Indian Share Market Tips

Investors Group Chat On Skype (An Idea)

Mayank — Tue, 13 Mar 2012 17:15:46 +0000

Thinking of an idea, how about a group discussion chat room for Indian Investors from around the country? Using Skype, a free instant messenger, we have the opportunity to make chat groups where we can add any number of people and chat together. I think it will be an interesting idea if we get lots of investors on skype chatting to each other and sharing their knowledge. At least for me, it is going to be a really interesting idea. Let me share more about this idea in details. If you have any queries regarding this, send me an email (see at the bottom to get my email).

What is investors group chat all about?

Investors group chat is going to be a group chat room on skype where we will add all the people who are interested in being part of the group. Anybody who likes to talk about stocks or stock market can become part of the group and have a discussion with the rest of the people. We are all going to be simple retail investors who invest into the market and you do agree that all of us might have some kind of information or knowledge to share and discuss with others. So this is definitely going to be interesting and yet informative.

What are the benefits of being part of this group?

1. If you like to chat about individual stocks and stock market as a whole, you are going to love it as you get a chance to talk to just so many people about this topic that interests you.

2. What if you have a stock query? You can go and ask in that chat immediately and see what others have to say about it instantly. Views of others can help you take better decisions.

3. You can share your information and knowledge with others and others would do the same with you. It could be a key to learning more about things that interest us.

4. It is completely free, so it doesn’t cost you a penny to meet new investors from all over the country and share knowledge with each other.

Things to know

1. There is no compulsion that you have to be active enough to be part of the group. You can come online any time of the day or not come online at all and still be part of the group. If you don’t want to talk much, you can also just read what others say, which could still be helpful in some way.

2. If you don’t wish to be part of group, you can just leave the group chat anytime you want to. There is no compulsion for anything.

3. You don’t have to come online everyday to be part of the group. You can come online whenever you wish to and talk if you really want to with others. You are free to do whatever you want to. This chat is just there with people to talk each other to, participate if you want to, or simply read what others are saying secretly =D

In all, I can tell you that this is going to be a lot of fun. For someone like me who likes to discuss about stocks or markets, I am going to enjoy this a lot. Now let me talk about Skype and other stuff in detail, for those who don’t know what it is.

What is skype?

Skype is an instant messenger, a famous and probably the best way to talk to others online. Skype is the best because of the features it provide us with. You just have to download this software onto your PC, make a free account on Skype and login and you’re online. Add me to your skype and I can get you added to the group chat immediately.

Myths about skype

1. You need to pay in order to use skype – No, you don’t have to pay at all for using skype. I’ve been using skype for years now and I haven’t paid a penny to use it. Only people who are interested in making phone calls using the computer have to pay to skype.

2. You need to have a webcam and microphone to use skype – Another myth, no you don’t necessarily need a webcam and a microphone to use skype. Skype can be used by individuals to type and chat with others free. Skype offers webcam and microphone facilities and has the best quality amongst other instant messengers but it is NOT compulsory.

3. You might get stalked by idiots online – Hmm no! If someone stupid adds you to skype, you have the option to immediately block them and they can’t talk to you anymore. Don’t add people you don’t know =)

4. Your personal details can be leaked using skype – Not really, just don’t add any personal details there. We will use the group chat to strictly talk about the stock market and individual stocks or other investment/trading ideas and not for sharing personal information or meetings and hookups among investors. So no way can someone find out your personal details unless you do something silly and reveal them off.

How To Join Group Chat?

Simple, if you have skype, add me to skype. My Skype ID is greatestmj17. Once you add me, send me a skype message and let me know you want to get added to the chat, I’ll do it right away. I’m mostly online on skype all day since I work online. If you don’t have skype, goto http://www.skype.com and download skype. Click on download skype and not download skype premium. You can alternatively click here to download the skype on your windows directly >> Download Skype For Windows.

Once downloaded, just make a free account, activate it and login to skype. On skype, you will see Contacts tab > Add contact > write in skype name as greatestmj17. Then once added, send me a message and I’ll get in touch. You will find it a little unusual to use skype in beginning but then it is all easy once you get the hang of it.

Any doubts? Confused?

Put up a comment here in this post or simply send me an email with your questions > mayank@teenhut.net.

