Small fish in Big Ocean
Category: Stock Markets
What to do in Current Stock Market in Apr2021: Sell out, buy more or hold ?
Most of the investors I talk are bullish and confident after making money in last one year. They are quite confident that every fall now is a buying opportunity
Also read : Invest in Stock market IF
We can broadly classify investors today in four kinds
- Who have entered market in March 2020 in or after lockdown and seen everything they touch turning to gold and in last one month, they lost some part of money by taking aggressive calls or to multiply it faster by trading in options and losing it faster henceforth
- Who have seen 2000, 2008, 2018 crashes and mostly sat on sidelines in March 2020 crash and still in disbelief that markets made a new life time high recently
- Who have adapted themselves fast and riding the trend till now
- Those who have have rode the trend and partially exited in March-April and hold around 25% cash
So as you are reading this article, did you notice where do you belong?
Congratulations, if you are able to see yourself amongst one of the four kinds mentioned above
Question still remains same for everyone : What to do now? Should we buy, sell or keep holding? What’s next : Is it bull market or is crash near?
Let’s read further to understand more about it and see what strategies people can adopt
Case 1. Sell out 100% and wait to re-enter at lower levels
Thsi strategy is for people who
- Are facing Liquidity challenges
- Can’t sleep properly due to fear of crash in markets
- Borrowed money to invest
- Goals are near ( within 1-2 years)
Advantage with these strategy is you may not lose capital if market goes down and may get a chance to re-enter at lower levels. Problem with this strategy is it is impossible for anyone to predict whether market has topped out or not. Will Market go further up and can give you a bigger chance to cash out? Will market come down and give you a chance to enter at lower levels. Nobody knows. Get away from people if they claim to know.
It is always better to cash out if our goals are near or we have debt to pay because when correction happens, it will not give you a chance to exit at your desired levels
You may need to decide a market point where you should re-enter
Case 2 Go opposite and buy more
I will strongly advised against this. Problem with this strategy is most of us will be invested in 50 + stocks by taking tips from random sources and keeping most of the stocks which are in loss. So if market correction happens, we will not be having enough money to average down all stocks.
In case, you have idle money and have a itch to invest at these levels, in such cases adopt a simple strategy
- Have a watchlist of quality stocks and
- Keep buying from the same watchlist based on quarterly results or in sip mode
- Plan your investment in a staggered manner instead of putting money in single go
- Invest the money which you don’t need for next 5 years
Correct portfolio allocation and conviction in the chosen stocks is a must for investing at these levels
Case 3- Hold and reorganise your portfolio
This strategy is for people
- Who are confused and not sure which strategy one should adopt
- Who have long term views on equity but not sure what to do in such a bullish market scenario
- Who have money available to invest right now but not sure in which stocks
- Who do not need to sell out as no immediate money requirement
Under this strategy, adopt the simple course of action
- Reduce number of stocks to a level which you can track easily. (20 stocks in a portfolio is considered reasonable for an average investor to track)
- Reduce the stocks positions partially or completely which you have bought on tips and not working or in loss. Getting out with a small loss is good at these levels to rearrange your portfolio
- Buy more of convincing stocks with long term horizon of 3-5 yrs.
- Increase the positions in stocks which are showing a promising future and management is walking the talk
Case 4- Sell Partially
This strategy is for people
- Who are ready to leave last 10-20% gains on table
- Who are ready to have patience for their cash deployment
- They do not feel zealous when other people make money and they themselves stay in cash
- Under this the simple course of action is
- Sell partially up to 10-25% and sit on cash, may or may not get a chance to deploy cash soon and wait can get longer
- Rest 75% to 90% should remain invested, so if markets runs up, they are still in the market
What i am doing in this market? My answer is Case 4.
- I have booked out of most positional stocks apart from few holding with my closed group of people
- I am selling the stocks which have run ahead of their fundamentals.
- I am selling the stocks which have hit stop loss levels ( both long term and short term stocks have stop loss levels)
- I am holding stocks which have good story building up and adding more on each quarterly result. In case they looking pricier at this point, i am not adding and just trying to hold and wait for next quarterly results for further action towards buying/selling
- Any new stock which looks promising to me, I am waiting for correction to add more
- I am not averaging any stock as of now
So that effectively means
I am not putting new money into the market
I am selling my existing less convincing or loss making positions
I am waiting for small correction in market to add more
I am not re-organizing my portfolio for next cycle of market
I am keeping Cash levels close to 20% to handle market correction and adding more.
I am happy to ride with my invested convincing positions
I would not recommend to sell out and sit if you have not borrowed money and are not facing immediate liquidity issues. But for sure remove dud stocks and put that money into other quality stocks as always
Overall, what I learnt from markets in my journey is very simple and easy to follow :
You can’t be 100% invested in market
You can’t be 100% sold out from market.
Will correction happen–We don’t know but fact is every rise is being sold into. The situation on ground is bad for COVID-19. Correction if happens, can take Nifty to 13100, 12400 levels where we can average on our positions. Bounce back should be sharper until and unless Covid 19 gets out of control and needed stringent undesired lockdowns, In such scenario 10k on nifty cant be ruled out
Are things all bad –No, not all is bad , There is good ray of hope for Q4FY21 results and Q1 FY22 results. There is hope for different vaccines being rolled out. Nifty new high cant be ruled out as of now
Whatever strategy finally you adopt. don’t be a blind follower
Read more on Blind follower here
Wishing you all the best and lots of luck
In case you have any questions/ queries, please feel free to reach me through Contact Form
Do spread the word among your peers, family members or anyone who can benefit from this blog and asked them to subscribe. But be selfish and take care of yourself first by subscribing before they do.
Enjoy the day and your life. Don’t forget, we are alone in this grand universe and may not get a chance to live again.
Software in 2k : Oxygen in 2021
Aatmnirbhar version : LED and AC components
Unknown Transformed into Knowns , hence
Its 10 Years : Decoded and Proven
Lockdown 2.0 impact started
GTPL Hathway : Showing good Growth
Promoter Holding : What is that!!
Aatmnirbhar version : PLI in Solar Modules and White Goods
FPI beneficiaries
PLI for Food processing
Investing : Wrong half the time and still make a fortune
Accredited Investors Tag: Coming soon
TAX on investments
Please treat this as just a indicator as these are subject to change or could have been changed
Consult you financial advisor before making any investment decision
PMS vs MF
Insider Trading Picking up!!
Alivira : Animal Health Award Winner
Gamestop Saga in India : Not possible!
FerroChrome : Price Journey to moon?
FMCG : Worst is Over?
Container Roadblock to Exports growth!!
Broadband ready Cable : Boost coming
Duopoly is set to go!!
A Decision which can have far reaching consequences for NSE, BSE, CDSL, NSDL
Out of these BSE and CDSL are listed on stock exchanges
More Details and discussion paper attached here ( from SEBI)
Marico : Marching Ahead
Sovereign Gold Bonds : Some Facts and Series IX details
SGBs are government securities denominated in grams of gold.
These are substitutes for holding physical gold.
SGBs are issued by the central bank on behalf of the Government of India.
Investors have to pay the issue price in cash and the bonds are redeemed in cash on maturity.
There are many reasons for buying gold.
The yellow metal acts as a hedge against inflation.
