When you read a heading like 'Today BSE Sensex closed higher by 726.72 points at 14,042.32' then most of the people don't dare to predict that market will tumble and will tumble so fast. But that's what I was saying (getting beating for that) when I wrote this on my blog on September 19, 2008. This warning was repeated by another warning on Oct 7, 2008, by that time Sensex was already at 11,695.24, when I reiterated that Sensex will tumble to 9000 levels. Today, when I am writing this article, the Sensex is at 8043 level and has already lost 7.56%.
This was my second prediction in a row which went absolutely accurate. The first one was about Rupee. When rupee was hovering between 36-38 levels and many were predicting the death of the dollar, it turned out to be rupee which surprised many. Rupee has touched a level of 50 now and presently trading at Rs 50.16. Both these predictions were based on macro economic environment and coincidently both were against the common belief that it will never happen - under no circumstances.
So what's next in the offing. Before I start writing about that, I would like to start on the note about the risk that many people take. I have spoken to at least two senior professionals. Both of them had purchased Unitech at a price of Rs 500+ and both of them have bought 200 shares. Today they do not know what should they do with that investment/gambling of Rs 1 lac and when will they be able to recover their investment, forget about profits? My question to them was/is, what was the sense to make that investment? No one knows as it was more of an erratic emotional investment decision that was made because the stock was moving up sharply and some nonsense 'technical' analyst predicted that it has strength to see new levels. Unfortunately that never happened and they lost almost 80% of their wealth (lost up to 95% till Friday). The important factor is not that only 'educated' people can fall prey to this, it can be anyone who is constantly getting flooded by media with the message that market is going to see moon.
There is another set of people who were always probing me to get investment ideas by leveraging (simple terms taking easy loans esp personal loan and investing the market). This is the second layer of speculators who are now out of the market.
I recommend and follow in the simple investment philosophy - Invest only what you can afford to lose but before investing make it sure that you don't lose. So for not losing you will have to come to the terms of investing only in sound businesses while understanding the overall/macro economic environment.
Now about what is next in the offing: the markets were always here and they will continue to be here only. Only the stocks will move out from weak hands to the strong hands. We will miss some of the players who were identified as the weak link in this game. In my last 15+ years in the market, I have seen several (almost 99%) people loosing their life time in the market and have seen very rare (just 1% or even less) who have earned decent returns from the market. But the common thing that I have found in those who have earned decent gains is they were well disciplined and have never been in a mad rush to make quick bucks.
I wrote in my previous post (subject: Spanish flu - The Great Depression of 1929 - Bird flu - Financial turmoil of 2008) this downfall was well expected and it will continue, albite with lowered intensity, till the end of December 2008. The market is now discounting December quarterly earning. The market to come out of this situation will take at least 6-9 months time. However, this will give us very exciting time from investment perspective. I am also very tempted to invest and may be investing gradually and very carefully, under no circumstances more than 1% of the total fund (my total exposure in stock market is very very low). This investment has to be very selective investment only in very high quality stocks which are offering huge cushion to the investment. Market will come down further but it will become better and better for those who want to stay here for long term.
Cheers,
Niteen S Dharmawat
http://dharmawat.blogspot.com/
IMPORTANT DISCLAIMER: Investment in equity shares has its own risks. Sincere efforts have been made to present the right investment perspective. The information contained herein is based on analysis and up on sources that we consider reliable. I, however, do not vouch for the accuracy or the completeness thereof. This material is for personal information and I am not responsible for any loss incurred based upon it & take no responsibility whatsoever for any financial profits or loss which may arise from the recommendations above.
On Tuesday, October 7, 2008 Niteen S Dharmawat wrote:
Market Updates and course of action
Only 3 weeks ago, to be precise Sep 21 2008, there were not many takers of my call that market may meltdown to a level of 9000, please see the posting 'Reliance Industries Update' on the blog. But today when you see that the market - mostly paper wealth - getting chopped like pack of cards there are many who come to agree with this view. It's a common human tendency that we want status quo or if the change is expected then it should/will not hurt me and my financial goals in any of the way. The human tendency which is common amongst everyone is nothing but greed.
