Parag Parikh’s interviews usually have some tips that you can pick up and apply to your investing career. His latest interview to valueresearchonline.com is no exception.
One of the important pieces of advice that Parag Parikh offers is that investors should remain prepared to grab stocks when the golden opportunity comes their way. Unfortunately, the universal experience is that when the golden opportunity does come in the form of a crash in stock prices, most investors (me included) are like a deer caught in the headlights, totally paralyzed to do anything.
To overcome this syndrome, Parag Parikh suggests that we prepare ourselves psychologically by having a ready check-list of stocks to buy. “Fortune favours the prepared mind” Parag Parikh said, with a smile on his lips.
| Parag Parikh’s Mantra For Finding Winning Stocks |
| – Buy stocks only of fundamentally sound businesses which are run by credible management, have pricing power, have low debt and are relatively easy to understand and which are quoting at reasonable valuations; |
| – Be disciplined. Don’t buy fancy stocks at absurd valuations; |
| – Keep your emotions in check and take advantage of others’ irrationality; |
| – Buy systematically in small lots over a period of time; |
| – Keep a wish-list of your favourite stocks and seize the opportunity when it comes. |
Some other valuable bits of advice offered by Parag Parikh were that investors should not obsess over economic or political predictions while buying stocks. Instead, they should focus on investing in fundamentally sound businesses at reasonable valuations. Investors should pick businesses that are run by credible management, have pricing power, have low debt and are relatively easy to understand, he added.
Parikh Parikh also suggested that investors have to keep their emotions under control and take advantage of other investors’ irrational behaviour. This is exemplified by Warren Buffet’s immortal quote “Be fearful when others are greedy and greedy when others are fearful” Parag Parikh added. It is also not a good thing to time the market, he said, suggesting that investors adopt the SIP route to buy stocks.
Parag Parikh was also grilled about his fascination for Noida Toll Bridge and Maharashtra Scooters which have underperformed their peers. Parag promised that the good times would dawn for both stocks, sooner than later.
Interestingly, Parag Parikh put up a spirited defense over his fascination for foreign stocks. It may be recalled that he has faced a bit of flak on this aspect because one school of thought is that the Indian avatars of the foreign companies offer better bang for the buck than their foreign counterparts and that there is a great currency risk. However, Parag Parikh turned the tables over his detractors by arguing that his gameplan of hedging 90 per cent of the foreign exposure through exchange traded currency futures contracts earned 7-8% instead of bearing a currency risk. He pointed out that the USD-INR ‘Forward’ / ‘Futures’ rate is always higher than the spot rate in order to reflect the inflation or interest differentials between the two nations, and that this created a gain instead of a risk. He did, however, admit that the residual 10 per cent of the foreign exchange denominated portfolio is affected by prospective changes in the value of the USD-INR rate.
Hi
Arjun, I feel you are doing a great job. I searched for similar websites and guess what…I couldn’t find any other sites with such distilled wisdom from stalwarts.
I hope all the readers understand how difficult it is to compile the reports that you do. Anyways, I feel small investors like us have already gained so much fro your website….thanks a ton and keep up the good work. I check almost everyday if you have posted a new article. One a day would be ideal but I know that will be too much to ask
noida toll bridge finally toiling for share holders , already 2.5 rs declared , on a price of 29 rs it is 9.5% % yield. and its technically debt free in june ie and upgradation by CARE , deep discount bonds was the earlier rating A is for safety but with a lower rating, AA which is the current rating is for bonds with Superior and a higher safety rating , in simple words it has got upgraded WHICH REFLECTS ITS DEBT REDEMPTION CAPACITY
AS PER LAST QRTR RESULTS JUST 24 CRS SHOWS AS ON MARCH 31ST and out of this 18 crs is the deep discount portion for which the above rating has been given. Therefore by june at the current run rate of 13-14 crs being paid towards institutional or bank loan will pay back just 6 crs will be paid in june qrtr and plausibly the first ,50 or .75 re june interim dividend is plausible provided the capex is funded from liquid fund and gen reserves leaving the free cash flow of 13-14 used for the plausible interim dividends every qrtr,lets see how it pans out.
So parag parikh will stand redeemed now and ppfas added another 1.5 lakh in march end qrtr.between feb n march ie he bought more with the feb interim dividend. WITH A GREAT YIELD AT CURRENT 9% IT CAN HIT 25 % GOING BY ITS CASH FLOW EVERY QRT AND NOW NO MORE DEBT TO BANKS TO BE PAID AFTER JUNE 14 QRTR EVERY QRTR .75 RE CAN BE PAID OUT. THEY HAVE SENT A STRONG SICNAL BY JUST RETAINING .4 RE AND PAYING 2.50 OUT OF ITS EPS OF 2.90
STAKE SALE BY IILFS OR LAND DEV RIGHTS OF 99 ACRES LAND TO COMPENSATE FOR THE 20% ROI VALUED AT UPWARDS OF 90 RS PER SHARE CAN COME ANY TIME. ITS A BUY EVEN NOW AT 29 RS.