Porinju Veliyath and the purists have an ongoing feud on whether high-quality high P/E stocks should be preferred over low-quality low P/E stocks.
Porinju is outspoken about his contempt for high P/E stocks even though they may represent high quality. He believes that real value investing comprises of buying stocks which are not fancied by the market and which are available at dirt-cheap valuations.
On an earlier occasion, Porinju mocked the gurus by pointing out that they have lost sight of the difference between “great stocks” and “great companies”. He explained that while stocks like Page Industries, Kitex Garments, Ashiana Housing, Atul Auto, Symphony, Kaveri Seeds etc are “great companies”, they are not “great stocks” owing to their exorbitant valuations.
Page is over-priced unless govt makes it compulsory to wear 2 underwears, like superman 🙂 https://t.co/OVTovP99Lq
— Porinju Veliyath (@porinju) August 14, 2015
(Page is over-priced unless govt makes it compulsory to wear 2 underwears, like superman 🙂 )
Great Cos may not be Great Stocks:
Ashiana was 'Great Company' at ~325 in Feb, while I was buying Ansal Buildwell, a 'Great Stock' at ~70
— Porinju Veliyath (@porinju) August 17, 2015
(Great Cos may not be Great Stocks: Ashiana was ‘Great Company’ at ~325 in Feb, while I was buying Ansal Buildwell, a ‘Great Stock’ at ~70)
Sad that amateurs are chasing success stories at wrong prices; I have been warning about Page, Kitex, Ashiana, Atul Auto, Symphony, KSCL etc
— Porinju Veliyath (@porinju) August 17, 2015
(Sad that amateurs are chasing success stories at wrong prices; I have been warning about Page, Kitex, Ashiana, Atul Auto, Symphony, KSCL etc)
In his latest interview, Porinju was asked his opinion about “wealth creator” stocks like Dr Reddy and Sun Pharma which appear to have lost favour with investors. Porinju used the opportunity to launch a scathing attack on the gurus:
“I am so lucky I do not have that kind of positions to hold on. I am a value investor, so Sun Pharmaceutical never came to my radar in the last few months or a Dr Reddy’s or Page Industries or Eicher Motors or Bata India, Kaveri Seed Company, Kitex Garments. I hated these stocks in the last one year because there are no values left, they are great companies. That is again I am repeating, I have been always talking look at the stocks, the great stocks and not the great companies.
I am telling you one more thing. In the last one year, Samvat 2071, what happened? The moat became a trap for all the new investors in this country. A lot of people I know, thousands of them, they started first time investing in this last one year. They listened to the biggies and the big people, fancied guys and they were all talking about some stocks which have gone up by five times and 10 times and 20 times and now, it has become moat stocks.
This was the biggest trap and people are losing 20-40 percent by doing that kind of safe investment.”
Porinju did not take any names but there are no prizes for guessing that the gurus in his cross-hairs are Prof Sanjay Bakshi and Basant Maheshwari.
Prof Sanjay Bakshi, the authority on value investing, is an outspoken votary of buying high-quality stocks even if they are quoting at high P/Es. In fact, the Prof wrote a treatise (Pay Up, But Don’t Overpay) in which he argued that even if investors had bought stocks like Nestle, Asian Paints, Pidilite etc at exorbitant valuations, they would still have made mega bucks. The Prof repeated this theory in another piece. Even in his latest piece, the Prof has drawn the analogy of a race between a high-powered Jaguar car and a low-powered Nano car. The Prof argues that even if you give the Nano a head start in a race, the Jaguar will still overtake it and win the race if the race track is long enough. It is explicit in the Prof’s advice that investors should prefer high quality stocks and pay the price for that.
The Prof also wrote a piece on Kitex Garments in which he waxed eloquent on why the stock offered a great investment opportunity despite its high valuations. The Prof has also written a note on why Symphony is/was a great investment. Ashiana Housing is also known to be one of his favourite stocks.
Basant Maheshwari is also an outspoken advocate of buying high P/E stocks. His Model Portfolio comprises of Page Industries, Hawkins Cookers, Sun Pharma, HDFC Bank, Gruh Finance, Repco Home Finance etc all of which are known for their high quality and high P/Es. Basant also delivered a talk in which he explained his theory about why high P/E stocks will not crash land even if the growth slows down.
At the end of the day, the debate between whether one should buy high-quality stocks at a high P/E or low-quality stocks at a low P/E is not one that can be resolved one way or the other. Both have their advantages and disadvantages. Each investor has to decide for himself which path he wants to take and which guru he wants to follow depending on his own preferences and investment outlook.
It’s ironic that Porinju’s Ansal Buildwell is actually down. It’s not a great stock by any yardstick!
Please Check Ansal Buildwell Price, it is 109, 50% from recommended price of 70.
