When Howard Marks, one of the greatest investment thinkers of our time, dispenses wisdom, you will find the intelligentsia vying with one another to pay him their compliments on how great his wisdom is.
However, few amongst the intelligentsia are able to connect the theoretical wisdom of Howards Marks to practical real-life stock picking.
Here, I must compliment myself because though I am not amongst the intelligentsia, I was able to connect Howard Marks classic advice that a stock quoting at a 52-week low is actually a “risk-free” and “safe” stock and that investors should dive into it without a care in the World – with the status of Tata Motors, the blue chip behemoth of the venerable Tata group.
Tata Motors had witnessed relentless selling and had plunged to a 52-week low of Rs. 285 on 28.09.2015 over fears that the slowdown in China would spell doom for its JLR business.
Applying Howard Marks’ wisdom, a blue chip stock quoting at a 52-week low is a no-brainer buy, I theorized.
Luckily, there were a few amongst the intelligentsia who were of the same view.
Shruti Aggarwal of seekingalpha.com was very plain in her advice: “Tata Motors Is Extremely Undervalued And Has Potential For 100%+ Gains” she said in words that even the dullest of novice investors could understand.
Rajat Sharma of Sana Securities also rushed in to advice that Tata Motors is a “screaming buy”. He emphasized that there was no fundamental reason for Tata Motors to trade at distress levels and that the only reason for its woes was “aggressive selling by traders”.
Today, less than four weeks after the mayhem happened, Tata Motors stands tall at Rs. 383, giving gains of 34% to all those who listened to the sensible advice and acted on it.
If you have missed the bus, there is no reason to despair because Tata Motors is still a “fantastic buy” according to CA Rudramurthy of Vachana Investments. He explained that “Tata Motors has given a huge upmove from levels of Rs 280 and it even touched levels of Rs 385-390 easily. Now again stock is giving us small retracement and it is a fantastic buy even at current levels or even for a slight dip to levels of Rs 355-360”.
Hopefully, the rest of the intelligentsia will take a cue from the episode to connect the wisdom of great thinkers with practical real-life examples instead of just mouthing meaningless platitudes!