First my story –I am a teacher by profession and have a keen interest in Indian stock market. I love to do my own research and based on that like to write about companies and their valuations.I am a keen reader and have a special bent towards autobiographies.Two books which have remarkable impact on me are
a) My experiments with truth- MK Gandhi
b) The Fountainhead- Ayn rand
So, the market is at an all-time high, and we are inches away from Nifty @10,000/- Valuations of mid cap and small cap are so stretched, that some MF like DSP black rock has stopped taking new fund flows.
We at Shikhar capital started getting cautious at 9000/- booked lots of profits in mid and small at 9600 and now sitting idle.Lots of profits were gone into Tata Motors which is muted and Jubilant food works which have rewarded handsomely after Q1 results. And now we remember the following quote by John Keynes
“The market can stay irrational longer than you can stay solvent.”
Last week Westlife Development the master franchisee of McDonald’s in the south and west India declared their annual numbers.
We analyzed the numbers and are not at all happy with them . its been years and years of losses and sales are marginally higher to around 900 crores. Marcet cap is around 4000 crore and we now getting nervous about potential returns from this stock.
We have accumulated this stock at around 160-175 and started selling it around 250 with last lot sold at 220 .
We at Shikhar Capital had booked partial profits in our Midcap and small cap holdings like … Adani enterprise, Westlife, Associated Alcohol, Rain, Escorts, Dewan and plowed all these profits into TATA MOTORS.
But, Tata motors has been a downward trend and now we are feeling bit nervous.So why this downward trend?
So for last one month markets are flirting at 9000 level to 9300 level and we are booking profits bit by bit.
We have booked some profits in Adani , Rain , Westlife ,Escorts , Dewan housing etc and sitting on 15 % cash as of now. Some of the profits booked from small and mid cap like associated alcohol etc are plowed back into Reliance and Tata Motors.
So, it’s tough times as — “I will tell you the secret to getting rich on Wall Street. You try to be greedy when others are fearful. And you try to be fearful when others are greedy. –Warren Buffett”
We are big fans of theme parks but the problem in India is either they are too expensive like wonderla holidays or the quality of theme park is way below the standards (Let’s not name the small theme parks with the shitty crowd and stuff).
So market still stares at 9000/- levels and our earlier targets of 9400-9600 are still intact.
However, again the mid cap and small cap stocks are hitting roughs and whenever stocks like Lycos starts hitting upper circuit we get skeptical. Stocks like Delta corp are up 70 % from Demonetisation and Brexit low. How come they are commanding such (more…)
So Nifty is knocking at 9000/– Historic moment indeed. Fantastic volatility, first the lows of 6800 during last Jan ’16 – Feb’ 16, Then it went to highs of 8800, after that, it again went down to 8000 due to demonetisation & Trump(On same day ) and after that, a straight forward bullish march to 9000/-
We at Shikhar capital were lucky enough to get these lows and highs correct even though we don’t speculate. But since we are low on capital we have to churn our portfolios to get some more juice. If capital allows we would love to keep our portfolio intact for years together.