It is a relatively stable investment compared to equities.
It is a good diversification strategy.
It can be purchased easily
COVID-19 IMPACT : Life Insurance Premium
Building Material Stocks
China Effect !! On Indian Steel Companies
IPO stocks and History of gains fizzling out
Read more for these IPO before listing on their business, strength, risks Bector Food , Happiest minds, Route mobile, Rossari biotech, Burger king
Investments in 2020 : Are you on track?
Cox and Kings : Self destruction
India : Parts Sourcing Hub
Havells : HIGH GROWTH OPPORTUNITY?
Recent Darlings of Investors
Route Mobile
Read more here on Route Mobile
Burger King
Read more here on Burger King
India’s boAT –fifth largest wearable brand in the world
Read more here on boAT
In case you have any questions/ queries, please feel free to reach me through Contact Form
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Tata Motors making a comeback!
Among Top 5 car makers, Kia Motors and Tata motors gain market share and other have lost. After quite some time, Maruti’s Market share dropped below 50% mark
Value buying or value trap for retailers !!
Retail investors often take their investment decisions based on the share price instead of the fundamentals. They tend to buy what looks ‘cheap’ and get influenced by the news around a company. They often see a large fall in share price as an opportunity. However, such investments often end up becoming value traps. A huge price decline may not always be due to a temporary issue but also due to a permanent dent in the company’s prospects. Also, a sudden surge in the stock price attracts retail investors. They then invest in such a company, without paying much attention to its fundamentals. Curiously, the lower the ticket size of the share, the more interested retail investors become. All these are wrong reasons to buy a stock. A stock should be bought because the fundamentals of the underlying company are robust. Tracking the activity of promoters, FIIs and DIIs can be a useful input in determining this.
-source Valueresearchonline
Auto Industry and Semiconductors shortage
Covid-19 : Vaccine delivery
Who would have thought this in Q1FY21!!
UPL Money Siphoning case : Be Aware or BEWARE
Confident Promoters!
PLI Scheme : 10 Sectors
Implementation of production-linked incentive (PLI) schemes worth up to ₹1.45 lakh crore for 10 key sectors announced recently by the government is likely soon.
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Future of Future is Shrinking fast!
Top Dividend players to Govt
PSB : VALUE UNLOCKING for fending themselves?
What to do in Current Stock Market : Sell out, buy more or hold ?
If you have not read my earlier post , please go through What to do in stock market in early 2020. It’s important as you will be able to relate to this post in much better way after that!
Most of the investors I talk nowadays are not willing to invest in this supposedly overheated Indian stock market and its not about only December 2020, i can see the fear of crash looming in their talk from Sep2020. Most of them have cashed out from market in September 2020 due to Indian Chinese troop clashes and fear of US election results. What happened thereafter is more painful for such investors, Markets ran away further leaving them behind.
Also read : Invest in Stock market IF
We can broadly classify investors in Dec2020 in three kinds
- Who have entered market in March 2020 in or after lockdown and seen everything they touch turning to gold
- Who have seen 2000, 2008, 2018 crashes and mostly sat on sidelines in March 2020 crash and still in disbelief that markets made a new life time high in Dec 2020
- Who have adapted themselves fast and riding the trend till now
So as you are reading this article, did you notice where do you belong?
Congratulations, if you are able to see yourself amongst one of the three kinds mentioned above
Question still remains same for everyone : What to do now? Should we buy, sell or keep holding? What’s next : Is it bull market or is crash near?
Let’s read further to understand more about it and see what strategies people can adopt
Case 1. Sell out 100% and wait to re-enter at lower levels
Thsi strategy is for people who
- Are facing Liquidity challenges
- Can’t sleep properly due to fear of crash in markets
- Borrowed money to invest
- Goals are near ( within 1-2 years)
Advantage with these strategy is you may not lose capital if market goes down and may get a chance to re-enter at lower levels. Problem with this strategy is it is impossible for anyone to predict whether market has topped out or not. Will Market go further up and can give you a bigger chance to cash out? Will market come down and give you a chance to enter at lower levels. Nobody knows. Get away from people if they claim to know.
It is always better to leave last 10% on the table and cash out if our goals are near or we have debt to pay because when correction happens, it will not give you a chance to exit at your desired levels
You may need to decide a market point where you should re-enter
Case 2 Go opposite and buy more
I will strongly advised against this. Problem with this strategy is most of us will be invested in 50 + stocks by taking tips from random sources and keeping most of the stocks which are in loss. So if market correction happens, we will not be having enough money to average down all stocks.
In case, you have idle money and have a itch to invest at these levels, in such cases adopt a simple strategy
- Have a watchlist of quality stocks and
- Keep buying from the same watchlist based on quarterly results or in sip mode
- Plan your investment in a staggered manner instead of putting money in single go
- Invest the money which you don’t need for next 5 years
Correct portfolio allocation and conviction in the chosen stocks is a must for investing at these levels
Case 3- Hold and reorganise your portfolio
This strategy is for people
- Who are confused and not sure which strategy one should adopt
- Who have long term views on equity but not sure what to do in such a bullish market scenario
- Who have money available to invest right now but not sure in which stocks
- Who do not need to sell out as no immediate money requirement
Under this strategy, adopt the simple course of action
- Reduce number of stocks to a level which you can track easily. (20 stocks in a portfolio is considered reasonable for an average investor to track)
- Reduce the stocks positions partially or completely which you have bought on tips and not working or in loss. Getting out with a small loss is good at these levels to rearrange your portfolio
- Buy more of convincing stocks with long term horizon of 3-5 yrs.
- Increase the positions in stocks which are showing a promising future and management is walking the talk
What i am doing in this market? My answer is Case 3.
- I have a watchlist which i keep updating based on consistent reading about different stocks and their potential
- I have a process where i keep updating my trailing stop loss for the trading positions on weekly basis
- I am selling the stocks which have run ahead of their fundamentals.
- I am selling the stocks which have hit stop loss levels ( both long term and short term stocks have stop loss levels)
- I am holding stocks which have good story building up and adding more on each quarterly result. In case they looking pricier at this point, i am not adding and just trying to hold and wait for next quarterly results for further action towards buying/selling
- Any new stock which looks promising to me, i am initiating a 50-60% position at this time and waiting for small correction to add more
- I am keeping my cash holding levels consistently between 10%-20%. That forces me to evaluate a new position against my existing positions
So that effectively means
I am not putting new money into the market
I am selling my existing less convincing or loss making positions
I am adding more of existing convincing positions
I am adding new stocks position partially and waiting for small correction in market to add more
I am re-organizing my portfolio for next cycle of market
I am keeping Cash levels close to 20% to handle market correction and adding more.
I am happy to ride with my 80% invested convincing positions
I would not recommend to sell out and sit if you have not borrowed money and are not facing immediate liquidity issues. But for sure remove dud stocks and put that money into other quality stocks as always
Overall, what I learnt from markets in my journey is very simple and easy to follow :
You can’t be 100% invested in market
You can’t be 100% sold out from market.
Whenever I tried to cash out in fear, I lost major gains in next cycle. Whenever I invested fully 100% in greed, I lost good amount of capital and recovery becomes difficult.
