How to make money for all you dumbos..

Discussion in 'Ask A Query About Your Stock Picks And Portfolio' started by Gaithonde, Dec 27, 2018.

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Who is interested in learning and making money?

  1. Yes I'm

    66.7%
  2. No I want to lose money in junk and try and make 10x in 2 years

    33.3%
  1. Gaithonde

    Gaithonde Member

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    hi all,

    I'm gaithonde. I had started investing in college. I started with 35Lakhs loan from a relative.

    I had bought companies like La opala, Cera, Wimplast, bajaj finance etc in 2014 times. Markets were so cheap you could buy anything. Ive had so many multibaggers including a mega 10x plus in Bajaj Finance.

    Over time around 2017 beginning I was worth around 1.8cr in 3 years. I got very lucky to have joined the market in 2014 and managed to snag some great franchises really cheap.

    Seeing valuations in 2017 I got very very scared because I came from a place where V guard traded at single digit PE. So I moved to 100% by 2017 october and held onto liquid funds until 2 months back. Using the interest from liquid funds and taking some cash out I paid back the loan.

    I graduated in 2016. I found things very different. I had classmates searching for jobs and attending campus interviews while I was sitting on nearly 2cr net worth. I then decided to pursue other things and started working at a high end chinese restaurant and made momos there. I had left last month due to fighting with my boss as she wanted to buy cheaper ingredients, I found that wrong.

    Anyway I have been slowly deploying. I will reveal my PF to everybody if interested. I dont look at 10x in 2 years kind of ideas. I never have, I bet on solid companies and got lucky by buying them very very cheap.

    I'm here to teach everyone to be better investors, focus on things that matter and forget all the noise and junk that most seem to buy.

    I understand that almost all here will not be smart enough to invest on their own. Most on this forum lack even the most basic knowledge when it comes to investing in the markets. I will try and help all of you as much as possible but I need to see some genuine interest in making LONG term returns and not not 3 years 10x returns. By long term I mean atleast 5-10 years.

    Let me know if you all are interested.
     
  2. D.Ravichandran

    D.Ravichandran New Member

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    I am interested. please guide for long term investing. Thanks.
     
  3. marrakesh

    marrakesh New Member

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    A scam is brewing!
     
  4. Gaithonde

    Gaithonde Member

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    Hello friends,

    As per popular request. I have decided to slowly begin educating you all on how to build wealth through investing.

    1) What is the objective of your investment journey?

    Do you want to build wealth or trade in and out? Do you want to compound at a realistic rate or make 10x in 3 years? I think you all need to use your brains and start being realistic. NONE of you will make more than 7-9% cagr over a decade long period with your investing styles. Doing prima facie research based on brokerage reports and a skim of a few articles and the AR. Making so called "contra" bets and losing capital. Please figure out what you want first. And be realistic.

    Here are my opinions on how to achieve various return rates for all of you.

    anyone who wants 25-30% cagr over a decade long period, please dont invest in the stock market, go to goa and gamble.

    anyone who wants 18-20% cagr over a decade, you better have the knowledge & the temparament of a superior investor. Which Im sure NONE of you have or will ever have for that matter.

    anyone who wants 15-18% cagr over a decade, yes it is highly possible.

    anyone who wants 12-15% cagr over a decade, yes you can do it with higher probability.

    anyone who wants to make 10-12% cagr over a decade, you can and the kicker is you can do it with a debt component in your portfolio as well.

    Now to give you some perspective (because none of you think properly)

    12% cagr for 10 years is 3.11x and for 20 years is 9.65x .

    15% cagr for 10 years is 4.05x and for 20 years is 16.37x.

    18% cagr for 10 years is 5.23x and for 20 years is 27.39x.

    9% cagr (which is what most if not ALL of you forum MEMEbers make over a long period of time) for 10 years is 2.37x and for 20 years is 5.60x.

    Let us focus on the upcoming decade. It is clear that at around 12-15% cagr you will make anywhere between 3.11x-4.05x on a portfolio level.(Since you all wont understand, your entire portfolio will be worth 3.11x-4.05x more after a decade not an individual position. For eg: if you make 10x on a 3% allocation it means absolutely nothing on a portfolio level.)

    So by focussing yourselves and thinking about a decade long investment horizon with a reasonable rate of 12-15% cagr one can make some very very good money on a portfolio level.

    so we have concluded that NONE of you can make that 18-20% cagr over a DECADE long period. So how do we go about making 12-18% cagr over a decade?

    I will give out a method as to how one can hit the upper end of that 12-18% cagr mark. Something that every novice investor with some effort can do.

    I will however do this in my next post. Depending upon the response on this post.

