Possibly we should think of end of current bull market

Recently, I started getting news articles that says double your money by investing in these 50 stocks. Also, recently smallcap stocks has given very strong gain signalling top of bull market. 

What is your plan to tackle bear market? It will come anyway. Today or tomorrow Bull market will end and Bear phase of stock market will start. Do you have any plan? Please share with on Twitter.

 

I was talking about these articles:

पैसा डबल : ये हैं 1 माह में पैसा दोगुना करने वाले 50 शेयर

Why is Indian stock market not shut down despite the lockdown?

Stock Market is the reflection of our current state of Indian economy and future of it. If our economy is not doing good then it has to reflect it. Corona Virus has stopped most of the economic activities of the country and that need to settle. Even if we shut down the stock market now then whenever it opens it will adjust. But, if we close it then investors confidence will go down as they won't be able to settle their investment as per the confidence in economy. Also, there are other market in the world where those money for trading can go. Singapore market trade our stocks too that is SGX. Money will move there and we may loose big part of the trade to them.

Also, technology firm can allow most of its workers to work from home. So, there are sense to let them work with minimal attendance at workplace.

So, it is for investor's confidence and risk of loosing money to other competitors, we have allowed Stock Market to function.

Has Value Investing stopped performing?

Value stocks in the U.S. have lagged growth since early 2007, a brutal and rare 12-year stretch of underperformance.

Value stocks as measured by P/B ratio trailed growth by a crushing 5.5 percentage points a year from April 2007 through May. Other measures of value fared better but also fell behind. Using P/E ratio and P/CF ratio,value lagged growth by 2.1 percentage points and 2.6 percentage points a year, respectively, over the same period.

There are already some popular theories why Value Investing is lagging.

One is that value investing has become too popular. Once the value premium was discovered, the theory goes, investors piled into value stocks and squeezed the premium away.

A second theory is that growth companies are more dominant than they used to be. Their vast technological edge and near-monopolistic powers, it is said, will allow them to outpace value companies for the foreseeable future.

A third theory — and the most generous to value — is that the measure of value is broken, not necessarily the strategy itself.

P/B ratio is widely used by researchers and indexes to identify value stocks, but some complain that book value no longer captures the full value of intellectual capital and other intangible assets of fast-growing companies such as Amazon, Google and Facebook, making them appear more expensive than they truly are.

Source: Don’t Count Out Value Investing Despite Growth’s Spurt

Comparison of 10 years chart of BSE Sensex and BSE SmallCap

This comparison on Google Finance shows that Small Cap gains sharply and correctly sharply than Sensex. Today, I read that Small Cap are cyclical. I see that is not right. I see here both gain together and fall together over longer period. Only point to remember is Small Cap is high beta.
Also to note is that bear market ends when small Cap touch Sensex. So, over longer period both gives almost same gain to you if we go by index.

Now, we need to understand that timing matters a lot here. We take high risk in SmallCap. But, if we remain invested then we can loose all gain in market correction as both indexes join each other over longer period. When market corrects then Small Cap comes down faster to touch Sensex.
Also, if we decide to remain invested in Stock Market in bear phase and correction is not over yet then shifting to large companies and high quality companies in respective sector is the only option in general.
Individual Stocks can perform differently. For example, any new company catching market share from larger companies. But, it is not easy to catch this. See, even after very good results by few, they are correcting in this correction.

Tried to check data for Nifty but Google Finance is not giving data older than 2016 for Nifty Small Cap 50 and SmallCap 250. This comparison over shorter period is meaningless. I think, BSE comparison given us fair idea.

What to buy after deep correction in small Cap stocks?

I had all small Cap stocks prior to correction. Few I sold at loss and few are still with me. After correction, I still have small caps only.

Sold:
Sanwaria Consumer,
Himalaya Foods International,
Thirumalai Chemicals,
Vikas EcoTech.

Have:
KSE Ltd,
Avantel LTd,
Dhunseri Petro,
Ashapura Intimate Fashion,
White Organics.

Sanwaria, White Organics, and Himalaya Foods are bought due to Patanjali and consumer facing stocks. Sanwaria Consumer sold at heavy loss due to news about its many things not matching up. Also, Sanwaria as given wrong result data at the start of April but given Audited result at the end of May. Also, promoters selling in past two quarters has taken my confidence at this blood bath market. Himalaya Foods also sold due to many not satisfied with its promoters commentary. I was threatened in this tough market which has started from end of Jan or start of Feb, 2018. But Himalaya was showing very strong upward trend on price chart. Not taking about technical analysis but general view.

Vikas Ecotech also sold due to management. Number was not as per liking but every time they say some positive things.

