So because of diff entities, one firm is able to write a report and other is buying, right? Correct me if I am wrong. Thanks again for the given info

Hello friends,
I started my investment journey in 2014 with mutual funds, and still holding them but has recently paused sip in them. Lately has started investing In stocks in 2019. I have been using screener.in and other websites to check for fundamentals, concalls, and rating reports and have built my portfolio.

I am posting my portfolio here for feedback from esteemed fellow valuepickers.
Would request your feedback/criticism/suggestions on my portfolio.

Stock % Portfolio

HINDUNILVR 9.6
TATACONSUM 6.5
VBL 3.5
BECTORFOOD 3.9
ASTRAL 2.9
MOLDTKPAC 3.7
RELIANCE 9.4
KEI 9.8
Shivalik Bimetal 1
COROMANDEL 4.3
PIIND 5.5
NH 3.9
RAINBOW 3.9
Infosys 11.2
REDINGTON 1.2
CONTROLPR 2.3
MAPMYINDIA 6.6
SAREGAMA 3
TIPSINDLTD 2.4
ACE 5.3

Company has done well in the last 5 years, growing sales at 12%+ CAGR; and profitability has also improved from Operating Profit Margins at 9% to 16%; however if I view auto industry as cyclical, last time it peaked was in 2014 at 15% OPM… Also a few things I find concerning and request views are:

1. what to make of the rise in inventories (almost 1/3rd of quarterly sales is inventory); to the extent that the operating cash flow has turned negative for the 1st time in last 10+ yrs
2. To maintain dividend, company borrowed which does not seem a good practice
   pls have a look at the cash flow statement at Screener produced below
   

Hey Saurabh,

I can somewhat relate to your concern. While some senior VP members have already added their inputs, I’ll leave you with the following perspectives

1. In the short term, the market is a voting machine. It’s very hard to predict where the prices will move – whether it is a stock, a sector, or broader indexes. There could be a hundred reasons for a sudden drop or surge in prices. If you keep digging into the reasons, you may find some clues. But how does one establish causality, they could be mere noise?

2. Valuation – What is expensive? 20x, 30x, 40x, 50x? There’s no science to this. If you can ASCERTAIN that the underlying business can double its earnings in <2 years, even a 50x isn’t expensive! I didn’t buy Cera for a long period because I found it expensive at 25-30x. An expensive mistake, but one that I have to live with! I follow a certain philosophy, and I’ve made peace with missing out on a few winners. I don’t know if this stock is cheap or expensive at the current valuation. It depends on one’s view on risk, business quality, and earnings potential.

3. Pendulum Swings—Howard Marks has written extensively on asset prices and cycles. His memos or The Most Important Thing are worth the read. Jotting some relevant comments:
   a. An overpriced asset can remain overpriced for uncomfortably long periods. Worse, it may get even more overpriced. During such periods, value/sensible investors may appear foolish. e.g. 1997-2000, 2020-22 tech boom.
   b. It’s not worth one’s to predict the direction of market/stock prices, but one would do well to know where is the pendulum’s arc (towards greed or fear). If the price/valuation looks too hot, it’s sensible for a defensive investor to be defensive.

To summarise, this depends on how you play the game. I know successful growth investors who buy businesses at 50-60x and yet earn handsome returns in 2–3 years if 6/10 of their bets deliver earnings growth.

Happy investing.

Disc. Not invested. Tracking

@hitesh2710

Sir, are there any differences between patterns that you have observed with regular bullish setups, and 52 week or ATH setups. A particular setup or a pattern that happens only in the intervals of a rise, fall and rise, in between, but not at 52 week high or ATH? Or there is no such distinction and any kind of pattern can form at any highs? Request you to throw some light on it.