A Dose of Rakesh Jhunjhunwala

Rakesh Jhunjhunwala on Future of Equity Market

Methinks every Indian Equity Investor needs a dose of Rakesh Jhunjhunwala (RJ) every few years! ~ any sooner it could be an Overdose !  😆 ~ just kidding !

I like the guy ! ~ right since I interacted with him when I invited him around 15 years ago at the turn of this century for interacting in an evening  Q & A session with my packed class of @ 90 participants in my Equity Portfolio Structuring and Stock Analysis Workshop at the BSE Training Institute as I thought he would add practical value & he did

“Boss ! I’m a Sadak Chaap ! ”  he had told us then as also how he had reconstructed his equity portfolio to concentrate only in a few stocks after the 2000 ICE debacle…so in a sense most of his Wealth has grown only in this Millennium in the past 15 years ~ and to his credit in Selections that were not really Blue Chip or Core

Yesterday had gone for an  IMC interactive meet in Mumbai to check out if RJ has sobered & matured in his ‘manner of speak’ over the years ~ I rarely watch Stock Channels ~ don’t even have a TV in office~  so was not really conversant with how & what he delivered in his appearances though knew of his initiating big stakes in companies

I am delighted to blog he has not changed ! ~ shot straight from the hip & mouth again as he always does ” I’m a satodia(translated to mean speculator)  & investor & not an economist” ~ his investment portfolio has spread into the Alternatives of  Bollywood Movie Production too with Kareena & Arjun starrer ‘Ki & Ka’ being his latest co production~ is into horse racing too and owns a few horses ~ passions perhaps where return on investments need not be measured in monies !?

Many perceive him as Dehati or Crude Dude for his rustic loud boorish way of speech~ but don’t let it fool you ! & he does not make any pretenses ~ he’s a CA by training & wears a fairly sharp mind

Money Talks & Crowd Laps it up all !~ many vigorously & ‘knowledgeably’ nodding in agreement

These RJ’s views & responses to questions posed should interest you :

On The Future of Equity Markets ~ Reiterates this is only the Trailer & we are going to witness a Mother of all Bull Runs.India is a thriving young Democracy with US $ 600 b in Savings every year.Equity Markets receive just US $ 50 b from this.This has to improve and it will ~ anyone ,any  doubt!?   

On Returns from Equity  ~ Ironically while his riches have been through multibagger 1000% + equity gains in concentrated high weightage stocks like Titan & Crisil he asserts that one should be happy with 18% CAGR gains and if it goes to 24% one should be really happy read more

Wow! A Full House NSE Training Fundamental Workshop !

Wow! A Full House NSE Training Fundamental Workshop yesterday !

Seems to get bigger & better every time !

Did the first one on August 8,2015 and had blogged on it  as linked below

Interesting Interaction at the NSE Equity Fundamental Training Workshop

Sunday, August 16th, 2015

Did this one too on “Interpretation of Financial Statements for Stock Analysis” under NSE’s Rapid Series at their NSE BKC Complex

@ 30 Participants,both genders aged 22 to 58 from leading Broking Firms,Corporates,Banks and even Individuals who had come on dot and stayed till 8 pm ! expecting to learn how to read financial statements and  market dynamics to assess risks and opportunities in Indian Equities

Common Question right from Manish Shah,who introduced himself  to me in the lift going up to the Class ” How are the Markets Looking “? ~ “Where will the Sensex & Nifty head in the short term”?

Had taken a Bull along ! really !…a smaller version of the Wall Street one….told the class I love four animals…Elephants (Lord Ganesha),Lions (My Zodiac Sign),Tortoise(Good Luck & of course Bulls (I’m always one!)….and you’ll always find them on my office desk !…in fact four bulls of various sizes !…and clients know my market view on simply seeing how the bulls are placed !…if facing them straight up  (↑)  as they sit across me,I’m very bullish…if slanted ( ⁄ )towards them,I’m bullish…slant inclination reveals how much !….if a horizontal view (↔ ) then indicates market will remain flat to rangebound and if the bulls face me vertically (↓ ) I’m bearish !….and slant facing me shows intensity of being bearish !

