Capitalizing from this Bearish phase!
Printed From: The Equity Desk
Category: Market Strategies
Forum Name: Fundamental
Forum Discription: Discuss the operations and finances of any of your companies.Make the other participants aware on the investment opportunities available in a stock on PE free cash flow etc
URL: http://www.theequitydesk.com/forum/forum_posts.asp?TID=1673
Printed Date: 07/May/2025 at 4:38pm
Topic: Capitalizing from this Bearish phase!
Posted By: basant
Subject: Capitalizing from this Bearish phase!
Date Posted: 18/Mar/2008 at 6:31pm
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It is strange how quickly things have changed; people wanting to sell at any price and getting back home. It is not easy to take away the wealth from the markets. Didn't someone say that "too much wealth has been made in too little a time".
More then the cash equity component which all of us focus on the focus should be on the kind of stocks that we hold. Bearish phases provides excellent space for people to change the bad stocks for the better ones. In other words we can wash our sins in this market.
So if you have RNRL and it has been down 40% you can buy HDFC which is also down 35% and walk away without any bad effects on your wealth.Most of us do have this notion of purchase price and it is this purchase price which disturbs us in doing what we should.
So just making a list of the companies whose EPS seems unstable over the next few quarters shouykd provide enough clue.
Finally even if you are in 30% cash do not let that other 70% fall by 60% because in that case what we will be left with is 1005- 70%x60%= 58%.
Please be very careful in choosing the horses to ride on. One worng decision and we could be wiped out because on recovery this market isn't going to lift all boats!
Rememeber most of the people had missed out the bear market in 2001-03 because it was unfashionable to invest and the ones who invested at that point in time made money like bandits.
Quite a few who kept buying stocks like DSQ and HFCL in the fall of 2000 were stuck with what we now know as dud stocks.
So while some stocks rallied the older ones faltered and inevstors should recognize the difference between the two.
Finally please do not average but try and see whether the initial thesis in which you bought the stock makes sense if it does then buy more if it does not take the loss and run.... to another company or cash as you think is appropriate ------------- 'The Thoughtful Investor: A Journey to Financial Freedom Through Stock Market Investing' - A Book on Equity Investing especially for Indian Investors. Book your copy now: www.thethoughtfulinvestor.in |
Replies:
Posted By: deepinsight
Date Posted: 18/Mar/2008 at 6:42pm
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Basantji:
Good thoughts.
Can you help qualify the variables on which one should choose?
Quality of earnings.
Order Book.
etc.
------------- "Investing is simple, but not easy." - Warren Buffet |
Posted By: chic_1978
Date Posted: 18/Mar/2008 at 6:44pm
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Basantjee
Can we identify the stocks out of TED XI that can be bought in switch over in current scenario .....everyone must hv missed some or other stock out of XI earlier because of price factor....say pantaloon or titan... ------------- happy & wise investing |
Posted By: prashantmohta
Date Posted: 18/Mar/2008 at 6:55pm
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So if you have RNRL and it has been down 40% you can buy HDFC which is also down 35% and walk away without any bad effects on your wealth.Most of us do have this notion of purchase price and it is this purchase price which disturbs us in doing what we should.
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i have bought more hdfc today.i have full faith in deepak and since from years it is the pillar of india stock market whether u take harshad or kp scam.it is 50% cagr.
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Posted By: omshivaya
Date Posted: 18/Mar/2008 at 6:59pm
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Basant sir, recently you increased exposure to HDFC or HDFC bank, which one?? I guess when you talk of HDFC, you are meaning HDFC Bank right?? ------------- The most important quality for an investor is temperament,not intellect.A temperament that neither derives great pleasure from being with the crowd nor against it |
Posted By: BubbleVision
Date Posted: 18/Mar/2008 at 7:05pm
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I was really hoping that this kind of thread would be called "Investing in a bear market". If that was the case, I would have immediately posted "Why invest in a bear market in first place". Why not go short????
