M & M Finance since some time.Wating for an opportunity.
Shriram/ SCUF(Sundaram Finance ??) I would prefer to go with M & M Fin.
Love your comment about jockey. Totally agree. I sold Cairn on 26/5/14 at 361.55 less expenses.Sensex 25097. Bought at 335.35 (Sensex 18640) on 26/10/2012. Every analyst has been saying good things about it but it has not been performing.
Let us hope for JMaruru's sake that it does very very well in future.
Once again Thanks a lot.
Regards
PS: Bajaj Auto hived off their divisions and I got Bajaj Holdings.On and off I have been adding to the original and it has done pretty well.Only thing is it goes up and down like a yoyo.

[sgiitk]

Originally Posted by sgiitk

Sensex moved in a band of over 550 points, and the fine print is not even understood!

Samir Arora was very upset. Since 100 crores is nothing more than a statement of Intent, still it was leading to 100 point plus increases/ decreases. Down 300+, Up 400+ closing 100+ down, what a day.

[VindyWheels]

JMaruru and Faustus,

M&M had a 22% growth in income in q4 and 27% growth in FY14. This is impressive as the conditions were difficult for vehicle sales. The growth came due to rural penetration. But profits growth got affected due to higher provisioning. Gross NPAs increased from 3% to 4.4%. But you see most of these NPAs are temporary in nature and the company does not want to sell off the vehicles and recover the amount, but instead want to bear with it for the time being.

Inspite of the provisioning expenses the ROA is above 3%. Once the economic growth picks-up, NPAs reduce, yields increase and ROA will increase. Its a nice company to capture all the infra-housing-sme growth focus the government is promising. Great management with almost captive business (48% of business from M&M auto dealers) expanding in various segments. They are the 2nd largest financier for Maruti vehicles which have high acceptance in Tier-2/3/rural segments.

With more than 30 lac customer contracts, they can sell their housing loan products to existing customers. In five years the housing loan business will also contribute. The home loan book grew from 879 Cr in FY13 to 1335 Cr in FY14.

Its trading at around 2.6 times TTM Book Value. Looks good for a 5 year investment. Yes, if monsoon worries increase the stock may be available even cheaper.

Cheers

Vindy

[nazimk24]

First post here. So here are my primary thoughts on this thread and the nature of the discussions. I have seen here (just like I have seen elsewhere) very many people who trade stocks based on technical/fundamental analyses. Unless you're a pro for him this is bread-ans-butter, dont do this. And by trade, I also mean those whose typical holding period is six months.

Consider this: investing in stocks is simply about trying to foresee a business and its earnings growth and the only proven fact in investing is: over the long term (which means ober a period of five-seven years or more), stock prices are a slave to profit growth. This is assuming you don't buy a stock at bubble prices (circa 1992, 2000 or 2007).

And forecasting earnings for one damn difficult job considering the complexity and sheer numbers of variables and probabilities involved in running even a small business forget a huge multinational. (If you're a direct stock investor and haven't read Nassim Taleb's Fooled by Randomness, your really missing in your education).

But at the same time, you get a huge headstart when you look at companies that have shown strong track record, have a strong business franchise with a known brand, has economic moats (a very important concept) and is consumer-facing. Typically, these are also the leaders in their respective industries or a strong challenger to the leader. Pick up a portfolio of 15-20 such companies (basis a very sound rationale that you havent wedded yourself to) and hold on to them forever, and you'll see above-average earnings growth and stock prices.

Or better still, eliminate all of this effort and hand over your money to a good fund manager to do precisely do this for you at a small fee and forget about it. Its important to see the larger picture. India's economy will highly likely grow at about 15 percent nominally for the next few decades and logically should produce similar growth for benchmark indexes. A good fund manager who manages to give even 2-3 percent over that after managing costs would result in a serious bump in your capital. An 18 pc CAGR over the long term is stupendous growth.

That's it for now. Look forward to answering any queries and joining in a stimulating discussion on investing on here.

Regards.

PS: I am a senior editor with Moneycontrol.com with about seven years experience as a financial journalist.

PPS: Even as this is being nit-picky, I have a problem with the title of the thread: Do you PLAY...'. Like value investor Ramesh Damani says: investing should be boring and is not meant for excitement. If you want excitement, go play poker in Vegas.