The market is not the only entity which is getting chopped off. The after effect, as anticipated, is further erosion of INR. The INR is now at 48.60-48.75 and coming close to 50. I may sound a dooms sayer here but the things are not very rosy and in fact things are slipping out of the hands of country like India. We did not require the outsiders to make mess out of our system. We should also be equally blamed. We have pursued populist policies including loan waiver schemes of the farmers, pay commission recommendation, not taking action while world-wide crude prices were witnessing a sharp rise etc. These all have a serious impact on the overall health of fiscal (deficit) and is going to impact INR, Inflation everything, stock market. The markets are a just reflection of the policies pursued world-over in a globally connected economy.
Now what's next if markets continue to melt like an active volcano erupts and engulfs anything and anyone that comes in the way? Invest in the quality stocks which are offering value for money, how to look for one? Simple, to find a multi-bagger stock or a stock which has intrinsic value please follow following simple rules:
- Single digit P/E
- 3-4% yield
- PEG (PE Growth ratio) is less than one
- No Debts OR Very Low Debts compared to equity
- Management buying the stock
- Always remember, when in doubt, stick to quality. Never speculate...
Cheers,
Niteen S Dharmawat
http://dharmawat.blogspot.com/
IMPORTANT DISCLAIMER: Investment in equity shares has its own risks. Sincere efforts have been made to present the right investment perspective. The information contained herein is based on analysis and up on sources that we consider reliable. I, however, do not vouch for the accuracy or the completeness thereof. This material is for personal information and I am not responsible for any loss incurred based upon it & take no responsibility whatsoever for any financial profits or loss which may arise from the recommendations above.
On Mon, Sep 22, 2008 at 1:12 PM, Niteen S Dharmawat wrote:
Reliance Industries - Update
Reliance Industries is one my favorites. Some of you would recall that I have been recommending this stock from Rs 520 onwards when the feud between two warring brothers were on the street and media was opening fresh can of warms on a daily basis by flashing new breaking stories released by 'good sources' of warring brothers. The entire market during that time was in upswing while RIL stock was butchered to the extend that it became an untouchable stock. Later they reached a settlement and problem got resolved leading to unlocking huge value which I was talking about in my mails. The RIL stockholders were the biggest beneficiaries. They got shares in four companies free of cost. Today RIL is at 2100+ levels and the free stocks (RComm, RNRL, Reliance Energy etc) are doing equally good. This is a return of almost 6 times from the original recommendation.
Now what should we do with the stock with yesterday's 'big' announcement by Mukesh Ambani. One of the conclusions that we can draw is that the company is in a great shape to go to the new levels which means un-parallel growth and solid wealth creation for the shareholders. If you are holding the stock from 520 levels onward (and various other levels when it was re-recommended) then please continue to hold it. This single stock may help you plan your retirement, I am talking about real long term investment!!!
But if you want to buy more then is it the right time to enter in the stock? Should we really want to time the market or intrinsic value offered by the company is more important? The value offered by the company is, as I said earlier, going in the trajectory of un-parallel growth which will be realized over a period of 2-3 years. But the value offered by the market is something under question. So would advice immense caution while making any fresh exposure in the market. Let opportunities go but we should not loss our investment - should be the philosophy of the investment. I am of the opinion that market may come down to 9000 levels due to various reasons, discussed in earlier posting, over a period of next 6 months and that will be an amazing opportunity for investment. However, one can start investing from a level below 12000 thru' a stagger investment mechanism. If you have any questions, then please do write to me or post your comments on blog itself.
IMPORTANT DISCLAIMER: Investment in equity shares has its own risks. Sincere efforts have been made to present the right investment perspective. The information contained herein is based on analysis and up on sources that we consider reliable. I, however, do not vouch for the accuracy or the completeness thereof. This material is for personal information and I am not responsible for any loss incurred based upon it & take no responsibility whatsoever for any financial profits or loss which may arise from the recommendations above.
Cheers,
Niteen S Dharmawat
http://dharmawat.blogspot.com/
IMPORTANT DISCLAIMER: Investment in equity shares has its own risks. Sincere efforts have been made to present the right investment perspective. The information contained herein is based on analysis and up on sources that we consider reliable. I, however, do not vouch for the accuracy or the completeness thereof. This material is for personal information and I am not responsible for any loss incurred based upon it & take no responsibility whatsoever for any financial profits or loss which may arise from the recommendations above.