Thirumalai Sold due to higher Crude Oil price. Crude oil prediction is very though and it is tied to that. Even after high oil, its result for Mar, 2018 was very good. Market was expecting more than that. But very good doing company.

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In recent past many goof-ups has taken a toll on market especially in small cap. PSU Banks one after another giving reason to sell Indian market as this shows corruption and mismanagement at very high scale.

Vakrangee and PC Jeweller problem and then one after another Auditors related problem or problems companies have and promoters denied to hide has created very bad sentiment in market.

SEBI Additional Surveillance Measures (ASM) list has created another wrong sentiment for the market especially for small Cap. List was out before SEBI has published in market. Few operators taken advantage of it and created pressure on it to sell on high. It is a cheating and retail investors who are threatened from loss from Jan 2018 are forced to sell who were still holding it.

Sanwaria Consumer was also put in ASM. As the list was leaked so Sanwaria was on Lower Circuit from few days before list came into public.

Thirumalai Chemical has recovered very fast. and it is not having problem regarding management and promoters. But it depends on Oil price.

Worth checking this for buying this strong correction.

Consistency is the key in Stock Market too

Stock Market loves consistency of a company. For example, Titan Company gained 6 times in profit from 2008 but price has gained 16 times.

But a question has arisen seeing few data on screener. EPS has not risen. Net cash flow has risen manifold . Reserve is also very high compared to 2008. Net cash flow rise is very high.

If you see small increase in profit of a company over years then you can expect far more rise in stock price over years to come. This is better for smaller companies. Well established companies like HUL many not give this much return. Because smaller company can grow faster. Smaller and newer companies has low trust at first so it can be available on cheaper valuation.
Challenge is to find companies which can grow consistently over many years. This can give you multi-bagger return at very low risk in stock market. Here if you see if a company is rising 20% per year then you can think that your gain will be far better after few years of consistent growth.

Consistency is the key.

HonorSociety

Lottery Vs Stock fund investment

Magic I felt today in Stock Market

Today, I felt magic in stock market when Optiemus Infracom after just two 5% Lower Circuit has turned into green with 5% UC.

From long I am sailing alone on Optiemus Infracom. Today a magic has happened so I am letting you know about it. Hope you would like it. Alone, because no one is supporting it and no Research Agency has recommended the stock in past.

Optiemus Infracom has been on run from long. If you take it from recent 52w low then it is more than 520% gain from Oct 2017. But it has just given two 5% LC. and after that it is in green again with 5% UC. I was thinking of big cut in gain and was thinking - Oh! I could have sold it after such gain but then used to say that if could have sold very early and could not have made such a huge profit. Even after correction, I will sit on very good profit. This thought used to come and go.

Optiemus Infracom has been on run and given more than Twenty 5% Upper Circuit continuously. I posted about on December, 2016 and later too in May 2017 (Govt started focusing on Mobile manufacturing in our country).

Updates has been posted on Facebook Page or Group. Twitter handle is @satya61229.

Updates in Short (not in order by date):

• Merger of two of its 100% owned subsidiaries
• Kult branded mobile launch
• Blackberry mobile in India, Sri Lanka and Bangladesh. Nepal launch is due.
• Govt has increased Basic Custom Duty on Mobile device in Dec, 2017 to support domestic mobile manufacturer.
• Bad part is its Samsung distribution business is badly performing due to DeMo and Samsung loosing market in India.

Any comment on Sell time for Optiemus Infracom! When should I sell? Should I sell today as this is the time to take profitable exit!

This can also happen in Stock Market. ऐसा भी होता है

During Dot Com bubble, stock price of Tiscali rose sharply and dropped very sharply. But how sharp?

Tiscali - Italian telecommunications company whose share price rose from €46 upon its IPO in November 1999 to €1,197 in four months. The share price then fell to €40 in less than two months and eventually fell to €0.20.

Tiscali rose to 30x in four months but back to original in just two months. So painful for stock market investor!1997 to 2001 was the period of Dot com bubble/dot com boom/dot com crash/Y2K crash.

But here are important lines on Wikipedia:

During 2000–2002, the bubble collapsed. Some companies, such as Pets.com and Webvan, failed completely and shut down. Others, such as Cisco, whose stock declined by 86%, and Qualcomm, lost a large portion of their market capitalization but survived, and some companies, such as eBay and Amazon.com, later recovered and surpassed their stock price peaks during the bubble.

Here even great companies as we know now also crashed. Cisco and Qualcomm.
eBay and Amazon recovered soon and even surpassed their peak price during bubble.

Tiscali logo

fig. The bubble phases chart of Hofstra University's Jean-Paul Rodrigue. 

