Wednesday, November 11, 2015

DIWALI WISHES ..

First of all , wish you a very happy Diwali and a prosperous year ahead.I believe many of my readers made decent return in last 1-2 years mainly due to overall better sentiment in small and mid caps.Generally, retail investors become active in a bull market and there is no exception this time too. From the mails I am receiving from my readers , I feel lot of first time investors entered in market during this period. But unfortunately only a very small fraction of these investors are serious about investment and remaining considering stock market as ground to play for ‘ time pass’ . My following two cents are for this newbie friends who always suggest me to give the name of few stocks for investment.

Like any other profession , to succeed in investing , lot of hard work and patience is necessary. Controlling emotions is very important and we must ready to accept our faults and willing to correct it. “ I am a new investor , please suggest some stocks to me" is the common message I am getting from at least 25 % of mails receiving in my mail box. I have only one suggestion to such friends, before jumping into the market first of all we must realize what kind of investor we are, based on our temperament,expectation, risk taking capacity..etc .One stock suitable for a person may or may not suitable for another .Another point is , ‘ a good company’( based on balance sheet and related equations) always never means as a ‘Good Investment’ and the entry price is very important in investing and rate of return from it.On the other side, a bad company ( with a poor balance sheet so far ) may turn as a wonderful investment if our entry is at right point and things develop as per our calculation and expectation. Of course the risk and reward in both these cases will be always different.So , defining our own aim and selecting the way suitable for us is most important for our investing journey. Generally we can classify stocks into three categories ( This is my personal view and never expect the copy book meaning for the terms used ) – Value Stocks , Growth Stocks and Dark Horses.

Value Stocks 

Generally a stock termed as a value stock if it trade at a lower price compared to its known fundamentals. One common mistake lot of new investors making while selecting value stock is their inability to assess the reason for lower valuation and taking investment decisions based only on certain pre-defined valuation methods like P/E ratio..etc.Personally I don’t think a lower P/E never guarantee good return,instead to a certain extent, it may give a cushion against sharp fall.At certain point of time ,outdated businesses may seems attractive if we follow lower P/E alone as a benchmark for stock selection. Such business may attractive till date but ends in big loss in the years to come due to changing trend, technology ..etc.
So , while selecting value stocks we should also consider future prospects, promoter quality,dividend distribution policy ..etc along with cheap valuation . One can expect steady return and good dividend from such stock with less risk but don't expect multiple times returns from such stocks in short period .


Growth Stocks

As per definition , 'Growth Stock' is the stock of a company whose earnings are expected to grow at an above-average rate relative to the market.These type stocks may always look expensive based on conventional valuation parameters but remain as expensive till their growth trajectory ends which may last for many years .While value stocks are selected mainly based on the current performance,growth stocks are practically selecting based on the anticipated business growth in future and hence the later is riskier than the former.


Dark Horses :

Please don’t search for the meaning for such stocks , you may not find it anywhere :)
These type stocks are only for daredevils but may change our fortune on either side . Generally lesser known with poor fundamentals at present but potential to grow multi fold over a period of time due to some unique features like niche technology,patented products, possibility to emerge as a winner due to changing trend of people in favor of company’s product ..etc. Risk is very high in such stocks and any error in calculation and assessment may wipe out entire investment in such stocks . They are not suitable for newbies and better to avoid in the initial stage of investment journey, at least till we gain something from stock market itself.

 So, before investing in any stock it is always better to study whether that particular stock is suitable for you considering your style of investing  , even if everyone around you claim it as a wonderful one. 

 


Once again ,Diwali wishes to all my readers .

82 comments :

  1. Wish you a very happy Diwali valuepick sir.
    Regards
    Senthil

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  2. Thanks sir ..... But why not Diwali pick ..?...As all are waiting for Diwali pick.....please post a Diwali pick

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  3. Wish you and your family a very happy Deepawali sir

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  4. Wishing you a very happy and prosperous diwali sir. Can you please share you current view on Tree House after Q2 results sir? You are still positive on this stock for long term?

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    Replies
    1. Not result , uncertainty about cash flow affecting vluation.

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  5. Its been a great association wit u ... HapPy Diwali to u and family sir..

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  6. Vp sir...wish you and your family a very Happy Diwali and prosperous and healthy New Year...

    Regards,

    Krunal

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  7. Thanks for valuable message sir. It really helps newbie like me.

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  8. Sir, Alps Industries. Reported loss again.. Just not able to analyze the results, hence the question.. is there anything positive in the results.. I can wait till I get the superb output from this.

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    Replies
    1. Don't expect good result till debt restructuring happens.

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  9. Thank you for all the inputs you have shared from time to time. Wishing you and your family a happy diwali.

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  10. Thank you VP sir. Wish you and your family also a happy and safe Deepavalli.

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  11. May the Divine Light of Diwali Spread into your Life Peace, Prosperity, Happiness and Good Health. Happy Diwali

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  12. Hi VP sir,
    Thanks for your valuable insights not even newbies but ppl investing for some years commit these kind of mistakes due to lack of knowledge. I haven't read such things anywhere before.
    Thanks and Regards,
    Vinay

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  13. Thanks sir g.
    Wish you a very happy Diwali.
    N one more thing, this blogs help me a lot to improve my investing skills.
    Heatyl thanks

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  14. Dear Sir,
    First of all wishing you happy Diwali and prosperous new year. My question is,There is huge valuation diff. between sunil hitech and other construction companies like J kumar infra, gayatri project, techno electric etc.Although they are operating in diff.area and have diff. level of OPM And NPM,reason for such wide diff. could not be found from P/L account. Sir, am I missing something or some valuation parameter here or it is just market perception about management quality.
    I wish i will get answer from you this time as i have asked this question earlier also.

