Market at new High,Beware of Modern Harshad Mehtas,shift to Quality from Poor Quality stocks.

Market is at new High ,many of unknown fundamentaly weak stocks have also risen to undesired level as now People has started buying as cult followers like in 1991 Harshad Mehta Boom.In my view now just shift from poor quality unknown stocks systematically and keep stop loss in these till you shift from them to fundamentaly strong Quality stocks which are growing in atleast double digits .Although I don't anticipate any sharp correction soon but now onwards I expect only Quality Stocks to perform better.I wish atleast in next down turn (which I assume is still some time away)small investers had safety net of Quality and don't ends with duds bought on hyped tips from face books ,Twitter's and other social media.99% of Third Grade stocks remain Third Grade for decades and this is not going to change with hype by Modern Harshad Mehtas.Even if some is bent upon trading/ investing in third class stocks ,my advice is to keep Strict Stop Loss to protect your profits and Capital.

 

100% agreed. It is becoming very dangerous situation. I am also feeling afraid because people are buying stocks with dare devil attitude and without any fear. It is very dangerous because trend can change anytime. If you have good quality stocks like DHFL, CAPF, JB Chem, you can hold and 100% you will get money back with good return in the future even if market crash is there. But if you have Dabba stocks than capital is gone forever because loss cannot be recovered.

So Kharb sir is 100% correct in advice

 

Small and Mid cap are in bubble category. Although I dont expect any big fall in 2017,but if it comes due to unpredictable reasons ,poor quality small and mid cap will be butchered and may not recover soon So stay with Quality stocks.In my view, if some body still want to remain in third grade stocks,they should put strict trailing stop loss to protect their profits /Capital in third grade small and mid cap stocks.This post is just for discussion and not an expert advice.

 

That's really true. SEBI is making the right steps so that it will not trap the new and innocent investors.

 

I agree. It's always safe to invest in fundamentally strong company no matter it's bull or bear market. Good stocks have always given decent returns and will continue to do the same in future.

 

Market is costly , Domestic issue 331 COMPANIES ISSUE and Global issues are key factors to decide market Direction ... so investors maintain some cash position and stick on to Quality stocks only
diversified small portfolio is safe for investors

 

I had earlier written about Thomas Cook when it was around 200/- . The share went to Rs. ~250 and is back at Rs. 223/-. I think it is an absolute great buy if one is willing to hold for few years. Other than steady improvement in its own operations, main value is coming from Quess Corporation. Adjusting for QC value, entire TC operations are valued at less than Rs. 30 per share. I know there is always holding co. discount etc. but that will still leave lot of undiscovered value in TC. Further, promoter holding in QC is still above 75%. At some stage either TC has to sell some Quess or make a QIP for Quess. Both will lead to value unlocking for TC.

 

If one is looking for something for a long term with major improvement in fundamentals with every passing day, I believe this is the stock. Go ahead and let me know why I should not hold/buy it?

 

As per my opinion when market is at significantly elevated state, is it prudent for small investor to go for such a highly overvalued pick when there are equally, if not more, attractive opportunities in the market at reasonable valuations? Good company but not a good buy ,in my view.at present time. In addition,.I am not much bullish on concerned sector as compaired to other sectors like finance, banking,infra etc. Hence as a long term investor, I am unable to see with conviction where this company will be in next five years, thus in words of Bill Miller unable to find value. No offence meant.

 

@ Shakti sir ,

you are correct sir , market is not in attractive valuations , Nifty PE Ratio is above 25
so high risk low returns for inverters , and more over International and domestic issues are not good
there is no place for value investment at current situation
last 10 months " Demonetization and GST issues " sales are decreed to companies
and now GDP issue also added to that .....

and i am most worried about " Market Timings change proposal by exchanges "
up to 5.00 or 5.30 or 7.30 PM
is a bad idea why because , less time create more volatility and create speed volume
if time increased for trading volatility and speed decreed , for day traders it is not suitable , so they leave day trading , after that volumes and turnover will decrease in stock market cash and F&O Sector also

and lot of problems for stock broking employees also

 

@shakti khanduri
Five names please which are attractive opportunities in the current market and at reasonable valuations

Define value in the current context - relevant to current market conditions

What is soooooo hot about finance, banking and infra - kindly back this claim with facts and figures - no pipeline dreams please

 

@RAMA MURTHY SASTRY CHALLA

if its a high risk low return game at the moment, what is your strategy - have you wound down all your positions and sold all stocks and sitting on a pile of cash??

exchange timings - yours seem to be a lone voice in terms of the reasons cited. Do you have some evidence or result of studies done with shows inverse relationship between time and volatility/speed??