    If no one is interested in a realistic way to building wealth and a realistic return over the next decade then you all can look at yourselves in the mirror and call yourselves IDIOTS. While enjoying the fortune you make trying to bet on turnarounds and the next asian paints. I think those who arent interested will be those who make 4-7% cagr over a decade on their investments! Better go via the FD route...
     
  5. Newbie

    Newbie Member

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    Your modesty is absolutely overwhelming. Kindly enlighten us poor souls.
     
  6. Gaithonde

    Gaithonde Member

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    When you are a self made crorepati at such a young age coupled with knowledge that is leaps and bounds ahead of the ordinary retail investor like yourself. Being modest is not of importance. Instead I should be aggressive and try and teach you all. See you all know nothing, let us be honest..

    You all basically look at some tip, check the PE ratio, read some articles off of popular websites along with the opinions of some "senior" forum MEMEber and make an investment.

    I bet 90% of you do not know how to read a cash flow statement, or its significance. You all probably look at bottom line and top line thats it.

    I bet 90% of you dont uderstand the significance of important metrics like ROCE and ROE and what they mean. What happens to a business when they are high and low. How does this aspect influence the earnings and the cash flow of the business etc:

    I bet 90% of you dont understand the INSIGNIFICANCE of the PE ratio in the long run.

    I bet 90% of you will lose money over a 5-10 year period vis a vis a liquid fund.

    I bet 90% of you dont even understand the basics of the businesses that you buy.

    I bet 90% of you buy consensus trades and then wonder what went wrong!

    I bet 100% of you think that you can outperform a simple MF/nifty50 over a 10 period. In reality 90% of you genius stock pickers will make 4-9% cagr over a 5-10 year period.

    I love how so many of you think you know more than the reputed fund managers and advisory companies. All of you think that they are out to scam you. That is because you all want to make 10x in 3 years and will go and follow stock tip advisories promising you that and get scammed.

    Always remember the stock market is the transfer of wealth from the impatient to the patient. As Warrent Buffet says.

    If you all are really interested I can begin imparting my knowledge and strategies upon you. Else I have no issues I will make my money while you all lose your shirts, sleep, health and money.
     
  7. Gaithonde

    Gaithonde Member

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    The concept I will be explaining a few concepts. They matter alot more than you think. I will also be starting to debunk the PE myth with the next post. I will also give out an actionable investment idea/investment avenue for you all to use your new learnings and invest for the long term. Stay tuned.
     
    Mr Yogi likes this.
  8. Mr Yogi

    Mr Yogi Member

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    Hello...eagerly awaiting your posts and promised knowledge and enlightenment.. by the way do you run any advisory service or conduct some workshops on investments? Would also request you to share link to any articles that you may have authored in any investment magazine or journal.
     
  9. Gaithonde

    Gaithonde Member

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    Hi Mr Yogi, No I dont run an advisory. I will not share any link of anything.do your own due diligence and research. I'm not here to spoon feed you. Merely to drill some sense into your heads so that you all can atleast get on the right path and compound at a decent rate. Yes will post this week.
     
  10. Newbie

    Newbie Member

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    Chap is going from strength to strength. LOL :) I'll just pop some corn and watch the show.
     
  11. Gaithonde

    Gaithonde Member

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    Yes fools! Shoot! Ask me your questions.. It can be anything. I will answer even stock specific questions or general questions on investing! You all will become far better investors by listening to me. I will try and help you all! Im too lazy to type out the strategies. Im sure they will come out slowly as the thread builds out.. IF you guys dont want to ask then dont. I really dont care! One thing is for sure you all could use my feedback and advice. Awaiting the questions but not looking forward to them... have a nice day fools and be happy with your 4-7% cagr returns in the equity asset class..
     
  12. ssgeethan

    ssgeethan Member

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    Knowledge without character is dangerous ... Give respect and take respect
     
    Feroz likes this.
  13. Gaithonde

    Gaithonde Member

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    Mr. Geetha What is dangerous is investing in the markets with no knowledge, like you must be doing. What is dangerous is thinking that you know how to invest when in reality you are among the stupidest in terms of knowledge of the subject. That is dangerous, I suggest that you get out of direct equity for your own safety. I think for you, considering your age and stupidity. I would go with 50% in FD, 25% in Liquid MF and 25% in long term debt funds.
     