One Tip On Using Skype

Due to chat being very active, you might get a lot of notifications and sounds, so you can always turn off sounds by going to Tools > Options > Sounds > Mute all sounds. If you use skype actively for other chat and need sounds. Just turn off notifications for our group chat if it is disturbing you at work. Open the group chat thing > Conversations > Notification Settings > Off the notifications. Then you won’t get sound updates.

To make this group chat successful, we will need a lot of participitation. So let us work on this model and make it successful. It is going to help us learn a lot more about stocks and stock markets with just so many people sharing their ideas with us.

Buy On Every Dip In The Markets

Mayank — Sun, 26 Feb 2012 06:52:32 +0000

So what is going on with the market right now?

Well just as I have been suggesting that markets have run up quite a bit and needs to catch some breath. As upside gets limited in the immediate term, people tend to start profit booking. The slightest of negative will get people to start profit booking. The markets are likely to correct a bit more and consolidate before resuming uptrend. The biggest fear right now is Brent Crude rally which is definitely going to dampen investor sentiments and could trigger further correction in the markets. The markets have not fallen too much because global cues and positive US data every week has been holding their markets and even Asian markets have been holding steady.

So what should an investor do now?

If you’re thinking about booking profits, then please don’t. If you’re an investor you have to ride this rally because you probably won’t see those low levels that you did last year anytime soon unless something monstrous happens and I doubt it. Unless you’re trading you don’t book profit but continue to hold your investments with a long term view. Even though I agree markets might correct more, I would not advice to book profits for investors because I know that most investors have a mindset of buying really low in markets and you might not get that, so don’t risk being left out of the market rally. For example, 90% of the people I know or talk to regarding markets bought nothing around 4500-4700 levels even though my suggestions were to use every dip as a buying opportunity from and below 4700 levels. Today a lot of them feel like they have missed the rally and are again unwilling to buy feeling that stocks are too costly now. Some are still waiting for new lows to be formed by market which I really doubt it.

Buy on every dip

Right now, I continue to remain firm with my decision that investors should buy on every dip we see in the markets. The mood of the market is quite bullish because a lot of DIIs and retail people got left out in the last rally that they will try to enter markets at every dipping level. One should use this opportunity and get into high quality names on each dip market gives and hold tightly till the next bull market. Don’t try to buy your way in the market on the upside, the rallies are extremely sharp and before you could realise that you have to buy, markets will be very high.

Just make a list of few good quality stocks, divide your money into 3 parts for each of those stocks and buy on each dip in those stocks. Considering investing into private banking names on dips as I believe that banking sector should be one of the market leaders in the next bull market.

What Kind of Investment Strategy to Implement Now?

Mayank — Thu, 02 Feb 2012 05:54:20 +0000

Surprisingly, the entire correction of that day was countered by an equivalent size of rally and then the markets continued to move upwards in excess of 5200. So what should an investor do at this stage? Some investors who missed buying into the last fall are worried that they might miss a bull market and are in a hurry to buy into the markets. Some investors are profit booking into this rally with hopes to buy again lower. I’d say that both of these strategies today are ruled out from my side. There is no bull market coming anytime soon and the same way, no bear market coming anytime soon unless Europe dies.

I don’t advice to buy into the current market nor sell into the current market. Markets are being very unpredictable today and you don’t know where the markets can go, so sellers beware and buyers beware too, any strategy can go wrong. You don’t want to buy into the markets only to see a correction and you don’t want to sell only to see markets continue to move upwards. Plus if you sell and markets correct, you might feel lucky but you really don’t know till where the correction can take markets and how sharp a rebound from lower levels be. Thus there is a possibility that you might not be able to buy into the markets completely post correction. The markets are very volatile and it will be difficult to catch and time the market at this point of time.

For buyers, I’d tell you that wait for a correction into the markets before you try to enter. The correction will and has to come one day. You will need to wait for some more time before there is a buying in the market. You can safely put money into the market after the next correction and go long with the next bull market targets. We’ve entered the stage where soon positives will weigh more than negatives and thus the next buying opportunity should probably be where you buy and forget with a long term view. I understand that there are a lot of people who are getting impatient today to buy into the markets, I suggest being more patient, the market will surely give you another opportunity : P

Use Dips to Buy into the Market

Mayank — Mon, 30 Jan 2012 12:59:17 +0000

I have been maintaining my view that the market has gone up too quickly too fast and thus I would not rule out a nice correction. Today, one of such correction was seen across the markets where largecaps as well as midcaps fell sharply. I don’t think that this is the end of the correction and we could probably see further correction in the markets. But don’t mistake this correction as a beginning of the bear market but it is merely a correction. Treat this as a correction into a crazy rallied market and nothing else. We will enter back into the bear market phase ONLY if you find some big issue popping up in Europe or USA and their markets collapse otherwise most of the macro problems are done with. The market already knows that the fiscal deficit is ballooning or industry is slowing down and so if markets had to test new lows, it would have done by now.