Holding and adding to convincing positions seems simple but definitely a task which is not easy
So is this a bullish market — i dont know and neither i want to know as i am working on stock specific action
Will correction happen–The more we go away from March 2020 lockdowns, greater will be the chances of economic recovery and lesser are the chances of crash. Healthy Market correction (upto 15-20%) can still happen and can give a nice entry point. Not sure of whether it will happen next week, next month or next year or not at all!!
Whatever strategy finally you adopt. don’t be a blind follower
Read more on Blind follower here
Wishing you all the best and lots of luck
In case you have any questions/ queries, please feel free to reach me through Contact Form
Do spread the word among your peers, family members or anyone who can benefit from this blog and asked them to subscribe. But be selfish and take care of yourself first by subscribing before they do.
Enjoy the day and your life. Don’t forget, we are alone in this grand universe and may not get a chance to live again.
Cement Companies : GROWING well!! Capex and demand outlook
In case you have any questions/ queries, please feel free to reach me through Contact Form
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Apollo tyres : Getting into high margin business
COVID effect on Consumer Durables!!
Covid -19 has an impact on consumer durables to such an extent that demand outsrips supply and many SKU have waiting periods.
Interestingly Dishwashers demand is so high that it outstrips last few years combined sales already. Listed Companies like Whirlpool, Siemens,, Voltas, IFB can be beneficiary and Voltas and IFB stocks have run up in recent past already
This is a trend which will not stop and will have a contagious effect in Indian Society where word of mouth helps a lot in buying decision.
So premium items like dishwashers may become a common sight in coming days in many Indian households. Look for this trend to unfold in medium term
In case you have any questions/ queries, please feel free to reach me through Contact Form
Do spread the word among your peers, family members or anyone who can benefit from this blog and asked them to subscribe. But be selfish and take care of yourself first by subscribing before they do.
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Polycab : FMEG segment
FMEG segment already growing –from earlier posts some indicators showing this already
Despite Fall in revenue in other segments in 1st half FY21
SBI CARDS : What’s Unfolding
Q2 FY21 results fo SBI cards are out and does not look great on few fronts although long term story seems intact as of now
Few snaps from SBI recent investor presentation where we can see the lagging part from company as compared to previous year FY20
SBI Cards : Declining portfolio growth, SBI Cards : Increasing NPA , SBI Cards : Declining PAT
Looks better to wait for right entry price : NOT a RECOMMENDATION
AATMNIRBHAR Version : SHIPYARD
Q1 FY20-21 : Decent results
After a meltdown in Q4 in markets, there was an anticipation of meltdown which never happened. Is current market correction on the way to meltdown? Which stocks to buy/ which to leave? Questions galore!! Lets revisit some of the stocks which have decent set of results in Q1 of FY21
Also go through decent set of results in Q4 FY20
Don’t treat this post as a basis of investment. There are lot more factors to decide where a company will go in coming quarters. Discuss with your financial advisors before taking any position in stocks
Disclaimer : I may be fully biased while treating a company result as decent or bad
In case you have any questions/ queries, please feel free to reach me through Contact Form
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Addition to Ponzi Scheme
Will PSB Recap ever end?
Garment industry in shambles
Recently 4 shocks shook the garment industry –highlighted few points from an article in Hindu business line — Read the full article to have better understanding
1. Shortage of import of raw materials from China which hit countries which are dependent on import
2. Cancelled order or delay in payment from brands
3. Lockdown by administartion
4 Dull demand and slow recovery due to macroeconomic trends
This all will contract the industry by 20-30% despite an opportunity to make masks and other related stuff
Also read : https://alpha-affairs.com/2020/08/19/yes-bank-path-to-recovery/
Also read : https://alpha-affairs.com/2020/08/19/one-more-blow-to-hospitality-industry/
Times are changing : HDFC bank ?
Q1 earnings : Disaster
Impairment Charge : BEWARE or BE Aware
Biggest Risk in Indian Stock Market
Understand few ratios
Three common ratios ( D/E), (Debt Service Coverage ratio) and (Interest service coverage ratio) represented in annual report and discussed at various places in quarterly results of many companies.
These numbers, if not given, can also be calculated if few details are looked into the report carefully
Advertising is HIT!!
Decide the Right Question to ponder upon
So instead of worrying about market fall or rise, decide on whether the companies invested are sound and safe and can increase your wealth in right proportions
In case you have any questions/ queries, please feel free to reach me through Contact Form
Do spread the word among your peers, family members or anyone who can benefit from this blog and asked them to subscribe. But be selfish and take care of yourself first by subscribing before they do.
Enjoy the day and your life. Don’t forget, we are alone in this grand universe and may not get a chance to live again.
SWOT Analysis : DHANUKA
This is in series of posts where you can find the SWOT of a listed company along with factors to watch out for in coming quarters.
SWOT means
S – Strength of a company
W- Weakness of a company
O- Opportunities available for a company
T – Threats for a company
Disclaimer – Analysis is NOT a BUY/SELL/HOLD Recommendation. It can be used for educational purposes. There can be lot of things which have been missed in analysis either due to lack of information or oversight etc.. Do your own diligence & contact your expert financial adviser before making any investment decision.
Also Read – SWOT- Parag Milk Foods
Also Read – SWOT- SBI CARDS
Also Read – New to Stock Market : Part 1 : As Investor or Trader?
Also Read – Invest in stock markets only if
Investing is buying right stocks with right allocation at right price at opportune time with exit strategy in place Experience counts!!
Lets invest!!
Join our Equity booster plan at very nominal fees get in touch https://wa.me/919740311223?text=interestedinequityboosterplan
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DMART : 3200 or 1900
Please note that I had hold positions in DMART stock in past and exited and may hold in future as well. I may be fully biased in the below opinion. Please don’t take it as investment advice. Its just sharing of what i observed and reader is advised to do due diligence before acting on opinion
Dmart is a stock which i am tracking from IPO days. Could not get IPO allocation but I entered into it at very late stage and also exited without making much gains. The Reasons are aplenty but as we see it is also a stock which has defied gravity in valuations. Here i am trying to find the correlation with the results announced for Q4 and full FY19-20 with what i have observed a month back and shared to people on twitter. .
This what i observed and shared a month back on 22nd April 2020
Almost 50% stores closed for a month, open stores only selling essential items like grocery which have low margin, other things like clothes, utensils (high margin business) is closed because of less staff operating. Open stores have less footfall, there is limit as well on items that can be taken out while on the other side they need to keep store open for longer time –our area 24 hrs open, instead of normal 10am-9pm ..so more operating costs. Plus operating expenses are rising because of social distancing, sanitation of trolleys, infrared thermometers, sanitizes to people when they enter the store , Electricity expenses, Getting worker to work at night shift may increase salary allowance. More people in line has forced DMart to put up tents outdoors. So less revenues, more expenses, profit will take a plunge in coming time. And now enters JIO deal. A bigger challenge for dmart to retain customers. May force them towards home delivery with shrinking margins My view at that time was to exit DMART and re-enter later.
What happened to DMART price. From the point i exited, it went from 2150 to 2380 in last one month
Sounds familiar!!
You sell a stock, it goes high
You buy a stock, it goes low
Amazing isn’t it!!!
But here the pain is less, atleast till now, as i was waiting for Q4 results to take a fresh call .
So how was DMART results on 23rd May 2020?