That got a few knowing laughs from the participants and set off the mood for the Workshop with humour being interspersed right through

Interacted on the Sensex Dynamics right from base year 1978 and in the last 20 years from November 1,1995 to October 30,2015 when despite nearly half of the @ 4850 trading days saw the Sensex close negatively the Sensex ran up over 650% !…but is that enough!…..the Opportunities & Threats that were clearly visible during the years right from 1991 when Modern Reforms set in to 2001 when Markets had bottomed  out on the ICE Age Melting to the Sharp drop in Interest rates from 14% to 7% in and around 2004 to post Lehman 2008 levels of 8000 in October 2008 and March 2009….showed them from current Sensex of 26657 how to assess fundamentally where we could be heading and the risks associated….discussed Passive Index Investing vs Active Investing and therefore the need for Fundamental Analysis and therefore the need to Interpret Financials & therefore the need to assess Value vs Price  & therefore this Workshop  ! read more

Value Protects in Inefficient & Wildly Swinging Scary Stock Markets

Value will Protect in a Wildly Swinging Market !

How Terribly Inefficient our Stock Markets are !

The Share Price Swings in Small & Mid Caps can be equally exhilarating and devastating !…depends !

And all this happens when the Sensex and Nifty move in a very narrow range !

Down ! Down ! Down!

Look at Amtek Auto’s Crash yesterday and continuing today !…all because the Exchanges announced that it will no longer be traded in the F & O Segment 

It was Rs 141.50 on August 17,2015.Yesterday August 19,2015 it crashed  by nearly 40% and Rs 50 to hit a low of  Rs 78 before closing at Rs 89 !

And this morning August 20,2015  it crashed another 40% to a low of Rs 50.70 before now recovering to Rs 67 levels !  

So the fall in three days from a High of Rs 141.50 to a low of Rs 50.70 is 64% erosion of market cap  from Rs 3100 crs to Rs 1100 crs in just one big Breath ! with High Volumes but low Delivery %….SCARY !

And this is a Company where the Promoters Dhams & Their Companies own 48.98%,FPIs like Goldman Sachs & Macquarie hold 18.83%,Domestic Institutions like LIC hold 16.47% as on June 30,2015.

There were over 46000 shareholders on this date.Spare a thought for them !…and for those who were long in F & O !

…and Spare a Curse for those Broking Houses and FPIs who recommended this Scrip !

Did not all know that the Group is struggling with over Rs 25000 crs in debt !….Wise after the Event ! 

 

Date

Open

High

Low

Close

WAP

No. of 
Shares

No. of 
Trades

Total Turnover

% Deli. Qty to Traded Qty

17/08/15

135.00

141.50

127.55

133.10

133.54

11,27,928

15,415

15,06,28,023

17.63

18/08/15

133.25

134.25

127.40

128.55

129.54

5,32,507

5,649

6,89,83,199

23.42

19/08/15

126.90

126.90

78.00

89.00

100.86

35,47,065

26,846

35,77,46,778

36.40

Look at Stampede Capital  !

Rs 650 two days ago after an all time high of Rs 800 on August 6,2015 and down on two consecutive lower circuits of 20% yesterday at Rs 494 and even today to Rs 406 on BSE !….CRAZY !…and SCARY!….just over 2700 shareholders,one being Superstar Amitabh Bacchan (entered a year and a half ago picking up One Cr shares at Rs 88 & similar at  Rs 110 levels), at June 30,2015 in what is clearly a highly controlled scrip

Look at Ansal Buildwell ! Big Up & Down Swings in three days ! 

Clearly Insider trading Involved or can the long positions be defended as aggressive risk taking based in favourable anticipation of a Supreme Court Judgement that was announced yesterday on the Ansal Brothers for the Uphaar Cinema Hall Tragedy that took 59 lives 18 years ago in a devastating Fire !

On August 17,2015 the Share Price was Rs 123.On August 18,2015,just a day before Supreme Court Order the Price flared to Rs 148.30.Yesterday it closed up on upper circuit at Rs 163.10 ! as Supreme Court announced merely a Fine of Rs 60 crores on the Brothers and no Jail Sentence !….and today it’s on lower circuit at Rs 146.80 nearing noon !…and the rise was being justified as Market Cap just @ Rs 100 crs and land bank value worth Rs 10000 crs !       read more

Reliance or NBCC ? ~ Both @ Rs 850 levels

😀 Oh ! How I love Equities !

Reliance Industries or NBCC !?

No Brainer!?

Both  FV Rs 10 and @ Rs 850 levels

Reliance with a Market Cap of @ Rs 275000 crs and  embedded in controversies and has actually lost monies for shareholders in the last six years of holding

NBCC with a Market Cap of  @ Rs 10200 crs and on the ascend yet despite a stellar over 500% rise in just over a year !