[faustus77]

NazimK
Hi
Welcome to TeamBHP and to this thread.
Well written post.Thanks for the same.
Sorry unable to understand the meaning behind your phrase economic moats.Please help.
Also unable to understand "(basis ....wedded yourself to)".Please help.
Sorry for being an ignoramus.
I am afraid cant agree to holding a stock forever. Yes, I have some which I have held for years and in Colgate's case for decades. But there have been stocks which were yesterday's darlings and today are pariahs. Orkay,DSQ software,Mazda,Pentafour(that was during the tech bubble that you mentioned) to name a few
Love your quote of Ramesh Damani.
Regards

[nazimk24]

Originally Posted by faustus77

NazimK
Hi
Welcome to TeamBHP and to this thread.
Well written post.Thanks for the same.
Sorry unable to understand the meaning behind your phrase economic moats.Please help.
Also unable to understand "(basis ....wedded yourself to)".Please help.
Sorry for being an ignoramus.
I am afraid cant agree to holding a stock forever. Yes, I have some which I have held for years and in Colgate's case for decades. But there have been stocks which were yesterday's darlings and today are pariahs. Orkay,DSQ software,Mazda,Pentafour(that was during the tech bubble that you mentioned) to name a few
Love your quote of Ramesh Damani.
Regards

Hi Faustus,

Thanks for the reply.

Moat (literally: a ditch of water surrounding a castle historically used for defence purposes) as a term was coined by Warren Buffett and refers to the ability of a business to have a competitive advantage over others. Competitive advantages can stem from a number of factors (brands, economies of scale, patents, etc) and while there is no guarantee a firm that has a wide moat around it currently will continue to do so, investigating if firms have competitive advantages increases your probability of uncovering a winner.

For a more elaborate analysis, you could read an article by googling "Five sources of moat" (disclosure: i have worked with that firm in the past -- though this is absolutely not a plug), which lays down a very sound framework to conceptualize moats.

"I am afraid cant agree to holding a stock forever." The idea here is that a). holding on to investments for really long periods of time rather than flipping them is really the key to make money, and the entire trading game (while it adds liquidity) serves little purpose except for brokers who make money off our trades.

As for duds, while investing in some duds is part of the game, anyone, myself included, who bets on stocks during market bubbles (IT in 2000, realty in 2007), which is when one buys the most duds, needs to continue to get more education into the science of behaviour finance.

Again, the best way to "hold on forever" is probably buy into mutual funds (as their usually diverse portfolios reduces dud risk) or simply hold on to an index via a fund/ETF (as indexes have a natural rebalancing bias to eliminate losers), rather than try individual stock picking.

You can afford to be a stock picker only if you know your stuff really well. As Buffett says, risk comes from not knowing what you're doing.

And frankly, if your broad equity index portfolio will likely outperform most other asset classes over sufficiently long periods (including, you heard me right, property), why not simply buy and forget about it (lump-sum or SIP) rather than try to stock-pick, risk not even making that much return and add unnecessary stress to your lives.

[JMaruru]

Originally Posted by VindyWheels

Its trading at around 2.6 times TTM Book Value. Looks good for a 5 year investment. Yes, if monsoon worries increase the stock may be available even cheaper. Vindy

I have added more to my portfolio, as it is now available for around 15 P/E. Looks like monsoon is improving in central and western regions.

[humyum]

Originally Posted by faustus77

VindyWheels

Last week I bought CPEETF and will add more earliest possible. Next on my list is Nalco.

Hey, Just a suggestion, Nalco is a very market sensitive stock, when the market drops by 150-200 points, Nalco nose dives and rises up slowly slowly everyday as the market picks up. Wait for a drop and buy Nalco at around 50 - 51 levels. I had got lot of these at 48 when the market nose dived and sold it at 63 in a duration of one month. If you are buying in kilo tons, Nalco is a good way to make quick bucks.

[alpha1]

Originally Posted by nazimk24

Or better still, eliminate all of this effort and hand over your money to a good fund manager to do precisely do this for you at a small fee and forget about it. Its important to see the larger picture. India's economy will highly likely grow at about 15 percent nominally for the next few decades and logically should produce similar growth for benchmark indexes. A good fund manager who manages to give even 2-3 percent over that after managing costs would result in a serious bump in your capital. An 18 pc CAGR over the long term is stupendous growth.

The very funny thing I have observed is that funds that I was looking at 5 years back as good performers (vis-a-vis nifty/sensex/sector index performance for previous 3-5 year) are not good performers now. The funds that are great performers today were performing quite poor 3-5 years back.

Does this mean I have to churn my fund portfolio too? (eg sell DSP, buy SBI magnum) every year or so - or whenever my fund starts diving compared to the market?

Then where is the peace of mind?

[nazimk24]

Originally Posted by alpha1

The very funny thing I have observed is that funds that I was looking at 5 years back as good performers (vis-a-vis nifty/sensex/sector index performance for previous 3-5 year) are not good performers now. The funds that are great performers today were performing quite poor 3-5 years back.

Does this mean I have to churn my fund portfolio too? (eg sell DSP, buy SBI magnum) every year or so - or whenever my fund starts diving compared to the market?

Then where is the peace of mind?