First glance at results shows solid performance with approx 24% increase in YOY revenues, 29 % yoy growth in EBITDA and 60% rise in EPS YOY. Looks like i missed the bus by selling my position and already stock by approx 10%.
Still i decided to delve deeper into results and compared Q-O-Q numbers (Q4vs Q3 of FY19-20). I saw a decline in Revenue as well as EBITDA and only 8 days were the stores closed in Q4. Why did the Q4 numbers so weak? I thought actual impact should be visible in Q1 FY21 but here Q4 revenue decline is not making much sense? It is beyond my imagination that only 8 days has caused such havoc in Q4 numbers. I was not able to solve the puzzle for quite some time. Could not get any clue and I was re-reading the results & commentary again and again.
I pulled out numbers for past 8 quarters and there you go!! It confirms that Q4 is a historically weak quarter. But here the decline from Q3 to Q4 was 30% approx while in the past years the decline from Q3 to Q4 profits were limited to 20%. Somehow what i observed a month back starts making some sense . 8 days of lockdown did have an impact and its clearly visible in Q4 numbers.
I reached to Management commentary and in section Covid-19 update, Management very clearly reflected on the lock-down observations and its impact on business. I am highlighting the paras below for your readings.
Reading the paragraphs gave me a sense of relief that missing such bus last month might not be not painful in long run. It also highlight the fact that while the results may look better at first glance but they are more than mere numbers and why one should go deeper to understand the results.
Entry of JIO MART along with COVID-19 lockdown may be a lethal combination for DMART. We need to see how the company performs in coming days and will NEWTON’s gravity will finally pull the stock down or not at all.
I don’t yet know whether i may get a chance to board the bus again or not as stocks prices can remain irrational longer than one’s patience!! I am also skeptical as of now whether bus should be boarded at all. I may be totally wrong as i see there are people who are predicting or rather speculating that all is well with company and stock price is on way to 3200!!! Its better to wait and watch from sidelines although I would be really surprised if the DMART stock reaches 3000 levels before retreating back to 2000 or 1900 levels. But Stock markets can really make you go crazy at times.
Please share your opinion on what you think about DMART stock price
We will revisit this post possibly after Q1 results again and learn more from markets.
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Q4 FY19-20 : Bad, Average, Good and Solid
Interesting to see how many from solid and good results will move to Average and bad results category after Q1 FY21 results. Those who survive in good or solid category even after Q1’FY21 should be worth researching more to invest
Don’t treat this post as a basis of investment. There are lot more factors to decide where a company will go in coming quarters. Discuss with your mentors or financial advisors before taking any position in stocks
Consistent Stock Returns recipe
Sharpest recovery among historical bear markets : Beware or be aware!
Next decade for chemicals ?
Banks NPA & NIM data
Banking and finance sector is the worst performer in recent months and there are high chances that it will continue to do so. There could be multiple reasons for same including defaults in payments and slow credit growth
Below is the list of Public and private sector banks with NIM, Net NPA %and Gross NPA% as of 17th April 2020. It may help you to make an investment decision more prudently. Don’t forget to consult your financial adviser before doing so.
Public Banks
Private Banks
Given a choice based on this data, the below banks seems better than other banks on certain criteria.
- HDFC Bank
- Kotak Bank
- Bandhan Bank
- Indusind Bank
- IDFC First and
- City Union Bank
- State Bank of India (only one from Public Banks list)
Be aware that these NPA numbers has a high probability of increase in next two quarters.
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Mind your temperament
Stop falling to SIP propaganda if..!!
Read full article at we have all stopped our SIP
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Weekend HookUp: April 18, 2020
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Edge of Individual Investors
SWOT Analysis : SBI Cards
This is in series of posts where you can find the SWOT of a listed company along with factors to watch out for in coming quarters.
SWOT means
S – Strength of a company
W- Weakness of a company
O- Opportunities available for a company
T – Threats for a company
Disclaimer – Analysis is NOT a BUY/SELL/HOLD Recommendation. It can be used for educational purposes. There can be lot of things which have been missed in analysis either due to lack of information or oversight etc.. Do your own diligence & contact your expert financial adviser before making any investment decision.
Also Read – SWOT- Parag Milk Foods
Also Read – New to Stock Market : Part 1 : As Investor or Trader?
Also Read – Invest in stock markets only if
Also Read – SWOT- Dhanuka
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Indian Market Valuation lowest since global financial crisis
Market Capitalisation (M-CAP) to GDP Ratio : The stock market capitalization-to-GDP ratio is a ratio used to determine whether the overall market is undervalued or overvalued compared to a historical average. As pointed by Warren Buffett, M-CAP to GDP is “probably the best single measure of where valuations stand at any given moment”. The result of this ratio calculation is the percentage of GDP that represents stock market value. The Ratio for Sensex is currently stands at 54%, way below its historical mean of 69%. This ratio is at its lowest level since 2010 – an outcome of the flash crash seen in the last 22 odd trading sessions.
If we look at Nifty, on financial year basis this ratio stands at 49%, again lowest since the global financial crisis.
Which stocks to buy (not to buy) in this COVID-19 Lockdown!!
If February 2020 was forgettable for investors then March 2020 would be a month which most of the investors want to skip in their investing life. But what is the guarantee that April and May 2020 will be better if not the worst? So a rational investor can not wait for bottom as he dont know about the bottom. But what to buy and what to leave in such markets?
Let’s try to find out
Just when i was thinking what stocks to buy in these stressing conditions for economy and people, i mostly get stuck on FMCG companies. But the amount of negative news for the whole market is so high that making a decision is becoming difficult day by day. So i thought to keep watch on all news around COVID-19 lockdown and see if there are any positive inputs for any sector or industry.
It is evident from various sources that people are getting bored at home even when they are WFH. Although some of them are fitness conscious and are actively engaged in indoor exercises but their normal physical movement has almost gone done to ZERO. To pass the time, they have started indulging in binge watching/exercising to somehow beat boredom or depression. So i feel that these are the two sectors which could benefit the most in this lockdown as grocery stores are open and some of them do keep yoga mats or basic exercise equipment.
I searched a bit more on internet and came across something which positively testify this theory. https://www.stackline.com/news/top-100-gaining-top-100-declining-e-commerce-categories-march-2020
The site mention the TOP 100 Grwoing and declining e-commerce categories in US although most of these things also apply to Indian context as well.
Some of the major takeaways are (source : stackline)
· There is a surge in home fitness products including weight training equipment, fitness accessories and yoga equipment as gyms and workout studios are forced to close. Due to the increase in at home workouts, the gym bag category and many outdoor sport categories such as baseball & softball and track & field are in decline.
· Many companies have implemented a work-from-home policy, driving demand for computer monitors, keyboards & mice, and office chairs up as employees look to create a temporary home office.
· Most travel has been halted, causing declines in the luggage & suitcases, briefcase, and camera categories. Additionally,many spring break vacations were canceled, triggering a decline across sandal and swimwear categories.
· Formal apparel categories including Bridal and Men’s Suits are in decline as many couples are forced to cancel or delay their weddings.
So what we can take out from this in current Indian Stock Market scenario?
My observations (not recommendations) :
- Hospitality and Aviation stocks are facing issues like Lemon Tree hotels, Oberoi, Indigo, VIP industries etc.
