Manoj,

For me long term bets have to have a fair amount of predictability and that is what I find lacking in business of Omkar. From whatever I have read about the company I find that it is just a commodity business having a good time. I wouldnt compare it with the likes of great pharma companies like ajanta, torrent, alembic, shilpa or other businesses I own like the HFCs.

I am not too impressed by the oft used word PATENT which is bandied about by Indian firms. The kind of patents Omkar boasts about are in effect just process patents and nothing much to brag about. If patents dont convert into higher sales and profits for the company it is no use.

The good thing I find about Omkar is decent management, and benefits of expansion which could keep the growth going for a couple of years or more.

Key monitorables include debt situation and working capital management.

Have now more clarity.
I simply wanted to invest some part of my new investment in safer stocks and this time, I believe, is right time

Hi Guys

Just have a basic issue: if i have registered my profile in screener using an old email id, i cannot find an option to change my email id and update the same on screener profile to seek alerts...

Is there a way out?

Dear All

Requesting your views on this Portfolio for further Study

Bajaj Finance
Capital First
Repco Home
SKS Mirco
PI Industries
SRF
Balkrishna Ind
Hexaware
Supreme Industries
Jubilant Food

I think the call is highly personal. If one is in capital building stage, it doesn't make sense to hide in div. yield stocks. If one has already built a nest egg larger than required and is feeling uneasy, div. yielding stocks might be the right choice. Most people would NOT have built a nest egg larger than required.

At the cost of being repetitive, let me elaborate since fear does terrible things to our rationality. I see 2 main risks for all the above stocks:

1. Opportunity cost - "Time is the friend of the good business, and enemy of the mediocre business".
   I think the main reason people might be looking to hide in div. yield stocks right now is to get less damage in a bear market and convert the capital to high growth stocks when the dust settles. But cash (read as cash/bank FD) is the best place to hide for such a purpose (I am not advising to liquidate one's portfolio). It is certainly true that high yielding stocks won't fall as much as small/mid cap or even some large cap stocks in a bear market. But that is just relative - in absolute terms 20-30% falls are nothing. And stocks can quote at less than cash on books (which should also be discounted by 16% for DDT). Though only for a short time, but exactly when your 30% compounding machines are available at 15-20 PE. Even if the yield is 2-3% more than FD rate, that gives 10% over a 3 year period. And like I said before, one incurs a huge opportunity cost in holding div. yielding stocks for a long time.

2. Cyclicality - Most of the commodity stocks can keep going down like in a bottomless pit. Porinju is smart and might get it right, but it is VERY difficult for an average valuepickr to make money from such stocks even once in a row - because you need to get 2 calls right - buy and sell. Even if Porinju is buying right and sells right, we don't know when he will sell. Btw, NALCO is 25% down since he tweeted about it on Aug 10. And unlike most of the secular growth stories discussed here, 5-10x moves on either side over a cycle are common for cyclicals. We don't know whether Porinju is averaging down, or whether we have nerves like him. No one (including in the China's finance ministry or LME) knows when we reach a bottom. With the China export engine coming to a stop, there is no bottom in sight - I am not saying this time is different, I am just saying that this time things could be amplified further.

For PSU stocks, there is a third risk, namely govt intervention. Disinvestment might keep prices at bay. From the div. yield perspective, its nice that govt. is arm-twisting companies into paying high div. Further, NALCO and NMDC have 4.6kcr and 18kcr of cash. But all this could backfire due to the law of unintended consequences if the co. decides to start using its cash rather than pay dividend and ends up di-worsifying.

For Vedanta, I don't see any other risks (mainly because I never thought of investing in it), but I see one thing for CERTAIN. They WILL fleece minority investors. I am saying this not because I have a crystal ball, but because I have looked at the past track record.