Surely nothing of this sort resulted when timings changed from 9:55am to 9:00am

One can understand reluctance from brokers as extended timings may lead to higher costs and for them costs may outweigh benefits.

 

wild_hipman sir

i reduced my portfolio size and quantities also , and i increased my cash positions
and waiting for good correction....

it is not the issue of 9.00 AM or 9.55 AM .... it is the proposal for time increase of 4 hours from 3.30 pm
or increase up to 5.00 PM or 5.30 PM

i worked several years in stock brokerage companies in deferent segments ....
and also market trading and Investment experience also ....

MCX is the best example for Time duration and volatility relation ship
buyer and seller price gaps and also volumes i was seen

in my view market is like spring type it is tight it is very effective ... if it is loose it will not give proper results like that

my experience in commodities operator in stock brokerage company
morning starting time Half an hour having good volumes and some volatility
after that after 10 am slowly volumes are getting effected by seller and buyer price gaps

after 3.30 PM equity market closing time commodities market slowly in crease volumes
and after 6 to 10 only volatility increase due to European markets effect and inventory numbers

like same main problem arise for Day Traders with huge time period
these are all only my experiences and views , it may not correct also ...this is only for discussion purpose

 

Sir ,no body can contest that you have a knack of grilling anyone with full impact by your questions &cross questions. But kindly spare me because most of my investments are based on intuitions unlike you,whose investment decisions are made on the basis of your profound knowledge. Hence I accept my inability to answers your queries convincingly. Kindly accept my apology.

 

I am bit surprised at this comment. The whole argument about investment in Thomas Cook (TC) is it’s mouth watering valuation after adjusting for Quess Corporation (QC) holding. The whole non QC business of TC on that day was available at around Rs. 30 per share. And I am sure that you would agree that the gamut of businesses TC is in is worth much more. It is a good co. backed by a well known business Multi National Business house. It has already completed its major capital expenditure. Revenue will increase at a disproportionately higher rate compared to expenditure in coming years. So will be the profits. Not being bullish on Leisure sector in an growing economy where populations aspirations are rising rapidly is something that has surprised me even more. Incidentally, TC has Rs. 1377 crores cash on its books as on 31.03.17 which is roughly Rs. 37.50 per share. Thus one is literally paying nothing for all the businesses it owns. Just for record, TC at Rs. 243 at the time of writing this comment is higher by about 9% since the date of last comment.

 

May be I was unable to explain my view properly. I have never said TC is not a good company.All I said is that at present time it does not appear attractive to buy. My resevations are as follows 1-Markets as such are in streched state ,both domestic and even in US market, and correction is, in my view, due very nearby. 2- I agree TC appears undervalued asset wise but price earning multiple wise both, TC and Quess corp, are at very high level ,meaning in correction, prices and Market cap of both will come down significantly, thus giving opportunity to buy at reduced prices resulting in better upside potential. 3- In my individual view . in our growing economy infrastructure building and housing ,being priority sectors, offers better upside potential. I consider banking and finance related sector also more attractive at present time. By your presentation I am fully convinced that Thomas cook is wonderful ,asset wise ,under valued company, ideal for long term buy but I am hesitant to park money in this company at present level. P S.-When I buy for long term( 5 to 10 years) I over look short term volatility.

 

@shakti khanduri
But cant name 5 value buys in the current market - even in the sectors you like???

and isn't it a self defeating argument when you say that is a short term correction round the corner and so the scrip will be available at better levels and that you overlook short term volatility when you invest for long term

@FUNDOO

I hold not only TC but Cox & King and Mahindra Holidays too - simply because I too believe that tourism and holiday spends will continue to occupy a fair and increasing share of a family's wallet.

 

Price chart study suggests that,as the stock is trading near all time high,it should be bought if it crosses this level convincingly.

 

Sir, when i said I expect correction I did not mean short term correction but significant one.In addition, I also foresee good potential in leisure tourism sector but at present time I see better opportunities in those sectors I mentioned.

 

@wild_hipman. Would you be kind enough to explain the rationale of buying so many stocks of tourism sector instead of going for the best,in your opinion as is expected of investor with very sharp intellect?In my opinion TC appears to be the best among them.Do you differ?