- Branded retail stocks like Future group are also facing headwinds
- Jewelry stocks like Titan etc may face headwinds for quite some time.
- Real Estate stocks like Oberoi, DLF may be down for quite a long time
- FMCG stocks like ITC etc may be gaining out of this
- Pharma company stocks like Abbott, CIPLA, IPCA which are into sale of vitamins, cold and cough medicines, masks, PPE and ventilators may gain more
- IT stocks like TCS, INFOSYS etc may win more contracts
- Communication related companies may gain like Reliance Jio
- Gyms like Talwarkars may be facing headwinds for a bit longer time
- Food delivery services like Jubilant may gain market share
Please note that the information shared is for educational purposes. My views can be biased and i may hold some of the stocks mentioned. Please consult your financial adviser before taking any financial decision and most importantly do your own due dligence
What do you think out of this COVID lockdown? Please comment or mail me your views
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Warren Buffet Quotes from Twitterfeed
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Weekend HookUp: March 29, 2020
Weekend HookUp: 29 March, 2020
Life: The 1 Percent Rule (James Clear)
Investment: Unknown man became Billionaire from one Idea (Ridgewood)
Psychology : Investment Quotes (DollarsandData)
Health: Sugar : The Bitter Truth (Youtube)
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PORTFOLIO OPINION – THIRD EYE LOOK
As we have seen multiple times, people enter into stock markets with a lure of quick money and start buying stocks based on tips, analysts recommendations, social media news or friends recommendations. All this stock buying happens as a blind follower. Unfortunately most of the times these blind follower theory works for buying only. People forget to sell stocks or intentionally keep holding them because of losses in these stocks and they don’t want to miss out if stock rebounds. So they keep on waiting for stock to come to their buying level or worse they keep averaging such stocks.
What people really miss or can not analyze is whether the stock bought is good enough to hold or not? or Is it good fundamentally? or the original buying thesis has undergone a change or not? Whether this stock ever turns back or not and why? Whether they should average or not?
Our team at Alpha Affairs has recognize this need for common people who need a opinion on their holding so that they can take a decision themselves with better understanding. Alpha Affairs has filled this need by giving a chance to common man to get the third eye look on his/her portfolio.
Portfolio opinion is a premium service (nominal fees) and our motto behind this service is to help our friends remove dud stocks from portfolios to improve overall portfolio returns. We call it as a Third Eye Look on your portfolio. This Opinion should be construed as knowledge sharing only and not be construed as financial advice ( we are not SEBI registered) and any losses or profits arising out of same are responsibility of the stock owner. We are only trying to help each other in best possible way we can. It is better to consult your financial adviser before initiating buying, sell or hold calls on your portfolio
Please find the details at the link provided below
https://alpha-affairs.com/portfolio/portfolio-opinion-third-eye-look/
Premium service includes
Your portfolio review maximum two times.
One at start of discussion and
another review on or before 90 days as per request
You can use Services for Stocks or Mutual funds review or both together.
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What to do in Current Stock Market : Sell out, buy more or hold : Road Ahead?
Most of the investors are waiting for market to overcome the budget day shock given by markets and hoping that February should end fast and March should begin as earnestly as possible. Little did they know the second week of March 2020 will bring more blood on the streets literally (Dalal street became Laal street ), pun intended.
Most of these investors are new into the market and did not know how to react to such situations in market. Some of them only read about 1992, 2000, 2008 market crashes and personally not experienced them. This market crash is a kind of a graduation ceremony for new investors, while at the same time its a post graduation for 2000, 2008 graduates. If you survive 1992, 2000, 2008 and ongoing 2020 then you deserve a lifetime achievement award as well.
So as you are reading this article, did you notice any pattern in stock market crashes?
Congratulations, if you are able to see that
Stock Market crash is inevitable every 8-10 years.
Ofcourse capital protection in these times are the first priority. How to do that, lets read further on what strategies people can adopt
Case 1. Sell out 100% and wait to re-enter at lower levels
Thsi strategy is for people who
- Are facing Liquidity challenges
- Can’t sleep properly looking at downside in portfolio
- Borrowed money to invest
- Goals are near ( within 1-2 years)
Advantage with these strategy is you may not lose further capital if market goes down and may get a chance to re-enter at lower levels or bit higher levels when dust settles. Problem with this strategy is it is impossible for anyone to predict whether market has bottomed out or not. Will Market go down further in next 2 days or 2 weeks or 2 months. Nobody knows. Get away from people if they claim to know.
We may see occasional sharp upturn but may not be able to sustain it because economy will be impacted definitely due to most of world going into lockdown mode for few months.
You may need to decide a market point where you should re-enter
Case 2 Go opposite and buy more
Since such market crashes, most of the stocks fall even if they have good balance sheets, business , zero debt, so advantage with this strategy is you will get good quality stocks at throwaway prices and from these levels, they can return 15-20% CAGR in 5 years. Problem with this strategy is most of us go overboard and can’t classify what to leave.
In such cases adopt a simple strategy
- Create a watchlist of quality stocks and buy from the same watchlist
- Don’t look for tips.
- Plan your investment in a staggered manner instead of putting money in single go
- Don’t borrow money to invest
- Invest the money which you don’t need for next 5 years
- Prepare to see more downside to market and holding these investments are the key for longer term
Correct portfolio allocation including cash in hand at all times is the key to survive these crashes.
Case 3- Hold
This strategy is for people
- Who are confused and not sure which strategy one should adopt
- Who have long term views on equity but not sure what to do in uncertain the atmosphere is .
- Who has no money available to invest right now
- who do not need to sell out as no immediate money requirement
Under this strategy, neither you buy nor you sell but wait for the dust to settle down to take the next course of action.
What i am doing in this market? My answer is Case 2.
- I had a watchlist and i am making full use of it.
- I have a process for staggered investment over a 6 month period and i invest whenever market panics. On budget day, on LC days. That kind of panic selling gives me an opportunity to buy stocks that I always wanted to buy, but decision was deferred due to valuations.
- I am still not chasing expensive stocks and wait for them to cool down a bit more before initiating positions
- I would recommend this strategy if you have cash in hand and can hold shares for longer term ( more than 5 years). I am banking on the process i have adopted and still ready to take hit on 30% of stocks turning turtle in years ahead assuming 70% investments will easily cover the returns of 15-20% CAGR.
I would not recommend to sell out and sit if you have not borrowed money and are not facing immediate liquidity issues. But for sure remove dud stocks and put that money into other quality stocks
Whatever strategy finally you adopt. don’t be a blind follower
Read more on Blind follower here
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SBI Cards IPO listing – What to do on listing day and further
Disclaimer : This is my view point and can be biased or totally wrong. Please consult your financial adviser before acting on the strategies discussed below. Any losses originating out of same is your sole responsibility. Article assumes reader has basic knowledge of markets/IPO and it’s associated risks.
Read on SBI cards Business Strengths, Oppurtunities, Weakness, Threats in the post SBI CARDS IPO. We will discuss in this post on what could be an investor strategy once its listed on 16th Mar20.
