Great time to make fundamently strong blue chip portfolio

Dear kharb ,

Yes , you are correct brother .... quality is more important ....

SIP in quality stock is also very good method .....

 

Thanks Kharb and Ramamurthy Ji for your nice responses.

 

what parameters ,u think, are crucial for making investment decision ? How do decide the quality?

 

Dear shakti khanduri ji ,

Quality depend on so many parameters some of it i will tell you ....

1.Business Model
2.Management abilities
3.Marketing network
4.profit margin , sales , profit ratios , product demand , diversified products
5.Company Financial Soundness
6.Brand Image
7.Market share in sales
8.patents
9.subsidiaries financial health
10.promoter performance in difficult situations
etc..


and more qualities combined picture is called Quality ....

 

Mr Murthy, my query is which are crucial parameters i.e. relatively more importat in your own opinion?For example l give more weightage to sustainable & scalable buisness model.A company can not sustain for long time if it is not earning profit..Hence sustainability presuppose profitability.Likewise scalability presuppose growth.Kindly give your opinion.

 

I am giving Highest weightage to " profit margin "

 

Thanks. But, Sir, I need to understand -why should we give utmost importance to - profit margin agaist other vital parameters?

 

Others also some times vital .... In my view mainly company growth is depend upon profits ...

 

Today again may be Buyers day which bargain hunters always wait.Today and may be few days can prove to be Diwali sale.???Uncertain times are sure, certain buying times. This is not a form to discuss politics and I have no intention to do so.But market will react to politics today.But I mantain that it was fight between two of best bets and Biharis were lucky to have it.Modi, a devolpment Maskot at Delhi and Nitish Sushasan Babu means good adminstrator and devolpment oriented person,who can be said one of the best CM of Bihar.So Biharis had good choices on both sides but could chose only one at a time .They had already put Modi, a dynamic leader to good work at Delhi,so might have chosen Nitish at Patna ,to have best of both worlds.So in my view democracy has won ,how it can be bad for Economics. Nitish has been CM for last 10 years and Bihar GDP is increasing more than national average and stock market has been going up. I would like to be politicaly neutral here and none of us has any choice now other than endorsing decision of voters of Bihar .I am just trying to find out positive out of a given situation here and request others not to give any political response.So I shall enjoy panic sell today and may be for few more days and enjoy bargain hunting of apples being sold at rate of potatoes .I know, no sale is going to be permanent and market will make new life time high in future.Good and strong business of quality managements will do well irrespective of political results...Happy Buying ,Happy Diwali.

 

SUPERB THINKING Sir. 100% AGREED!

 

This person is always painting gloom picture. He spoils the mood

 

Shanker Sharma is necessary Item of stock market .He is gloom mascot of stock market and is in great demand on TV channels after some event which market may be looking temporarily negative .In language of cricket, he is pitch curater. He will prepare ground for your buying of stocks.I love to bat on pitch prepared by him.But if he is talking specifically negative or positive about a stock,then be attentive about that stock .If he is positive in any stock it may be good buy.But if he has apeared after some event,he just prepare ground for your buying.But just in lighter mood I shall advise chicken hearted investers to stay away from listening him ,otherwise they are risking themselves to go in coma.Better we use him as a person and experienced guide who is trying to make us cautious and careful so that we buy only Quality and Quality and never through out fundamentals out of window .In Hindi it is ,Josh me hosh nahi khona hai. .This is all pasted with due respect to Great Stock Market Guru Shanker Sharma .I always praise and Salute him for right bearish call in Reliance and right bullish call in Tata motors in 2008.

 

Surprised and happy to see small investers maturing.No panic selling,but I just added some HDFC bank as token buy.I think Shanker Sharma and Media influnce on investers is on decline. Investers have started believing rightly that business are run by businessmen ,not by politicians.They have also started believing rightly that with liberalisation ,economy is more or less on auto pilot.Still wait in buying mode for some downward action from chicken hearted investers under influnce of media.

 

Well said. I am quite disappointed because the low prices seen early in the session evaporated too quickly.

 

A few months back on cnbc tv18, Shri. Rakesh Jhunjhunwala was asked whether iinvestors should follow Rakesh Jhunjhunwala? He said NO. In a program on zee business, Mr. Sunil Minglani was asked " Retail investors always follow Institutional Investors and Big Investors/ Big Bulls etc. . Is it a right strategy? He said NO. He quoted a incident. One retail investor informed Sunilji that he had bought a particular stock in large quantity and wanted to know its future. When asked why he bought the stock. He replied that because LIC has just bought the stock. Sunilji asked him Are you LIC? LIC is 5000 crore + co. They can afford to bear loss if the stock does not perform. Can you? You wont even know when LIC would exit from the stock. Sunilji advised the person not to copy institutional investors blindly.

 

In next one year market may give good buying opportunities. So those who want to buy good Quality stock should do it on scattered basis over a period .So keep your cash ready and deploy in small parts on some Good Bad Days. Good Bad Days for me is when Good stocks are available at Bad price ,you buy Apples but pay for potatoes.Next year will be bad for bad stocks as they may go out of favour and many of them may never come back .So investers who will deploy at lower level during next one year will make good money in next 3 years.I will keep my freash cash ready and also cashing out of weaker stocks to raise cash to buy top quality stocks on bad days.Seller of Good QUALITY Stocks if any , please note.Good stocks are like 24 Carrate Gold may go down but will not go out of fashion.So keep on accumulating 24 Carrate stocks when are down on any day but don't go down below 22 or at the lowset 20 Carrate stocks. Keep away from Platinum or Gold coated poor stocks,as polish may come out any time.For reference HDFC bank is 24 carrate Gold stock and so on..

 

This pretty much aligns to my investment style

 

In my view there are three type of investers .First type ,starters and many who know that equity give good return but don't have time or knowledge to invest should always go to mutual funds.Second type is of those who has some knowledge and also want first hand action along with some thrill but don't have expertise, should stick with Quality names .They should invest aprox 40 % in Nifty compnies,next30% in BSE 200 compnies,and rest 20% in midcap but not beyond BSE 500. Not more than 10% should be beyoond bse 500 If they still want to play in Unkown smaller names can do it additionally taking exposure in small cap funds.I belong to this class.Third is Master Class.This requires high degree of knowledge,lot of time,first mover advantage in information age ,they know what they are doing ,are trend finders.They also know when to enter and when to jump out ..First type should not try to do second in hurry till they gain some experince and avoid doing third. Second type should not do third type till they are very succesful as Second type and started beating Sensex and NIFTY for at least 5 years.Third type don't need any advice but are requested to reply for benefit of first two type of investers, how and where they are investing as third type investers.