The people who had gone by my suggestions and bought in the last rally can continue to hold their investments with a long term view and those who were hoping that markets will hit 4200 on nifty or even below and did not buy into last decline, they can re enter the markets in a staggered way as market begins to fall more. There is no hurry to enter the markets immediately, you can wait for some more correction into the markets and then enter, whenever it happens. This correction could be a very interesting opportunity for those who had missed the rally. This could be it, your opportunity to buy and forget with a target of next bull run, whichever month or year that happens.

Make sure that you don’t buy high valuation stocks but focus on good quality cheap valuation stocks as those are the ones that will lead the next bull market and not the ones that never corrected. Most private banks fall in that category and they could be your single best buying opportunities in the markets. So my strategy now from wait and watch is soon going to go back to buy on dips. Let’s wait and see where the market goes and depending on the reason of market fall, we can reassess the situation in the next couple of days or weeks. I would keep you guys updated.

Is The Bear Market Over?

Mayank — Thu, 26 Jan 2012 04:33:15 +0000

So are we in a situation that we can safely assume that bear market is over? Well perhaps yes. The markets have gone up too fast too soon and it is too late now to be expecting to see new lows anymore. If the nifty was around 4700 – 4800 levels, we could expect to see 4400-4500 levels again but now we’re closing in on 5200 levels and thus I rule out any possibilities of new lows unless we see a big world financial crisis like we have seen in the past but we’re not Roubini and thus we cannot predict such things.

Now even if we do see some correction in the markets, it is going to be take us to old support levels and breaking that would need a lot of bad news and that we don’t have. Global markets were not correcting much and only our markets was constantly testing new lows and all that is over with the latest RBI’s policy where he cut CRR. So from the macro front, we have entered the phase where most of the macro bad news is priced in and the positive news are starting to outweigh the negatives. Imagine if the budget is some what okay and then RBI starts to cut rates, will markets be testing new lows or preparing for some kind of upside?

So there is a chance that the markets might have made their lows and is done with it. I wouldn’t rule out some correction in the markets but we’re at a stage now that every other person will jump into the markets on the next correction. I can very confidently tell you that there are a lot of people who are waiting with cash to jump into the markets, all it will take is a correction that will have people going crazy to buy. Why I feel a correction is due because US markets are also trading at a very high level and haven’t corrected in a long time. Our markets have gone up too sharp too fast and profit booking can take place at any time.

What are your views? Do you think that bear market is over? Please comment.

Yes Bank Q3 FY12 Results

Mayank — Wed, 25 Jan 2012 13:32:20 +0000

Yes Bank reported a very strong set of results in Q3 FY12 but it was pretty much expected. There hasn’t been a quarter where Yes Bank hasn’t reported a strong and better than expected numbers, atleast since I’ve started monitoring the stock and picked it as my top pick in the entire stock market space.

The following are key figures from Q3 FY12 results : -

Net Profits up 33% to 254 cr yoy.
Net Interest Income up 32% to 427.6 cr yoy.
Savings account deposits surged 99% yoy and 40% qoq due to it’s high savings deposit rates.
CASA has moved up 46% qoq to 5913 cr which has moved the CASA ratio up 1 .6% to 12.6% now.
Advances were up 15% and deposits were up 19% this quarter.
Net NPAs were at super low 0.04% and gross NPAs were also very low at 0.20%.
Yes Bank’s current basic EPS moved up to 25.82 and book value to 129.5

The above are clearly are very strong set of numbers, whether you talk about profits or income or just pick any figure out of there and it is really good. The bank maintains it’s NPAs at such a meager levels which is also best in the industry.

What I like the most about these numbers is the saving deposit increase which doubled in a year and went up 40% in a quarter. I am hoping to see much more rise in their saving deposits in the next few quarters because even today most of the banks are yet to touch their saving deposit rates and thus banks like Yes Bank that are offering 7% rate are going to see rapid rise in savings deposits. CASA has always been the main issue of Yes Bank and now that is seeing a substantial rise. If CASA improves every quarter, it is going to be easy for Yes Bank to continue to maintain such high profit growth as CASA is always going to improve their margins.