Since Market scenario has turned bad as compared to IPO subscribe days, its better to be prudent in investing. Just pulling back line from old article on subscription strategy, the longer term strategy will remain as such
One can subscribe to SBI cards IPO if one can hold the shares for 3 to 5 years and looking for long term gains
Note taken from earlier post on subscribe or not : SBI CARDS IPO.
Case 1. No Allocation happened in IPO
This could very well turn out to be a blessing in disguise as you have money available to put in stock market. Whereas others are finding it challenging to arrange money to buy stocks available at cheap valuations after a drastic fall, you are spoilt of choices.
Action 1–> Keep some money ready for SBI cards and allocate rest amount to buy other quality stocks in market
Action 2–> If Listing happens at premium of +15-25% IPO price, you need not to do anything. Wait for correction in stock price before initiating your position
Action 3–> If Listing happens at +/- 5% of IPO price, you need not to do anything. Wait for correction in stock price before initiating your position
Action 4–> If Listing happens at -20% of IPO price or share price moves down 20% from IPO price ( approx 600 Rs), you can initiate buying and can put 33% of your money kept aside for SBI Cards. In more likelihood, you will get chance to put more at down levels.
Case 2. You got 1-2 lots allotted in IPO
Action 1–> Sell all allotted shares of SBI cards if listed at 20-25% premium to IPO price and wait for re-entry
Action 2–> If Listing happens at +/- 5% of IPO price, you need not to do anything and wait for further correction before averaging down your price
Action 3–> If Listing happens at -20% of IPO price or share price moves down 20% from IPO price ( approx 600 Rs), you can initiate buying and can put 25% of your money kept aside for SBI Cards. In more likelihood, you will get chance to put more at down levels.
Action 4–> Buy 50% or more of money kept aside if share price moves down 40% from IPO price ( approx 450 Rs).
Case 3. You got 5 or more lots allotted in IPO
Action 1–> Sell all allotted shares of SBI cards if listed at 15-20% premium to IPO price and wait for re-entry.
Action 2–> If Listing happens at +/- 5% of IPO price, you need not to do anything and wait for further correction before averaging down your price.
Action 3–> If Listing happens at -25% of IPO price or share price moves down 25% from IPO price ( approx 530 Rs), you can initiate your further buying and can put 20% of your money kept aside for SBI Cards. In more likelihood, you will get chance to put more at down levels.
Action 4–> Buy 50% or more of money kept aside if share price moves down 50% from IPO price ( approx 375 Rs).
Things to watch out for in coming years to stay invested or move out
Slowing economy may led to lot of defaults. NPA % is sure thing to watch out for
Rich Valuations at IPO time may take longer time to deliver mutlibagger returns and if any quarter results are not as good as expected, these rich valuations may play havoc
Emergence of new player to snatch market share. Keep watch out for AXIS Bank and ICICI Bank market share vs SBI Cards market share
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Yes Bank : Buy Sell or Hold
Practical advice for existing shareholders of Yes bank
Disclaimer : I am not a Sebi Registered adviser and currently invested in Yes Bank with average holding @45 Rs. This article is based on Yes Bank taken over by RBI and placed under moratorium on 5th Mar 2020. The content of the articles are not relevant if there are any future developments which are not in sync with this article. This article is not meant for traders. Please consult your financial adviser before making any decision on buy, sell or hold. You are advised to have your conviction and owning the decision thereafter.
As per the recent developments, Yes bank is placed under moratorium by RBI and SBI , LIC are potential investors with dilution of shares. So in such a case what an existing shareholder can do.
Should an existing investor buy, sell or hold? A dilemma which refuses to die down every minute and becomes more bigger with every news link.
Thumb rule
Your all investments may not be successful and may fail. One should be ready to accept such failures, learn lessons and move on to next opportunity.
Stocks may fail or fall due to technical reasons (overpriced) , due to bear market (every stock falling) , due to bad policies (power stocks, aviation are good examples), or change in fundamental story.
Be clear that Yes bank has fallen due to change in its fundamentals and its story has changed. Whatever thesis we have for Yes Bank at the time of investing is changed forever and this is the time to have a relook on yes bank investment.
So what we can do as retail investor when you are up against
- Change in fundamentals
- Lot of Traders
- Insider news operators
- Big fund houses
- Prevalent misinformation
Here is the practical advise in three scenarios
HOLD Yes Bank shares
Hold if your average is too high (beyond 60 Rs and further) (CMP Yes Bank is ~16 Rs) and don’t book losses. Let the losses remain on paper.
You can not do anything with pennies anyway.
Wait for investment thesis by SBI, other players to play out
Let the stock get stable and take a call again but do remember not to throw good money after bad money.
Buy Or Sell Yes Bank Shares
This section is specifically for investors holding positions below 60 Rs.
First step you should do is look existing amount as fresh investment in new bank or a new company & ask yourself few questions
Section 1
◆Will new Yesbank be multibeggar in near future?
◆Can I afford to lose all what i invested till now or further money in Yesbank debacle?
◆Will brand value of Yes Bank remain intact among customers and depositors after moratorium.
◆Will new customers open their account in Yes Bank ?
and like wise you can frame more questions
Section 2
◆Are there better opportunity in this falling market?
◆Will old customers withdraw all money on first given opportunity from Yes Bank?
and like wise you can frame more questions
If the answer is YES (for Qs in Section 1) along with NO ( for Qs in Section 2), Then read Option 3 down further
If the answer is Yes for some of the above questions in section 2 along with No answers to some questions in section 1, Then there are three options
Option 1. Think it is one of the bad ideas and sell if liquidity is a challenge. Book your losses and Move on to next opportunity.
Option 2. Hold if liquidity is not a problem. You may recover some of the price and decide accordingly. Don’t throw good money after bad money
Option 3. You have enough liquidity and can afford to lose all money invested in yes bank plus you have enough time horizon to play like 3-5 years, Go and buy shares of new Yes Bank and average your holding if shares available at below 10 Rs. Even if you choose option 3, allocate not more than what you afford to lose completely. I would not advise you to go beyond 5% to 10% capital in yes bank of your total capital allocated in market. Definitely a Riskiest option but rewards (if any) will be equally high.
Choose your option wisely based on current liquidity, your risk appetite and investment horizon and do as much due diligence as possible on your holding.
I hope this article might have brought some clarity to your current thoughts. Any feedback’s are welcome.
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IPO Hookup: SBI Cards – Subscribe or not ?
Subscribe SBI CARDS IPO or not ?
Few things on SBI CARDS IPO to help you decide whether to go ahead with subscribing for IPO or not.
Strength/Oppurtunities
Healthy Balance sheet
Strong parentage backup (subsidiary of SBI)
Second largest credit card issuer in India with 18%
Low credit card penetration in India ( @ 3% only) . Developed markets have this ratio @300%
Largest co-brand credit card issuer, having partnerships with several major players.
Will become the only listed company in India in this space.
Weakness/Threats
Fast usage of UPI interfaces may led to increased competition
Fast usage of mobile wallets may led to decline of credit card users or slow penetration into new user base
Unsecured credit may lead to high NPA
High Valuations
Subscribe or not?