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Monday, October 27, 2008
Thursday, October 16, 2008
Spanish flu - The Great Depression of 1929 - Bird flu - Financial turmoil of 2008
I would like to quote here one very unusual example which does not have any direct relation with economy/stock market. But still gives a convincing reply to why and how the world will come out of the financial trouble it is facing today.
The example is of Spanish flu which hit the world sometime in 1918. This influenza pandemic spread to nearly every part of the world. It was caused by an unusually severe and deadly Influenza A virus strain of subtype H1N1. Historical and epidemiological data are inadequate to identify the geographic origin of the virus. Many of its victims were healthy young adults, in contrast to most influenza outbreaks which predominantly affect juvenile, elderly, or otherwise weakened patients. The Spanish flu lasted from March 1918 to June 1920, spreading even to the Arctic and remote Pacific islands. It is estimated that anywhere from 20 to 100 million people were killed worldwide, or the approximate equivalent of one third of the population of Europe, more than double the number killed in World War I. So in short it was a very grave situation which took life of 20-100 million people between 1918-20.
We had another unprecedented turmoil that hit the world in 1929. It's better known as The Great Depression. It was a worldwide economic downturn starting in most places in 1929 and ending at different times in the 1930s or early 1940s for different countries. It was the largest and most important economic depression in modern history, and is used in the 21st century as a benchmark in how far the world's economy can fall. The Great Depression originated in the United States; historians most often use as a starting date the stock market crash on October 29, 1929, known as Black Tuesday. The depression had devastating effects both in the developed and developing world. International trade was deeply affected, as were personal incomes, tax revenues, prices, and profits. Cities all around the world were hit hard, especially those dependent on heavy industry. Construction was virtually halted in many countries. Farming and rural areas suffered as crop prices fell by 40 to 60 percent. Facing plummeting demand with few alternate sources of jobs, areas dependent on primary sector industries such as farming, mining and logging suffered the most.
Now, I have a parallel to Spanish flu. Avian influenza, sometimes Avian flu, and commonly Bird flu refers to "influenza caused by viruses adapted to birds." Recent influenza research into the genes of the Spanish Flu virus shows it to have genes adapted to both birds and humans; with more of its genes from birds than less deadly later pandemic strains. Between year 2003 to 2008, 385 cases of Bird flu were reported in the world which took 243 human lives. It is not even 0.001215% of the total human lives lost by Spanish Flu (here I took total 20 Mn casualties and not higher number of 10 Mn by Spanish Flu). This is even more important considering the fact that genetic analysis of the H5N1 virus (bird flu) shows that influenza pandemic from its genetic offspring can easily be far more lethal than the Spanish Flu pandemic.
So why the number of casualties were far less than Spanish flu? The reason is only one. The world is much better connected than it was in 1918. Today the globally connected economy responds and communicates much faster, better and effectively. The coordinated efforts of various governments, health groups, NGOs, WHO etc have helped to successfully face this challenge posed by Bird flu.
In the similar way, the world is in a much better position to face the unprecedented financial situation today than it was in 1929. I believe that the world market is going to come out of this situation within 6-9 months period with the coordinated efforts of all the governments world over. The media is going to blow things out of proportion and a panic like situation is going to get created which will benefit only those who control their nerves.
These were my two pence worth. You may share your thoughts/opinion directly on the blog or write to me at niteen.dharmawat@gmail.com
Cheers,
Niteen S Dharmawat
http://dharmawat.blogspot.com/
IMPORTANT DISCLAIMER: Investment in equity shares has its own risks. Sincere efforts have been made to present the right investment perspective. The information contained herein is based on analysis and up on sources that we consider reliable. I, however, do not vouch for the accuracy or the completeness thereof. This material is for personal information and I am not responsible for any loss incurred based upon it & take no responsibility whatsoever for any financial profits or loss which may arise from the recommendations above.
