I have a concentrated portfolio with top 3 stocks making up 82% of the portfolio. In the last 3 months I have been reducing Hawkins Cooker and finally sold it all on the day sensex crashed 6%. Replaced it with Kitex and Ajanta Pharma. Idea is to keep nibbling Ajanta Pharma every now and then and add more to Kitex post Q2 results. Have been tracking MT Educare and Shriram Transport Finance as well but have not bought them yet.

Guys,

This is the biggest major correction in this 3 yr bull market. Index is down 15 % from peak. Technically 20 % fall can take it to bear phase ( as they say). At VP we generally don’t (should not) care about index level and focus on stock specific stories. As @hitesh2710 recently said market is always good for the one who is prepared and patient. Also psychologically correction is best time for PF rebalancing as switching is easier.
Some of us can take this correction as an opportunity to get into stocks we always wanted to buy and get rid of our weaker stocks. Some may not do anything as they say not doing anything is the best thing to do.Also it can be a good time to rebalance PF wrt PF allocation framework shared by @Donald i.e most undervalued and highest conviction should max allocation etc ( refer that thread).
I generally have a very concentrated PF having Ajanta, Can fin, Repco, Kitex, Cap first. During this correction I am nibbling in at lower levels Torrent Pharma and Avanti Feeds after their fantastic Q1, with limited downside in FY16. I am reducing Cap first during to prolonged slowdown in real state and LAP etc. At this time it can be a good strategy to have a very diversified PF for preserving the gains.

It would be interesting to know what others are watching buying.
It can make one prepared in case Index dips significantly from this level to buy from real good bargains, Also cash calls can be taken accordingly in counter rallies.

I dont know this is the right strategy or not, or sitting quite for this phase can be a better strategy for patient ones

I am also watching Shilpa, Indocount, welspun, nitin, Alembic pharma, kaveri etc for any dips to be considered as a buy.

What is your watch/buy list
Any pointers/strategy/put buying for

Cheers
Santosh

Hi @sachit, Thanks for bringing those points.Admire your attention to every single detail in AR.Those are valid concerns but dont have an answer.These are circumstantial evidence and one needs to take a judgmental call. However if we look at even well run companies in India,there are lots of examples of promoters paying themselves hefty salary.
Some recent examples are given below:

1.Sun TV ( Rs. 60 crores for Maran and another Rs.60 crores for his wife Kaveri on a profit of Rs.700 crores.

2.Apollo Tyres ( Rs.30 crores on a profit of Rs.300 crores for Onkar S Kanwar)

3.Amararaja Batteries: (Rs.30 crores for Jaydev Galla on a profit of Rs.420 crores)

http://www.rediff.com/money/report/pix-special-indias-10-highest-paid-ceos/20140910.htm

Your second point is most important and am stumped by your close attention to the balance sheet notes.I was looking into receivables to sales and Inventories to Sales and never paid attention to current Liabilites closer.Thanks again for bringing those here:

AR 2015 page 128 mentiosn about this:
15. Payables include to Pokarna Fabrics Limited Rs. 5085.48 Lakhs (previous year Rs. 4768.88 Lakhs),
Pokarna Marketing Limited Rs. 1213.32 Lakhs (previous year Rs. 1138.05 Lakhs),
Pokarna Fashions Limited Rs 35.00 Lakhs (previous year Rs. 35.00 Lakhs),
Southend Extension Rs. 3.66 Lakhs (previous year Rs. 14.40 Lakhs),
Gautam Chand Jain Rs. 1587.68 Lakhs (previous year Rs. 1949.45 Lakhs),
Rahul Jain Rs. 1022.28 Lakhs (previous year Rs. 918.25 Lakhs),
Prakash Chand Jain Rs. 1260.95 Lakhs (previous year Rs. 987.50 Lakhs),
Rekha Jain Rs. Nil Lakhs (previous year Rs. 14.37 Lakhs),
Nidhi Jain Rs. Nil Lakhs (previous year Rs. 5.43 Lakhs),
Apurva Jain Rs. Nil Lakhs (previous year Rs. 5.43 Lakhs),
Arrush CreationsRs. 6.78 Lakhs (previous year Rs. 32.58 Lakhs),
Southend Rs. 0.03 Lakhs (previous year Rs. Nil Lakhs),
Karvy Computer Share Private Limited Rs. 0.25 Lakhs (previous year Rs. Nil Lakhs)

I was thinking the management will reduce the long-term bank loans using the cash flows of the next few years given that there is no CAPEX needed.

Now,this payables are concerning me as well.When i call their Investor relations,I will ask them about this.

Please bring in more such blind spots that we obviously miss.Do you see any other loopholes in the story?

-Sambath.

Using smartphone right now. Will get back in couple of days.