I expect Yes Bank to report an EPS of very close to 28 for full year FY12, unlike the expectations of various brokerages that say it is going to be around 26-27. Currently the stock is trading at 327 so this brings us to the current valuation of 11.8 as per FY12 EPS. If we look at book value, we expect to see a book value of around 138 for FY12 that means it is trading at close to 2.4 times the book. If someone is looking to enter Yes Bank, then wait for next correction in the markets and enter the stock.

Systematic Investment Plan

Mayank — Wed, 18 Jan 2012 03:13:12 +0000

Systematic Investment Plans are very popular in India and I have never talked about it in particular. So let us take a look towards that in detail.

What is Systematic Investment Plan

A systematic investment plan or SIP is one of the ways of investment where you invest your money in a regular or say monthly basis. Whether you invest regularly into mutual funds or directly into equities, I’d coin them both in a similar fashion. Since SIP is mostly regarded to investing into mutual funds, I’m going to focus it that way.

The whole idea of systematic investment plan or SIP is that you are going to set aside a certain sum of money each and every month to invest them in buying units of a mutual fund. You invest your money regardless of what the price of the fund is at that given point of time. Indians like this form of investment because it helps them save money on a regular basis and also helps them in building a form of investment that would give sustained returns over a period of time. All you need to do is to have an account with a broker that offers mutual funds, like HDFC or ICICI or Axis etc.

Benefits of Systematic Investment Plan

- The most important benefit of setting up a systematic investment plan is to develop a regular saving habit and discipline. Most people cannot develop the savings discipline unless forced upon and this SIP method will act like an automation force taking away part of your money each and every month. You will treat it like a burden or a loan where you have to give money regardless of how you like it. This helps you save money as well as have a good investment portfolio.

- If you do not have the knowledge of the markets and cannot time it well, investing in systematic investment plan way helps you buy into the market in all phases of time, a falling or a rising market, thus you get a good average price without taking the pain of trying to time the market.

What Are Mutual Funds?

Mayank — Tue, 17 Jan 2012 02:41:56 +0000

So what are Mutual Funds? Mutual Funds refer to funds that are raised and invested mutually. If two people invest their funds together, they have just created a mutual fund. Mutual funds are a company or a fund managed by a fund manager where people like you or me invest their money into and the fund manager takes care of investing those funds properly using their expertise to give the investors good returns. People invest into mutual funds when they feel that they don’t have the time and knowledge to do the investment themselves and expect fund managers to do the job on behalf of them. So in short, mutual funds are investment companies that depending on what kind of fund it is, invests appropriately. Think of mutual funds as a company where in you buy units or shares of that fund by investing your money and with proper skilled investing the price of the fund grows and thus your money.

There are two types of mutual funds – open ended and close ended. An open ended mutual fund is going to sell it’s shares without a limit and a close ended mutual fund has limited number of shares. Some mutual funds are based on equity funds and some are debt funds. It is you to decide which type of investment suits you, high risk and high return or low risk low return investment.

One of the question in everyone’s mind is if Mutual Funds are risk free? Well no form of investment is actually risk free unless you take into consideration the fixed deposits but I’d rather call it saving than investing. Mutual funds are so popular in India even though it is not risk free. It is because a lot of Mutual funds are very well managed by expert fund managers and your job is limited to finding a good mutual fund to bet your money on. You pay some charges to the mutual funds to manage your money and in return they invest your money properly making your money grow over time. The best part of Mutual Funds are that you see your money grow without you doing anything. Your job is done in the beginning when you’ve identified a good fund to invest into. Sit tight and enjoy!

Gold ETF Funds In India

Mayank — Mon, 16 Jan 2012 04:29:56 +0000

Gold ETF Funds in India has been gaining popularity ever since it was first launched in 2007. Since 2007, there has been several mutual funds launching it’s own gold ETF funds in India and all of them are seeing good buying interests as well. Historically, gold is something Indians have always been so very interested at. I personally believe that every middle class to rich class has gold in the form of investment in their homes. Even my family had invested into gold ages ago and if I remember correctly, some of the gold were bought when it was priced at 4000 rupees which is crazy as gold trades at 27000 today. Anyway my point is Indians have so always been interested in gold and that is pretty much the reason why gold ETF funds in India saw a huge buying interest among retailers and big fund houses too.