The example is of Spanish flu which hit the world sometime in 1918. This influenza pandemic spread to nearly every part of the world. It was caused by an unusually severe and deadly Influenza A virus strain of subtype H1N1. Historical and epidemiological data are inadequate to identify the geographic origin of the virus. Many of its victims were healthy young adults, in contrast to most influenza outbreaks which predominantly affect juvenile, elderly, or otherwise weakened patients. The Spanish flu lasted from March 1918 to June 1920, spreading even to the Arctic and remote Pacific islands. It is estimated that anywhere from 20 to 100 million people were killed worldwide, or the approximate equivalent of one third of the population of Europe, more than double the number killed in World War I. So in short it was a very grave situation which took life of 20-100 million people between 1918-20.
We had another unprecedented turmoil that hit the world in 1929. It's better known as The Great Depression. It was a worldwide economic downturn starting in most places in 1929 and ending at different times in the 1930s or early 1940s for different countries. It was the largest and most important economic depression in modern history, and is used in the 21st century as a benchmark in how far the world's economy can fall. The Great Depression originated in the United States; historians most often use as a starting date the stock market crash on October 29, 1929, known as Black Tuesday. The depression had devastating effects both in the developed and developing world. International trade was deeply affected, as were personal incomes, tax revenues, prices, and profits. Cities all around the world were hit hard, especially those dependent on heavy industry. Construction was virtually halted in many countries. Farming and rural areas suffered as crop prices fell by 40 to 60 percent. Facing plummeting demand with few alternate sources of jobs, areas dependent on primary sector industries such as farming, mining and logging suffered the most.
Now, I have a parallel to Spanish flu. Avian influenza, sometimes Avian flu, and commonly Bird flu refers to "influenza caused by viruses adapted to birds." Recent influenza research into the genes of the Spanish Flu virus shows it to have genes adapted to both birds and humans; with more of its genes from birds than less deadly later pandemic strains. Between year 2003 to 2008, 385 cases of Bird flu were reported in the world which took 243 human lives. It is not even 0.001215% of the total human lives lost by Spanish Flu (here I took total 20 Mn casualties and not higher number of 10 Mn by Spanish Flu). This is even more important considering the fact that genetic analysis of the H5N1 virus (bird flu) shows that influenza pandemic from its genetic offspring can easily be far more lethal than the Spanish Flu pandemic.
So why the number of casualties were far less than Spanish flu? The reason is only one. The world is much better connected than it was in 1918. Today the globally connected economy responds and communicates much faster, better and effectively. The coordinated efforts of various governments, health groups, NGOs, WHO etc have helped to successfully face this challenge posed by Bird flu.
In the similar way, the world is in a much better position to face the unprecedented financial situation today than it was in 1929. I believe that the world market is going to come out of this situation within 6-9 months period with the coordinated efforts of all the governments world over. The media is going to blow things out of proportion and a panic like situation is going to get created which will benefit only those who control their nerves.
These were my two pence worth. You may share your thoughts/opinion directly on the blog or write to me at niteen.dharmawat@gmail.com
Cheers,
Niteen S Dharmawat
http://dharmawat.blogspot.com/
IMPORTANT DISCLAIMER: Investment in equity shares has its own risks. Sincere efforts have been made to present the right investment perspective. The information contained herein is based on analysis and up on sources that we consider reliable. I, however, do not vouch for the accuracy or the completeness thereof. This material is for personal information and I am not responsible for any loss incurred based upon it & take no responsibility whatsoever for any financial profits or loss which may arise from the recommendations above.
Monday, October 13, 2008
Rupee dollar equation & market updates
If you were holding the previous dollars which you might have earned during your onsite engagement/earned thru' exports of services and products then the time has come to book the dollars now. One can now start converting those dollars into the Indian currency.
The collective efforts taken by various governments across the globe will have its impact visible in next 6-9 months. It is the same as dollar rupee equation. I wrote about the change in the direction based on the crude prices which were moving north and the impact on the dollar was visible in 2-3 quarters. The mad rush to get dollars so that one can buy crude had its impact on all the currencies worldwide. All the currencies depreciated against dollar. A parallel can be drawn when interest rates in India were increased to control the inflation. This had to impact the liquidity and thus the growth of the economy. The impact took almost 9 months and now we have dismal industrial production numbers. This was surely expected. We can't expect better industrial and manufacturing numbers in next quarter also. The impact of interest rate hike will still be haunting the companies, how? The companies were finding hard to get loan for expansion, or if they had taken the loan then they had to pay higher interest amount in their 'EMIs'. So all the calculation had gone for a toss. Now when the RBI in India and other regulators world-over had reduced the interest rates then a similar impact will be visible in terms of more stability by way of fresh liquidity in the world market. But it will take some time, may be 6-9 months.