ROFL
------------- You can't make money if you are unwilling to lose...It's like willing to breathe in but not willing to breathe out. -- ED SEYKOTA ....Read Disclaimer! |
Posted By: prashantmohta
Date Posted: 18/Mar/2008 at 7:16pm
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there is rumour in the market that citi will sell the entire holding and also heard from few mungeri but i think citi should use common sense. |
Posted By: basant
Date Posted: 18/Mar/2008 at 7:17pm
There is a sale in the market. The ones I picked were CBoP (HDFC Bank) and Titan. Take your pcik and get rid of the duds in the portfolio.
 ------------- 'The Thoughtful Investor: A Journey to Financial Freedom Through Stock Market Investing' - A Book on Equity Investing especially for Indian Investors. Book your copy now: www.thethoughtfulinvestor.in |
Posted By: India_Bull
Date Posted: 18/Mar/2008 at 7:26pm
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Considering the current valuations, HDFC bank should also come down, as it still has to digest the merger in the balance sheet, so next few bad quarters are not priced in the HDFC Bank yet, may be we can get this golden stock at more attractive prices. (If I consider CITI selling stakes in India holding to recoup losses elsewhere then one gets scared about thinking the possible price of HDFCBank !!) P.S- My personal opinion, I am not an expert ------------- India_Bull forever Bull ! www.kapilcomedynights.com |
Posted By: prashantmohta
Date Posted: 18/Mar/2008 at 7:30pm
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does anyone remember the itc case few years back when stock tanked and then recoverd.i would like somebody to co-relate same with the hdfc and hdfc bank here.
good stocks always recover.
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Posted By: prashantmohta
Date Posted: 18/Mar/2008 at 7:51pm
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NEW YORK: World's newly crowned richest person Warren Buffett may have some lessons for other billionaires and CEOs of the world. Buffett, CEO and Chairman at Berkshire Hathaway, does not use office car, has neither taken a salary hike for 25 years nor desires any in future, pays back the company for minor items such as phone calls, postage and favour from office personnel that are personal in nature, does not fly in company jet for personal visits and gives over four-times bigger pay package to his Chief Financial Officer. |
Posted By: gopal
Date Posted: 18/Mar/2008 at 8:04pm
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TEDies / seniors Will you mention some / few stocks & the percentage that they have fallen ...... further it would be best if these stocks have no connection with USD and are based on strong India local sales or business.
this will benefit us all .......
At same time also do mention sectors / stocks to avoid or to be very cautios in .....
------------- Women are like the stock market Coz they're irrational n can bankrupt u if u're not careful |
Posted By: nitin_jagtap
Date Posted: 18/Mar/2008 at 8:44pm
------------- Warm REgards Nitin Jagtap |
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Posted By: basant
Date Posted: 18/Mar/2008 at 9:09pm
I am not sure how many bear markets you have seen but I have made my biggest money buying stocks when peole were screaming at each other to get out of the market.
And yes, I am not a trader who would turn his hat at every trend.
------------- 'The Thoughtful Investor: A Journey to Financial Freedom Through Stock Market Investing' - A Book on Equity Investing especially for Indian Investors. Book your copy now: www.thethoughtfulinvestor.in |
Posted By: omshivaya
Date Posted: 18/Mar/2008 at 9:27pm
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After reading various intelligent posts today, I just remembered an old wise saying just out of the blue(aise hee)
"A person's true character(his real essence which he simply cannot hide), comes out only when he is in power and not when he is in poverty". So, give a man power...make him feel more powerful than you are, and you shall see his true character in full form." ------------- The most important quality for an investor is temperament,not intellect.A temperament that neither derives great pleasure from being with the crowd nor against it |
Posted By: gopal
Date Posted: 18/Mar/2008 at 9:39pm
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Basant jee & Devesh bhai,
In this mkt I would like your feedback for Reliance capital ......
