Boom!as FM Busts Corporate Tax!~Wow!How!Now!?

Released today under my authorship in the SCRIP STANDPOINT Module of Jeena Scriptech Alpha Advisors Pvt Ltd  

“How’s the Josh !?”

Boom!as FM Busts Corporate Tax!~Wow!How!Now!?

The effect of Fun & Excitement peaks when the cause is least expected

Market Sentiment has reversed dramatically & instantaneously !  

BSE & NSE  has seen the Sensex & Nifty created historic surges moving respectively 5.32% & 1921 points up to 38015 & 569 points to 11274 on Friday,September 20,2019 & even more by 2.83% to 39090 & 11600 on Monday ,September 23,2019 to aggregate a surge of 8.3% in just two trading days with Total Market Capitalisation zooming up in just these two trading days by Rs 10,45,700 crs or nearly US $ 150 Billion  to  Rs 148,87,830 crs or near US $ 2.1 Trillion ,thus regaining US $ 2 Trillion Capitalisation quickly ! 

Date Sensex Close Up/(Down)  Points, % Approx Total Market Cap

(Rs Crs)

Total Market Cap Up (Down )

Rs Crs, %

Friday ,September 13,2019

A Week Before

37385 1,42,42,950
Thursday,September 19,2019

Day before Tax Rate  Game Changing Significant Slash Announcement

 

36093 (1292), – 3.46 1,38,42,130 (4,00,820),  -2.8
Friday,September 20,2019

Morning of  FM’s Tax Rate  Game Changing Significant Slash Announcement

38015 1922, 5.32 % 1,45,34,237 6,92,107,   5
Monday,September 23,2019

On Second Trading Day after  FM’s Tax Rate  Game Changing Significant Slash Announcement

39090 1075, 2.83 %

&

2997 in two days, 8.3%

1,48,87,830 3,53,593,   2.43

&

10,45,700,   7.56 

Wow ! How !  Now ! ?

It took a Government Sacrifice of  Rs 1,45,000 crs or US $ 20 Billion in Corporate Tax Revenues to create a 7x sacrifice surge in Market Cap of US $ 150 Billion in just two trading days !

It’s like the Government conceding to the Corporate Sector ” Hey Guys ! we’re transferring our Revenues to you as you’ll can put it to more productive use by funding an Investment Capex Cycle to stimulate more growth for better returns than we can through increased Government Spending “

What is clearly a Market Valuation Re-Rating Move,on the morning of Friday,September 19,2019 our FM Mrs Nirmala Sitharaman announced,what should be seen as a forced measure, a Tax Bonanza for Corporates busting the Tax Rate from an effective high of 34.94% for most to an effective 25.168% with no requirement for those who opt for this rate,  to pay the Minimum Alternate Tax which too was slashed to an effective 17% from  the current 18.5%.Another major tax incentive will be a Tax rate of just 15% for manufacturing companies incorporated after October 1,2019  & who commence manufacturing by March end 2023

Such Tax Rate Cuts & Incentives  announcements should have been part of the budget in early July.If one recalls since the NDA came to power in 2014,it’s always been their stated intent to reduce the Corporate Tax Rates gradually to 25%.Economic slowdown is a catalyst to this ‘one shot’ reduction now & that’s why it can be viewed as a forced measure

It’s a ‘No Brainer’ that Markets would instantly turn euphoric as back of envelopes calculations see the Nifty 50 Companies,whose aggregate FY 19 PAT was Rs 370000 crs , benefit by a clean Rs 27000 crs or US $ 3.8 billion in FY 20 on this Tax Rate reduction.Factor in Earnings Growth before Tax & the benefit is even higher  read more

Looooooooong Full House Saturday Equity Mumbai Workshop Sept 14 2019

It was a looooooooong,should have held it over two days,  Full House Equity Workshop in Mumbai on Saturday,September 14,2019 with a whole spectrum of smart participants that made for really invigorating interaction ~they came from Mumbai,Gurgaon & Pune ~ from young upwardly mobile grads & post grads from top ranked Management Institutes in India,UK (London) & USA(Harvard) to ‘ well tuned in’ professionals from the IT ,Consultancy,Broking,Corporate & Banking Sectors to veteran high networth investors . We commenced at 9.30 am & concluded well beyond 7.30 pm ~ 🙂 should have arranged dinner too

Thank you Guys !