As mentioned earlier also, one can go for stagger investments in the market and look for the best value and margin of safety. One can start injecting the money by investing 10-15% of total available money for equity. It is the discount sale which is going on right now. However, on the caution note: one should not have more than 30% of the investible amount in equities and investible amount should be distributed amongst: equity, debt, cash, insurance and real estate.
Cheers,
Niteen S Dharmawat
http://dharmawat.blogspot.com/
IMPORTANT DISCLAIMER: Investment in equity shares has its own risks. Sincere efforts have been made to present the right investment perspective. The information contained herein is based on analysis and up on sources that we consider reliable. I, however, do not vouch for the accuracy or the completeness thereof. This material is for personal information and I am not responsible for any loss incurred based upon it & take no responsibility whatsoever for any financial profits or loss which may arise from the recommendations above.
The collective efforts taken by various governments across the globe will have its impact visible in next 6-9 months. It is the same as dollar rupee equation. I wrote about the change in the direction based on the crude prices which were moving north and the impact on the dollar was visible in 2-3 quarters. The mad rush to get dollars so that one can buy crude had its impact on all the currencies worldwide. All the currencies depreciated against dollar. A parallel can be drawn when interest rates in India were increased to control the inflation. This had to impact the liquidity and thus the growth of the economy. The impact took almost 9 months and now we have dismal industrial production numbers. This was surely expected. We can't expect better industrial and manufacturing numbers in next quarter also. The impact of interest rate hike will still be haunting the companies, how? The companies were finding hard to get loan for expansion, or if they had taken the loan then they had to pay higher interest amount in their 'EMIs'. So all the calculation had gone for a toss. Now when the RBI in India and other regulators world-over had reduced the interest rates then a similar impact will be visible in terms of more stability by way of fresh liquidity in the world market. But it will take some time, may be 6-9 months.
As mentioned earlier also, one can go for stagger investments in the market and look for the best value and margin of safety. One can start injecting the money by investing 10-15% of total available money for equity. It is the discount sale which is going on right now. However, on the caution note: one should not have more than 30% of the investible amount in equities and investible amount should be distributed amongst: equity, debt, cash, insurance and real estate.
Cheers,
Niteen S Dharmawat
http://dharmawat.blogspot.com/
IMPORTANT DISCLAIMER: Investment in equity shares has its own risks. Sincere efforts have been made to present the right investment perspective. The information contained herein is based on analysis and up on sources that we consider reliable. I, however, do not vouch for the accuracy or the completeness thereof. This material is for personal information and I am not responsible for any loss incurred based upon it & take no responsibility whatsoever for any financial profits or loss which may arise from the recommendations above.
Wednesday, October 8, 2008
Market Updates and course of action
Only 3 weeks ago, to be precise Sep 21 2008, there were not many takers of my call that market may meltdown to a level of 9000, please see the posting 'Reliance Industries Update' on the blog. But today when you see that the market - mostly paper wealth - getting chopped like pack of cards there are many who come to agree with this view. It's a common human tendency that we want status quo or if the change is expected then it should/will not hurt me and my financial goals in any of the way. The human tendency which is common amongst everyone is nothing but greed.
The market is not the only entity which is getting chopped off. The after effect, as anticipated, is further erosion of INR. The INR is now at 48.60-48.75 and coming close to 50. I may sound a dooms sayer here but the things are not very rosy and in fact things are slipping out of the hands of country like India. We did not require the outsiders to make mess out of our system. We should also be equally blamed. We have pursued populist policies including loan waiver schemes of the farmers, pay commission recommendation, not taking action while world-wide crude prices were witnessing a sharp rise etc. These all have a serious impact on the overall health of fiscal (deficit) and is going to impact INR, Inflation everything, stock market. The markets are a just reflection of the policies pursued world-over in a globally connected economy.
