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smartcat
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   Topic: CashFlow - The ultimate thing!
Posted: 28/Aug/2007 at 6:56pm |
| Dish should hit 81-82 levels but the chart pattern is not suggestive of a big upmove. Till 94 is taken out, the upmove should be taken as a bounce rather than the change in the trend |
This statement is a bit like poetry. I don't understand what it means but feels good to read it.
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Vivek Sukhani
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Posted: 28/Aug/2007 at 6:58pm |
well, i beleive the case is different from i made out to be.....Averaging has certain rules and levels have to be taken with some consideration. As I say, too much loyalty is a matter of dogs, so in case you beleive in the fundamentals of a company, cherry pick your levels and just dont go and do the averaging exercises like that. I have a friend who beleived in the ethanol story and made thre back to back averaging in bajaj hindustan. you may rubbish him off at this moment by saying sugar is a commodity play, but then also pay due consideration to the fact that dish etc. are not free cash surplus game, so in case you indulge in a growth play , be very strict on that count. Now not for a single moment I am saying anything against Dish but Tyler Sirji, people have limited cash surplus to do an averaging exercise just like that( in most of the cases, your case may be different though). Conviction is very often a matter of personal circumstances and most of the people i know generally dont do the averaging for the second time( meaning they buy at just 2 levels). I hope this comment sparks off a healthy discussion about cash generation criteria for individual stock picking.
Also, will be glad if you dont add suffices like ji to my name. I think ji spoils the meaning of my name.
Hope you will take this post in the right spirit.....
Cheers and Vande Mataram
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smartcat
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Posted: 28/Aug/2007 at 7:16pm |
>>> free cash surplus
>>> cash generation criteria
There are some growth investors who see free cash flows negatively. Now for a value investor, this statement might be difficult to swallow.
If Bharti/RCom (for example) start generating free cash flows, it means the existing infrastructure is enough to support the new subscriber additions. It could mean the growth is slowing down in the sector/ business and should warrant a review of investment.
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basant
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Posted: 28/Aug/2007 at 7:21pm |
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DTH business is free cash flow presently the one year free scheme is accounting for the losses. Pantaloon with negative cash flow has been up 60 times in 4 years.It is still cash flow negative!!!
Edited by basant - 28/Aug/2007 at 8:05pm
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tyler_durden
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Posted: 28/Aug/2007 at 7:23pm |
post taken in absolute right spirit vivek...you re a technically sound person..
1. what about a person who does not have any knowledge about support and resistance levels...how will he know whether to average out at 70 or 60 or 50...you can easily do that...but for others its tought to find the bottom....
2. i dont have anything to do with dish tv...i just pitched in because people who have bought the stock based on fundamentals were getting baffled because of technicals....
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If you aren't fired with enthusiasm, you will be fired with enthusiasm.
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CHINKI
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Posted: 28/Aug/2007 at 9:18pm |
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Everybody knows that lot of money is made depending on at what price you buy any stock.
But someone who is assured of the management capability and business scalability/opportunity, should buy at a level comfortable to him. Rs.10/- to Rs.20/- difference will not make much differences in the long term.
Timing the market or try to find out the bottom/top of any stock price is like trying to find a needle in the hay.
When I started investing in Dish TV, I had never thought that DTH can be put for a car or a train. This is the additional source of revenue for the operator.
As far as the competition is concerned, bigger it is more will be the innovations. Hence more sales/revenues.
Talking about TATA SKY being leading in Kolkata. I remember of seeing Dish TV connections everyhwhere in the remote parts of Coorg almost two years back. So each DTH player will have list of places where they are strong.
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TOUGH TIMES NEVER LAST, BUT TOUGH PEOPLE DO
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Vivek Sukhani
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Posted: 28/Aug/2007 at 11:01pm |
I will like to stick to academic discussion here only...whether pantaloon was up or down or bharti was up or down or Rcom is very stock specific and hence irrelevant for this discussion. If pantaloon has been huge then Pyramid saimira or a shopper's Stop or a Trent has been nothing of a sort of a performer. Tata Tele has been nothing short of a disaster, so whether price has gone up or down, is something I wont like to talk about. all I intend to say is that when the stock is going up, you ignore cash flows but when it comes down things which were being overlooked becomes important. It all depends how they manage growth. You have to come up with crackers of quarter and no doubt market will reward a growing( more revenues)and performing( meaning profits) business more than a mere performing business(only profits, but no topline growth) or a growing business(only increased turnover but not accompanied by rise in profits). I think Dish has to show both the topline as well as bottomline growth to attract investors. somethink what educomp is doing. .....and here I would again like to confess, i was horribly wrong and hence I regard growth companies as decent investment prospects if they set up good profit streams. Opto is another case in point.....strong topline growth and even stronger bottomline growth.
Tyler, supports and resistances are all in the mental makeup. The discretion I was talking about was more in the context of apllying the mental strategies and in order to be successful for averaging one should spread average points to suit the risk management needs. Its better to have a small position and then do an averaging at lesser points then o accumulate a large quantity in between a narrow level and a higher level and then to lose the capacity( mental as well as monetary in some cases) to average at lower levels. Frankly if you start with a small quanity you would always like the stock to do poorly on price front so that you can accumulate more but if you begin with a huge position you tend to get fatigued quite early if the stock doesnt perform. and thanks a lot for being nice to my post as I think that I was bit harsh in my choice for words but at times I tend to get agitated and hence the outbursts
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basant
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Posted: 28/Aug/2007 at 11:15pm |
Vivek I made a 6 bagger in Trent in about 3years in which time it outperformed the market and almost all big sensex stocks it had a very good operating profit growth positive cash flow, cash on balance sheet but all it needed was fire in the belly of the promoters. Though I made 6 times I really lost an opportunity in buying the bad stock of that time Pantaloon.
I remember during the 2004 investor conference at Swabhoomi all experts including RD, Nilesh Shah, Gul Tekchandani were bullish on Trent compared to Pantaloon and we all know what happened after that.
I am not saying that cash flows do not matter it does matter but if the management is good and has fire in its belly we can sacrifice short term gains (profits) for longer term targets.
When investing in value stocks management does not matter because it is very little that they can do but for growth companies we have to be with the sector leader and the best management and these two things are easier to spot then a negative cash flow.
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