Here are a few candid clicks from the Workshop :

The Coverage was expansive & the Interaction from Participants very intelligent & which opened out many threads that we examined with anecdotal support . When analysing a company ,they asked what is “Non Negotiable” &  “How to have Foresight as on Hindsight we are always right”

Really a lot was covered ,some of which is below  :

  • Macros through :
  1. Examining the Equity Table’s four legs of Valuation,Liquidity,Momentum & Sentiment & the Impact of FPI Flows ~ when Valuation,which should be the strongest leg,sometimes takes a back seat as Liquidity or even a lack of it drives the momentum & sentiment
  2.  Not getting Seduced by any Bounce at  Friday closing Sensex 37385 & Nifty 11076 Levels as Caution is strongly indicated by domestic & overseas economy & geo-political headwinds
  3. Negative Interest Rates Era vs the Magic of Compounding in such meltdowns
  4. Sensex & Earnings & Market Cap & low GDP growth Dynamics on Levels & Valuations ~ Past,Present & Forward & why downside risk remains wide open while the upside appears capped for now ~ we referred to 1991/92 abnormally high Sensex PE pre Harshad Mehta Scam exposure & the High PE in 2000 with Ketan Parekh was in action & where the markets were clearing running ahead of fundamentals by huge margins~ we referred to the Sensex PE of just 6 in the late 1980s when VP Singh was the PM 1988~ we covered Mkt Cap/GDP Highs pre Lehman collapse in 2007/8 & the levels now
  5. Fx Reserves  & Exchange Rate Risk &  the Risk of increasing Sovereign Debt as planned by Government ~ How our Rupee has always had a South trajectory,except when it soared from Rs 49 to the US $ to Rs 39 to the US $ creating havoc especially in the Diamond Sector
  6. Why Inversely co-related Gold & US $ are moving up together instead
  7. Turm-Oil & Impact on Fiscal Deficit & Rupee  like last happened in 2007/8( On Saturday at the workshop we were not yet clued in to the Drone Attack on the Oil Refinery in Saudi Arabia that saw Oil Prices dangerously soar 20% in spot) ~ India is hugely dependent on Oil Imports
  8. Interest & Inflation rates
  9. Trump ~ Not sure if he’s a macro or micro factor !
  • Micros through many companies  & sector dynamics covering :
  1. Checklist on how to Smartly & Effectively & thus Quickly Read a voluminous Annual Report
  2. Our Five Steps for Evaluating a Company for Investment
  3. Impact on the Financial Statements in Scenarios like Buy Back,Rights Issues,Fictitious Sales,RBI issuing a divergence on Provisioning for NPAs,non linear jump in Sales Realisations,5 G Spectrum Fees,Permanent Diminution in Investments,Monetising Assets & Depreciation of the Rupee
  4. Quick Brief on Absolute & Relative Valuation & how to prepare a quick Valuation Grid from the Annual Report, Market Price Trends & Shareholding
  5. Why Liquidity more than Profitability is the ‘Circle of Life’  for a Company as viewed through the lens of the Cash Flow Statement dervived from the Balance Sheet & Profit & Loss Ac & that distinguishes operating,financing & investing flows
  6. Corporate Governance Issues on inadequate Disclosure or Non Disclosure, Incorrect & questionable Accounting Treatment & Lack of Transparency &  irresponsible (deliberate?)  Management utterances  that give a leg to Insider Trading & huge Profits through  Derivatives Play
  7. Courage & Conviction Promoter or Institutional recent Buying in Vodafone,Yes Bank,I B Real Estate & Tata Motors & seeing more wealth destruction since in these   
  8. Basis for Disclaimer of Opinion by the Auditor of Reliance Infrastructure & what holds out some hope
  9. Intangibles,Investments & Impairments
  10. Reliance Industries’s Enterprise Value,Revenue Segments Potential,Spin offs of the Jio Telecom Infra into two trusts, Aramco’s 20% stake being negotiated in the Refining,Petroleum Retailing & Petrochemicals Business that should lead to further demerger & reviving & scaling the Gas Exploration Operations
  11. How Defaults & Corporate Governance Issues decimated into or near oblivion Eros,Cox & Kings,ManPasand,Tree House Education,Satyam,Jet Airways,Kingfisher & Talwalkars & is there any hope of operational & share price recovery with Asset values holding out some hope in a few ~ How Clearly the Statutory Auditors & Credit Rating Agencies were negligent or intentionally turned a blind eye in many cases
  12. Huge Potential Outlay of the ‘Nal sey Jal’ Scheme of the Government & the new Jal Shakti Ministry focus that should benefit many companies if the implementation & execution is as noteworthy as the intent
  13. How IndAs 115 continues to affect Bombay Dyeing
  14. How Exchanges continue to accept outright untrue or tepid clarifications from Companies
  15. Reference to Investment Gurus & Living Legends Warren Buffett & Peter Lynch Approaches & Success
  16.  Coverage of a few sectors like Defence, Hydrocarbons,Broking,Telecom,Real Estate,NBFCs,Banks & Automobiles & Disruption that’s in play in many
  17. Consolidation & Capitalisation of PSU Banks & the controversial Acquisition of Laxmi Vilas Bank by I B Housing Finance pending RBI approval
  18. Common Investor Mistakes