Now what's next if markets continue to melt like an active volcano erupts and engulfs anything and anyone that comes in the way? Invest in the quality stocks which are offering value for money, how to look for one? Simple, to find a multi-bagger stock or a stock which has intrinsic value please follow following simple rules:
- Single digit P/E
- 3-4% yield
- PEG (PE Growth ratio) is less than one
- No Debts OR Very Low Debts compared to equity
- Management buying the stock
- Always remember, when in doubt, stick to quality. Never speculate...
Cheers,
Niteen S Dharmawat
Mobile: +91-9850571857
http://dharmawat.blogspot.com/
IMPORTANT DISCLAIMER: Investment in equity shares has its own risks. Sincere efforts have been made to present the right investment perspective. The information contained herein is based on analysis and up on sources that we consider reliable. I, however, do not vouch for the accuracy or the completeness thereof. This material is for personal information and I am not responsible for any loss incurred based upon it & take no responsibility whatsoever for any financial profits or loss which may arise from the recommendations above.
On Mon, Sep 22, 2008 at 1:12 PM, Niteen S Dharmawat wrote:
Please read this using the following link:
http://dharmawat.blogspot.com/2008/09/reliance-industries-update.html
Reliance Industries - Update
Reliance Industries is one my favorites. Some of you would recall that I have been recommending this stock from Rs 520 onwards when the feud between two warring brothers were on the street and media was opening fresh can of warms on a daily basis by flashing new breaking stories released by 'good sources' of warring brothers. The entire market during that time was in upswing while RIL stock was butchered to the extend that it became an untouchable stock. Later they reached a settlement and problem got resolved leading to unlocking huge value which I was talking about in my mails. The RIL stockholders were the biggest beneficiaries. They got shares in four companies free of cost. Today RIL is at 2100+ levels and the free stocks (RComm, RNRL, Reliance Energy etc) are doing equally good. This is a return of almost 6 times from the original recommendation.
Now what should we do with the stock with yesterday's 'big' announcement by Mukesh Ambani. One of the conclusions that we can draw is that the company is in a great shape to go to the new levels which means un-parallel growth and solid wealth creation for the shareholders. If you are holding the stock from 520 levels onward (and various other levels when it was re-recommended) then please continue to hold it. This single stock may help you plan your retirement, I am talking about real long term investment!!!
But if you want to buy more then is it the right time to enter in the stock? Should we really want to time the market or intrinsic value offered by the company is more important? The value offered by the company is, as I said earlier, going in the trajectory of un-parallel growth which will be realized over a period of 2-3 years. But the value offered by the market is something under question. So would advice immense caution while making any fresh exposure in the market. Let opportunities go but we should not loss our investment - should be the philosophy of the investment. I am of the opinion that market may come down to 9000 levels due to various reasons, discussed in earlier posting, over a period of next 6 months and that will be an amazing opportunity for investment. However, one can start investing from a level below 12000 thru' a stagger investment mechanism. If you have any questions, then please do write to me or post your comments on blog itself.
IMPORTANT DISCLAIMER: Investment in equity shares has its own risks. Sincere efforts have been made to present the right investment perspective. The information contained herein is based on analysis and up on sources that we consider reliable. I, however, do not vouch for the accuracy or the completeness thereof. This material is for personal information and I am not responsible for any loss incurred based upon it & take no responsibility whatsoever for any financial profits or loss which may arise from the recommendations above.
Cheers,
Niteen S Dharmawat
Mobile: +91-9850571857
http://dharmawat.blogspot.com/
IMPORTANT DISCLAIMER: Investment in equity shares has its own risks. Sincere efforts have been made to present the right investment perspective. The information contained herein is based on analysis and up on sources that we consider reliable. I, however, do not vouch for the accuracy or the completeness thereof. This material is for personal information and I am not responsible for any loss incurred based upon it & take no responsibility whatsoever for any financial profits or loss which may arise from the recommendations above.
The market is not the only entity which is getting chopped off. The after effect, as anticipated, is further erosion of INR. The INR is now at 48.60-48.75 and coming close to 50. I may sound a dooms sayer here but the things are not very rosy and in fact things are slipping out of the hands of country like India. We did not require the outsiders to make mess out of our system. We should also be equally blamed. We have pursued populist policies including loan waiver schemes of the farmers, pay commission recommendation, not taking action while world-wide crude prices were witnessing a sharp rise etc. These all have a serious impact on the overall health of fiscal (deficit) and is going to impact INR, Inflation everything, stock market. The markets are a just reflection of the policies pursued world-over in a globally connected economy.
