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 ?
Participants learnt to be aware & compute Valuations on the basis of Earnings & Assets & how to trust or not trust data inputs for such Valuations ~ recalled & recounted the red flags that I had identified in Kingfisher Airlines,Karuturi,Subex,Suzlon,Treehouse,Geodesic,Satyam & many others before they destroyed shareholder wealth…many covered in blogposts in earlier years
How to prioritise the Value Assessment Exercise in these five Steps :
~Quality of Promoters & Management ~ Standard of Corporate Governance~ discussed a host of Promoters like Ruias (Essar Oil) ,Vedanta’s Agarwals (Sterlite Tech) & many others
~Business Model ~ Stated & Boasted Intentions & Plans & Actual Ability & Delivery
~Financials ~Past,Present & Projected ~ Can we trust audited results ? how serious are the auditor qualifications? ~ Does Networth need adjustment for any restatement of assets or liabilities ~ High Debt critical to repay ( assets that can be sold a top source),convert to Equity or settle with waive-offs to revive (Company like Ballarpur Industries remaining @ Rs 6000 crs debt despite conversion of Rs 1009 crs last year to Equity & Turnover levels under Rs 3000 crs ~ why Price drifted down to Rs 7 despite being advised by many as a turnaround multibagger ) ~ Contingent Liability (like the over Rs 1400 crs claim by Odisha Govt on Orissa Minerals Development Company (OMDC) of which only Rs 200+ crs has been provided bringing networth down to Rs 580 crs & for years their Mining Leases have not been renewed & the company survives on Other Income of Rs 50 odd crs on Cash of @ Rs 800 crs ~ Price has dropped below Rs 800 with a 52 week high of @ Rs 2342)
~Valuation on Earnings & Assets~ any non-linear earnings potential that looks promising like real estate development or likely Defence Contracts in the future~ impact of Brent Oil Price crossing US $ 83/barrel ~ Impact of the Rupee Depreciation to cross Rs 72.50 to the US $~ Any opportunity in this Bank Consolidation?
~Value Vs Price Assessment ~ Companies,Indices,Mkt Cap/GDP
The Participants too provided huge value inputs especially when discussing Edelweiss & ICICI Bank & Reliance,Ruby Mills & NBCC
Here’s some of the instant feedback from this workshop:
Gaurav,just launch into Annual Reports right from the morning so we can cover valuation of more companies
“let me know when’s your next program”
” it was wonderful…honestly I am privileged to have learned so much from you”
“productive Saturday learning…I had a super day at the workshop…you were at your best & there were a suite of high value takeaways…I must say that your knowledge & experience of the markets & your way with numbers is truly exemplary…I truly believe with your passion to teach,share & transfer your insights to class you should seriously consider structuring it over two days”
“thank you sir for sharing your valuable insights on valuations.Would like to interact again whenever opportunity comes”
” I really learnt a lot today.Every time I meet you I realise how much there is to learn from you.You are very very passionate about the markets and I really enjoyed the programme”
“Thank you very much for your valuable guidance”
“It was a very stimulating experience.I hope to attend your future session also.Thank you once again for your insights”
🙂 All in all,it was indeed a lovely absorbing & I dare add an exhausting Saturday for all of us but we did have fun
😀 Oh Yes ! Can you spot the direction in which I’ve placed my Bulls in front of me ?~ will help you guess my current mood on markets
1 thought on “Valuation!Valuation!Valuation!~Lovely Interactive Equity Workshop”
Wonderful initiative sir. I will be joining your workshop soon.