The next Equity Workshop is scheduled  pre-Diwali for Saturday ,October 19,2019 & will be announced soon on www.jsalphaa.com & social media

Touched by some warm & constructive feedback from participants :

  • thanks for a lovely interactive session…”
  • “enjoyed your session yday”
  • “it was great to meet again & reskill to be better prepared for opportunities which would arise”
  • “Thanks for being the Enabler,the last few days have been very encouraging”
  • “Cover the Scenarios Exercise more with Investor focus than just on Accounting Impact & take in a few Annual Reports before Lunch”  

😆 & I swear I did not pay for these ones !

  • ” You are very good at what you do,comes naturally to you,with a vastness of the subject to cover you did justice to cover the best you could with your insights and experience of all the treasures of knowledge,you are an encyclopedia of the subject with case studies,which is the best way of teaching, sharing & learning according to me,the various industries that you know of,the processes & the products,the promoters & the pitfalls,the auditors & the audited,you can understand in the readings the stated & the unstated,intention & intended,you truly personify_the integration of intellect with instinct_”   
  • “Whoever missed this one, missed learning a radical way to look at balance sheets. Very practically in a few minutes you can strip away the padding and bullshit that promoters hide their sins behind. If the stock market’s motto or rather rider has always been caveat emptor or buyer beware, Gaurav’s lessons in Analysis would ensure that a “fool and his money are not soon parted” for when emotions like fear and greed coupled with ignorance seize us even the wisest are prone to behave like fools. Especially the wisest!”
  • read more

    Valuation!Valuation!Valuation!~Lovely Interactive Equity Workshop

    Fabulous Participants & Fabulous Interaction at the Equity Workshop
    Fabulous Participants & Fabulous Interaction at the Equity Workshop

    It was quite an interactive Saturday at the Full House Fundamental Equity Value Vs Price Mumbai MasterClass on Compounding & Capital Protection

    We began in earnest at 9.30 am right through to 8 pm~ so much debated from current unnerving market meltdowns & what should be mindsets & strategies in such times that suddenly overcast us in September ~ of Courage & Conviction & Cash ~ what if one is fully Invested ? should one average? should one exit ? why in panic one tends to always sell off the winners to realise whatever profit in hand & let’ losers drag? ….lot’s of questions that were addressed with a confidence culled from such experiences in the past thirty years

    They came from all around ~ rookies to veterans ~ small to High Net Worth ~ from Broking Houses,J P Morgan,Accenture,Abu Dhabi Commercial Bank,Cap Gemini,Reliance,Moneycontrol etc

    We covered Time Value,Volatility,Valuation & Asset Allocation with Illustrations of over 25 companies with few of them in detailed Valuation over Earnings & Assets & Challenges faced…went through a few Annual Reports & Interim Results & Exchange Notifications & Developments through News in the Media…checked price trends in the short term & even over last ten years to assess Risk & Reward  & Mispricing Opportunities

    How the discipline of Valuation & Asset Allocation is your Weapon for Survival & Wealth Protection while growing it & to stay away from Noise & Insider trading & from those who know nothing or even more dangerous from those who don’t know they know nothing !