Is this company ok for investing more at todays price with a 6 months to 1 yr out look ...... since long outlooks are risky now
or was this just anoth ADAG balloon that should be exchanged with another fundamentally sound company .......
I exited all other balloon stocks of adag bhai in time but I still have this one with purchase prices of Rs1827/-
Further the only other banking stock I am left with is Axis bank with purchase price of Rs977/- is this good price for axis or should this be changed for some other better stock to capitalize from this bearish phase .. ------------- Women are like the stock market Coz they're irrational n can bankrupt u if u're not careful |
Posted By: valueman
Date Posted: 18/Mar/2008 at 10:07pm
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Finally please do not average but try and see whether the
initial thesis in which you bought the stock makes sense if it does
then buy more if it does not take the loss and run.... to another
company or cash as you think is appropriate This is the most appropriate one I feel to be done in current context . ------------- To achieve satisfactory investment results is easier than most people realize ; to achieve superior results is harder than it looks . Benjamin Graham. |
Posted By: Janak.merchant1
Date Posted: 18/Mar/2008 at 10:30pm
Hi Basant,
I have seen few bear markets during Harshad, Ketan and tech phase.
And everytime, i have made my biggest money buying shares after the crash.
Hope the pattern repeats.
Best wishes ------------- I love my money, not my opinion. So i am ready and willing to change my opinion for the sake of protecting my money. |
Posted By: deepinsight
Date Posted: 18/Mar/2008 at 10:35pm
Have you been able to get an indicator that it was time to start investing? in other words is that time now? ------------- "Investing is simple, but not easy." - Warren Buffet |
Posted By: gopal
Date Posted: 18/Mar/2008 at 10:38pm
This is my first bear mkt after investments and it came too soon ...... by next bear phase I will become smarter I think ...... but for this one some advise / feedback plz .... on above querry of mine .....
------------- Women are like the stock market Coz they're irrational n can bankrupt u if u're not careful |
Posted By: deveshkayal
Date Posted: 18/Mar/2008 at 10:41pm
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http://www.theequitydesk.com/forum/forum_posts.asp?TID=934&PN=61 - Reliance Capital - A play on Financial services
Click on the above link. ------------- "You don't need to be a rocket scientist. Investing is not a game where the guy with the 160 IQ beat the guy with a 130 IQ. Rationality is essential"- Warren Buffett |
Posted By: Ajith
Date Posted: 18/Mar/2008 at 10:46pm
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I think there are some super multibaggers out there waiting to be bought but the current environment is such that there is confusion all around because conviction is now a rare commodity. Hopefully soon it will be back to normal.In the meanwhile ,we can spot the mega trends . ------------- Ajith |
Posted By: gopal
Date Posted: 18/Mar/2008 at 11:14pm
but devesh bhai,
i had read the rel cap link before I also read the specific page on ur link.
rel cap has no forex or derivative problem, it is also not a bank so why is it falling sharply as banks .....
thnx ------------- Women are like the stock market Coz they're irrational n can bankrupt u if u're not careful |
Posted By: basant
Date Posted: 18/Mar/2008 at 11:27pm
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Ajit ji i do not think that we will get these prices once the confusion moves away. The risks of buying at these levels come with the rewards. ------------- 'The Thoughtful Investor: A Journey to Financial Freedom Through Stock Market Investing' - A Book on Equity Investing especially for Indian Investors. Book your copy now: www.thethoughtfulinvestor.in |
Posted By: Vamsee
Date Posted: 18/Mar/2008 at 11:49pm
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gopal,
Rel Cap is what people call "high beta" stock. that is when it is going up it will go way above its reasonable value and when it is going down it will go way below its reasonable value.
Now the pendulum is swinging the other way.