Article source of above image

Wikipedia Dot com bubble

Overall here in bubble case too, gaining money can take time but loosing is fast. Also, seeing Tiscali, we can say that amazing and magical things can happen in stock market. You can feel like getting kuber ka khazana at once. But same kuber can snatch the money too. So, be careful.

Subsidiaries Vs Associates

The terms affiliate, associate, and subsidiary refer to the degree of ownership that a parent company holds in another company. In most cases, affiliate and associate are used synonymously to describe a company whose parent only possesses a minority stake in the ownership of the company.

However, a subsidiary is a company whose parent is a majority shareholder (owning more than 50%). While in a wholly owned subsidiary, the parent company owns 100% of the subsidiary.


A parent company publish financial statement of its subsidiaries but not of associate. Associates are mentioned as asset on parent company financial statement.

Image Credit: https://www.slideshare.net/jtimmermans/class7-17795260

Read more: What are the differences between affiliate, associate and subsidiary companies?

Stock Market scams with easy explanation

I liked this slideshare because stock market scams discussed here were easily explained.

Indian Stock market scams from Prithvi Ghag

Excellent results of companies this Sept 2017 quarter

List of companies given excellent result this quarter with price when I noted it.
Companies in this list is worth further investigation for future investment.

Company name	Price Rs
Keerthi Industries	Rs 202
Thangamayil Jew	409
Orient Cement	175
DCM Shriram	539
Meghmani Org	108
Rain Ind	340
HPCL	431
JK Cements	1037
Godphry Phillips	1044
Action Construction	89
CMI FPE	850
Escorts	685
Vakrangee	618
SOM Distilleries	158
Automative Axles	1153
Himadri Speciality Chem	163

Few I have noticed has given good return after the result.Action Construction is the one.

The chase is better than the catch - Say hello to cognitive investing

Like they say, ‘The chase is better than the catch’, research in neurosciences proves that the anticipation to see our money double is more exciting than the actual act of profit booking.

Cognitive Investing is an investment philosophy which requires one to isolate the current market condition from the investor’s time tested investment thesis.

Clearly, the idea behind cognitive investing is to be completely aware of the fact that humans suffer from many psychological biases which can negatively affect the investments that we make.

A typical cognitive investor pays attention stock’s valuation, business model, valuation, asset allocation, etc. He would typically view these variables in isolation of the current market conditions.


Have you lost money in penny stocks? Say hello to cognitive investing

I want to highlight the term "Cognitive Investing" but Penny stocks was used as a subject in the above article. While searching for an image I got this book which is regarded as a meaningful book by its reviewers. It is not for very experienced investors but for all others. Many Retail investors like to trade in Penny stocks. If you are the one too then why not have some fundamental is this area! This book on Penny Stocks is basically on fundamentals and how to recognize Penny Stocks. One chapter is given for technical analysis. Technical Analysis does not work for Penny Stocks.

Study about penny stocks to earn

What is off-Market acquisition? : Stock market study

Sometime you see off market acquisition by promoters. The number of shares could be huge too. Ever wondered from where those shares came!
Transaction is called off Market transaction.

An off-market transaction is settled between two parties on mutually agreed terms and the clearing corporation or the stock exchange is not involved. These include legacy transfers, gifts, transfer of shares between two demat accounts, shifting of securities between a client and a sub-broker, and transactions in unlisted securities. One party is the transferor, while the other is the transferee.

Instruction slip: The transferor has to give a delivery instruction slip (DIS) to his depository participant (DP), instructing the latter to transfer the securities to the receiver's (transferee's) demat account. The 'off-market trade' option must be selected in the DIS.

Read more at:
http://economictimes.indiatimes.com/articleshow/23209723.cms

What is the last date for filing Quarterly result in each quarter?

Last date is 45 days after quarter end. For March quarter , it is 60 days.
For SME, it is only half-yearly and full year result publishing is required.

Compliance calendar with other requirements. Example:

Shareholding pattern: Within 21 days from quarter end.

Microcap Investing: A very risky ride even for an astute investor

A story about how even best of the investment research can go wrong.The investor research about the stock for 1 year. Visited fair, researched about the market share, checked on forums and many more. But bad management made it all wrong.

Read:
Microcap Investing: How even Astute Investors Can Get Taken for a Ride

“Lesson for my fellow investors is, to repeat the quote from legend, ‘if the management does not have integrity, then their intelligence and energy will kill you’.

Alcohol Stocks are trading at very low valuation. Check Pharma too.

Alcohol Stocks are trading at very cheap valuation. Value buyers can check the sector. Winter is coming and that make it seasonal choice of traders too. So, at that time it should be coming in news.

I have no particular choice currently from the sector. But you can check at Globus Spirit and GM Breweries.