Alpha1,

If you're referring to fund performance prior to/around 2008, a lot of Indian managers (many, in fact) went all in on the infra boom/bubble and paid for it in the later years.

But over the past few years, none of the top funds today (HT200, IDFC PE, ICICI Bluechip Focused, Birla Frontline, to quote a few) have severely under-performed the benchmark and/or category. These were among the top draws back then and continue to remain now.

As for fund churn, I wouldn't be too worried by a year or two of under-performance, as that is par for the course for equity markets and no manager can out-perform year after year.

The better way to select funds would be to select managers basis their investment philosophies through some research and then select their best funds. For instance, Prashant Jain's value investing style or Kenneth's ideas of how business scale up in different economic environments. After that, you leave it to them entirely, except running a performance check while carrying out the annual year-end re-balancing activity.

[faustus77]

Originally Posted by humyum

Hey, Just a suggestion, Nalco is a very market sensitive stock, when the market drops by 150-200 points, Nalco nose dives and rises up slowly slowly everyday as the market picks up. Wait for a drop and buy Nalco at around 50 - 51 levels. I had got lot of these at 48 when the market nose dived and sold it at 63 in a duration of one month. If you are buying in kilo tons, Nalco is a good way to make quick bucks.

Humyum
Thanks for the tip.
I wait for more than a year before I sell.
Totally agree with you about your view. Havnt bought this scrip in the last 4/5 years.What attracts me now is that Hindalco has started an upmove and maybe this would follow. However will wait for 51/52 and then decide. Incidentally in 2005 or 2006 this was one of the best performing scrip in the frontline stocks.
Regards

Nazimk.
Thanks for your post.Now understood the meaning of moat as far as the market is concerned.Wanted to PM I but cant.
Wish there was a thanks button on this thread.
PS: Unitech, Mahindra Life, Peninsula,Reliance Comm, 3i InfoTech, Ucal Fuel. Bought all these in 2007/2008. My consolation that I must have sold something at a a good profit and so was sitting on cash.Small quantities though. The last 2 were bought after their 1 : 1 bonus issue.Hope is eternal Someday the historic prices will come
Regards

[humyum]

Originally Posted by faustus77

Humyum
Thanks for the tip.
I wait for more than a year before I sell.
Totally agree with you about your view. Havnt bought this scrip in the last 4/5 years.What attracts me now is that Hindalco has started an upmove and maybe this would follow. However will wait for 51/52 and then decide. Incidentally in 2005 or 2006 this was one of the best performing scrip in the frontline stocks.
Regards

Nazimk.
Thanks for your post.Wanted to PM it but cant.
Wish there was a thanks button on this thread.
Regards

You are welcome, like Nalco, there are some stocks like IOB, Jain Irrigation, which you can buy at lower levels when the market drops. They are very volatile and hence money can be had if you enter at the right levels.

Best of luck.

[VindyWheels]

Hi,

I had mentioned Suven Lifescience around 2 weeks back. Further research has led me to reject it. Not fully confident about the management and the business model.

Page Industries (up 40% from when we discussed in April) is doing quite well. Kitex has bounced back to 280 levels after the post result drama.

Find MPS Ltd quite attractive at current levels too. Its giving almost 5% dividend yield at CMP and growth seems to be picking up. Please read the company's latest AR and investor presentation. It gives a good idea about their business.

Canfin Homes, inspite of the run-up (had discussed the same at 125 levels a year back) to 450 levels still looks good. I was researching more on other housing finance companies. Canfin was "over-valued" in my mind as my target price was Rs 250. Like "price anchoring" we sometimes fall prey to "target price anchoring" too. In our quest for new stocks/stories sometimes we neglect some gems already in our portfolio.

Canfin has already opened 17 new branches this year. They had around 83 branches by end of Mar 2014 which they plan to take to 109. The loan disbursement growth would most likely continue at 40% rate for next 2 years. The NPAs are very low. At Rs 450 its trading at around 1.6 times its FY15 Book Value.

I would strongly recommend anyone tracking/invested in Canfin and having appetite for own research and stock-picking to attend the AGM on 30th July at Bangalore (Jayanagar).

I am going to Chennai for Igarashi Motors AGM on 30th, another promising story.

Cheers

Vindy

[S_U_N]

In January I invested a small amount in MAFATIND. This was my second stock investment.
After this, the stock has been down by around 50% or so.
Today, I noticed that the stock is back to almost the same figure as my buy price.
Now, I am no longer confident about this company (just gut feeling) and want to know what happens if I sell the shares off.
If I sell at this instant, I would have made a loss of Rs. 100.
But what is the tax implication for me since I am selling within 6 months? Does it complicate the process of filing returns for me in FY 2014-15?

Edit: My portfolio is showing me 30% gain and most of the stocks were purchased in March 2014. So, I am happy.