Ignore the price for now. Look at the latest results of Ansal Buildwell and tell me if you feel confident about the company. 🙂
No one can buy entire quantity at recco price only. It has to go up by 70% to reach previous high. Also, you cant put more than 1 lakh or so in such companies. Even if you gain, it is only in percentage terms not portfolio building.
Hey yo. Hey Porinju. You have done very well in some stocks, but the manner in which he invests in tantamount to casino gambling and nothing more. He has gotten some good spins on some stocks, he has won some good progressive jackpots, but he is a stock gambler. That’s it. Not one of his companies warrants any investment rationale whatsoever. Sorry. But he is a great investor who has made great rewards, it is too bad that even after such a success nobody can recognize or understand his investment method. Maybe another punter would.
Porinju is a manipulator and he dont deserve to comment anyone who have proved with their own money. Porinju is a gambler who rely on blind followers to buy based on his tweet. He don’t have anything to lose because PMS disclosure would be no returns are guaranteed. He is playing with others money. If he has guts he should play with his own money and prove himself before commenting anyone.
Arjun Must write a story on Porinju latest pick Alpa Labs..
Veliyath is both a good stock picker and a smart guy , he must be making something like Rs 20 crores per annum net for himself , he keeps himself in lime light some how by all these controversies , guys we have to remember even for the best investors atleast 30 percent of the picks go totally wrong so he cannot be an exception, when the Badshah gets it wrong in Bilcare, Autolite etc, what about others ?
To me Pronju is like artist of Circus who loves to do difficult acts.He can throw QUALITY out of window for undervalue. To me it look like that he was doing these circus act with ease becuase of underlying safety of market due to on going mid cap mania and huge inflow of money in mid cap funds.As now market has become fairly priced ,this game will slow down.But is it so what I said ,unlikely becuase never challenge or crticise the success otherwise we may miss our focus to find out reasons behind success.But what he has said that you can not pay the moon for Quality is right and his comment about Page and other stocks I fully endorse.But Prof Bakshi Qualty is different from what I say QUALITY. For me Qualty to buy is like HDFC bank,Kotak Bank,L&T,HUL,ITC,Asian Paints,Ultratech Cement ,Maruti,Tata Motors due to Price,,Lupin,Sun Pharma,Infosys , TCS and for further lower order stocks to which I would like to buy may be LIC housing, DHFL ,Rel Capital due to turn around .Quality stocks of my type may /will also go dwon,but for me that will be God send opportunity to buy more at less. But I am sure to beat market in long term with sound sleep.
Poriju’s strategy is misleading when he is unmindful of quality. It appears he practices Greter fool theory.Perfect recipe for getting trapped !
Porinju Veliyath, you have written about your investment ideas. good. appreciate. dear PV, at the end of the day, an analyst searches for value > price and it may be hidden in so many ways and places in the working and presentation of the same in the annual report. People first- management quality – do they do what they know and do they know what they do. if the commitment is there, invest dear friend and let time do the rest. products do they give returns better in their competitive basket. If it does observe how it increases them slow and steady wins the race, invest dear. these are just two explicit examples. if you do your homework thorough, then leave the rest. results should -god willing- be in your favour. anyway i liked your fighting dogged spirit of individual thinking against the so called experts who often than not misguide about mutliple gains. Remember the joke a man was asked who is he? Q1 he answered A1 : lakhpati. Q2 : earlier; A2 : crorpati. Q3 why?How? A3 : because i followed the so called self proclaimed experts on TV about investing in shares.
Porinju should see many people still not wearing underwear’s or using the same under wears for many years. Ha ha who knows do they wear or not.
Why these so called “analysts” focus on porinju ? Why they point their fingers towards porinju? What is the reason behind this ?
Ashiana is a great company and a grat stock to make investos bankrupt
Too much noise over Ashiana,even after reducing to half from peak,Still dividend yield is 0.3 and PE 35 .Is it Quality or Kwality? which Pronju is mocking?
that is waht i said in my comment Ashiana is a disater for investors and I do not think porinju recommending this stock
Is it jealousy behind this attacks ?
Ajayan despite of 100% up 200% up climes on his tweeter, he is up by just 21% since last two quarters, that shows what he is up to, a trader with an value mask!
the problem is no one is slamming porinju…
lazzy money seekers blindly follow him..
dlf 100 he called buy … 140 he exit.. people got stuck ..
just entry no exit calls by porinju– 2 reasons
1. nice way of transferring public funds to his accounts
2. in any case in future if the stock does well re post with profits
god bless these short term cloners … pitty
Not only porinju but none of the investment gurus will tell when to exit a stock. The strategy is Buy truckload, scream later of the hidden valu,e make investers chase the stock, create value and exit some time later coolly in a hush. Nothing wrong. But we should have the wisdom as to at what stage to book profits.