------------- May you live in interesting times -- Ancient Chinese Curse |
Posted By: bharti
Date Posted: 18/Mar/2008 at 11:49pm
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One caution - its great to invest during panics...i am following this and have invested some surplus already... But don't over-invest or over-leverage or become too greedy - please remain in control , invest only uptill the amount which you are comfortable to hold say for atleast 12 months...it should not be that you borrow money and start to invest or you need this particular money say after one month for some purpsoe....long term means long term....it may happen that for next 6 months...markets go nowhere or may even drift downwards...you just need to have the capacity to hold... |
Posted By: basant
Date Posted: 18/Mar/2008 at 12:01pm
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Just check the earnings of Rel cap before you take the plunge. On the rebound this will be the fastest stock to move but that should be the time to recheck. ------------- 'The Thoughtful Investor: A Journey to Financial Freedom Through Stock Market Investing' - A Book on Equity Investing especially for Indian Investors. Book your copy now: www.thethoughtfulinvestor.in |
Posted By: gopal
Date Posted: 18/Mar/2008 at 12:07pm
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ok thnx for clearing da doubts on rel cap
will wait for next qtr on it to check its growth & by then I should also have got its annual report frm company
thnx ------------- Women are like the stock market Coz they're irrational n can bankrupt u if u're not careful |
Posted By: rishikesh_m
Date Posted: 18/Mar/2008 at 12:10pm
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Basant Sir,
Can you recommend any midcap stock which we can buy in this panic ? KLG Systel was rated as an Outperformer by ICICI and showed earnings growth & massive dip in price since the report. Two small caps, Parekh Aluminex and SREI Infra are recommended by Equitymaster and would love your opinion on same. Thanks |
Posted By: gopal
Date Posted: 18/Mar/2008 at 12:26pm
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dear all,
US cuts key interest rates by 0.75% now
thnx ------------- Women are like the stock market Coz they're irrational n can bankrupt u if u're not careful |
Posted By: kulman
Date Posted: 18/Mar/2008 at 12:29pm
Yes Bharti. You are absolutely right.
No one really knows whether or when any of those black swan event could strike.
Invest upto a point of peaceful sleep. Most importantly Mr. Market's moody behaviour shouldn't affect one's day to day lifestyle.
------------- Life can only be understood backwards—but it must be lived forwards |
Posted By: rishikesh_m
Date Posted: 18/Mar/2008 at 12:36pm
| If we were to buy stocks which we want to hold for next three years , what would be your choice ? |
Posted By: TCSer
Date Posted: 18/Mar/2008 at 1:00am
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This 0.75 % cut for both discount n normal interest rate plus better then expected results from Lehman n Goldman plus superb advance tax figures from indian corporates will lead to MASSIVE SHORT SQUEEZING TOMORROW expect 800 to 1000 points jump in sensex tomorrow itself.
WHERE THE HELL IS SHANKAR SHARMA A BLOODY DALBADLOO
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Posted By: manishdave
Date Posted: 18/Mar/2008 at 1:16am
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Everything is Good And Bad at A PRICE!
Looks like mkt went from one extreme to another.
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Posted By: TCSer
Date Posted: 18/Mar/2008 at 1:18am
| WHATS YOUR TAKE ON ICICI BANK n TCS |
Posted By: manishdave
Date Posted: 18/Mar/2008 at 2:20am
I don't follow TCS much so won't comment on it.
ICICI is good when sector is turning around from bad to good. But business was already good for few years so I would prefer HDFC Bank. Taking risk is in ICICI's DNA. And taking no risk is in hdfc's DNA.
Bcoz of credit problems, corporates bond prices have tanked, which means if a company wants to issue bond, they will have to pay higher rate and due to volatality, there must be higher premium for hedging too. This should bode well for indian banks as their spread will go up. So withoug betting who will move up faster, go with company that has strong balance sheet and less risk.
