Team-BHP > Shifting gears


View Poll Results: Stocks as a percentage of my net assets are -
0 - 25% -- I'm like the most conservative Indians. I love FDs. 312 33.73%
26 - 50% -- I have a few stocks. 410 44.32%
51 - 75% -- I'm an active trader. 139 15.03%
76 - 100% -- Hey, I'm an i-banker!!! 64 6.92%
Voters: 925. You may not vote on this poll

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Old 30th November 2020, 15:31   #4486
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Default Re: Do you play the stock market

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Originally Posted by Sherlocked View Post
That's not necessarily true. Futures and Options or trading intraday is a zero sum game. But not if one takes equity delivery in the cash segment. Here both the parties can benefit.

https://tradingqna.com/t/trading-a-z...m-game/11080/2
Thanks for sharing this and extending the point further.
I was talking more on the perspective of buying and selling the individual shares (delivery mode) at the most fundamental level.

In any case, that's how I tend to trade and it sort of works for me.
Looking further for inputs from other members.
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Old 30th November 2020, 15:46   #4487
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Default Re: Do you play the stock market

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Originally Posted by Sherlocked View Post
That's not necessarily true. Futures and Options or trading intraday is a zero sum game.
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Originally Posted by nitinkbhaskar View Post
Thanks for sharing this and extending the point further. Looking further for inputs from other members.
Derivatives, if used as a hedge or as a part of strategy, is not a zero sum game. I can be a winner overall even if I lose money on a derivatives trade. Eg:

- I buy 500 shares of reliance @ Rs. 2000 and sell Reliance 1 lot 2100 call option @ Rs.30
- If Reliance shoots up to 2200, I will lose money on my derivatives trade. But I will book profits in my 500 shares of Reliance.

In the above example, the dude who bought the call option from me made money. And I made money too (in shares). The above strategy is called "Covered Call Strategy", and is even available for ETF investors in US. This ETF has a 5 star rating.
https://www.globalxetfs.com/funds/xyld/

Warren Buffett too uses derivatives as a part of an overall strategy.
How Warren Buffett Use Put Options to Increase Berkshire’s Returns
https://www.re-thinkwealth.com/warre...hires-returns/

Last edited by SmartCat : 6th December 2020 at 23:51.
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Old 6th December 2020, 22:48   #4488
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Hello All, given the future of auto market being EV, any suggestions on long term investment in companies related to EV or battery manufacturing companies?
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Old 6th December 2020, 23:40   #4489
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Hello All, given the future of auto market being EV, any suggestions on long term investment in companies related to EV or battery manufacturing companies?
Are we sure about this? Because just an year ago, we thought "shared mobility" was the future.

There is no way to take exposure to EV space via Indian stocks. But generally, many Indian automobile or component manufacturers have short & long term plans. Eg: Hero Motorcorp owns 40% of Ather Energy.

Last edited by SmartCat : 6th December 2020 at 23:55.
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Old 7th December 2020, 03:15   #4490
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Default Re: Do you play the stock market

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There is no way to take exposure to EV space via Indian stocks.
How about possible ancillaries like 'Amara Raja', 'Exide' OR 'Motherson Sumi' who might chip in to the EV revolution?
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Old 7th December 2020, 07:23   #4491
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Dont think traditional lead acid batteries are used in EVs - not the jugaad tuktuk substitute EVs.
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Old 13th December 2020, 12:25   #4492
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Default Re: Do you play the stock market

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How about possible ancillaries like 'Amara Raja', 'Exide' OR 'Motherson Sumi' who might chip in to the EV revolution?
Exide and Amar Raja had announced a EV manufacturing plants, but they were assembly units - importing the cells from , well, China.
Not sure if this has been hit by the current border situation.
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Old 13th December 2020, 15:05   #4493
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Quote:
Originally Posted by whitewing View Post
Exide and Amar Raja had announced a EV manufacturing plants, but they were assembly units - importing the cells from , well, China.
Not sure if this has been hit by the current border situation.
No future for any EV player without proper R & D.

There are several "tuktuk" EVs all over, can anybody name a single brand worth investing? May be, they are profitable and growing, which is good. But still a little more than "brothers & company" or dad and kids shops.
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Old 14th December 2020, 16:33   #4494
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Default Re: Do you play the stock market

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Originally Posted by BaCkSeAtDrIVeR View Post
No future for any EV player without proper R & D.
Quote:
Originally Posted by whitewing View Post
Not sure if this has been hit by the current border situation.
Quote:
Originally Posted by JMaruru View Post
How about possible ancillaries like 'Amara Raja', 'Exide' OR 'Motherson Sumi' who might chip in to the EV revolution?
Quote:
Originally Posted by SmartCat View Post
Are we sure about this? Because just an year ago, we thought "shared mobility" was the future.
I am sure I am not the first person to think along these lines but how about investing in tire companies? Everyone is convinced that electric cars will become mainstream in the coming years. At this point of time, there is very less information on which companies have the lead in terms of EV development. I am of the opinion that the current electric vehicles produced in India are not full blown EV vehicles like the ones produced by Tesla (I may be wrong here). Rather than betting on the potential winners in EV space, how about we bet on ancillary industries which might benefit from this EV revolution. As far as I know, all types of vehicles (EV or non EV) will run on rubber tires. Tire companies therefore are less at risk in terms of technological disruption which is about to happen in passenger vehicles.