One can subscribe to SBI cards IPO if one can hold the shares for 3 to 5 years and looking for long term gains
Things to watch out for in coming years to stay invested or move out
Slowing economy may led to lot of defaults. NPA % is sure thing to watch out for
Rich Valuations at IPO time may take longer time to deliver mutlibagger returns and if any quarter results are not as good as expected, these rich valuations may play havoc
Emergence of new player to snatch market share. Keep watch out for AXIS Bank and ICICI Bank market share vs SBI Cards market share
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Where do you see Indian Stock Markets by Dec’2020
Dilemma : Remain invested or hold cash in stock market
A dilemma every investor face : To remain invested in market or be fearful and cash out.
NO doubt, abundance of cash will allow you lot more investment flexibility than other people in market, more so in such volatile times or bloodbath in share market. But for that, you have to pass so many good looking (but not good) opportunities when markets are going up to preserve your cash.
On the other hand, if you are fully cash out in times of fear, you will miss the amazing wealth creation journey as shown below
So these two tweets shows exactly the dilemma one faces. As John Keynes quoted long time back –“Markets can remain irrational longer than you can remain solvent“
So the key here is to have correct portfolio allocation.
You should know which opportunities to let pass by. That can only happen when you don’t work on tips but study the business (ok, i mean share) in which you are going to invest.
If you can’t understand Balance sheet or cash flows, no problem.
As long as its not a penny stock chosen by you, you can just start with a basic google search about management integrity or business viability as a macro picture and things will start to appear. Take help to understand bigger picture of business. Understand the parameters for different kind of business. Is it cash guzzler or work on leverage? Is it a high margin business or high volume business?
So if your basic search, sanity checks on company itself shows you own a dud investment, be fearful and cash out. Deploy that cash to buy quality stocks further. Not only it will avoid to push more cash from your pocket but also trim your future losses.
So the cash you generally deploy for below par investments can be saved by doing some basic sanity checks on a company and that cash can be really useful in bloodbath in share market. You will get good companies at prices which will be seen as missed opportunity by people who don’t have cash.
Before i leave you to ponder on further details about the companies, do remember
A great company may not be a great investment!!
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Barbeque Nation Pre IPO shares
Bengaluru-based Barbeque Nation Hospitality (BHNL) has filed IPO papers with SEBI for the second time. Backed by private equity investor CX Partners and ace investor Rakesh Jhunjhunwala’s investment firm Alchemy Capital, the IPO would comprise a fresh issue of shares as well as offer for sale.
Barbeque Nation is one of India’s fastest growing and widely recognised restaurant brands in the rapidly growing CDR market
Rakesh Jhunjhunwala’s investment firm Alchemy Capital holds 2.05 per cent stake in the company. Private equity investor CX Partners owns 33.79 per cent. The promoters of Barbeque Nation Hospitality are Sayaji Hotels, Sayaji Housekeeping Services, Kayum Dhanani, Raoof Dhanani and Suchitra Dhanani. They together hold 60.24 per cent stake in the firm.
A very limited quantity of pre-IPO shares of Barbeque Nation is on offer.
Some of the details can be found here at https://economictimes.indiatimes.com/markets/ipos/fpos/barbeque-nation-hospitality-ipo-all-you-need-to-know/articleshow/74223280.cms
For those interested,please email me with details through Contact Form
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Weekend HookUp: February 9, 2020
Weekend HookUp: 9 February, 2020
Stocks: Blue Chips with almost zero returns in a decade (NT)
Travel: Agra Beyond Taj (Livehistoryindia)
Auto: 10 worst Indian Cars of a decade (TeamBHP)
Health: Ideal level for Ketosis (Livingwellwithketo)
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Want to Start investing in Stock Market
As lot of people keep asking me regarding the specific financial advice when entering a stock market, this quick-read article gives you some pointers before you jump into stock markets
Start Early
- Best advice anyone can give to you is to Start Early and Early means NOW
- Whether you are earning 5k/month or 5lac/month, you need to start asap.
- Only when you start early, you can finish or reach your goal early
Emergency Fund
- A must step!! Build an emergency fund equivalent to 3-6 months expenses
- Understand the importance of emergency fund. There is no second thought about it.
- Always maintain the emergency fund and review it on yearly basis.
- Increase the emergency fund every year
Read in detail : Emergency funds
Buy Life Insurance & Health Insurance
- These two insurances should be in addition to any insurance cover your employer provides.
- Buy an appropriate term policy life cover (minimum 25 times of annual income)
- Buy an adequate health insurance (minimum 20 lacs)
Also Read : You should invest in Stock Market if
Also Read : You should not invest in Stock Market if
Become Debt free
- Apart from home loan, there should not be any debt.
- Clear off your credit card debts, gold loans, car loans.
Establish a household budget
- Maintain an elaborate budget with expenses under different heads
- Don’t run away from noting down every single expense ( every rupee for that matter)
- Keep %age of money for stock market investment and %age of money for other asset classes
- Follow Save first, spend later approach.
Follow Goal based investing
- Split your saving across different and appropriate set of investments
- Park your money in Fixed deposits, Recurring deposits, liquid funds, debt funds, gold.
- Start investing in Stocks and mutual funds when you are done with above steps
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Emergency funds : First step in personal finance and gateway to wealth creation
Importance & need of emergency funds
Emergency fund is money which comes to your rescue when something unexpected pops up in our daily routine. One needs an emergency fund as life is very unpredictable. Something that can go wrong will eventually go wrong at wrong time.
Just think of emergency fund as a lifeline thrown at you when you are drowning and this article is about creating that lifeline yourself
One may need to travel unexpectedly (we all know how much bomb a ticket costs at last minute) or there could be medical emergency (Generally Life insurance or medical insurance will work for this but by the time insurance claim comes to you, you need to survive yourself and family and pay hospital bills) You need funds for that.
Or worse if you are working in an industry where jobs are not secure and layoffs are frequent, such a fund becomes mandatory.
You wouldn’t be forced to reach out to family or your so called friends for help and further You also wouldn’t have to accept the first job offer that lands on your plate in such a scenario
How much to keep aside for emergency funds
Basic Thumb rule is to have minimum of 3 months and maximum of 12 months of expenses as your emergency funds. e.g, if your monthly income is Rs. 50000 and you spend Rs 45000 month on an average and save 5000 Rs per month then you should have minimum 45000*3 =135000 as your emergency fund.
- Minimum of 3 month expenses in highly liquid form (365*24*7)
- Minimum of 3 month expenses in fast-accessible liquid form (T+1 days)
- Approximate 3 month expenses in easily accessible liquid form (T+3 days)
- Approximate 3 month expenses to be put aside in somewhat inaccessible liquid form e.g. 9 month fixed deposit or 1 year fixed deposit
Best way to calculate emergency fund
- Monthly Expenses should cover Home EMI, personal loans, car loan installments, household expenses, school fees, grocery bills, phone bills, personal grooming expenses etc.
- Best way to arrive at monthly expenditure is to divide yearly expenditure by 12. This is only possible if you know your yearly expenditure by having household budget and maintain every single expense in that.
- Second best way is to add all major expenses in a year and divide by 10 (instead of 12) to arrive at approximate monthly expense.