    Valuation ! Valuation ! Valuation ! …how this leg of the equity table actually must be the most solid to hold the table together when the other leg of Liquidity  props up the remaining two legs of Sentiment & Momentum ~ Impact & Quantum of  FPI & DII Flows especially when they slow down or reverse

    Put up Friday,September 28,2018 closing prices touchlines of over 200 scrips & even those separately in the Finance,Pharma & Realty Space showing the wealth destruction in them from their 52 week Highs….alarming yes,but is there value re-emerging in many? ~ Showcased a Core Scrips Valuation Grid too

    In this continuing market meltdown across the board that has knocked off 50% & more in many that actually hold wealth creation potential & in many that simply were wealth destroyers in the making & should never have been married to ,who can one trust for relevant,reliable & timely information & unbiased & wise interpretation ? ~ Government,Exchanges & Regulatory authorities,Bankers, Auditors,Media,Brokers,Experts,Promoters & Fund Managers of PMS & MFs,Company Promoters & Management ? Who ? read more

    Fundamental Equity Mumbai MasterClass ~ Sat Sept 29 2018

    Hey! here’s a Fundamental Equity Mumbai MasterClass you should attend on Saturday,September 29,2018

    Register here => http://www.jsalphaa.com/register.php

    It’s a back to back month Workshop as many could not be accommodated in the August 2018 Workshop.This is a MasterClass that focuses on Compounding & Capital Protection & involves diving deeper into data & interpretation & deliberations  

    Fundamental Equity MasterClass in Mumbai
    Stock Selection ~ Value Vs Price

    Indian Equity ~ Compounding & Capital Protection ~ The Magic & Miracle in this Market Matrix

    Saturday, September 29, 2018

    There’s a lot that we shall cover on the day foremost of which is :

    We’ll take a Listed Company ,which you can suggest too when you register, & :

    ~ We’ll check out the Promoter & Management Pedigree & their skin in the company & assess any Corporate Governance Issues

    ~ We’ll discuss & debate the Business Model ~ Dynamics of Demand & Supply,Scale of Opportunity,Resources,Pricing Power & Competition among others to gauge if  intention is backed by ability to execute & perform

    ~ We’ll rip through the Annual Report & latest Financial Performance understanding how to read & interpret these…what they state …or do not state ! .We’ll work our way through Exchange Notifications & News & Views in the Print & Social Media & on Stock Portals & TV Channels

    ~ We’ll work out the Valuation of the Company on several relative & absolute,traditional & contemporary basis

    ~ We’ll then make an assessment of Value Vs Share Price to gauge how much of it is already factored into the Price…the less it has ,the more the opportunity beckons  

    With confidence & conviction you will not only be able to read & interpret Auditors Report,Profit & Loss Statement,Balance Sheet,Cash Flow Statement & Notes to Accounts  but will be equipped to assess their impact & bearing,along with other objective & subjective factors, on Valuation & further on the Share Price

    This is a MasterClass…so we shall be going real deep in debate & discussion & deliberations after some deep reading & interpretation & deep valuation computations to decide with deep conviction if there indeed exists a deep compounding opportunity & what could be the downside risk in context of Capital Protection

    The Investing process dialogue will cover Themes,Approaches,Strategies,Concepts,Gurus,Mistakes

    You shall be able to read any Research Report with a detached mind thus not blindly accepting all that is stated or concluded in it.In fact you shall be able to create a decisive Research Report yourself read more

    Just 3 Seats left! Sat Aug 4 2018 Mumbai Fundamental Equity Workshop

    Just 3 Seats left for the Saturday, August 4, 2018 Mumbai Fundamental Equity Workshop

    Sign up now   

    There’s a good mix of participants from seasoned market veterans to even novices & from independent investors to those from institutions

    All coming to assess Value Vs Price & differentiate a Goldmine from an Explosive Mine in this jungle of Indian Equity & employ Compounding convincingly to create Wealth through Equity 

