Jun 18, 2019

LEEL Electricals; What to do know

Very hard to predict what might happen in near future for LEEL but everyone ignoring some factors.
1. Stock fallen to single digit where company had Book value of 300+
2. Solid experience and established brand with good manufacturing facilities across the India.
3. Brand Lloyd AC of havells no manufacturing facilities and all the AC units of Lloyd should be supplied by LEEL only.
4. Promoters are questioning the SEBI to inquire on Porinju role for any role in the price drop of the stock and also they are stating "No siphoning of money took place in the books of the company"
5. Stick trading at utter cheap valuations and yet there are no authorised confirmation for siphoning of money.

By all this it is clear that there a lot of value at the CMP of Rs.7/- but there nothing to loose from here those who are holding the stock from three digits. It is understood that not to sell a single stock at this point if time until some clarity comes. Those who are holding from higher levels can average your holdings as there is every chance to bounce back to 13-15 levels immediately seems to be a good idea to study.

With thanks
advance wishes


Note: The above article is not a research report but it is a information as available on public domain and it should not be treated as a research report. It is just a study which I/we observed and recording them as a dairy of mine/us.

Registration status with SEBI: I am not registered with SEBI under the (Research Analyst) regulations 2014 and as per clarifications provided by SEBI: “Any person who makes recommendation or offers an opinion concerning securities or public offers only through public media is not required to obtain registration as research analyst under RA Regulations”

Disclosure: It is safe to assume that i/we might have positions in my/our portfolio and hence my/our point of view can be biased. Readers should consult their financial advisory before any investments.

Jun 13, 2019

Common mistakes committed in the equity market

Throughout your investing career, it is likely that you will be guilty of committing a lot of mistakes. There is no one today who has not committed costly financial mistakes including the legendary Warren Buffet. However it is the ability to recognize and learn from your mistakes that will determine whether you are able to achieve your investment objectives. It is thus paramount to commit as few mistakes as possible. Failure is often the best teacher provided you allow yourself to be taught. The hindsight is more important that foresight as we need to learn from our past to have bright future.

The last three months have exposed investors to several such mistakes. Here we highlight eight of the common ones.
1.     Relying on tips and hearsay is the first and most common mistake committed by most investors.
2.     Expecting Big Gains fast. Very few people have the mindset and patience required to invest in equity. A common expectation is to make big gains quickly. There is no focus on the risk the investment exposes your portfolio to. A classic example of recent times was the Power sector. Any stock that had the name ‘Power’ in it was considered sacrosanct. People did not even care about risk involved in taking exposure to such stocks. Instant gratification is injurious to your wealth.
3.     Leverage in equity markets can have disastrous consequences not just on your financial health but on your physical health.
4.     It’s not easy to always make money in equities and there could be periods of negative returns. Though over time, returns can even out, in the short run there could be sizeable downside. So don’t be surprised by it. Understand, expect corrections and be realistic.
5.     Have reasonable expectations from equity. As an asset class equity should technically deliver returns in line with corporate earnings. However we do not invest in a utopian stock market but a market that drives on hope, greed and fear. Hence you are bound to see eras of excesses and exuberance and those of pessimism.
6.     It’s all easy to know ‘Buy low and sell high’, but majority of people would end up doing exactly the opposite. Most investment banks, brokerages, hedge funds, FIIs, domestic investors, gurus and analysts are super confident in a bullish market when highs are torn apart every other day. Things suddenly change for them when the market corrects and no one is ready to put even their thumb in the market. Learn to embrace market sell offs. People who could not earlier invest had an excellent opportunity to invest at 10000 to 11000 levels but I do not know too many people who had the gut to really invest.
7.     When the market corrects, do not put all your eggs immediately. Corrections that happen after very sharp rallies tend to extend themselves over a few months. One of the strategies that can be adopted is to invest in a staggered fashion. You should start investing if the market has corrected by more than 15-20% and go higher when it crosses 30-35%. There is no way to know what the bottom could be and I don’t know how people come up with their holy predictions on how lower can the index go. When the going is bad, all one hears is bad news and it’s very important to grow beyond these daily projections. Investing is certainly not a poker game and you would be harming your economic interests by following what a bunch of unknown people are doing.
8.     Don’t keep looking at your portfolio because things are not going to change even if you see it many times. A quarterly or semi annual review should be good enough for most people. Looking daily is harmful to your overall thought process and can urge you to take emotional decisions whether on the way up or way down.