Monday, September 29, 2014


BASF LIMITED - recommended @ Rs.510 hits its life time high today @ Rs.1370 .Those with some risk appetite can still HOLD this 73 % subsidiary of world's largest chemical company , for long term.

Recommendation link HERE

Saturday, September 27, 2014



When Warren Buffett started his investing career, he would read 600, 750, or 1,000 pages a day.Even now, he still spends about 80% of his day reading."Look, my job is essentially just corralling more and more and more facts and information, and occasionally seeing whether that leads to some action," he once said in an interview."We don't read other people's opinions, “he says. "We want to get the facts, and then think."To help you get into the mind of the billionaire investor, we've rounded up his book recommendations over 20 years of interviews and shareholder letters.

1."THE INTELLIGENT INVESTOR " by Benjamin Graham

When Buffett was 19 years old, he picked up a copy of legendary Wall Streeter Benjamin Graham's "Intelligent Investor."It was the one of the luckiest moments of his life, he said, since it gave him the intellectual framework for investing."To invest successfully over a lifetime does not require a stratospheric IQ, unusual business insights, or inside information," Buffett said. "What's needed is a sound intellectual framework for making decisions and the ability to keep emotions from corroding that framework. This book precisely and clearly prescribes the proper framework. You must provide the emotional discipline."

2."SECURITY ANALYSIS" by Benjamin Graham

Another groundbreaking work of Graham's, Buffett said that "Security Analysis" has given him "a road map for investing that I have now been following for 57 years."
The book's core insight: If you do a thorough enough of analysis, you can figure out the value of a company — and if the market knows the same.Buffett has said that Graham was the second most influential figure in his life, only after his father."Ben was this incredible teacher, I mean he was a natural," he said.


While investor Philip Fisher — who specialized in investing in innovative companies — didn't shape Buffett in quite the same way as Graham did, he still holds him in the highest regard.
"I am an eager reader of whatever Phil has to say, and I recommend him to you," Buffett said.In "Common Stocks and Uncommon Profits," Fisher emphasizes that fixating on financial statements isn't enough — you also need to evaluate a company's management.

Buffett says that the former Secretary of the Treasury's book about the financial crisis is a must-read for any manager.
Lots of books have been written about how to manage an organization through tough times. Almost none are firsthand accounts of steering a wing of government through economic catastrophe.
"This wasn't just a little problem on the fringes of the U.S. mortgage market," Geithner writes. "I had a sick feeling in my stomach. I knew what financial crises felt like, and they felt like this."

If you want to get to know the way Buffett thinks, go straight to the Sage himself.

In this collection, he keeps it very real — in his signature folksy-intellectual fashion.
"What could be more advantageous in an intellectual contest — whether it be chess, bridge, or stock selection —than to have opponents who have been taught that thinking is a waste of energy?" he asks.


In his 2001 shareholder letter, Buffett gleefully endorses "Jack: Straight From The Gut," a business memoir of longtime GE exec Jack Welch, who Buffett describes as "smart, energetic, hands-on."In commenting on the book, BloombergBusinessweek wrote that "Welch has had such an impact on modern business that a tour of his personal history offers all managers valuable lessons."
Buffett's advice: "Get a copy!"

7. "THE OUTSIDERS" by William Thorndike, Jr.

In his 2012 shareholder letter Buffett praises "Outsiders" as "an outstanding book about CEOs who excelled at capital allocation."Berkshire Hathaway plays a major role in the book. One chapter is on director Tom Murphy, who Buffett says is "overall the best business manager I’ve ever met."The book — which finds patterns of success from execs at the Washington Post, Ralston Purina, and others — has been praised as "one of the most important business books in America" by Forbes.


 Bogle's "The Clash of the Cultures" is another recommendation from the 2012 shareholder letter.In it, Bogle — creator of the index fund and founder of the Vanguard Group, now managing $2.0 trillion in assets — argues that long-term investing has been crowded out by short-term speculation.But the book isn't all argument. It finishes with practical tips, like:
a)      Remember reversion to the mean. What's hot today isn't likely to be hot tomorrow. The stock market reverts to fundamental returns over the long run. Don't follow the herd.
b)      Time is your friend, impulse is your enemy. Take advantage of compound interest and don't be captivated by the siren song of the market. That only seduces you into buying after stocks have soared and selling after they plunge.


