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!”
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    Wealth Destroyers as Potential Multibaggers~ Mumbai Equity Workshop Sat June 17 2017

    Wealth Destroyers as Potential Multibaggers~ Announcing a Full Day Mumbai Fundamental Equity Workshop on Saturday, June 17 2017 

    🙂 This time in this Stock Selection ~Value Vs Price Workshop have kept an exciting Theme :

    WEALTH DESTROYERS : POTENTIAL MULTIGAGGERS

    As Limited Seats would advice to Book Your Seat right away here => http://www.jsalphaa.com/register.php

    Plan to cover over 25 Wealth Destroyers to assess any Turnaround Value vs Price & thus a chance to redeem themselves and become Wealth Creators from here… or should just one move on in many of such Wealth Destroyers that are now beyond redemption

    Here’s what some participants said of the December 2016 Mumbai Fundamental Workshop on Stock Selection : Value Vs Price…and this was before IB Ventures zoomed 7 x in months from Rs 20 to Rs 140 & HOV doubled in the same time to cross Rs 300… we had covered both these & more in Earnings & Asset Basis Valuation exercises

    “Amazing… Awesome Session about Fundamental Stock Selection & Wealth Creation ”

    “Full of Inspiration, filled with wisdom…. am really proud to be a part of this wonderful session”

     & from a repeat participant “recreated the same old magic of Bangalore in Mumbai… great Saturday”  

    Would love to interact with you ~ So do invest one Saturday ,June 17, 2017 with me in my Mumbai Fort Office near BSE and above Starbucks & Croma

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

    Here’s the Detailed Template of this Workshop if you want more details on coverage

    gap-master-class-mumbai-17june2017

    🙂 See you Saturday, June 17, 2017 at my Mumbai Fort Office Conference Room… we’ll figure out if Suzlon will continue to be ZZZZZlon!  & dissect many such Wealth Destroyers!

    Cheers !

    Jio ! Reliance ! Jio! @ Rs 1000

    Reliance Underperformance
    Reliance Underperformance

    Over 2.6 million shareholders retain faith in Reliance Industries despite the clear underperformance  over the years

    Tum ‘Jio’ hazaron saal,hazaron kay aar paar ?  🙂

    Sensex disappoints in FY 16 as many of the 30 constituents lose big value

    FY 16 has been a mixed year for Stocks with Markets on a downward drift  with  Sensex closing 9.4% lower  at 25341

    Sensex disappoints in FY 16 as many of the 30 constituents lose big value 

    Interesting & Heartening to it’s Shareholders ,Reliance has been the biggest constituent gainer at @ 27% while at the other end BHEL has lost half it’s value at 51% !  ~ another 11 companies have lost between @ 19% to 30 % values

    Domestic Concerns revolved around  second consecutive failure of monsoon in 2015 &  slow pace of Reforms  & Corporate Earnings Lethargy with growth in single digits despite boasts of GDP Growth of over 7% and lower Inflation and Oil Price falling 40%

    Global Concerns revolved around  China’s Growth slowing down considerably & It’s Stock Markets losing a lot of it’s froth in panic falls, continuing recession in Europe & expectations of the US Fed raising rate

    Consequently FPI Inflows which were a record US $ 17 b in FY 2015, reversed to outflows of US 2.1 b in FY 16.These outflows would have been higher if last month March 2016  had not seen a reversal back to FPI Inflows of US $ 3.2 b 

    In the first three months of this Calendar Year 2016 , January &  February 2016 witnessed significant outflows of US 1.67 b & US $0.8 b respectively that dropped Sensex to 23000 levels.On the back of many countries like Japan,Switzerland and Sweden embarking on Negative Interest Rate Policy,the  US Fed send out dovish signals and has delayed Rate hikes.This saw FPI Equity Inflows smartly cross US $ 3 b in  March 2016  getting them back into the Green in 2016 & revive the Sensex back up @ 10% to 25500 levels or else FY 16 would have seen a Sensex drop of nearly 5000 points & @ 18%,double than what it actually did in the end

    Here are some FY 16 Trend observations :

