Monday, December 20, 2010

Market is down...but not out....Updates...

Market is down by 2000 points but stocks are down by over 40-50% and even more .There is a cautious atmosphere in market.Market pundits are advising caution, some are sure about trend reversal as well, means starting of a bear phase.
Perticularly the midcaps has been battered down very badly but then these are the times when one gets great fundamentals stocks cheap.
I like such type of correction which gives chance for investors to lapup good stocks.
Always remember one thing, whatever the market is ,buy the Value.If one finds a stock cheap, disregarding what market is doing one needs to go ahead and buy it.Fundamentals has always given great returns.
I have written many times, making money in market is not easy.Don't borrow money to buy stocks.Don't play in F&O.Don't trade daily in stocks.Don't buy for a week or a month.Market never fulfill our such wish.Market has a very very bad tendency to prove everyone wrong and that it does consistantly without fail.
Never make projection for ST.Never make projection which are abnormal.Market do give abnormal returns but one never knows in which stock one will get that.
For example, if we take Parekh Aluminex,which I recomended here at Rs 105, went on to touch 600.Many readers who follows me wrote me that they have already sold 50% and had made the rest holding free of cost.That is excellent thing to do but when any stock gives abnormal return within a year or year and a half, then readers needs to book profit as well.Like in Parekh Aluminex the return was 600% in a year or year and a half.That is the key here.Booking profit when a stock is giving enormous return is the order of the day as well.Those who bought Sujana Towers at Rs 32 when I recomended and sold 50% at 64 should book profit at 180-200 as well.Sujana Towers ran like a mad bull and in a very short time of last couple of months went from 52 to 230 .Now these type of return is just out of world.Only one is lucky then only one can have stock with them.
Yes, selling 50% at double is my first choice as the holding becomes FREE and one has no investment left.But market is not just taking out money but also making money and if one do not book profit at times one may feel letdown.
Both Parekh Alu and Sujana Towers are excellent cos and will do well in future as well but if one has sold 10-20% he would have been able to buy them again at cheaper rate.
I just read that Serial entrepreneur and ace investor C Sivasankaran has bought 1.5% stake in Sujana Towers for Rs 19 cr at Rs 130( Which is also wayup from my recomended price).He has already picked up stake in K S Oil another tainted stock under SEBI scan.Why an ace investor has to buy a stock which is under SEBI Scanner?Because the fundamentals of the Co is great.
These opearors when they try to move some stocks , not all are without fundamentals.Maybe couple of them are such but 70-80% do have excellent fundamentals otherwise if they try to operate all poor fundamentals stocks then no one would buy it or there can't be huge buying that can come to lift the stock up.So when operators picks up stocks they also pick stocks which have excellent fundamentals.
So don't be afraid of buying stocks which are under operators list which have been manupalated, if you see the fundamentals are good , one need to go ahead and buy it.


Sucheta Dala one of the journalist has come out with news that KP is still active and she has wrote some 20 stocks where KP is active and she now says they are K20 stocks instead of K10 in year 2000 which he ran.
So it means that when KP bullrun was on in 1999-2000 of IT sector, he ran only 10 stocks which were then known as K10 and now when KP is debarred by SEBI uptill 2017 he is running 20 stocks!Isn't that looks more surprising?KP in debarred state is more dangerous then without it.......
The list of stock she has given are as under:

1.Orchid Chemicals

2.GMR Infrastructure

3.Cairn India

4.Deccan Chronicle

5.Reliance Industries

6.Punj Lloyd

7.India Bulls Real Estate

8.Pipavav Shipyard


10.Amtek Auto

11.Hindustan Oil Exploration Company

12.Camson Biotechnologies

13.Crew Bos Products

14.UCO Bank

15.East India Hotels

16.State Bank of India

17.OCL India

18.Kemrock Industries

19.Tatia Global Ventures

20.JSW Steel
And so that is how it is! Excellent finding.Now out of these 20 stocks Orchid Chemical, Punj Llyod,Hind Oil Explo are Rakesh Jhunjhunwala's stocks where he has invested big.
Now take Cairns, Ril Ind,State Bank,East India Hotel ,GVR Infra are very very big.Big in the sense they have HUGE Mcap and rigging those shares is just out of world.
She also wrote that KP wanted to buy 60 mn shares of Amtek Auto.
That means that eq is40 cr means, 4 cr shares and is 2 paidup so there will be 20 cr shares and out of that 60mn shares means KP wanted to buy 30% of the eq to rig up the price.
Now Amtek Auto has come down from 200 to 140 and even if we think that promoters and KP were hand in gloves with each other and they gave 6 cr shares to KP they should have got 917 cr from KP even at CMP of Rs 140! Wow! So for a small Co like Amtek Auto ,if KP wants to rig the price , first he needs to have shares and for acquiring it he will have to have Rs.917 cr to buy 60 mn , means 6 cr imagine how much he has to put money to run stocks like SBI, RIL Ind where the Mcap is huge?
Is it possible for a person like Ketan Parekh to have 917 cr to buy stake in Amtek Auto and then rig the prices?I don't believe that is possible.
Now just imagine if KP has to run all 20 stocks how much money he will need to corner floating stocks of that shares to rig up the price.
I have written recently, barring A gr stocks there needs to be an operator to move the stock above 50% in a year .The reason I wrote barring A gr is they are having HUGE eq and hence HUGE Mcap and DII's,FII's , HNI's all have taken stake in it and hence it is difficult to rig prices of A gr stocks.
Now coming back again to rigging prices of stocks, 3-4 stocks belongs to where Rakesh Jhunjhunwala has taken stake , and hence it again vindicates my belief that even operators are there that doesn't mean fundamentals are weak.
And according to me it is impossible for anyone to rig up the prices of SBI,Ril Ind, Cairns India which has huge eq and is distributed among many DII's and FII's and promoters.


