Goldman Sachs also predicted oil at 200 usd when it topped out at 140 usd. Predictions aside,we should mull over why we got ourselves invested in Rain Industries in the first place. Seasoned investor Mr. Sanjeev Khanna took a massive loss in this stock and gave up. Mr. Pabarai has held it for more than 6 years and is equally frustrated. I am a small retail investor, although the management is top notch integrity wise, but the business in which Rain operates is extremely difficult. In the last investor presentation, they have said that they are fine with aluminum at 3000 usd/ton…it is good for them to make reasonable profits. To be honest market has given up on rain share price improving in near future( less than 12 months).
I have held rain ind. for last 2 years with a small notional loss and larger loss of opportunity cost. I have now figured out that why Rain as a stock has not done well and will continue to underperform., It is the frequent empire building missions taken up by the management at the cost of huge debt pile. In the last qtr. itself they have written off several investments in plants etc. If they do not decide to ” focus” on what they are good…the stock will continue to frustrate.
disc- invested at 180 levels since lst 2 years, 5 % of PF
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