  • Sensex closed down 9.4%.It was down @ 18 % just around a month ago but smartly pulled back on record US $ 3b FPI Inflows in March 2016
  • Of the 30 Sensex Constituents,amusingly after a seven year itch perhaps 🙂  Reliance is the biggest gainer  at 27% taking it’s Market Cap to US $ 49 b,next only to top TCS  which  despite a flat year retains Top Market Cap of US $ 73b !
  • Six Scrips,including all weather favourite TCS (Market Cap US $ 73b) have remained flat
  • Of the Four Banks,only HDFC Bank stays in the Green just about,the rest have lost lot of value from one third to one fifth
  • India Growth Proxy Larsen & Toubro has lost 26% Value
  • Four Pharma Majors have also dropped significantly from 13% to 28%
  •  Three IT Bellweathers saw Wipro down 10%,Infy up 10% and TCS  in between remaining flat
  • Of the Five Auto Majors,the two 2-wheelers are both in the green,two ,Maruti & M & M are flat while Tata Motors has lost 30% value
  •  Three eternal FMCG Favorites,ITC,Asian Paints & HUL have held up
  •    After a Steel Sector Battering past few years,Tata Steel is now catching it’s breath
  • All  Five  Non Bank PSUs continue to flounder ~ BHEL has lost half it’s Value follwed by ONGC down 30% ,Coal India down 19%,NTPC down 13% & Gail down 8%
  • Housing Finance Leader HDFC too has taken a beating of @ 16%
  • Controversial Adani Group’s Adani Ports is down 20%
  • Telecom Leader Bharti Airtel is down 11% despite getting a 4G breather as Reliance’s Jio ,expected to be a sector disruptive force,launch continues to be delayed but should be fully operative by FY 17 year end
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    Essar Oil Delisting is Over or is It !? ~ Glitch or Golmaal !?

    Essar Oil Delisting is Over or is It !? ~ Glitch or Golmaal !? 

    Yesterday at 3.30 pm was the cut off time for all shares to be tendered in the Essar Oil reverse book building on BSE & NSE

    The First criteria for the delisting endeavour to be considered successfull is that  at least a minimum number of 92,569,408 Shares be tendered  in valid bids from the 142489858 Equity Shares being 28.54% of the public shareholding that could

    At  Closing 3.30 pm on Monday,December 21,2015  BSE & NSE showed aggregate cumulative bids for 101143045 shares

    So then what’s the problem !?

    1,98,99,305 shares from 8 bids all at Rs 262.80 are yet showing unconfirmed on the BSE Screen !

    Seems there is a Glitch ! or was it a Golmaal !?….if so for what purpose ? …to derail the delisting effort !? If so ,why!?

    Seems Ruias of Essar court controversy regularly….either they  follow it or it like a guided missile follows them !  

     The 8 Unconfirmed Bids for Rs 262.80 for 1,98,99,305 shares apparently is from the LIC Holdings of Essar Oil in their various portfolios

    If you remove these unconfirmed bids then the valid bids aggregate just 81243740 shares which is short of the 92,569,408 shares requisite

    BSE has referred the matter to SEBI for guidance as to whether they should accept the LIC Bids as confirmed and therefore valid….if they say ‘Yes’ and that it was a genuine issue by Stockholding who were unable to upload the bid as confirmed in time by 3.30 pm for LIC then we have the Discovered Price or Exit Price of Rs 262.80 provided this price is accepted by Oil Bidco( Mauritius ) Limited the Acquirer….they can of course offer an even higher price than this to garner more shares

    Essar Oil has got to be extremely anxious for delisting….in 2014 I had raised a stink when they set a floor price of just Rs 108….SEBI had to stop the effort…..however they allowed it this time around  with a higher floor price of Rs 146.05….in my view they should not have until the Rosneft Deal price for acquiring 49% stake in Essar Oil which is being negotiated was announced

    Essar Oil is anxious that the delisting takes place before the Rosneft deal as otherwise that would have triggered of an Open Offer by Rosneft and would have disturbed the Equity Stake Holdings by Essar Oil Promoters & Rosneft leaving Essar Oil Promoters vulnerable

    Whatever ! ~ even if this delisting is allowed with LIC’s bid being accepted at Rs 262.80 the shareholders who bid below this price or the exit price to be announced by Oil Bidco  will also get the Discovered  Price which will now be established at a minimum of Rs 262.80. Oil Bidco can accept this Price or announce a higher one as the Exit Price .It of course can reject it and the delisting would then not have succeeded read more

    Essar Oil Delisting ~ Love the Guy who has tendered at Rs 5630 !