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    Replies
    1. Unlike consumer product companies , project execution companies' profits depends on many factors .Tender conditions, location, execution cost .etc etc will affect.

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  15. Dear VPji,
    wish you and all our fellow boarders a very happy and prosperous deepavali .

    Thanks a lot for your continuous guidance .

    Best regards,
    Prashant

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  16. Wish you a very Happy Diwali Sir

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  17. Dear sir, Happy diwali to you and to your family, sir if u find time please comment about mic electronics results sir. Thanks sir.

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  18. Nice article sir,as always. Wishing you a very happy Deepawali.

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  19. Hi Sir Happy Diwali and Prosperous New year to your Family, Wanted your Views on Gandhimathi appliances AT CMP and Deccan Cement

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  20. DEAR VP Sir, wish you and your family whole hearted a very happy Diwali and a prosperous year ahead and all fellow friends. Thanks for enlightened article.

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  21. Hi VP sir,
    Happy Diwali. Please post your views on MIC Electronics results.

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  22. Sir, Wish you and your Family A Very Happy Diwali.......

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  23. Thanks to all for your wishes and same to all

    V

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  24. Wish Your good self Happy Diwali and Prosperous New year to your Family..

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  25. Wish you, your family and to all your fan Happy and Prosperous Deepavali!!!

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  26. Wish Your good self A Very Happy and Prosperous Diwali to your Family..

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  27. Wishing you a very very happy and safe diwali VP Sir.. You rockz as usual. I have been following you since 3 years . I got good amount of profit in Marksans pharma . I have invested in 3 stocks SKM , PEM and PFRL . I would have a time line min 3-4 years . I have an great belive on you . Could you tell me please shall I hold for those many long years

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  28. Wish you n your family happy Diwali sir!

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  29. Wish you n your family happy Diwali sir!

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  30. Sir wish you happy diwali !!!
    your views on current situation in Eros please

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  31. Sir wish you happy diwali !!!
    your views on current situation in Eros please

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  32. Dear VPg, Why MIC electronics are not clarifying about NPA and about it`s interest component. Every quarter they mention that profit has been overstated. What is the reason please ?

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    Replies
    1. Either read management reply for auditors observation in last annual report or contact with CS for reply

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  33. Wishing you and your family a very happy and prosperous diwali...happy diwali...

    Abhijeet

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  34. Sir wish you and your family happy diwali

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  35. VP Sir,

    Wishing you a happy and prosperous Deepavali. Hope you will continue enlighten us with your the light of your knowledge.

    Regards,
    KSG

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  36. Wish you very Happy Diwali VP Sir & Everyone here..!

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  37. Wish you Happy and safe Diwali for you your Family

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  38. Deepavali mei deepo ka deedar,
    Khushiyon ke saath Mubarak hazaar

    "Happy Diwali"

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  39. Wishing you and readers of this blog a very very happy Diwali

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  40. Wish u and ur family happy Diwali sir

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  41. Sir, Wish you and your Family A Very Happy Diwali

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  42. Wish u a very happy diwali ...

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  43. I wish u and ur family a very Happy & a Prosperous Diwali sir!! :)

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  44. Wish you a very happy deepawali, had a lititle expectation that you might recommend something for us in good festival day

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  45. Happy Diwali to you Sir. Thanks for all the knowledge you have and are sharing with your readers.

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  46. Wish you very happy Diwali to you and your family

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  47. VP Sir, What is your views on Swelect Energy Systems Ltd and Sunteck Reality Ltd?

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  48. Happy Diwali Sir.

    'Samkrg Pistons and Rings' results have been good. Sir would love to know your comment on this.

    Thanks

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  49. Diwali wishes sir.

    Gokaldas Exports has announced a decent Q2 result. But stock still oscillating between 56 to 64 range. Any encouraging words from you?

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  50. Wishing you and your family a very happy and prosperous diwali...happy diwali...

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  51. Wish you a very happy diwali to you and your family...
    Regards,
    Vinay

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  52. Hi Sir, Wish You & Your Family A Very Happy Diwali.

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  53. Dear VP Sir, wish you happy Diwali. Please suggest your view on the results of IFGL refractories. Is it worth holding the shares? Thank you.

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  54. Please give your view on rain industries ltd(also known as rain commodities) some new plants are about to start and all so kindly give your view.

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  55. Dear VP sir,
    A very Happy Diwali to you & your family..

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  56. Dear Sir,

    Wishing you and your family a very Happy Diwali!!!

    Best Wishes,

    Ajit

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  57. Wish you, family and all readers Happy Diwali and Prosperous new year!!!

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  58. Lakshmi energy results are improving Q to Q any comments on this..?

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  59. Wish Your good self A Very Happy and Prosperous Diwali to your Family..

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  60. Sir kindly share your views on the following:
    1. Ajmera realty
    2. Oricon entertainment
    3. Gokaldas
    4. Kesoram

    Wish you a prosperous year ahead!

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  61. Wishing you a very happy and prosperous Deepavali VP Sir :-)

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  62. Happy Diwali & best wishes for the New Year!
    Thank you for the good work you have been doing Sir.

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  63. Excellent piece of advice sir. A very happy new year to you Sir.

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  64. Dear VPji, wish you a very happy Diwali.

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  65. May god bless you and your family and all associated

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  66. Vp sir your views on current situation in Eros please

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  67. Hello sir,
    Your valuable comments on Akash optifibre . thanks
    Regards

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  68. Sir, your view on Dena Bank at CMP?

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