[deetee]

Originally Posted by BaCkSeAtDrIVeR

I can't figure out whether my approach is vindicated by these events, or whether there is a real buying opportunity.

Since the price fell a lot, many retail buyers will think on same lines. However, this is not the bottom , yet. But since budget is close by , there is fair chance for the price to bounce on a news and test 3050-3100 level and fall again . And when it breaks down 2700, it can fall upto 2250 level.

So, if buying at this level 2800, exit when price comes close to 3050 and be happy with that profit. Buy again only when price sustains above 3100.

Personally, I would like to short when price tests 3100 level rather than buy now and 'hope' for profit.

[thirugata]

Originally Posted by BaCkSeAtDrIVeR

Have avoided politically connected groups so far

If this approach has worked for you so far, then unless you have a strong reason to change your approach, you shouldn't for 2 reasons;
1) Your approach has helped you make money/avoid mistakes
2) There are enough stocks in listed space, so even staying away from some does not mean lack of opportunity.

Good luck with your investments.

[warrioraks]

Originally Posted by BaCkSeAtDrIVeR

How serious are the issues raised against Adani group? I have ignored the group shares so far but the price for looks tantalizing. Have avoided politically connected groups so far - Birlas, Ambani, Bajaj, all airlines, sugar, alcohol, etc. But in a still over-regulated legal framework, political connections are inevitable.

Nearly every name in your post has been net value and wealth creators for the country. I would say that having political connections is a big advantage provided the underlying business is healthy and sound.

So for someone who feels Adani’s firm will be successful in the long run and the stock is under-priced, it’s the perfect opportunity to invest.

I on the other hand would not touch the stock, primarily because of the corporate governance issues being highlighted. That is a deal breaker no matter how low the price of the stock goes.

[pravs3012]

First post in this thread:

I started as an experimental investor long back and within months gave up around 2012. I felt too much energy with very little to show for it. Stopped completely and closed the demat account.
In 2014 I started regular SIPs in equity MFs including one tax saving. The choice was HDFC Equity, SBI Blue Chip and Adita Birla Tax saving. I think I redeemed in 2019.

From mid - 2019 I started SIPs in stocks - mostly blue chips like HDFC Twins, Infy, Titan, Asian paints, Reliance, Larsen and ACC. These were limited to a certain amount fixed per stock leading to 2-4 stocks per month depending on the price. The March'20 tested the patience but stayed invested and continuing till now. The valuations have become very expensive from last 1 year and even after the recent corrections I feel they are expensive. As a result, I reduced the stock SIP quantity. Overall, I feel it has worked ok with dividends and occasional bonus shares. The best part was not getting worried or distracted by market movements and buying on 1st every month.

However, there are side effects and the approach of "not selling" has haunted me few times - Asian paints returned to what it was a year back, HDFC remains a dull stock. The latest horror story is ACC - work of 3 years got wasted in 2 hours last week. Other are ok if not great.

I also invested in 3-4 NFOs and started SIPs in those after seeing the return for 1 year. At some point I felt too many MFs (10) and have started reducing them - the target is to reach 7 by year end and may be 5 by next year.

Regarding stocks I remain confused now - no regrets- but had I just focused on MFs would it have been better?
I still don't want to sell and continue investing keeping valuations in mind, but the question pops up every month.

[SmartCat]

Originally Posted by pravs3012

Regarding stocks I remain confused now - no regrets- but had I just focused on MFs would it have been better?
I still don't want to sell and continue investing keeping valuations in mind, but the question pops up every month.

Don't look at returns of stocks vs MF investments. If you stick to blue chips, returns over long term should be more or less similar.

You invest in stocks only if you enjoy screening the universe of stocks and buying what you like, seeing them go up and down everyday and booking profits when needed. If you don't enjoy this process, then mutual funds are better.

Now if you do enjoy picking stocks, start slowly building portfolio (5% in stocks, 95% in equity funds). Increase stock allocation /reduce MF allocation over the next few years.

[pravs3012]

Originally Posted by SmartCat

Don't look at returns of stocks vs MF investments. If you stick to blue chips, returns over long term should be more or less similar.

You invest in stocks only if you enjoy screening the universe of stocks and buying what you like, seeing them go up and down everyday and booking profits when needed. If you don't enjoy this process, then mutual funds are better.

Now if you do enjoy picking stocks, start slowly building portfolio (5% in stocks, 95% in equity funds). Increase stock allocation /reduce MF allocation over the next few years.

Thanks for the inputs. I admit I have been disciplined enough to continue buying last 3.5 years - it's the selling part that never came to me. I feel I should continue buying them for a decade or so, but wonder has this investment mantra changed now? Are the fluctuations too many to really "build" a portfolio in stocks without selling and hence the previous question of MF vs stocks.

I guess there is no perfect answer and as you mentioned depends on individual's mindset.

[BaCkSeAtDrIVeR]

Thanks to all the kind souls who helped me think better on Adani group. I realise that the TTM EPS is miniscule, P/E is usurious and P/B is stratospheric. these are the three preliminary filters that I apply before researching a scrip in more detail. The two ratios are simply too high - not even FMCG cos are there.

Originally Posted by pravs3012

Regarding stocks I remain confused now - no regrets- but had I just focused on MFs would it have been better?
I still don't want to sell and continue investing keeping valuations in mind, but the question pops up every month.

The market has out-paced earnings in past few months and it will be a bit of a time before the earnings catch up. I have been holding some of these stocks from earlier. Every time I look at them, i realise that they have potential for further upside. So they stay. i feel this "target price" thing is an anomaly, Unless you have not reached the company properly. I confess I hold some high beta stocks that are inadequate researched, and these are held on target price or a maximum time basis.