    😆 Love the Guy who’s tendered  on NSE for just 25 shares at Rs 5630 in the ongoing Essar Oil Delisting Endeavour !

    Look at the NSE Confirmed Demat Shares Tender Position as at 3.30 pm this afternoon

    Who in their right mind would tender at Floor Price of Rs 146.05  or even below Rs 200 when current market Price closed at Rs 225 + levels ! ~ Yet some have !

    Most No of Tenders so far have come in at Rs 240

    Last date is on Monday,December 21,2015

    Wonder what LIC will be doing  with their holding !  

    Essar Oil Limited

    As on 17-Dec-2015 15:30:00 IST

    Price

    No. of Orders

    Demat

    Cumulative Demat

     

    146.05

    14

    505

    505

     

    150.00

    1

    200

    705

     

    152.00

    1

    150

    855

     

    152.05

    1

    200

    1,055

     

    156.00

    1

    0

    1,055

     

    160.00

    1

    175

    1,230

     

    180.00

    1

    100

    1,330

     

    185.00

    1

    0

    1,330

     

    190.00

    1

    0

    1,330

     

    200.00

    7

    700

    2,030

     

    207.00

    7

    0

    2,030

     

    209.90

    2

    7,900

    9,930

     

    210.00

    8

    2,705

    12,635

     

    214.90

    2

    300

    12,935

     

    215.00

    7

    2,02,607

    2,15,542

     

    218.00

    2

    400

    2,15,942

     

    218.20

    1

    300

    2,16,242

     

    219.00

    1

    18,282

    2,34,524

     

    219.80

    2

    1,500

    2,36,024

     

    220.00

    19

    75,117

    3,11,141

     

    220.75

    1

    50

    3,11,191

     

    222.00

    5

    80,834

    3,92,025

     

    223.00

    1

    0

    3,92,025

     

    224.00

    1

    10,000

    4,02,025

     

    224.80

    1

    600

    4,02,625

     

    224.90

    1

    50

    4,02,675

     

    225.00

    17

    42,28,421

    46,31,096

     

    230.00

    19

    86,105

    47,17,201

     

    233.00

    2

    600

    47,17,801

     

    235.00

    8

    26,599

    47,44,400

     

    236.00

    1

    20,000

    47,64,400

     

    238.00

    2

    2,250

    47,66,650

     

    239.00

    4

    10,13,451

    57,80,101

     

    239.40

    1

    200

    57,80,301

     

    239.50

    1

    1,000

    57,81,301

     

    239.75

    1

    100

    57,81,401

     

    239.80

    1

    890

    57,82,291

     

    239.85

    1

    1,000

    57,83,291

     

    239.90

    1

    75,000

    58,58,291

     

    240.00

    197

    88,71,013

    1,47,29,304

     

    242.00

    1

    0

    1,47,29,304

     

    245.00

    1

    250

    1,47,29,554

     

    250.00

    5

    1,840

    1,47,31,394

     

    255.00

    1

    300

    1,47,31,694

     

    275.00

    1

    10,051

    1,47,41,745

     

    280.00

    1

    100

    1,47,41,845

     

    290.00

    1

    300

    1,47,42,145

     

    300.00

    4

    3,340

    1,47,45,485

     

    325.00

    1

    200

    1,47,45,685

     

    330.00

    1

    729

    1,47,46,414

     

    350.00

    1

    1,500

    1,47,47,914

     

    400.00

    1

    100

    1,47,48,014

     

    496.25

    1

    400

    1,47,48,414

     

    500.00

    2

    675

    1,47,49,089

     

    550.00

    1

    600

    1,47,49,689

     

    600.00

    1

    400

    1,47,50,089

     

    700.00

    2

    16,500

    1,47,66,589

     

    5,630.00

    1

    25

    1,47,66,614

     

    If interested check out my earlier blog last week (with updates) for the full Delisting Story

    Essar Oil Sets Rs 146.05 As Floor Price For Delisting ~ Critical Questions Remain
    December 7th, 2015