Had Recommended Exit from Reliance over a year ago on Corporate Governance issues and had strongly recommended NBCC as a SS 2 Select on October 18,2013 as a super Diwali Pick at Rs 110

If you Guys consider a Switch from Reliance to NBCC and make some Money on this,let me know by email and I’ll tell you where to send my Fees ! 🙂

If you don’t make Monies then my email was wrong! 🙂

Oh! and if you’re considering switching from NBCC to Reliance in expectations of  ‘Jio’ Rollout benefit,then all the best and “Jugh Jugh Jio! ” 🙂

 

Union Budget 2014 ~ Will Sensex continue to Humour as Jaitley does not!

Have a look at our first impression posted  after our FM ‘s Union Budget Address and during market hours

Union Budget 2014 ~ Will Sensex continue to Humour as Jaitley does not!

Think he missed a great opportunity to provide us with the ‘Naya Soch’ of the new NDA Government

His Speech stated quite a few challenges and objectives like tackling Black Monies,raising Tax to GDP ratio,lowering Inflation and Fiscal Deficit % but stopped short of spelling out the specifics of solving these

Having just 45 days after NDA was elected he has opted for the easier option of simply following the UPA budget process and numbers too that the UPA FM Mr Chidambaram laid out in his Interim Budget in February 2014….whether it be Disinvestment or Tax Receipts or Fiscal Deficit Control Targets…made right noises but was tokenism in a few areas like social expenditure…thankfully nothing really adverse or anti poor though direct tax incentives are not really cause for any celebration

Sensex had quite a roller coaster ride today as to be expected….opening stable & pre budget speech at 25514 in the morning then sliding before noon over 300 points to 25117 from yesterday closing of 25445 during the budget speech before strongly racing away by over 700 points to 25920 …over 400 points previous day closing post budget speech only to reverse all the gains and close at 25373,down 72 points  from previous day closing

Will the Sensex continue to Humor us in the near term despite not an iota of Humor in the FM’s Speech !? …sense is that any correction will be a hiccup on the onward march towards 30000 on the back of increased FII Net Infows & Big Corporate Infra spending  

I see some clear big winners in the Infrastructure Space across the Board from Shipping to Power to SEZs to Real Estate to Highway Road Construction Companies and Pipeline Companies

 

 

Typical ~ Equity Investors are piling on at these Highs ~ they need to be cautious

Sensex has crossed a record 26000 & Nifty is now ahead of 7700

Typical ~ Equity Investors are piling on at these Highs  ~ they need to be cautious ~ especially those who are returning or initiating fresh exposure now not having done so in 2013 or earlier in 2014 ~ advisable to await the post budget scenario as there is a high probability that once euphoria abates the Sensex and Bellwether Scrips may correct 10% or more…the real danger though are the small caps and midcaps that have run up crazy,some over 100% in months…they may correct 25% to 50%…yes that high !  

At June 30,2014 ,Equity mutual funds saw record absolute rise in average AUM in the quarter, up by Rs 33000 crore or 16% to Rs 2,36,000 crore led by mark to market gains and inflows. The equity funds’ contribution to the gains in the industry assets was the highest among all categories

While this is to be expected on the back of the resounding BJP Victory and Narendra Modi assuming Prime Ministership there needs to some caution that should be exercised especially by those seeking instant profits and gratification as Sensex has crossed 26000 levels and seems to be running a little ahead of fundamentals for the near term on the back of  BJP & Narendra Modi sweeping the elections,FII Net Inflows exceeding US $ 8 Billion in 2014 till date and Great Expectations from the Budget in particular and the Government in general going forward

Great Expectations from the Union Budget this Thursday are countered by great challenges that continue to confront us on the economic and geo political front…Iraq & Ukraine Tension can escalate further causing Oil Price to surge even further past US 120/barrel and putting pressure on the Rupee…though a lot of the pressure has been taken off by record FII Net Inflows into India this year into both Debt & Equity

The Budget Backdrop is :

High ~ Inflation,Deficits & Debts

Low ~ Economic Growth with Manufacturing sector that needs urgent revival

45% + of the Projected FY 15 Fiscal Deficit has been reached in the first two months April & May  of FY 14 itself 

There is little room to lower Interest Rates immediately….so manufacturing thrust can be provided through diluting the Land Acquisition Act and opening out or increasing FDI cap in many sectors

It is commonly expected that the Budget will be kind to the Infrastructure,Housing Finance,Power & Banking Sector….a major beneficiary of this should also be the Cement Sector read more