I noticed the sector and timing 1 months ago but today it is up by 10% or more. That highlighted it to me. If you can wait and are ready to keep patience then you can looks at the sector. I am hoping that negativity is over for the sector and it should give good gain from here. If you have fresh money to invest then buy some Spirit stocks in few days and check Pharma stocks too.

Pharma Biz Reality

 

Do not buy Alcohol Stocks today. No need to buy at high price. It won't fly like rocket.

SEBI Shocked Stock Market today

SEBI has shocked Stock market today. It has banned 331 companies that will trade only on 1st of every months now. Next trading on 4th of Sept, 2017. The issue won't settle so soon. Many companies will go to court etc.

About 140 companies out of 331 are from Kolkata region.

Many companies banned are well known too. Example: Prakash industries are J Kumar Infraprojects big companies. Prakash industries was in highlight as Rakesh Jhunjhunwala is invested here. J Kumar Infraproject is known due to many report about its order book and its investment worthiness.

Know about SEBI rule for trading in these 331 listed companies. Also, list is available of banned companies. Search able list could not be found. 

HDIL touched 20% lower circuit. Settled at 18% loss. Many companies given lower circuit and given heavy loss to retail investors in companies that are not even in SEBI banned companies list. MidCap and SmallCap index posted ~ 1.25% loss and Sensex posted 0.78% loss.

Optiemus infracom has NSE listing today. Its manufactured Blackberry KeyOne was available for purchase on Amazon today. But this stock posted 8.87% loss.

Sebi introduces GSM, stricter surveillance for stocks

This process actually started on June 9, 2017. These companies failed Modi's demonetization! Over lakh of shell companies got closed. Today was the day for listed companies. Corruption won't be toletrated.
Retail investors got struck in many of these companies as they cannot come out. Even when it will be available for trading on 4th of Sept then that day it is allowed to sell but not to buy. (Don't understand what this mean! If not allowed to buy and how anyone can sell?)

लखपति से करोड़पति कैसे बनें? From Rs 1 Lakh to 1 Crore in 21 years is a reality

Here is a real news about - लखपति से करोड़पति कैसे बनें. How to a owner of Rs Crore from Rs Lakh?

If you had invested only Rs 1 Lakh in a Mutual Fund 21 years ago then by now you had Rs 1 Crore. Suppose that time your age was 30. So, by this time at the age of 51, you could have owned 1 Cr Rupee to spend.

Reliance Growth Fund started in 1995 at Rs 10. Now, its NAV is Rs 1000 in May.

Reliance Growth Fund, a mid-cap oriented fund, is primarily invested in financial, information technology, industrials and healthcare companies.

Read yourself about it - How Mutual Fund had made you crorepati?

I assume, if you had known about it then you may have invested more than 1 Lakh.
1 Lakh in 1995 = 1 Cr by now, then
10 Lakh = 10 Cr by now.
5 Lakh = 5 Cr by now.

So, invest some money in Stock market. Just don't buy bad businesses.

When is the end of this Bull Market?

When is this Bull market going to end? The question and answers are floating around.
We are near to 10,000 mark at Nifty. Many market experts think it can reach to 10,000 before bear market or major correction. But we all know market does not follow any mark. It can come any time without informing us. But it all depends on valuation and money flow etc.

An article on Economic Times mention few details about Bull and Bear market which read tasty.

The BEER (bond-equity earnings yield ratio) thus stands at 1.5. Since bond yields are seen as risk-free, a BEER value above 1 signals rich stock valuations, which means the market is already in the risky zone.

A strong bull run is generally followed by a flurry of IPOs.

High retail participation is often a signal of an impending correction in stocks. These investors represent “the last bear on the Street.

A typical bull market is known to have three phases: accumulation phase, that marks the end of a downtrend and informed investors start lapping up shares at cheaper prices; the public participation phase, when risk appetite develops among the general public and retail investors throng the market; and the excess phase, when the bullish sentiment turns into exuberance; informed investors being to bail out.

Listed Companies in Unorganised Sectors to Benefit Most from GST

Goods and Service Tax is coming and you may be thinking of which one to buy that benefits most from GST.

Few sectors are more organized than others. Those from Unorganized space will see consolidation. Business will shift from unorganized to organized as small companies which could avoid tax earlier will face problem doing so now. So, GST is providing level playing field to all.

Unorganized sectors means where non-tax paying companies are more.

Check these sectors where unorganized players are plenty:

1. Footware,
2. Plywood, 
3. Textiles, 
4. Sanitaryware, 
5. Batteries, 
6. Paints and 
7. Adhesives.

Add-Ons:
How GST will impact the Hawala business in India