Gold ETFs have given a way for us Indians to buy gold or rather invest in gold directly online which assures you of safety as well as of purity. So I would prefer buying this paper gold rather physical gold if it is only meant for investing. Let me now tell you about different gold ETFs offered by mutual fund houses in India.

There are currently 11 gold ETF funds in India right now : -

Gold BeEs – March 2007
UTI Gold ETF – April 2007
HDFC Gold ETF – July 2010
ICICI Gold ETF – August 2010
Axis Gold ETF – November 2010
SBI Gold ETF – May 2009
Reliance Gold ETF - November 2007
Religare Gold ETF – March 2010
Kotak Gold ETF – July 2007
Quantum Gold ETF – February 2008
Birla SL Gold ETF – May 2011

The above list contains all the current gold ETF funds in India that exist and also their listing dates. If you’re looking to compare all these gold ETFs, then refer to my article – Best Gold ETF in India.

Multibagger Stocks For 2012

Mayank — Fri, 13 Jan 2012 04:28:47 +0000

I believe that 2012 is going to be a good year for the stock markets and specially for a lot of those beaten down stocks and a good upside in the markets can make some of these stocks go up significantly and become potential multibagger stocks for 2012. I have made a small list of stocks which I feel are potential multibagger stocks for 2012.

Alok Industries – Alok industries is currently trading around 18 rupees which is 3 times FY12 expected earnings and 2.5 times FY13 expected earnings. Alok industries has a high debt and thus even though their revenues improve significantly in FY12, the net profit did not appear to be as strong due to interest rates moving up. However in FY13, when interest rates start to move down and they sell their land as well, the earnings could see a potential move on the upside. For me Alok Industries clearly works as a potential multibagger stock for 2012.

HSIL – HSIL is another good company with a strong balance sheet. It’s profits have been surging higher since last many years and the kind of expansions that are lined up, it is expected to continue with it’s high profitability in the next few years also. HSIL trades at 6 times FY12 earnings and 4.5 times FY13 earnings thus making it a potential multibagger stock for 2012. HSIL is one of the top small cap picks for me is clearly because of the correction the stock has seen in this bear market. Profits have gone up significantly but the share price of HSIL has halved from it’s highs. It is clearly a buy at current levels.

Sintex Industries – Sintex Industries was a decent stock pick pre correction but now after such a sharp and unreasonable correction, it has clearly become a potential multibagger stock for 2012. But one has to wait for one or two years to make the most of this scrip. The reason for the stock to crash was FCCB loan and forex losses and some slowdown in Europe and partly in India. I believe FY13 should be okay for the company and can post an EPS of close to 19-20 which suggests that the stock is trading less than 4 times FY13 earning estimates and thus posts a very strong upside post this correction.

Reliance Power – Reliance Power has also seen it’s stock price correct from 150-160 to 70-80 today. One has to have a view of atleast 2-3 years in this scrip to make the most out of this stock. The company is going to begin it’s plant operations today and the best of all is the secured coal mines it has. Reliance Power doesn’t have to cry for coal like other companies, but it has it’s own coal mines located in India and the fuel security it has makes it the best power play in India. It also has quoted the best rates in the industry making it surely a favourite of SEBs and no chance of any SEB defaulting any payment to Reliance Power. One can buy in any further correction and you’ll see in 2-3 years that you’ve bought a great multibagger stock.

Sona Koyo – Auto Sector is going to do good in FY13 as interest rates start coming down. Due to all the problems in the auto sector in FY12 as interest rates were going up, this stock has corrected significantly even when it’s earnings saw a good up take. I believe FY13 is going to be good for the company and it can see a decent growth which can make the stock touch new highs. With an expected EPS of 2.5 and the stock trading at 12 rupees and growth expected from FY13 onwards makes it a potential multibagger stock for 2012.

There could be many more multibagger stock ideas for 2012 but I don’t believe in a lot of diversification. Up you have a few consumer plays, power, auto etc. Another potential sector that you must have in your portfolio is a good private sector bank. They are not going to be huge multibaggers but they could become a Two bagger for sure if you have a 15-18 months view. My top pick in the private sector banking space remains as always Yes Bank.