  14. Gaithonde

    Gaithonde Member

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    If you all have any relevant questions regarding investing and PFs and even individual stocks. I will answer and I'm fairly certain that you will be enlightened by my response. When it comes to direct stocks please post a short brief with your rationale so that I will be able to understand your thought process and thesis and then give a response/view
     
  15. Jigyasoo

    Jigyasoo New Member

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    My major investments of equities are Federal bank (25%), ITC (15%), Reliance (15%), KEC international (10%) Ashok Leyland (15%), Motherson Sumi (10%), NBCC (10%), I m investing slowly for last 3 years. I booked some profit in delta corp/avenue supermart and lost in Navkar Corporation and Tata motors..What type of return I could expect in next 10 years if i hold tight...Any stocks that I could add in my portfolio
     
  16. Gaithonde

    Gaithonde Member

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    Jiggy,
    I think these banks will do very well over the next 3-4 years. Their provisions have peaked out and will normalise going forward. This will flow straight to the bottom line. Metrics will shoot back up (ROE, ROA). Now you should know that these banks have been growing advances over the last few years inspite of aggressive provisioning. So here we get a combination of earnings growth and re-rating. I see good money being made on this theme. Another kicker is the fact that NBFCs cant lend as aggresively, these solid CASA banks will be able to capture market share. There is also a capex revival on the cards and this will be beneficial to these banks. From FY20 you should see normalised provisions and an uptick in the bottom along with a gradual re-rating in the metrics. FY19 will still be slow however. Pretty much most banks apart from HDFC and Kotak I would say fit this theme.
    This would include banks like federal bank, Karur Vysya bank, axis bank, icici bank etc: Seems like you have chosen federal, I doubt that you have done any research on anything but hope this helps.

    ITC I think will do well going forward. Its a solid company with great free cash from its cigarette business. Valuations are alright as well. I think their FMCG business has hit critical mass. We should it contributing to EBITDA and this will trigger a re-rating. I think the stock will move in line with earnings growth. Treat the non cigarette business as an optionality, at these valuations you are paying only for the cigarette business in my view. So that is good. Let them keep investing the cash from the cigarette business into new verticals, that is only good in the long run. They pay out a decent dividend as well which will only go up as the fmcg business matures and starts contributing to the bottom line. I think you will do well on this investment. This is a company you can research on your own, so please do so instead of simply buying them because they trade at a discount to HUL. They should trade at a discount due to the cigarette business and the not so profitable fmcg business. So if that is your rationale behind buying ITC please do some more due diligence.

    RIL is a play on jio I assume. I dont think anyone is going to argue against jio. Please do look into how much of an impact jio can make to RILs bottom line. I think they will do well. They are just coming off of a major capex and that should bear fruit going forward. Please check on this capex Im not sure. Oh ya I forget you probably had no idea anyway! Whatever... RIL should do well and grow earnings at a healthy rate over the next few years and as jio and the consumer business mature, you could see some solid upside. But treat that as an optionality. Focus your thesis on the refining business as we really do not know his plans with regards to JIO becoming profitable. He might just stay in expansion and growth mode for a long time. I feel like he will demerge the jio and consumer business at some point in the future and that will trigger a re-rating for those businesses.

    Ashok Leyland and Motherson sumi I dont quite like. But I have nothing to say on them. You will have to include your rationale on them as I have stated before. So Please do so.

    NBCC again I need your rationale.

    Im not an advisor so take this as a disclaimer and hence I cannot tell you which stocks to add.

    I can however give you views on your theses and stocks. I would say look at the whole capex cycle as a theme, capital and industrial goods like cement etc: manufacturing.

    Im not a fortune teller I cant give you a return prediction over 10 years. But if you underperform the index then that is a massive massive shame on you. Your family will also be very ashamed of you..

    Not an advisor all views are personal and please do not act on them.
     
  17. Jigyasoo

    Jigyasoo New Member

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    My dear Gaithonde,

    I appreciate your time for writing such a detail reply....

    ITC and Reliance I bought for the same reason as explained by you.

    My way of stock picking is not very technical because of limitation of my knowledge but I try to do my best with my capability....I am of the opinion that if Indian economy has to grow at the same pace, banks have to do good...out of all the options, I opted Federal not HDFC because I am convinced that it will be futures HDFC....I first bought it before last bonus and is still accumulating...

    On Motherson: I like their management, their diversified portfolio and their 3Cx15 concept, their order book condition and recently integration of PKC

    One more thing which I consider on picking a stock is my own experience on the quality of the product/service of the company, (I like axis bank in that regard and HDFC is worst) and base on the same I am very sure that % share of AL in M&HCV,& LCV will be more in future and the money invested by government in roads and the consumption based growth of economy of india will increase the volumes substantially. your two comments "Let them keep investing the cash from the cigarette business into new verticals, that is only good in the long run." about ITC and "Please do look into how much of an impact jio can make to RILs bottom line" about reliance were really helpful. Kindly include more part of your wisdom in the replies and make others feel that they are fools. Families don’t feel ashamed on not beating the Index. You were very lucky that on the borrowed money (on entering the college) you could make big money (bajaj finance was definitely a good pick in 2014) when I am very much sure were not as knowledgeable about market as you are today (as you self claim). I wish you luck to become Rakesh Jhunjhunwala of future and let your success speak by itself.

