Dead End for Poor Quality Stocks, Speculators may be wiped out ,Hide behind Quality for Recovery

Discussion in 'Ask A Query About Your Stock Picks And Portfolio' started by kharb, Jan 7, 2016.

  1. kharb

    kharb Well-Known Member

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    World over Equity markets were booming on cheap and borrowed money.It seems that process of contraction is knocking on door.Unfortunately many of small investers has been draged in unknown poor quality micro,small and mid cap stocks by manupulatrs and speculators .Such has been froth that speculators in chiefs have been made new Stock Market Heros and Quality Pickers has been reduced as jokers .But now I am afraid ,Sun is finally setting for speculators. Small investers who are busy speculating in name of investing under motivations from speculators in chiefs, may face rough time if they did not change their gear towards quality even now.But those who are investing in strong quality blue chips or fundamentaly strong stocks even down the order may further buy on down trend if they have still some cash, for a sure recovery in long run ,which always happens.But for speculators and their blind followers ,I am afraid ,dead end is in sight.This thread is just for discussion.Happy investing,Stay with QUALITY.Sun never set for Quality .
     
    Last edited: Jan 7, 2016
  2. stockWisdom

    stockWisdom Member

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    Dear kharb,
    You are right in some sense, actually the secular party in Mid and Small cap stocks have come to an end, but the stock specific story is still intact. So only BLUE chips are not the solution of a balanced portfolio.

    Look at the stocks in Mid/Small caps which are based on Indian internal consumption theme. I am bullish on PVR, Godrej Cons, SRS Ltd, Tata Global Bev, Emami, Castrol, Pincon Spirits.........and the list goes on.

    Share price is a function of the underlying company's profit; in these stocks there is nothing to do with China. Pay commission and a good monsoon can lift these stocks.

    I am also looking to some stocks which are in pressure now -

    Tata Motor
    SBI
    Axis bank
    United Spirits
    DCB Bank

    Today I have bought Tata Motor(D), Axis Bank, Dish TV, SRS ltd in small volume.


    Except Metals and Oil exploration stocks, Financials, Auto, Consumer, Paints, Retail sector may do well in coming ONE year.

    Regards.
     
  3. kharb

    kharb Well-Known Member

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    Totaly agreed ,as Thread Headline itself indicates focuss is on Quality.QUALITY even if mantained with mid or small cap stocks is a good idea ,if you have ability to analysis.But for speculators it is easy to fool public with small and Unkown names presented with cooked stories as future growth story.More over known and proven fundamentaly good stocks are available at reasonable price,so why not to do slow bargain hunting there by avoiding speculative stories.
     
    Last edited: Jan 7, 2016
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  4. Srouta Mukherjee

    Srouta Mukherjee Well-Known Member

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    Quality always wins is my belief since long time that is why I always advice against junk stocks. New investor get attracted to junk stock and burn fingers badly in crises situation like present one where there are no buyers for junk stocks. I also learned lesson hard way :)
     
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  5. Parin Gala

    Parin Gala A long term investor

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    Some good quality midcap stocks which can be good bets to buy at current levels are-

    Pantaloon Fashion and Retail Ltd
    Heritage Foods
    Repro India
    Tata Global Beverages
    Dish TV India
    Sudarshan Chemicals
    Capital First
    Praj Industries
    NIIT Ltd
    Shemaroo Entertainment
    Wonderla Holidays

    The current dip in the market can be used to accumulate good quality stocks at bargain prices. I think these stocks can do well in the next couple of years.
     
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  6. Srouta Mukherjee

    Srouta Mukherjee Well-Known Member

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    Why there are no Pharma stocks even though they are best performers since long time. I think stocks like JB Chem, Ajanta, Shilpa can be added as basket (FDA risk). Stocks like Heritage, Repro, CAPF are also 100% safe stock in long term. There are many blue chip midcaps stocks that should be bought in current crises situation IMHO by way of SIP.
     
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  7. Parin Gala

    Parin Gala A long term investor

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    Yes sir you are right. But the FDA risk is increasing with many companies given warning letters. I personally like JB Chem, Cadila, Torrent Pharma, Shilpa, Biocon from the pharma and research pack.
     
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  8. bullinindia

    bullinindia New Member

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    Good thread. Death knell is sounding for companies with dubious fundamentals touted as next big story and recommended by online forums. If you observe, many small caps doubled, tripled in the last 2-3 months just because of some recommendations. Quality small/mid caps will survive.

    Many small caps are available at very high valuations and even quality mid caps and large caps are trading below those valuations. Time for a switch is what I believe strongly.

    For example, why would I buy an illiquid small cap company at 20 times FY17 PE when I can get say a Repco home finance with visible 30% growth for the next few years and high management pedigree at 25 times FY17 PE?