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Posted By: omshivaya
Date Posted: 18/Mar/2008 at 2:39am
The point is...what to buy. We have to be very selective! Prices are great for sure, but we have to choose those ones, which dont have any exposure to outside India...100% focused on domestic scene and of course it has to be come with a great management who wont screw things up!!! ------------- The most important quality for an investor is temperament,not intellect.A temperament that neither derives great pleasure from being with the crowd nor against it |
Posted By: tigershark
Date Posted: 18/Mar/2008 at 4:01am
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i doubt prices will be that great today! ------------- understanding both the power of compound return and the difficulty getting it is the heart and soul of understanding a lot of things |
Posted By: basant
Date Posted: 18/Mar/2008 at 8:37am
Go for leaders in the sectors. ------------- 'The Thoughtful Investor: A Journey to Financial Freedom Through Stock Market Investing' - A Book on Equity Investing especially for Indian Investors. Book your copy now: www.thethoughtfulinvestor.in |
Posted By: basant
Date Posted: 18/Mar/2008 at 9:13am
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Please do not make blanket sweeping comments. Try to justify with reasons/logic. This is in reference to the post on ICICI. ------------- 'The Thoughtful Investor: A Journey to Financial Freedom Through Stock Market Investing' - A Book on Equity Investing especially for Indian Investors. Book your copy now: www.thethoughtfulinvestor.in |
Posted By: Ajith
Date Posted: 18/Mar/2008 at 9:15am
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Mr. Basant, I have pumped in as much as I can on January 22 and afterwards in the confusion.But for the moment I am looking for better ideas.
------------- Ajith |
Posted By: Mohan
Date Posted: 18/Mar/2008 at 10:04am
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You will find that old ideas are better.
------------- Be fearful when others are greedy and be greedy when others are fearful. |
Posted By: Ajith
Date Posted: 18/Mar/2008 at 10:23am
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Have enough stocks of old ideas which I retain .Any new themes?This is being done by some members on TED for example,The emerging trend of agriculture. In the next rally, new leaders may emerge. ------------- Ajith |
Posted By: manishdave
Date Posted: 18/Mar/2008 at 11:09am
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It is based on past history.
In agriculture sugar is good buy. When I say sugar, it is sugar as a commodity. Sugar mill is different case. I am long on sugar future. Here is why. What has changed? Grain prices are going to stay high even if there is correction. So sugar has to catch up or farmers may plant different crops. European union supports sugar farmers by subsidy but wto has ordered not to do so so production will decline there even if they are not big player, marginal production makes difference when supply is tight. Demand side: 1. With oil so high and sugar so low ethanol is extremely competitive. This much difference is not sustainable in long run. Either oil has to come down substantially or ethanol(sugar) has to go up. Ethanol was competitive when sugar was just half but oil was 1/10th. 2. China's per capita consumption is <1/3 of India's. That is partly bcoz of food that they cook. That may not change. But they eat more ice-creame/candy/soda. Their growth in consumption is 10% and going to stay like that for long. With 1.3b ppl, in long run it can make big impact. Demand side is inelastic unless oil crashes big time. Unlikely. China story change is even more unlikely. Supply side risks are always there. No one can expect favourable weather yoy. And as long as grains are higher sugar supply will decline. Other than china/ethanol corn syrup/sugar are substitutes. Record corn price makes sugar sweetner attractive to users so more demand. Ethanol from sugar is more competitive than from corn but US has 55% duty on import of ethanol to support farmers. That may change given inflation scare and oil/food prices. If/when that happ there can be huge/sudden mkt for brazil ethanol. Even if that doesn't happen Brazil can export ethanol to other countries. Other countries like India/Japan are also considering ethanol option.
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Posted By: kulman
Date Posted: 18/Mar/2008 at 11:36am
1. Are you trading Sugar on MCX/NCDEX (Indian bourses) or Nymex/C-Bot?
2. I love eating sweets & in our family per capita consumption is slightly higher than avearge Indian sugar consumption based on past 20 years available data. Since I'm indirectly responsible for sustaining high sugar prices, could we share profits?
------------- Life can only be understood backwards—but it must be lived forwards |
Posted By: wise_man
Date Posted: 19/Mar/2008 at 11:22pm
all scenario are front of our eyes lets see where we will go but remember after all bear market we will have a mother of all bull market.