The period from 2014-2018 saw a huge rise in sales volumes of the automotive industry. This might probably imply that the demand for replacement parts (tires) should also be strong in the coming years. Are there any tire companies which can be considered at this point which satisfies certain parameters like low debt, history of dividend payment, quality production etc.?
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Old 14th December 2020, 16:57   #4495
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Are there any tire companies which can be considered at this point which satisfies certain parameters like low debt, history of dividend payment, quality production etc.?
List of tyre companies:

Do you play the stock market-screenshot_2.jpg

Of the lot, only Goodyear India (Tractor & truck tyres, not car tyres) and TVS Srichakra (2/3 wheeler tyres) have a long and consistent history of dividend payout. However, Balkrishna Industries (BKT Tyre brand, agriculture & construction equipment tyres) will pay 30% of its profits as dividends in the future (as mentioned in their new dividend policy).

MRF, Balkrishna, Goodyear India and TVS Srichakra have almost always been close to debt free. Because of this factor, these four companies generate consistent profits.

However, as of now, none of the tyres stocks are attractively valued.

One issue with tyre companies is inconsistency in profits. Their profits swing violently because input prices (Rubber) are very volatile. Also, cheap imports from China/ASEAN countries sometimes flood the Indian market, affecting the profits of Indian companies. However, the Govt is now keeping a close eye on this and looking to reduce imports:
https://www.team-bhp.com/forum/tyre-...e-imports.html (Govt. imposes severe restrictions on tyre imports)

Last edited by SmartCat : 14th December 2020 at 17:01.
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Old 14th December 2020, 17:59   #4496
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Default Re: Do you play the stock market

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Originally Posted by Saanil View Post
I am sure I am not the first person to think along these lines but how about investing in tire companies? ..... Rather than betting on the potential winners in EV space, how about we bet on ancillary industries which might benefit from this EV revolution. As far as I know, all types of vehicles (EV or non EV) will run on rubber tires. Tire companies therefore are less at risk in terms of technological disruption which is about to happen in passenger vehicles.
And all tyre companies will need additives/compounds to manufacture the tyres.
NOCIL, is one specialty chemicals manufacturer in the rubber processing industry. This is a niche company that will potentially gain due to the downstream dependency and demand for localization.
And as smartcat indicated, the fortunes of this company is closely linked to the fortunes of the local tyre industry -although they claim to be increasing exports.

PS: It was available at low valuation in March/Apr. Now the prices have shot up.
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Old 14th December 2020, 19:48   #4497
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Default Re: Do you play the stock market

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Originally Posted by SmartCat View Post
List of tyre companies:

Attachment 2093136

Of the lot, only Goodyear India (Tractor & truck tyres, not car tyres) and TVS Srichakra (2/3 wheeler tyres) have a long and consistent history of dividend payout. However, Balkrishna Industries (BKT Tyre brand, agriculture & construction equipment tyres) will pay 30% of its profits as dividends in the future (as mentioned in their new dividend policy).

MRF, Balkrishna, Goodyear India and TVS Srichakra have almost always been close to debt free. Because of this factor, these four companies generate consistent profits.

However, as of now, none of the tyres stocks are attractively valued.

One issue with tyre companies is inconsistency in profits. Their profits swing violently because input prices (Rubber) are very volatile. Also, cheap imports from China/ASEAN countries sometimes flood the Indian market, affecting the profits of Indian companies. However, the Govt is now keeping a close eye on this and looking to reduce imports:
https://www.team-bhp.com/forum/tyre-...e-imports.html (Govt. imposes severe restrictions on tyre imports)
Any reason why Apollo tyres trades at a much higher P/E compared to Ceat? Ceat appears reasonably priced to me compared to others. What am I missing here?
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Old 14th December 2020, 20:48   #4498
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Default Re: Do you play the stock market

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Any reason why Apollo tyres trades at a much higher P/E compared to Ceat? Ceat appears reasonably priced to me compared to others. What am I missing here?
If you are not too particular about dividend yields, then both Apollo Tyres and Ceat are reasonably priced. Don't look at PE Ratio alone - since tyre companies profits are volatile (200 cr, 100 cr, 300 cr, 50 cr etc). Consider the price to book value too - 1 in case of Apollo Tyres & 1.5 in case of Ceat). PBV of close to 1 can be considered as reasonably valued.
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Old 15th December 2020, 12:20   #4499
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What is to be done for Majesco Stock? Should new investors get in? Also what should be the exit strategy?
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Old 16th December 2020, 09:31   #4500
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What is to be done for Majesco Stock? Should new investors get in? Also what should be the exit strategy?
Yes, I would love to hear expert opinions on this one!
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