The Clash of the Cultures" is another recommendation from the 2012 shareholder letter.
Back in 1991, Bill Gates asked Buffett what his favorite book was.To reply, Buffett sent the Microsoft founder his personal copy of "Business Adventures," a collection of New Yorker stories by John Brooks.Gates says that the book serves as a reminder that the principles for building a winning business stay constant. He writes:  For one thing, there's an essential human factor in every business endeavor. It doesn't matter if you have a perfect product, production plan and marketing pitch; you'll still need the right people to lead and implement those plans.The book has become a media darling as of late; Slate wrote that it's "catnip for billionaires."

Thursday, September 25, 2014



Arrow Coated Products is one stock I introduced to my readers through GTS -3 @ Rs.12 . Today stock hits its life time high @ Rs.225 .Stock already turned as a 17 bagger for investors with patience, within  one year itself. Still recommending to Hold it .

Recommendation Link HERE


Aimco Pesticides is one recent recommendation ( GTS -6) around Rs.40 . While recommending this stock , I mentioned  about the promoter purchase up to a rate of Rs.35 .As per today's disclosure to stock exchange ,promoters again purchased shares even at a price of Rs.73 . I believe , it is an extremely positive development which indicating promoter's  confidence about the future of their company. Still recommending to Hold it.

Disclosure Links HERE and HERE

Wednesday, September 24, 2014


SMS PHARMACEUTICALS LTD recommended @ Rs.240 about six months back hits its 52 week high Yesterday @Rs.585 .Those with some risk appetite may still HOLD this stock for long term

Link to old posting HERE

Monday, September 22, 2014


LA-OPALA RG  initially recommended @ Rs.66  hits its life time high today @ Rs.1668.Company decided to split the face value of its shares from Rs.10 to Rs.2 . September 25, 2014 has been fixed as a Record Date for the purpose of Sub- Division.

Old Recommendation HERE

Saturday, September 20, 2014



Recently  we discussed two stocks from different verticals in packaging Industry. Polyplex from Polyester film based and Mold Teck Packaging from IML packaging sector . This week let us look into another company from a related sub sector – Metal packaging .Even though plastic packaging is gaining more acceptance ,some products still need metal packaging due to  special characteristic of products to be packed. Chemical reactions, keeping right nutritional / aesthetic values, requirement of extended shelf life ..etc compelling the producers of certain products to prefer metal packaging.This  situation ensures  enough room for metal packaging majors to grow though the chances for new entrants are bleak. At present, metal packaging commanding a 10 % market share of  total consumer packaging market. In this background, let us look into Hindustan Tin Works Ltd which  commanding  20 % of metal packaging market in India. HTWL manufacturing tin/metal cans and closures used in packaging of baby foods, edible oils,paints, ghee, canned food items, fruit pulp,juice,protein powder, shoe polish  etc. Company mastered in Aerosol cans and Beverage Cans . Aerosol cans are mainly used to pack Deodorants, Room Fresheners,Pesticides,paints and industrial products .Beverage cans are used to pack Juices,Flavoured milk and other beverages.Longer shelf life without refrigeration and leakage is an added advantage of beverage cans .Company’s major consumers includes the who is who of FMCG  and Food Industry like GSK consumer, Nestle, Britannia, Del-Monte Foods , Asian Paints,Reebok ..etc.

Company reported a top line of Rs.314 Cr , bottom line of Rs.8.5 Cr and an EPS of Rs.8 in last FY .Current book value of company is over Rs.100.Promoters holding 40 % stake and world’s largest steel trading group Switzerland based Stemcor A G holding another 10 % stake in this company.Now,  management  aggressively tapping emerging  opportunities by developing new products and entering into more overseas markets. The potential of Indian food processing Industry , softening of metal prices,revival of economies and company’s new initiatives are expected to drive the growth momentum forward.This market leading can maker is currently trading with a market cap of less than Rs.70 Cr and a P/E multiple of  8 .Stock is currently trading 30 % discount to its book value of Rs.100 . I believe ,it is one good stock which listed only in BSE and CMP around Rs.70

Link to Company Website HERE 

Disc: It is safe to assume that I have vested interest in HTW



Friday, September 19, 2014



CENTUM ELECTRONICS  recommended  @ Rs.88 .Yesterday stock hits its 52 week high @Rs.474 .Still recommending to HOLD this stock for long term.

Recommendation Link HERE

Tuesday, September 16, 2014


This stock recommended @ Rs.38  is currently trading  at its 52 week high @ Rs.526 .Stock already multiplied by 12 times in 11 months . Those with  low risk appetite may sell 25 % of remaining holding and keep the rest .