    Disclosure: I hold Repco home finance and it was just an example I quoted.
     
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  9. Srouta Mukherjee

    Srouta Mukherjee Well-Known Member

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    This is very good point.
     
  10. asharan83

    asharan83 New Member

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    How about Lupin.Since march it has not given good returns but it has no FDA issues as of now,strong pipeline. Most of the approvals are pending since 2013 and will have to be cleared soon by US FDA because they also have a deadline.Its acquisitions (because of which the stock took some beating) are also supposed to start contributing to EPS from next quarter onwards.
    I personally have Lupin,Torrent, Natco, Aurobindo in my portfolio
     
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  11. Parin Gala

    Parin Gala A long term investor

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    Not very bullish on Lupin. Not too sure how much and when its acquisitions will start contributing. Also not too sure about what will be the exact fate of its pending approvals. But that's just my personal thinking. May be wrong.
     
  12. kharb

    kharb Well-Known Member

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    Sucker's Rally Under Progress in poor quality small and mid cap unknown illiquid stocks.Sucker's Rally is A Big Rally Minus Fundamentals .,Only basis Money Pumped ,Stock Jumped.After that money supply dries,stock dies.Operators will now try to come out silently and poor small investers will be left with duds in their portfolio, never to recover and they blaming stock market as Satta Bazar ,never to return back.Hide Behind Quality,time is running out.Fundamentaly strong quality stocks are available at reasonable price.After End of Sucker's Rally,who knows HEROS and King of Speculative Times may turns into VILLAINS .History Repeats but unfortunately in stock market only few learns .
     
    Last edited: Jan 11, 2016
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  13. San8422

    San8422 Active Member

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    When a share goes up jackpot kings shout money rain but are silent when the same share gets a beating the next day. Also there are some ace manipulators very active in the market. But they have taken so much precautions that they will never get caught. Only retailers will suffer. Just read the MMB forums. People who invested in duds have lost huge amounts while the Father and Mother of Duds have disappeared.
     
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  14. Kris

    Kris New Member

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    Dear Sirs,
    What is your opinions on Granules, Lincoln, SMS Pharma - whether we could add on the above lists?
    Regards
    Krishnan
     
  15. Srouta Mukherjee

    Srouta Mukherjee Well-Known Member

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    Sir who you are referring to? All my good quality stocks are also deep down like TCI, Gati, JB, Granules, TV Today, Pokarna etc. I am in big loss sir even in good quality stocks :( It is very ugly and sad situation for me because there is also no money for buying stocks now to average cost.
     
  16. kharb

    kharb Well-Known Member

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    Dear Saouta Mukherjea .These stocks might have been become over priced under the the over use of words like GST or E commerce or in Name of future 100 x study by big market players..Pl look into historic prices and PE multiples enjoyed by the concerned Compnies for fair value estimation .Any way prices will always follow fundamental in long run .I have also stocks which has corrected but still I think none has reached to under priced level..From my portfolio ICICI bank ,Axis bank and L& T has corrected.I am just waiting for dust to settle for some buying in these to play recovery.Rest of my Portfolio is showing resilience to my surprise led by Reliance , Infy ,Asian paints ,HDFC bank ,Kotak,Indusind bank,HUL,Lupin and many more etc. I still don't mind some correction in these stocks in company of market.But I have full faith in my Portfolio . Three big beaten down of my Portfolio ICICI bank ,Axis bank and L&T may actually turn out to be my winner in future gain at the time of Recovery,as I may go for bargain hunting of these if further corrects 10% more at the time of third quarter results.
     
    Last edited: Jan 15, 2016
  17. San8422

    San8422 Active Member

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    Speculator shares have lost more. See performance of morepen and saksoft in last 5 days. These stocks were favorite of ace manipulators and MMB platinum and gold boarders. At least quality shares will recover. What about poor quality stocks?
     
  18. Farhan Ghumra

    Farhan Ghumra Active Member

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    "Bull markets are born on pessimism, grow on skepticism, mature on optimism and die on euphoria."

    - Sir John Templeton
     
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  19. darth

    darth Active Member

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    knowing where they are (lapping in luxury) will only add to the pain felt by their many followers.

    In this, small investors ( where greed is a hallmark) should share the blame too
     
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  20. kharb

    kharb Well-Known Member

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    I just heard Porinju saying on tv that mid cap stocks pain to remain, as many stocks has multiplied many times without any change in fundamentals.Great analysis and words of wisdom by Porinju .....But I am confused.Now big question is ,Who was Recommeding these duds till two weeks ago and guiding small investers to Unkown, poor quality ,illiquid stocks.?Can members help me....to find out ????
     
    Last edited: Jan 20, 2016
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