Investing

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I Regret…

Here is what a Safal Niveshak tribesman, Sanjeev Bhatia, wrote in the latest Facebook Jam last Saturday (sorry Sanjeev, but it’s your turn to claim the fame ;-))…

I have a particular Behavioral Problem. You recently wrote somewhere that pain of seeing your picks down 15% is more intense than pleasure of seeing your picks go up 15%. But in my case, it seems to be different. I am now seeing BHEL going up to 232 level, did not buy at 200 because my buy price was 180. Opto Circuit, my buy price was 140, it bounced back from 147 to 155…and with market going up and in strong upward momentum, it does not seem likely to come down soon although you can’t say that with certainty in this market. How to let go off this “being left out” syndrome?

What Sanjeev thought, and as I understood from his question, was that he was suffering from a “unique” behavioral problem – something like the “Alice in Wonderland Syndrome”, which is a neurological disorder that can effect a person’s perception.

But then, as I mentioned in the jam, and experienced investors would vouch for this, is that Sanjeev suffers from nothing more than a “common cold”, like most of us investors.

[Read more…] about I Regret…

Do You Want to Meet One of India’s Best Value Investors?

“If I have seen further it is by standing on the shoulders of giants.” ~ Isaac Newton

It goes without saying that if the world was minus Benjamin Graham and Warren Buffett, the idea for Safal Niveshak wouldn’t have existed as well.

Graham and Buffett have put enormous number of ideas into my head, which I have been sharing with you ever since Safal Niveshak was born. Reading their work had made a lot of difference to my life as an investor and human being.

However, there is one more person whom I’ve never mentioned on this platform, but who has been a great influence on the behavioral side of the analyst within me.

Is this Stock the “Next Page Industries”?

“What are you looking at?” my wife asked while staring at me.

“N-n-nothing dear!” I said. “I was just reading on a company.”

“All you guys are the same!” she said while rushing out of the room without even giving me a chance to explain.

“I knew this would happen!” I said to myself while turning back to that website of…Lovable Lingerie Ltd. (LLL).

I was looking at this company after a long-time reader of The Safal Niveshak Post, Nitin Shetty, asked me how he should go about researching this company and whether this could be the “next Page Industries” (the company behind the “Jockey” brand of innerwear in India).

The Return of Uncertainty, and How You Can Deal With It

Here is what a Safal Niveshak tribesman, Mr. Ramanand, wrote as a comment on my previous post…

“Reading all this (article and comments), as well as various traps such as “Growth Traps” and “Value Traps”, is it any wonder that the Stock Market is just a bunch of “traps” to any investor without a specific edge over others? Specific edge can be things like insider information, front runner, market operator, full time disciplined trader etc.

I just read an article in Yahoo today on Macro vs. Micro by Deepak Shenoy. This is another nail in the coffin of any person wishing to invest his hard earned money into the stock market. If even value investors cannot do a reasonable analysis due to so much uncertainty, is it any wonder that retail participation in the equity markets is declining day by day?

So now, on top of concerns like share price/value, market capitalization, company position, pricing power, market share, growth rate, EPS/ROC/ROE, and management competence….you have to additionally deal with unethical management, corrupt auditors, fudged balance sheets, fake earnings, hidden liabilities…and *NOW* you also have to worry about dollar exchange rates, govt inaction and policy about-turns, oil price shocks, terrorist attacks (both domestic/elsewhere), diplomatic relations *between* foreign countries (India may not be involved at all), Spanish Interest rates(!??!), Greek Utility companies payments (?!??!) and what not.

I’m beginning to wonder whether it is worth remaining in the Markets! Wouldn’t I be better off investing my savings in tangible assets (to protect against inflation), suspend my recommendation services, close my demat/trading account, and stay away from the stock markets for good (of course not making the mistake of coming back just because they went up after a year).

What do you say Vishal? Is this a real possibility now?

Mr. Ramanand, here is my humble reply to your observations, doubts and questions, which I believe must be shared by a lot of other investors as well.

Here’s my presentation titled “The Return of Uncertainty”.

Weapon of Mass ‘Temptation’ that Destroys Stock Market Investors

Have a look at this balance sheet…but first stop looking at the left side of the image. 🙂

Well, if you can’t read the numbers above and want to have a “better” look at the complete annual report of this company, click here to see…but please come back to this post soon! 😉

“Isn’t it an amazing annual report?” This is what an ex-colleague asked me showing this annual report sometime in 2009.

Safal Niveshak StockTalk #8: Opto Circuits

Welcome to the eighth issue of Safal Niveshak StockTalk.

After covering Clariant Chemicals last time, this time I’ve researched on a mid-cap company, Opto Circuits (India) Ltd (OCIL). Before we dive deeper into OCIL, here is a brief overview of the sections of this report.

About OCIL
Safal Niveshak’s 20-Point Checklist
Intrinsic Value Assumptions
Financial & Market Snapshot
“Should I Buy OCIL?” Checklist

3 Big Risks in Value Investing – Part 1

“Who would join a Facebook chat around investing on a bright Saturday morning?” I asked myself while preparing for the latest session of Safal Niveshak’s Facebook Jam on June 9.

I opened the session for questions at 9 AM, but the first question came only at 9.16 AM. So my fears were coming true. But then, the speed at which people came in and the intensity at which the discussions progressed, it was an amazing feeling by the time the jam ended at 11 AM.

Click here to read the transcript of the jam. The next session will be held on coming Saturday, 16th June, between 9-11 AM.

Anyways, the reason I’m talking about the Facebook Jam is that this is one platform where I’ve encountered the best questions around investing over the past four weeks since it all started.

Like in the last session, one of the avid readers of The Safal Niveshak Post asked, “What are the risks involved in value investing?”

Opto Circuits, and Power of Story in Investing

Power of Story If you clicked on the headline expecting to read my view on Opto Circuits, I’m sorry to disappoint you because this post isn’t about that.

The reason I mention Opto Circuits here is because I have received several emails over the past few days requesting for my view on the stock.

Given the number of requests for this specific company, I would definitely work on the same and try to release a report soon via StockTalk. But what intrigues me is – Why are so many people suddenly talking about a small-size company called Opto Circuits?

What’s the story?

Well, that’s what I’m going to discuss today – investing and power of “the story”.

Satyameva Jayate in Financial Services: When Victim is also a Criminal

I am a big fan of Aamir Khan and his ideas, so I make it a point to watch Satyamev Jayate every Sunday morning.

Over the past five weeks of watching the show, I’ve realized that there are three types of people who relate to Satyamev Jayate…

People who suffer from the crime – the victims
People who create the crime – the criminals
People (like you and me) who aren’t criminals but love/hate to hear about the crime between 11 am and 12.30 pm on Sundays

I feel sorry (and pathetic) for the first type – the victims. They really deserve huge moral support from their families and friends.

Is this a Good Time to Be a Value Investor?

A reader of The Safal Niveshak Post sent me this email yesterday…

For the last few days, one question is worrying me. As a value investor, even if I choose value stocks after thorough analysis of the business, how do I factor in general macro-economic environment, global slowdown, etc.? How do I know these macro-economic factors will not keep markets subdued for years to come? How do we identify if it’s not great depression again?

Just to add, is there a wrong time for value picking, or is it always the right time as long as there’s thorough analysis and sufficient margin of safety

Very important questions, I must say.

Traditionally, value investors have tended to ignore macro-economic issues and have focused on bottom-up investing.