- To hedge against inflation, multiply this emergency fund by 1.1 to arrive at real number assuming a 10% inflation in education, travel & medical fields
Review of emergency funds
- Review it on yearly basis
- Keep adding some money to emergency fund based on increased expenses
- Adjust for inflation and add funds accordingly
- Foresee any emergency in next few months and add funds
Where to keep emergency funds and accessibility time
| Asset | %age of emergency fund | Storage mode | How to access | Accessibility days |
|---|---|---|---|---|
| Cash | 15 % | Safe vault at home | Direct | 365*24*7 |
| Liquid Bank Balance | 50% | FD/RD/Saving account | Cheque/NEFT/ IMPS/UPI | 365*24*7 to T+(1 to 2) working days |
| Debt Mutual Funds | 30% | Ultra short duration funds, liquid funds | Demat account/ Cheque/ NEFT | T+(1 to 2) working days |
| Gold | not more than 5-10% | Safe vault at home | Sell to Jeweler | Jeweler working hours |
| Other avenues which can be used | How much % to use in case of emergency | How to use | Advantage | Disadvantage |
| Credit card | 25% | Make a habit to not cross 75% of allocated limit. Reserve 25% of credit card limit as emergency fund usage | It will give you 20-40 days to arrange funds from other resources. | Debt trap |
| Real estate | Neither recommended nor preferred | Additional plot/flat can be used to serve this purpose | Huge amount will be available | Highly illiquid. May be sold at high discount to market in emergency and may take months |
| Stocks/ equity Mutual funds | Neither recommended nor preferred | Sell in market | Emergency funds may grow faster | May be sold at high discount to market in emergency. T+3 working days to access funds |
Also Read :
You should not invest in Stock Market
You should invest in Stock Market
Gateway to Wealth creation
You can safely assume the emergency fund as gateway to wealth creation. Until you pass this gateway, dont dare to think of entering stock market.
The point i want to bring to your attention is — if you have build up emergency fund and saved enough money further (approximate 2 year expenses) in bank account then such a huge money can give you access to new opportunities in stock market.
Let’s say the economy crashes and potential layoff’s are round the corner and eventually stock market crashes and asset prices are below their intrinsic values. In such a scenario, instead of selling your stocks at penny prices, you would have enough disposable money to take advantage of stock market and build up new positions without fear.
Do keep in mind that Stock market is a risky place and there could be times where the market is down for quite a long time and you do not want to sell your securities at highly discounted rate, this kind of emergency fund may help you to pass through such bad times without worrying about any unforeseen risks in your daily life.
Last but not the least You need to have more than few of the personal qualities to succeed e.g.
- Always maintain the emergency fund and review it on yearly basis.
- Increase the emergency fund every year
- You have willingness to admit to mistakes and flexible to change your views.
- You do not panic frequently at home/office
- You can deal with uncertainty with ease
- You have disciplined approach and follow process instead of gut feelings in decision making
- You are self reliant and willing to do an independent research
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Do spread the word among your peers, family members or anyone who can benefit from this blog and asked them to subscribe. But be selfish and take care of yourself first by subscribing before they do.
Enjoy the day and your life. Don’t forget, we are alone in this grand universe and may not get a chance to live again.
Budget 2020 : Shockers (& hits) : Takeaways by experts
Positives, negatives and how to beat budget — https://mfresponse.adityabirlacapital.org/Hosted_pdfs/FEB_2020/Budget/INV/budget2020_MF.pdf
Budget 2020 & you — https://www.primeinvestor.in/2020/02/01/budget-2020-and-you/
Important takeaway points —https://finshots.in/archive/points-of-the-budget/
Shocker on non tax paying NRI’s – https://www.cnbctv18.com/personal-finance/income-tax-shocker-budget-2020-proposes-tax-on-non-taxpaying-indians-residing-overseas-5180771.htm
Budget 2020 : An eyewash : https://www.capitalmind.in/2020/02/budget-2020-lower-tax-slabs-just-an-eye-wash-but-check-for-yourself/
Also Read : Move to New Tax Regime or Stick to Old Tax Regime
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Weekend HookUp: February 1, 2020
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Indian Chemical Stocks to gain on Corona Virus scare
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Stocks Yearly Return > 50%
Stocks Market Response to Epidemics Outbreak
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Weekend HookUp: January 25, 2020
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You should invest in Stock Market if
You can afford to lose money without that loss having any affect on your and your family daily life in the foreseeable future.
You do not need money in immediate future (means within 2-3 years) e.g.
You decided to diversify your income streams.
You decided to get out of losing your savings from inflation
You are not fortunate to have a windfall family inheritance to live off.
You know stock market is a risky place and can differentiate between investing, trading and speculating. Read more in
You are aware that in long run, Equity investing is the best investment theme as compared to GOLD, FD, CD, BONDS, REAL ESTATE
Last but not the least You have more than few of the personal qualities needed to succeed e.g.
- You are patient and have a common sense
- You can detach yourself from the owned assets/liabilities
- You have willingness to admit to mistakes and flexible to change your views.
- You do not panic frequently at home/office
- You can deal with uncertainty with ease
- You have disciplined approach and follow process instead of gut feelings in decision making
- You are self reliant and willing to do an independent research
Also Read : You should not invest in Stock Market if
In case you have any questions/ queries, please feel free to reach me through Contact Form
Do spread the word among your peers, family members or anyone who can benefit from this blog and asked them to subscribe. But be selfish and take care of yourself first by subscribing before they do.
Enjoy the day and your life. Don’t forget, we are alone in this grand universe and may not get a chance to live again.
You should not invest in Stock Market if
You need money in immediate future (means within 2-3 years) e.g.
- You are planning to do higher studies in near future
- You need to pay for your college education soon
- You are aware that one of your immediate family members or yourself have to undergo surgery soon
- You need to close a loan soon
- You are saving for down payment to buy a house soon
You decided to live on fixed income e.g.
- You are an older person who needs to live in the comfort of fixed income
- You are a young person who don’t want to work and live off of a fixed income from a windfall family inheritance
You do not have control over your emotional behavior e.g.
- You can not detach yourself from the owned assets/liabilities
- You are not able to admit mistakes
- You panic frequently at home/office
- You can not make decisions without complete information
- You are too adamant to change your views
- You mostly go by your gut feelings
Also Read : You should invest in Stock Market if
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Do spread the word among your peers, family members or anyone who can benefit from this blog and asked them to subscribe. But be selfish and take care of yourself first by subscribing before they do.
Enjoy the day and your life. Don’t forget, we are alone in this grand universe and may not get a chance to live again.
Mutual Fund Stock Buys in Nov 2019
Mutual Fund betting Big on Big Stock Companies
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SWOT Analysis : Force Motors Ltd
This is in series of posts where you can find the SWOT of a listed company along with factors to watch out for in coming quarters.
SWOT means
S – Strength of a company
W- Weakness of a company
O- Opportunities available for a company
T – Threats for a company
Disclaimer – Analysis is NOT a BUY/SELL/HOLD Recommendation. It can be used for educational purposes. There can be lot of things which have been missed in analysis either due to lack of information or oversight etc.. Do your own diligence & contact your expert financial adviser before making any investment decision.
Also Read – SWOT- Parag Milk Foods
Also Read – New to Stock Market : Part 1 : As Investor or Trader?
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Do spread the word among your peers, family members or anyone who can benefit from this blog and asked them to subscribe. But be selfish and take care of yourself first by subscribing before they do.
Enjoy the day and your life. Don’t forget, we are alone in this grand universe and may not get a chance to live again.
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