    One more thing I would like to understand from you and other members also, is about right time for quitting the stock. I could do that at some times (mainly based on wrong outlook on the sector and exceptionally high P/E of stock w.r.t. industry), but many time I missed also like NBCC, please educate me on it.


    Regards

    Jigyasoo
     
    Last edited: Jan 14, 2019
  18. Jigyasoo

    Jigyasoo New Member

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    Your views on Asian Paint?
    Rationale: Market leader, They can sell the same products without much RnD (just by changing the name) for next 50 years and every building need painting after some time. Cruid prize could be the only problem in future, but could be solved by prize hike up to some extent, which was done by them when recently it went up. They are working aggressively on penetration in rural area and on providing the complete painting solution. With expansion in paints capacity in AP and Karnataka, it is well placed to handle any type of additional demand. My personal opinion is in next few years demand of putty from organized sector will increase as the buildings made in last 5-10 years will require first major repair/paint work (Logic: Most of the flats which are occupied by private sector salaried class don't prefer products of unorganized sector). Vizag plant will come by the end of Q4FY19. Is 15-16% CAGR with an assumption of 10% YOY volume growth for next 10 years will be reasonable? Is it a good candidate for 25-30 years hold?
     
  19. Gaithonde

    Gaithonde Member

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    Jiggy,
    Firstly you do not know if what Im saying is true. If what I have said about my market experience is true. You are going by my word on an internet forum. Never believe anybody on the MMB forum and this forum it is full of dumbos, liars and scamsters. Am I an exception? that is for you to judge.

    Coming to your comment on Federal bank being the next HDFC bank. It is comments like these that make foolish investors. There is no next HDFC bank. HDFC bank is a class apart. HDFC bank has managed to become a structural compounder in a cyclical kind of space. They have through their processes maintained unbelievable control over their underwriting process. Something majority if not all the banks have failed to do. They have also build a solid CASA franchise. Just because you had a shitty experience with HDFC bank doesnt mean it is not among the best companies and wealth creators of our country. In fact what you experienced with the bank... who cares?! who are you?? your experience means absolutely nothing and if thats what makes you evaluate an investment then that is a complete joke.

    Asian paints is among the worlds greatest companies. What they have done is something truly remarkable over the last many decades! gold standard competitors in Berger and Nerolac have not been able to even dent the growth or market share of asian paints. And these are two fantastic companies. They are the leaders and i think they will continue to be for a long long time. I have no doubt on the industries prospects in fact I think the industry will grow in double digits compounded for a long time. Our country has a long way to go in infra and houses. Crude price has not done anything to them. And probably wont. Crude prices over the long long run will only go down. Things like crude price fluctuations etc are meant for those stupid brokerages to give you sell calls. But keep an eye on the valuation. However if you sit put for the next decade you should most likely see good returns. I would personally wait for a dip to buy. This is the time to buy small and mid caps. These safe haven bets are what everyone is buying. But idiots like you and many on this forum must have bought small and mid caps in 2017 and now you all must be buying large caps and paying 80x for gillettes and Nestles. Good luck with that.

    To summarise, dont be a fool and think that Federal bank of all banks will be the so called next HDFC bank. Federal bank is a cyclical play on the NPA cycle. Asian paints is among the best companies in world. Valuations however are a concern. But if you have 5-10 year horizon then paying a fancy price may not hurt you. There could be some time correction for 2-3 years so be prepared for that. It is hard to get an entry into such companies at a fair price. So I guess you just have to look at the historical valuations of the company and buy as and when it hits its lower band of valuations. Another alternative would be to go in for a year long SIP.

    When to exit I dont know. Usually when idiots are paying obscene prices for the stocks. But this is a space where everyone goes wrong. Issue is you and many of these forum memebers dont understand anything about prices, valuations, various metrics etc: None of you even read about the company or why its numbers are like they are. Have you read ITCs annual reports? no. Do you know Federal Banks CASA numbers? no. How can you compare Federal bank to HDFC bank without knowing its CASA numbers?. Do you know Asian paints are among the leaders in terms of R&D in their line of business? no (since above you stated that they dont need R&D and can sell the same product) . Without knowing anything how will you even know when to buy and sell?? If crude hits 100$ you will sell asian paints 100%, your 5-10 year view etc will all be gone with the wind. In reality the crude prices over a long period of time have negligible impact on their operating margins. Take an assumption of 15% operating margin for asian paints and then take a call on earnings growth with your estimates and then take a call.

    25-30 years? have you ever held a stock for more than 5 years?

    Im annoyed now. Consider mutual funds. Dont underperform the index.

    Anything else anyone or jiggy would like to ask, please feel free...
     
  20. Newbie

    Newbie Member

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    Tsk tsk. There's so much we don't know. We are absolutely delighted with your enlightenment, kindly continue educating us.

    Arjun, did you hire this clown or this one came for free ?
     
    Jigyasoo likes this.
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