  1. Dear Rajeev,

    Your point is excellent. why would operators always choose only bad stocks ? They can do with good stocks as well. By the way,Hanung toys is one more stock under rumour of Operators driving the stock.Fundamental seems to be excellent in terms of results. Now its beaten. Does it fall in the category of undervalued stocks?


  2. thanks Rajeev. u answered lot of my queries.
    By god's grace, I could sell Sujana towers at 208.
    I have a small question. I see a small amount if buying happening in Parekh Aluminax by "Pacific Corporate Services Ltd". Is it the same brokerage firm under the scanner?

  3. Excellent as always - Buying on Fundamentals

    a. Buy & Grow with the company - If Promoters make lots of money - As Investor you too make lots of money as per your investment

    b. Always buy value - Perfectly said - Some stock whose value in the next 1 year is say 500 is available for 100 - Go ahead and buy it & learn to sit tight on it (I learnt this from Rajeev Ji)

    c. Now after 1 year the stock value would look like 1,500 in the next 2 years is available at 400 - New Investor will come and buy it - You sit on it still

    d. If Mad valuations come by it becomes 900 in 2 months book full profit and wait on sidelines

    Excellent article Rajeev Ji

  4. Their is huge debate & justification came after the 2g scam what govt did is right to keep the call rates cheaper.This another way to make fool of public. Everybody knows how tender process happen in india .. how to give price so much importance , how bribe is to happen.
    I wonder why after Dec 2007 fall, these PSU shows that much value ... when you see some psu or Banking share multiply more than three times or four times .. is this is not price rigging. Most of us know Small investor invest in Small cap & mid cap and in if you are indian you never believe in the Govt running companies as their is always a scam happening at any time & most of all they never work efficiently. I heard right from the start that some of big investor or Funds saying indian story lies in the hand of Private companies. Now everything comes from these PSU. Yes may be it is some internal people know that everything come out from PSU but most of us dont.And I think most dont buy these banking stock or PSU stock.

    FII investment is also not honest ,as they just want a market to sell their product. They know where they could get return of their money invested. Its only small investor has to bear.
    As a result you never take (Panga) with minister too they make your life so miserable that you not even eat. They make things so much difficult & costlier as that is happening.

    Sau sunar ki ek lohar ki. is 100% true


  6. Shaifali,
    U r correct and that is how India is.One need not be disturbed or get irritated with such things..because these are normal things in India and people of India do not mind person can't do anything....

  7. Uno, Pacific Corp sr is still Sanjay Dangi's firm as per what I read and make out.But at 200 Parekh Alu makes sense.Down from 600 to 200 and they are venturing in Power sector in UP I think...

  8. Rajiv Bhai What's going on in Compact disk & sunil Hitech.

    Sunil has come down to 130 levels

    and in compact disk I read it at money control that even after declaring dividend promoter is not paying it. one investor writes - Bogus company. I wrote to the company about non payment of declared dividend ( 20% dividend declared in september 2010 as per the AGM).They have replied saying that their bank accounts are frozen and hence they are not in a position to pay the declared dividend. I have again written back to the company that they shall inform this aspect to BSE and all shareholders through Media , since the dividend was declared in the AGM.

  9. Stay Away from Sujana Towers

    I Knew this scrip is being operated and those who have bought will never see these high prices in near future.

    see the BSE annoncement

    Sujana Towers Ltd has informed BSE that as per the authorisation given by the Board of Directors of the Company at their meeting held on November 14, 2009, the Management Committee of the Board of Directors of the Company at their meeting held on December 13, 2010 approved the resolution to convert 80,00,000 convertible warrants into 80,00,000 equity shares of Rs. 5/- each at a premium of Rs. 50/- per share.

  10. Mahesh,
    I have already mentioned when I gave the call for Compact Disc that there is some problem with the lenders and hence bank a/c are frozen.
    What I liked was , when u mailed the Co, they replied and didn't bunk the answer.

  11. Mahesh,
    May happen, Sujana Towers can come down more but it is an excellent Co with a turnover of over 1000 cr.
    Show me such Co which have got 1000 cr sales and available at this rate.
    As I recently wrote that astute investor C Sivshankaran has tken 1.5% stake in Sujana Towers at Rs 130....U mean to say he made a wrong decision and his 90 cr is now in water?
    Readers needs to take decision after going through all news and then do whatever needs to be done.
    Mahesh, one more thing.When I recomend stock there is no guarentee that it will go up only.Ups and Downs are part and parcel of market.If one is not confident about where one is investing he needs not to buy that stock.....So in case of Sunil Hitech, if u r not confident then don't buy it....or in that case any other needs not to buy that stock....When I gave the call for Sunil Hitech , I gave all valid identifies late or I may be wrong in analysing the future of the stock....

  12. Rajiv Bhai,

    Agree on Sunil Hitech I bought at 120 more so now I am at level.

    What your take on Financial tech. As of now it is restricted because of uncertainty of mcx IPO and listing but it is going to happen.

    Also one more scrip Allied Digital at these levels seems value ??