Tuesday, June 22, 2010

NOT ON CONCURRENT INDIA INFRASTRUCTURE BUT ON SMALL AND MIDCAPS.


Nowadays my mail box flooded with mails requesting to express
opinion on Concurrent India Infrastructure Ltd after recent
developments in the company. I really wonder ,how a small
company which changed its name and line of business recently
getting this much attention from investment fraternity.
On the other side I am really afraid because of my past experience
about over publicised companies in the past .
Anyway I would like to express my view on mid-small caps
generally and not on any company specifically.

1)      I strongly believes that , It is the commitment of any
good  management to come out with an explanation about facts
to its share holders,if there is any strong allegations about any company.

2)      If any company spending much time and energy  for publicity
and announcement ,such companies should be treated with caution.
If any company is working really well and growing steadily
investors will eventually find it out  and it will get deserved
valuation in long term – promoters should concentrate in
business rather than publicity .

3)If any company announcing business deals only  with unknown
counter
parties and parties outside the country ,such companies should be 
treated care fully. In the case of deals with companies outside the home
country , it is not very easy to verify the facts ,which increase the chance
of  foul play. Especially, if the company is very small and no previous
credentials of large project execution ,it is not very easy to get large
contracts anywhere.

4)      If any company announcing only the beginning of various
projects and silent on its completion , it is difficult to swallow such
claims as such

5)      If a company or promoter group  lost its glory due to  serious
allegations and no effective efforts from promoters to clarify their side ,
such company’s will underperform even if they declare excellent results later.
This is because  investors will sceptical  about the results ,
whether it is genuine or fabricated.

PS. :Study the history of companies like Teledata ,Compact disc ..etc.

6)    In a bull market  Small and midcaps are moving not only because
 of fundamentals , anything possible if the parties behind any company
is smart enough and their pockets are deep ,but such up move  may
not last longer.

7) IT IS STOCK MARKET - EVEN SMART GUYS  MAY BE CHEATED BY SMARTER ONES AND BOTH BY SMARTEST ONES.
 
This is my general view on small and mid cap investing and not specific to any company.

4 comments :

  1. Dear Valuepick sir,

    wonderfull lessons for retail investors. I have watched Compact disc, some of my friends even forced me to buy it because of high EPS, but i rejcted thinking even if it is high EPS why promoter holding is dam low and no dividend albeit it is profit making company etc.

    All the publicity stock never keep on run, look stocks like how indus ind, yes bank, mcnally bharat, hind dorr, FDC ltd, moving in good way and funda sound stock too. :)

    When stock become public then its best time to offload the stock :).

    Thank you
    Thank you

    ReplyDelete
  2. is it the same person arun blog

    ReplyDelete
  3. Arun the Stick Guru

    ReplyDelete
  4. Hi Anony

    I could not understand your question ,pls explain

    ReplyDelete

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