    In the February 17,2018 Workshop just five months ago one of the Exercises was on Time Value of Money & the case study on HEG was put up to explain the practical aspect & the magic & miracle of Compounding .It had already become a huge multi-bagger in a year rising from Rs 150 levels in January 2017.Objective was to assess if HEG at even Rs 2695 on February 16,2018 could be considered if one sought 20% CAGR for three years in an Equity Investment…It involved Valuation of HEG on many traditional & contemporary basis…Today HEG closed the week at Rs 4122  already up 53% in just five months when the Nifty & Sensex have managed to hold their Highs but the Small & Mid Caps have corrected 20% to 50% & even more in many…a 20% CAGR over three years would have computed to a price of Rs 4657 by  February 2021 ! We shall of course re-assess HEG

    This Workshop will continue,among other relevant valuation & wealth creation in equity concepts & market dynamics at play,to reiterate the Miracle & Magic of Compounding for serious Wealth Creation in Direct Equity & why Warren Buffett has become ‘the’ Warren Buffett because of this & his ‘Concentration’ of Stocks concept.

    Will just gazing & being guided by the Nifty & Sensex add or subtract to your wealth?…how to not get seduced by explosive mines like Kwality,PC Jewellers & Vakrangee & even Subex or Suzlon !…how not to be drowned by the caco-phony in the media & market networks…phony alright especially in bull markets  

    Like the Equity Coin has two sides of  a Buyer & a Seller,so are there two sides of Wealth Creation & Wealth Destruction…what’s the probability that you toss the Wealth Creation side always ?…for that you need to understand both Valuation & Market Dynamics & Forces at play   

    Be there at the Workshop !

    You shall enjoy not just the lunch !

    Cheers !   

    Sat Aug 4 2018~Mumbai Funda Equity Workshop~Spotting Gold Mines & Side Stepping Explosive Ones

    Fundamental Equity Workshop in Mumbai
    Stock Selection ~ Value Vs Price

    Indian Equity ~ Goldmine to a Few & Explosive Mine to Many ~ Training Minds to be Minesweepers to differentiate

    Saturday, August 4, 2018

    Wealth of Mind & Monies must move in tandem.Click above or here to attend my next Mumbai workshop on  Saturday August 4,2018.It’s yet again at my Fort HO,above Starbucks & Croma & a hop step & jump from the BSE

    Q’ attend karey? 

    ‘Q’uality’~how to focus on it~ Discipline of never Deviating~never? what about that potential multi-bagger turnaround or sapling that carries high risks ? Equity is all about Growing Wealth while Protecting it ~ taking & managing risk

    The above Registration link also displays the Workshop Template outlining what shall be covered & why you should invest one Saturday with me

    We’ve had real Fun at all the Equity Workshops in the last three years with some lovely entertaining interaction with & between participants from all over India & Overseas while playing the Corporate Tambola  or  even playing around with ‘Experts’ Views on our Sensex & Nifty or what Trump will do or not do next ! or whether any North Korea Missile is pointed at our Sensex ! or   explaining & evaluating practical applications of Investment & Financial Concepts through discussion & debate in Company Case Studies with focus on  assessing ‘Value vs Price’…we’ve seen the impact of FPI flows,Interest,Inflation & Exchange Rates,Fx Reserves,Oil Prices & Budget Deficits…we’ve discussed the importance of Corporate Earnings on Valuation & in many cases how it’s the Assets that give Value…we’ve examined the four legs of the Equity table ~ Valuation,Liquidity,Sentiment & Momentum & how to gauge rising risk when Markets run ahead of fundamentals…many of you have been rewarded too at the workshop for great lively answers & interaction

    Here’s another Opportunity in August 2018 in Mumbai to Train & sharpen Minds to become more efficient MineSweepers to spot & differentiate between Wealth Creating Gold Mines & Wealth Destroying Explosive ones

    We’ve tackled Valuations & Risks of Bombay Dyeing,I B Ventures,HEG ,Yuken,Ruby Mills & HOV among many others in the recent past & discussed the serious Corporate Governance Issues in the Essar Oil Delisting,Kwality,JBF & Vakrangee among others & the huge Risks associated with  wealth destroyed companies GTL Infra,ESL,Suzlon,Subex & Uttam Galva that yet keep offering hopes of a turnaround read more