Manoos

pcpune,
Thanks for your advice. you are quite well informed.
I think stock market is more abt what not to buy than what to buy.
and stay away from TIPS !!

perrenialquest

First of all thanks a ton PCPune for your valuable insights so far. I have the following stocks and been there since the past few years as am not that active in churning.

Polaris , Fortis Healthcare, GMR Infra and Central Bank of India.

Will you please share your thoughts on these.

Regards

pcpune

Thank you again for complementing my efforts. I am providing here Long term views hence in a short or medium term, you may experience blips...

About you stocks -
Polaris - Clear sell, it has given negetive returns since last 10 years...and this is without even looking at its technicals.If you are bullish on - 3 large caps are the way to go....Polaris is very similar to Rolta which looks much better...as I have said earlier - in IT the 3 large caps have provided the best returns and its best to stay with any of them...

Fortis Healthcare -I dont like stocks that float rights issues...the company has absolutely no history as being a good stock, no dividends, low RoE. Its PE is what 200? Well, please sell if you have, I like large cap pharma and med equipment supplier companies much better than Fortis...
Fortis MAY have a "potential" of med care in India, but I dont think it has the right focus and management to be great stock!!!!

GMR Infra Clear Sell again! This company doesnt care about its share-holders at all...technicals,history, future potential...Much better infra bets are companies like L&T with a strong track record...

Central Bank of India - It is a good stock and could provide you consistent returns over the years.But again, I think just pick a PSU bank which is not say SBI or a PNB, but which you think its doing better than CBI.I think likes of Dena,Syndicate,BoI,BoB,SBT, are really good which may have a good retail presense....Personally - I like to buy Bank ETFs instead of a stock itself, as over the last years the bank stocks always move in packs...when they go up or down...so why to take the risk with just 1 stock?

Overall, I believe you have purchased a lot of mid cap,small companies and you need first understand sectors that are bound to outperform (in that order)- fmcg,pharma,auto,IT,financials...out of these please pick the leaders...

rdwasnik_2009

I didn't know in depth about this sector, Thanks for this. I said what i heard on the street.
In this sector I personally like Deep Industries and Essar Oil... What is your view about these pics... Reason of my liking here is their future potential.

pcpune

STAY away from both please...
Essar group is a "chor" group as my dad calls it, it has changed the holding company 3 times since 1995 (ask old shareholders who have suffered and we are one of them)

Deep Industries -No dividends, low RoE, low NPM, 200% return in 10 years?..well really not enticing for me...

My important rule when I buy a stock - I should physically see the company somewhere - Deep ..surely I have not come across, Essar Oil - I have come across few petrol pumps recently but even they are deserted as their petrol/diesel is extremely bad quality...So its a clear decision for me...

realacres

Thanks pcpune. I would like to know your pick on Punjlyod.
Btw, I feel that it is best to avoid these sectors:-

1. Real Estate: For the simple reason we know here. Also, there are cases where a property is sold to it's subsidiaries so even if sales are shown, money doesn't flow. For eg. DLF & DAL. Btw, Rakesh Jhunjhunwala doesn't have a single stock of RE, irrespective of the co.
2. Banks:- Profits coming under pressure & NPAs are rising. Eg. Bank Of Rajasthan (hey, Hema Malini must be worried now),
3. Telecom:- 3G bidding has made them over-leverage while reduction in tarriff has impacted their bottom line as well. In case of Bharti, purchase of Zain Telecom Africa is considered to be overvalued especially when they didn't get the Zain's most lucrative market of Gulf. The debt: cash ratios is really poor for Bharati in such case. Reliance Comm was also poor, & it is only now when it made some money to pay for 3G by selling off it's tower biz to GTL.

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pcpune

I agree, but in times like these you need to take a contrarion call...and invest in small amounts in stocks like bharati...Debt/equity ratio of bharti is about 0.5, and hence for a company earning a net profit of 7500 crores per year, a debt of 10 or 20K crores can easily be wiped off in a matter of 1-2 years...Infact, I have decided to purchase very small quantiies of bahrti on every 20% rise(250,300,350,400,etc) and increase my investment everytime...Bharti, infact also has a great RoE and a good franchise based model and many verticals for its business....So...I am willing to take a small risk...however for other readers..I have a strong core portfolio in place and bharti only forms 1% of my folio..so its just a very small CONTRARION holding...

Also, in some way I am related to the telecom sector and understand that most operators have finished their expansions and payments for licenses,etc and now the only cost which they will have to pay is opex costs...I imagine myself as back in 2003, when the 2G boom started...we may have a similar 3G and broadband boom in next 5-10 years which really augurs well for Bharati...Also, I have see Bharti grow from 10 rs to 500 (bonus adjusted) and hence just feel it was the first leg...Last point - Cell is an "addition" to roti kapada aur makaan...to more than 50% Indians..

kaatesha

pcpune,
a great thread. i have a couple of questions.
1)could you share your views on titan? i am not able catch this, every day its making a new high. is it a buy at current levels?
2)i know this is an off topic. this is about taxation. lets say i book profit for amount X and book loss for amount y. i now have to pay tax on (x-y). is is my understanding right?

pcpune

Thanks again,

Titan - Is a great growth story,excellent technicals (very high PE currently but then markets know more than you -- ALWAYS) ! Has a good francise based model, has launched new stores for optics - very high margin business, but, I think its not really about timing stocks like Titan or Nestle, you need to just pick them on every dip, just start picking 1 or 2 every time you see a good fall, every fall should be oppurtunity to buy...but unless you make a start, you will never be able to buy it...I guess, just start picking in single digits and BUY on every dip. The more it dips, the more "quantity" you BUY.
But, personally - I dont see much of a upside in short term may 10-20%, and hence it can be a good defensive bet, as markets are showing signs of over heating.So, buy as a "change" from high beta stocks that are showing profits in your folio.


2. Well, depends on when you buy at X and when you sell at Y. If its in the same financial year April to March, you would need to pay "Short Term" Capital gains tax for X-Y, (include both loss and profits).

If its in the new financial year - its "Long Term" Capital gains tax.

Now, however, if you have more "losses" booked in a year, the IT dept wont accept it, and will want you to carry forward the loss next year, so always remember - either show profits or 0 profit/loss.(you cannot adjust loss in one year against salary earned)

The situation has changed with new DTC, and its terms are not out yet,once they are out, more clarity will be there.So, for last year...this is the norm.

Also,dont forget to take the STT tax certificate from your broker, and you could deduct the amount from your profit!!!

kaatesha

thanks a ton pcpune. i have gone thru the entire thread. i liked the way you answered them. very logical thinking.