Now what's next if markets continue to melt like an active volcano erupts and engulfs anything and anyone that comes in the way? Invest in the quality stocks which are offering value for money, how to look for one? Simple, to find a multi-bagger stock or a stock which has intrinsic value please follow following simple rules:
- Single digit P/E
- 3-4% yield
- PEG (PE Growth ratio) is less than one
- No Debts OR Very Low Debts compared to equity
- Management buying the stock
- Always remember, when in doubt, stick to quality. Never speculate...
Cheers,
Niteen S Dharmawat
Mobile: +91-9850571857
http://dharmawat.blogspot.com/
IMPORTANT DISCLAIMER: Investment in equity shares has its own risks. Sincere efforts have been made to present the right investment perspective. The information contained herein is based on analysis and up on sources that we consider reliable. I, however, do not vouch for the accuracy or the completeness thereof. This material is for personal information and I am not responsible for any loss incurred based upon it & take no responsibility whatsoever for any financial profits or loss which may arise from the recommendations above.
On Mon, Sep 22, 2008 at 1:12 PM, Niteen S Dharmawat
Please read this using the following link:
http://dharmawat.blogspot.com/2008/09/reliance-industries-update.html
Reliance Industries - Update
Reliance Industries is one my favorites. Some of you would recall that I have been recommending this stock from Rs 520 onwards when the feud between two warring brothers were on the street and media was opening fresh can of warms on a daily basis by flashing new breaking stories released by 'good sources' of warring brothers. The entire market during that time was in upswing while RIL stock was butchered to the extend that it became an untouchable stock. Later they reached a settlement and problem got resolved leading to unlocking huge value which I was talking about in my mails. The RIL stockholders were the biggest beneficiaries. They got shares in four companies free of cost. Today RIL is at 2100+ levels and the free stocks (RComm, RNRL, Reliance Energy etc) are doing equally good. This is a return of almost 6 times from the original recommendation.
Now what should we do with the stock with yesterday's 'big' announcement by Mukesh Ambani. One of the conclusions that we can draw is that the company is in a great shape to go to the new levels which means un-parallel growth and solid wealth creation for the shareholders. If you are holding the stock from 520 levels onward (and various other levels when it was re-recommended) then please continue to hold it. This single stock may help you plan your retirement, I am talking about real long term investment!!!
But if you want to buy more then is it the right time to enter in the stock? Should we really want to time the market or intrinsic value offered by the company is more important? The value offered by the company is, as I said earlier, going in the trajectory of un-parallel growth which will be realized over a period of 2-3 years. But the value offered by the market is something under question. So would advice immense caution while making any fresh exposure in the market. Let opportunities go but we should not loss our investment - should be the philosophy of the investment. I am of the opinion that market may come down to 9000 levels due to various reasons, discussed in earlier posting, over a period of next 6 months and that will be an amazing opportunity for investment. However, one can start investing from a level below 12000 thru' a stagger investment mechanism. If you have any questions, then please do write to me or post your comments on blog itself.
IMPORTANT DISCLAIMER: Investment in equity shares has its own risks. Sincere efforts have been made to present the right investment perspective. The information contained herein is based on analysis and up on sources that we consider reliable. I, however, do not vouch for the accuracy or the completeness thereof. This material is for personal information and I am not responsible for any loss incurred based upon it & take no responsibility whatsoever for any financial profits or loss which may arise from the recommendations above.
Cheers,
Niteen S Dharmawat
Mobile: +91-9850571857
http://dharmawat.blogspot.com/
IMPORTANT DISCLAIMER: Investment in equity shares has its own risks. Sincere efforts have been made to present the right investment perspective. The information contained herein is based on analysis and up on sources that we consider reliable. I, however, do not vouch for the accuracy or the completeness thereof. This material is for personal information and I am not responsible for any loss incurred based upon it & take no responsibility whatsoever for any financial profits or loss which may arise from the recommendations above.
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