Sunday, November 14, 2010

Some insights of what needs to be looked while investing.....

I have written many times but seems readers don't follow it properly.Someone asked me though Arman Finance nos are excellent then Capital Trust why Arman is lagging and Capital Trust is firing all cylinders.
Well, this reader is not a new reader of this blog and still do not understand why this is happening even though I have written many times that in stock market it is never 1+1 = 2.
If it is that easy then everyone can make money and all CA's should become a billioner reading the BS or AR.
I have written many times, I rarely reads AR or BS because they are of past year.It doesn't says what is happening this year.Ofcourse management do discuss future plans in AR but not all management will do it.
So reading BS or AR makes no sense to me all the time.
Now coming back to Capital Trust which I recomended at 70 odd along with Arman Fin in MFI space, Capital trust is going up and made a new high while Arman Fin has not moved an inch.
That means that market is knowing more then what we are knowing.
This is a very simple equation one should always keep in mind.
In case of  Capital Trust, market is knowing what is future plans of CT and what will be the earning if that will happen and hence giving it a thumbs up to the stock on the street.
Had anyone seen Delta Magnets Ltd recently?It is going up and up without any correction.That happened in Sujana Towers which raced away from 52 to 208 in couple of months.Those who sold to book profit never able to buy it again low.
Now Delta magnet is the same gr Co of Delta Corp where big starwarlts like RJ, RD, RKD etc has taken stake and is firing all cylinders.Delta Corp is 1 paid up and is at 136 , means Rs 1360 and 10 paid up.
If someone look at the balance sheet there one will find nothing.Then why that is happening?Why market is giving so big a discounting to Delta Corp and now Delta magnets?
There is one Co of same gr , named Arrow Textile which I discussed with someone in reply and Arrow Tex is also in buyers circuit last week.
Remember one thing.Market always knows better and earlier then us and when one sees a stock running ahead of fundamentals it means we are not knowing what market is knowing.One may call it insider trading.
What I am doing here is trying to figure out what is coming up way before market participants realise it and write it much much early then it starts moving and hence the wait is always long but once my picks start moving they goes in circuits for weeks togather.
One more readers wrote about my call on Arihant Superstructure which I gave a call recently at 74 and was in upper circuits last whole week and is Rs 90.When I wrote about it many or almost all readers barring couple of them didn't understand why I recomended it.
But what I was seeing is coming out true as it has started moving.
One readers asked me about Compact Disc about his concerns.His concerns are good but that is the reason a Co is available at 1 p/e! CD has an eps of 50 and is available at 60.
One other wrote about saying he gave a negative view and I gave him the reply that what you think is not negative as these raids etc keeps happening everywhere.
These are not negatives.If you feel the Co is good then this type of things is not a problem.
We have seen that in Venus Remedies.I gave a call on Venus at 220 and then the news came that they are not able to pay the FCCB money and hence the lender has gone to court to close down the Co.
Even after such news came out Venus never went below Rs.200.What does that mean?Market knows that these are a temporary thing and it will be sorted out and that happened and now Venus is at 300.
The things one need to understand is what market thinks, we need to understand that .How market works is very important to know.


    You are absolutely true. What we think about a particular stock or business is not that important , but what markets i.e other investors are thinking is the key.
    I have only experience of 3 yrs in this market and also in bull run, but of late I was also thinking on the same grounds. Its not about ourself but about others' thinking which matters.And thats the key to become EXTRA-RICH!
    So you have to be in others shoes & think like others.
    And believe me YOU ARE EXCELLENT AT IT.
    With Regards,

  2. Dear Rajeev,

    Thanks for ur writings.

    I have asked earlier, ur openion about electrosteel steels. You told you are not tracking this.

    However it would be great if you can look in to this once.

    1. Eventhough production is not started, its parent company seems good (Electrosteel castings)

    2. Face value of 10 and IPO price was 10 - 11 per share

    3. IPO lead managers were edelwess, enam sec, SBI capital market (I read these are very good lead managers)

    So if you get time, I would like to know ur openion about LT (I am not forcing you to look in to this :), I will not feel anything bad if you say again ur not tracking it, as you are already giving us a lot of choices and spending a lot of time which is making us to make good money)


  3. pradeep,
    it is very hard for me to look at each and every stock even though I track hundreds of stocks, still I miss some and I do not want ti track them become more burdensom to me....

  4. hi rajeev, thanx for an excellent article.
    i am new to market and its such a great fortune that i am follwing your blog from so early.
    i ,like many other people,was always puzzled by the way market respond to certain stocks.
    i have educomp stock and there quarterly result has improved this time, still market gave thumb down to it and it lost 10% in a day!!!
    now after reading your article i am getting some understanding of how things are working.
    thnx rajeev..

  5. hi rajeev,

    have a look at Rama Phosphates, it has delivered an Eps of above 40's for half year, it has went thru restructuring, the debt has come down,M.cap is 70 crs, half year sales of 202 crs, n.p for half year is 31.5 crs, margins on all fronts are increasing. if we take a conservative look at the companys financials and make out that the co. with its seasonal nature of business will deliver an EPS of 60 for the whole year, and looking at the peer valuations, this has a long to catch up with respect to its share price, its current price is 127.55/-, will like ur views on this one.

    Warm Rgds,

  6. Thanks Rajeev, I understand how difficult it is to track, ur own recoms and analysis are highly enough for us :)


  7. Manish,
    Rama Phosphate looks excellent........

  8. Dear Sir,

    Excellent result by loyal text eps 17.77. I have already doubled my investment and 100 % sure will get tripled very soon. Thank u very much

  9. I liked the sentence,"In stock market, 1 + 1 is never equal to 2". Any experienced investor in stock market would readily accept this. This man Rajeev knows what he is talking. I request the readers of this blog just to read his postings and try to remember what he said. Don't irritate him by asking irrelevant questions like what to do with the stocks you already own, which were not recommended by him. While he goes on recommending dozens and dozens of stocks, I never understand why people ask for his opinion on some other stocks. One should read this blog thoroughly more than once, I repeat more than once before asking any question. Like you study and analyze a stock, try to know what he likes and what he dislikes. Don't 'rub him on the wrong side'. Stock market is only for people with patience.

  10. Yes bipin,
    Loyal Tex has come out with excellent qr results and once again my confidence in this stock has proved correct.
    You are correct when u say days are not far when u will have 300% return and even more then that.....just hold it for 1 year....

  11. Rajeev Sir,
    What an equation " 1+1 is not 2 " ,So TRUE and the sentence should be REMEMBERED BY ALL THE VIEWERS.
    Secondly the followon question asked by the viewers , why ?? They just want to hear from the HORSES MOUTH , that is from Yes Rajeev Sir, once again,he affirmes the stock and they feel CONFIDENT, and PEACEFUL.
    This is my only assumption ,but as Krishna told
    have PATIENT is also true, so I too would like
    to request the viewer to have PATIENT and PLEASE do not REPEAT DO NOT ASK IRRELEVENT QUESTION .
    With warm regards and respect ,
    Vakharia M J

  12. Krishna/Mahesh,
    See after you wrote not to ask me such queries, someone wrote me.
    I have told many times read my replys as well and if someone is reading it then one can see what both of u have asked readers to do, but all going to DEAF EARS......