“Create Value” by what means ??
which school teaches that investors created value for company, its company and its business create value for investors and stake holders.
what porinju is doing its called front running activity, which is clearly false and misleading!
wisdom is no to know when to exit , wisdom is to know about business what we buying where we will never exit like said by warren buffet !!
Ya,no one usually recommended exit,it is upto investor,otherwise investor would have gone with mutual funds, isn’t it?He recommended force motors at around 400 and he existed by 1500.That is his style. When force reaches 1500,all gurus entered the field and started recommending. Another example is NIIT. Porinju recommended this stock since 30,now it reached 100.Again all gurus came with recommendations when it reached 100.But here Porinju didn’t exit till now and I am damn sure that he will exit when it reaches high Investor should take the decision when to exit
@ANITHA
“Create Value” by what means ??
which school teaches that investors created value for company, its company and its business create value for investors and stake holders.
what porinju is doing its called front running activity, which is clearly false and misleading!
wisdom is no to know when to exit , wisdom is to know about business what we buying where we will never exit like said by warren buffet !!
All are agianst Porinju’s way of investing or trading What is the opinion of his clients about his style of investing ? No one has come forward against him nor protect him.
As Shatru Shotgun Sinha said for somebody ” ……….hazaar aur Haathi (elephant) jaaye Bazaar (market) “
actually he is able to pick up stock at low levels and exit when they reach a very high price….
it is this ability that helps him reap his profits…..
if only we could do develop this knack …
latest stock recommened by porinju EROS INTERNATIONAL is on free fall.stock is not finding his down end
well, it is both- tempting and scary.. the only way to jump is to buy the day he tweets or next his name comes in bulk deals, then ride on some profit and exit.. let us not bash him whether he is value investor or not.. let us accept, people made money buy blindly cloning his ideas (for few days or months).. so just take out come profit and do not keep guessing whether he will hold it for years or no..
eg: what he says about NIIT is bit over confidence. but even then people made money from 40-105.. At the end, it depends on us at what levels we buy and sell. Forget NIIT to be a billion company and what not.. just ride the short term gains..
Dear Pdd, did Porinju tweet any new stock recommendation during Nov month. I have seen only EROS on 1st Nov and after that there was none. So, is there other source from where we can get his latest recco.
I started noticing Porinju when his call on Jubilant Industries after a dismal annual result. Scrip surged from 160 levels to 300 levels, as a novice I got intimidated and started look into his calls more closely. There are some misses also like Anantraj, Tata Global Beverage, Vedanta. And, Om metals Infra, NALCO gave only minor returns since his reco.
As someone rightly pointed out, buy when he tweets, go on with the rally and exit once your personal target (40-50% is reasonable to me) is reached. Not sure whether his strategies work for investing but for trading, yes. Treat him as a tips provider (or punter, whatever works for you) if you’d like to make money. I have both got trapped (Gokaldas) and benefited (Arvind Infra) from his calls, but I won’t blame him. If I am not smart enough to know when to exit, no point whining.
Syed – Same with me , I have faith in PV’s style of investing, only prerequisite is be patient and invest long term.
Most of the comments here have missed a very crucial stock – BDH Industries ( a small cap pharma stock) ; I do not remember when, but in one of his interview he mentioned this company’s name , and next day I purchased a substantial qty at 59 each (in March 2015) , today the stock is up to 96 (a cool rise of 68%)
I dont know if PV is invested is BDH right now , but I intend to hold on this stock for 2 years
Any investor is invested in BDH ?
Thanks
hemant kulkarni
very good said syed ji pl tell which site to follow 4 regular check up up up
Suresh ji, follow him on twitter (@porinju). He tweet most of his recommendation there.
His recent buy Alpa Labs moved from 31 to 50 within no time (10 continuous UCs).
porinju is cool in a way that he is a no nonsense guy….i started following him during the grexit period … his views were funny and outright…..he might not be a guru but knows how to churn money and i think that is the most important thing….he understands the pulse of the retail investor and acts accordingly…we need more people like him and less like ambit capital!!
I think Porinju is not trading guy as all stating if you buy good stocks from his recommendation and keep it for 1-3 years horizon it is good bet, like NIIT from 40 to 110 , Kitex from 40 to 400, Future consumer from 10 to 22 so all these are investment bets and for longer term and not just trading yes few ideas got no results or down because one is thinking on small terms (like anant raj but if one is ready to hold for 1 year anant raj maight also give double returns)
I am with you on this. His picks esp Kitex, Shreyas, Force Motors, KRBL et all are absolute gems, no doubt. But off late, there is a crazy fan following that took his recos (with poor fundamentals) to UCs; eventually some poor retail investors getting trapped.
Take Orient Bell for example, he tweeted about its new website, the scrip hit UC the same day and downhill from there. How would you explain this? I know, its not entirely his fault.