I held SKF on target price basis, got in at 250-300 and sold at around 450 now you probably know where it is.

Hindalco is another company where I sold out at double the cost. Sale price was around 250, IIRC. And holding period was 12-18 months - for LTCG.

I rarely put more than one lakh in any one scrip, so don't make or loose much.
Yes, knowing when to get out is just as important as getting in.

[whitewing]

Originally Posted by pravs3012

...Are the fluctuations too many to really "build" a portfolio in stocks without selling and hence the previous question of MF vs stocks.

I guess there is no perfect answer and as you mentioned depends on individual's mindset.

Do read up on Tax harvesting. This is a benifit I had not realized till some years back. Used properly, the 1Lakh limit can reduce tax outgo by atleast 10%. This can become even higher if notional losses are also booked.

[deetee]

Originally Posted by deetee

Since the price fell a lot, many retail buyers will think on same lines. However, this is not the bottom , yet. But since budget is close by , there is fair chance for the price to bounce on a news and test 3050-3100 level and fall again . And when it breaks down 2700, it can fall upto 2250 level.

So, if buying at this level 2800, exit when price comes close to 3050 and be happy with that profit. Buy again only when price sustains above 3100.

Personally, I would like to short when price tests 3100 level rather than buy now and 'hope' for profit.

Told you so
ADANI ENT stock closed at 2135, 28% lower than yesterday's close . Just one day after subscription ended.

[m8002?]

Do we know if there are any institutional buyers? I hope LIC has not been "nudged" to buy to reduce the slide.

[freakmuzik]

As a very first time investor in the stock market, I have been trying to read and understand the basics and after looking at so many things, I think I might initially try with Index Funds to test the waters but wrote down the following and thought I'll get an opinion on it.

Till now, my savings are in FD and I think I have a decent safety net with that. My interests would be long term generation of wealth as of now.

Say I want to save x rupees every month, how will the following be?

1. 50% equally allocated into four MFs via SIPs - NIFTY 50 Index fund (12.5%), 1 Small cap fund(12.5%), 1 Mid Cap Fund(12.5%) and 1 Hybrid Fund(12.5%)

2. The rest 50% allocated across large cap stocks from around four sectors (IT, FMCG, Finance, Auto) with 1 or 2 companies in consideration from each, that I can understand about at least a tiny bit, and invest in what I might consider as moments of dips.

Also thinking about investing a small lump sum in Sovereign Gold Bonds when the next slot opens.

Thanks in advance.

[BaCkSeAtDrIVeR]

Do people remember Harshad Mehta and what he did to ACC? He used public money to build up long positions in ACC. He is convicted for fraud and misappropriation of public (banks' funds) and not for what happened to ACC shares. With the huge longs and infinite access to this party, albeit illegally accessed funds, the ACC shares moved in only one direction - up.

What Hindenburg is doing with Adani is very similar i on opposite direction, - short positions, legal fund and taking advantage of the high valuation ratios of Adani shares.

[Holyghost]

Originally Posted by BaCkSeAtDrIVeR

Do people remember Harshad Mehta and what he did to ACC? He used public money to build up long positions in ACC. He is convicted for fraud and misappropriation of public (banks' funds) and not for what happened to ACC shares. With the huge longs and infinite access to this party, albeit illegally accessed funds, the ACC shares moved in only one direction - up.

What Hindenburg is doing with Adani is very similar i on opposite direction, - short positions, legal fund and taking advantage of the high valuation ratios of Adani shares.

Going by the reports, It does look like Adani and his shell companies also did a similar exercise as what Harshad Mehta did. The stock prices only went in one direction - "up"; until last week.

[PatienceWins]

Originally Posted by BaCkSeAtDrIVeR

Do people remember Harshad Mehta and what he did to ACC? He used public money to build up long positions in ACC. He is convicted for fraud and misappropriation of public (banks' funds) and not for what happened to ACC shares. With the huge longs and infinite access to this party, albeit illegally accessed funds, the ACC shares moved in only one direction - up.

What Hindenburg is doing with Adani is very similar i on opposite direction, - short positions, legal fund and taking advantage of the high valuation ratios of Adani shares.

There has to be some trigger for the bubble to burst. Investigative journalism from India did it for Harshad Mehta, which would not happen for Adani because of known reasons - see how the CFO is responding to the allegations by taking cover of nationalism. Short positions and their research report through investigative journalism is necessary for bringing transparency and accountability into stock market. Whistle blowers are required and in this case whistle would be blown only because of global money and their interests in our market.

[thirugata]

Originally Posted by thirugata

And for all those, who think dividend is profit sharing by the company, check the following example:
Lets assume company holds 1,00,000 Cr in equity.

CMP 100 RS, 4 Rs divided.

What you get as a share holder 4 Rs in bank account 96 Rs become CMP. Net addition to your asset = 0.

For company: 96,000 Cr in equity, 4,000 Cr in bank account.

Company gets to reduce their equity position without selling the stake and they call it profit sharing.

I leave it to your intelligence to decide how a company reducing its equity position can be a positive thing.

When I last time gave my view about dividend there were quite a few counter views (which is fine, you need counter views in stock market).
Now I cant found a most appropriate example than this to show what I exactly meant.

https://economictimes.indiatimes.com...7.cms?from=mdr

Adani needs money, Adani cant do FPO, so where does he dig in? a dividend of 67 Rs for NDTV share holders. So all those retails who might have 50, 100, 200 stocks will get enough dividend to go out for a breakfast or a meal in the weekend and Adani takes home a large chunk of money without reducing the stake in the company.
If my guess is correct, you will see this repeat in other adani owned stocks if he is unable to raise money from market in near future.