Porinju Veliyath Launches Counter Attack To Defend His Advice To Buy Untested Stocks

Twitter has become a battlefield between Porinju Veliyath and his fans/ detractors.

The provocation is Porinju’s latest interview in ET which has caused shock and consternation amongst many investors. In the article, Porinju advised investors to shun blue chips and well known companies and instead back small and untested companies. His precise words:

“People should look beyond those 40, 50 or 100 blue chip companies … The real money can be made in 2015, if you look beyond these companies. I am telling you, we have hundreds of companies which will go 10 times and more in 2015. These may be small companies. They may look like penny stocks. The managements may not be right. They may not be paying dividends, but that is the space to be in. Most importantly, some of these stocks may not be liquid and some of them may be listed only on BSE.”

Porinju added to his advice by tweeting that “Buying a famous ‘performed’ blue chip stock, with great management, clean BS and excellent growth business, doesn’t need any skill.”

Porinju’s advice met with instant condemnation.

@arunstockguru fired the first salvo by asking dryly “what’s wrong with @porinju?” He followed it up with a scathing but cryptic comment “Flying with albatrosses? Good luck though”.

Several others chipped in with their critical comments.

@ashishadukia was also clearly not impressed with Porinju’s advice. “#BlueChips helps you sleep well in d night. They navigate d long unpredictable #BusinessCycle well & r #WealthCreator” he said.

‏@Kamlesh_Samaria also attacked Porinju’s comment that buying blue chips did not require any skill by pointing out that one is not in stock market to show skills but to make money while minimising risks. ‏@amitdipsite also chipped in by arguing that “Investing is about making money, not showing acumen or insights”.

However, Porinju was not without his fans and supporters. They rallied around him in his time of need.

@Horizon_Abhay came out with all guns blazing in favour of Porinju by stating “Contrarion thinkers like @porinju are the need of the hour to take investors out of the Herd mentality!!”

@dkarthiks also appeared to be a devoted fan of Porinju. He exclaimed “hats off to ur far sightedness sir..thats y they say TIME WILL ANSWER EVERYTHING. your clients will be a happy lot.”

‏@ruchi_still was also clearly in Porinju’s camp with her tweet “As always, @porinju comes with a bang!!! Guts to go against the odds..”

@alappattu kept it simple by saying “@porinju You are simply great.”

@rahul6202 was contemptuous about Porinju’s detractors “yes sir .. When their holdings go up .. They brag about it .. When u recommend/buy something they talk about ethics ..”.

‏@akhileshrao1 was clearly not worried about buying untested stocks. “chill sir.. as long as ur scrips r giving gud returns nuthin matters 😉 bad management, weak fundamentals nuthin 🙂” he said.

‏@linkmanishsc also lent his shoulder to Porinju in his time of need by stating “It was nice to hear your views. Absolutely true – people should look beyond bluechips. Not many analysts are like you.”

Parag Parikh (‏@paragparikh), the veteran value investor also chipped in with a comment “@porinju It is the other way. When stocks go up investors change their perception of management. They find them good. Greed to graveyard route.” It is not very clear from the tweet whether Parag Parikh is in Porinju’s camp or in the Blue Chips’ camp.

‏Towards the end of the day, Porinju decided that he had taken enough lip from his detractors. He let loose a barrage of tweets showcasing the fact that he had bought several of today’s well known companies when they were yesterday’s “penny stocks” and with “unknown managements”:

“When I accumulated 8% stake in Geojit personally at a mktcap of Rs.3 Cr, most of my well-wishers were uncomfortable!”

“When I accumulated 5% of Kitex @ Rs.5 to 8 and a significant stake in Cera @ ~75 (bonus) under PMS, many clients objected due to bad mngt!”

“Last year, when I bought Fin Cable @ 30, KRBL @ 20, Orient Cem @ 30, Granules @ 110, HSIL @ 80, SRF @ 150, they were bad guys!!”

“Recently when I was buying Shreyas Shipping @20, Force @425, Zicom @ 105, 8K Miles @110, many of you warned me about management quality!”

Porinju’s spirited counter attack by referring to several super-duper multi-baggers as his stock picks appears to have silenced his critics, at least for the moment. We need to keep a close watch to see if they have an answer to Porinju’s counter attack.