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Posted By: Ajith
Date Posted: 19/Mar/2008 at 11:36pm
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Manishji, I am sticking to stock markets.I meant stock picks like Jain Irrigation and other rural themes may be interesting. ------------- Ajith |
Posted By: kvinodhan
Date Posted: 20/Mar/2008 at 4:09pm
| Hi All- Do you think it is a good time to get in TED stocks...like IDFC/Yes Bank/Axis...since we still are talking abt the indian story and are likely to see higher levels of sensex by the end of the year |
Posted By: basant
Date Posted: 20/Mar/2008 at 4:42pm
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There is a bit of an uncertainity in the entire financial space so for the larger names we are not sure of the others. On the other hand companies in retailing and airconditioning have no such overhangs and should be bought.
------------- 'The Thoughtful Investor: A Journey to Financial Freedom Through Stock Market Investing' - A Book on Equity Investing especially for Indian Investors. Book your copy now: www.thethoughtfulinvestor.in |
Posted By: kvinodhan
Date Posted: 20/Mar/2008 at 4:45pm
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In the airconditioning space do u prefer Blue star over Hitachi.... since Mr Damani is bullish on hitachi and the co has got into commercial airconditoning phase and if we believe the retail space booms the co should benfit....
Airconditoning co how much would be the annual AMC charge.....would that be a part continous stream of revenues.....
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Posted By: basant
Date Posted: 20/Mar/2008 at 5:02pm
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Yes, AMC brings in service revenue and has infinite RoCE. ------------- 'The Thoughtful Investor: A Journey to Financial Freedom Through Stock Market Investing' - A Book on Equity Investing especially for Indian Investors. Book your copy now: www.thethoughtfulinvestor.in |
Posted By: kvinodhan
Date Posted: 20/Mar/2008 at 5:26pm
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U r thoughts on Hitachi Air Conditoning System.... |
Posted By: basant
Date Posted: 20/Mar/2008 at 6:10pm
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Good stock; looks cheap but the commercial segment is monopolised by Blue Star and Voltas and that is where the real money is. Consumer segment is a) seasonal and b) does not have inbuilt AMC revenues.
------------- 'The Thoughtful Investor: A Journey to Financial Freedom Through Stock Market Investing' - A Book on Equity Investing especially for Indian Investors. Book your copy now: www.thethoughtfulinvestor.in |
Posted By: shivkumar
Date Posted: 20/Mar/2008 at 6:55pm
I am taking another look at pharma companies - especially the kind that makes diabetes medicines.... |
Posted By: kulman
Date Posted: 20/Mar/2008 at 7:02pm
 ha ha...
I'm by the way following fitness regime, may not be as strict as Anil bhai. ------------- Life can only be understood backwards—but it must be lived forwards |
Posted By: Janak.merchant1
Date Posted: 20/Mar/2008 at 12:16pm
Hi Deep,
Saw your post just now.
Indicators for that wud mean many. But the indicators that i follow, do not come from the stock prices. Mr. market does not guide us most of the time.
Those indicators that i focus on are about business dynamics.
I M usually a patient person. If i get four ideas a year for my portfolio, that's enough.
Many times, managing directors make silly mistakes. Like diversifying in unrelated fields. Recently a co in castings industry has announced plans to make dry dock with initial capex of 100 cr. Existing capital is ard 3.6 crores.
This is not a good indicator. I am sure, u can find abt that co. And the problem is that they have not yet indicated this to BSE! Fortunately i am no longer holding that share but i know that capital market had recommended it.
Coming to your query: other words is that time now?
Frankly, i have no idea. My plan is to wait for some more downfalls! They may come. Chances are more according to what i have observed from past. And as i said i just need four ideas as i prefer concentrated portfolio. Tho it is very risky to follow this method, it suits my personality.
Best wishes to a insightful fellow TED friend.
JM
------------- I love my money, not my opinion. So i am ready and willing to change my opinion for the sake of protecting my money. |