Link to Recommendation HERE

Saturday, September 13, 2014


Courtesy: Full credit of this wonderful article goes to the original author Mr.Ian Cassel
-------------------------------------------------------------------------------------------------- Extraordinary returns follow extraordinary discipline. Discipline in buying and selling , and maybe the most important one of all, holding. Developing the conviction to hold is something that I’ve learned over time. It didn’t come easy. The basis of this article is to give some insight on how to develop the conviction to hold your winners. It is very tempting to sell along the way, and it’s okay to take a little off the table, but the big money is made by holding.
“It never was my thinking that made the big money for me. It always was my sitting.” — Reminiscences of a Stock Operator
Many of us, myself included, look at stocks that have made big moves and think to ourselves, “If I would have only knew about that company and bought it back then.” But would you really have developed the conviction to hold during the run up? The problem is that to achieve a multi-bagger in the portfolio, you have to hold a multi-bagger. And if you want it to change your life, you need to hold a lot of it.
Don’t bother finding the next multi-bagger if you aren’t going to develop the conviction to hold it.
 Over the last decade, I’ve been lucky enough to be invested in a few stocks that have gone up 5-10-20-30x over a multi-year time horizon.  From my experience, the only way to hold onto a big position after it makes a big move is to know the underlying company better than anyone else. Greed and fear will test your resolve, so you need to learn to keep these emotions in check. You need to believe in your due diligence and form an unwavering conviction.

So how do you develop the conviction to hold?
 A lot of due diligence is on the front-end of a buying decision, but it certainly doesn’t stop there. The maintenance due diligence following the buy decision is even more important. For me, I talk to management regularly and keep close watch of all the ancillary forces and trends that are driving the company’s business. My “edge” is knowing my positions better than anyone else. This doesn’t mean I’m going to be right, but the more I know the better.
I think many misperceive high conviction for close-mindedness, ignorance, and arrogance. The conviction I’m talking about is quite the opposite. You need to constantly assess your positions and openly listen to counter arguments. Only then will you have the conviction to hold multi-baggers because you will understand all sides to the story. You also need to develop a thick skin. If you are not ready to be criticized for your convictions than you aren’t ready to make real money.
I believe most investors focus too much on selling strategies and not enough time on knowing what they own. Selling strategies such as, “Sell half after a stock doubles” or “When a position reaches 10% of the portfolio, sell it down to 8%” are meant for lazy investors. These selling metrics-formulas-strategies sound great in academia or when selling an investment strategy to a bunch of lemmings who can’t think for themselves. The truth is if you know what you own at all times, you’ll know when to sell.
In many cases the stocks I’ve owned were better buys after they doubled then when I initially bought them. In many cases when a position became 30% of my portfolio there was a reason for it.  The underlying business was doing really well, or institutions were just starting to nibble on shares, so why would I sell it. Just because a stock doubles, triples, etc, doesn’t mean it should be sold. Stocks should be sold when your maintenance due diligence shows something has changed. If you know the story better than anyone, you’ll likely get clues well before the rest of the market. When a company performs, and the story hasn’t changed, stop trying to change it. Enjoy the ride.
When a stock goes on a multi-year run there will be long periods of time when nothing happens. These are consolidation periods when old shareholders are selling and new investors are buying in
A big part of successful investing is becoming content doing nothing. If you are in great companies, a lot of times your biggest risk is boredom. Warren Buffett’s famous quote, “Our favorite holding period is forever”. If he likes where the business is headed, he’ll continue to hold it and probably buy more. Don’t be active for activity sake. Remember, there are no day traders on the Forbes 400 list. Learn to be content holding and doing nothing.
“Patience is power.
Patience is not an absence of action;
rather it is “timing”
it waits on the right time to act,
for the right principles
and in the right way.”
– Fulton J. Sheen

As a microcap investor who invests in companies with little to no institutional ownership, I want to hold for the institutional rally. When a management continues to execute on a great story, at some point it’s going to attract institutional inflows. You will see this when an illiquid stock all of sudden gets propelled by a sustained period of above average volume. Hello Institutions!
A multi-year run is made up of a bunch of mini-cycles that can last weeks or months. During these times the stock can become undervalued or overvalued. Quite a few professional investors I know like to trade 10-20% of their full position during these swings. For my psyche I’ve found it to be counter productive. If I own a $5 stock and think it might go back to $4 before it goes to $10 in 12 months, I’m fine simply holding it through the mini-cycles.
I hope I’ve helped shed some light on a hard but lucrative topic. Many investors spend all their time trying to find great microcap companies only to sell them after quick paltry gains. If management is executing and the story hasn’t changed, hold on for the real money. Find great companies, develop the conviction to hold them, and it will change your life.


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