Stocks for the long and short term portfolio
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Good report on Indian Steel Sector:
http://www.equitymaster.com/research-it/sector-info/steel/Steel-Sector-Analysis-Report.asp
http://www.equitymaster.com/research-it/sector-info/steel/Steel-Sector-Analysis-Report.asp
One more Investment GEM. Buy at almost any price and be assured for years. It will almost always give you a higher price to exit; just like FD, sans the tax.
This is a very reliable counter for investors. But, this is no news. It has been such for decades now. Please note that the trick is to see how it suits us; what we intend to do with it. We cannot have the same "play" for Cipla as we have for Bhel !
Cipla is different. It is a very stable scrip. It has given sharp corrections only twice since 2000. It corrects 50% odd percent in the worst times.
The reason it feels special is because of the given economic circumstances which entail rising "cost of money" and operating costs and shrinking profit margins. In such times, zero debt companies should be given special importance.
Cipla's Statements are straight-forward and impressive. They are like a metronome:
1) Showing steady growth in Sales by 10 to 20% each year.
2) Giving small and fixed dividends which is a wise thing to do. If the company can better utilize retained earnings by giving strong ROE, and shareholders are confident about the management then there is no reason for them to clamour for dividends.
3) Is a strong and established brand which is the most important thing for long-term survival. It cannot be achieved, but can only be attained.
4) Zero-debt: This factor adds a lot of stability to the share price. It takes the sting out of doing business.
5) GPM > 20% shows a strong presence of Moat. ROE >15%...
And all of the above happens every year... without fail.
I admit, I was generally bullish in 2012 hence thought of CIPLA as a laggard/dullard. But, not anymore. Its fundamentals are impressive and it is a safe stock. I will buy it at 250 t0 300 levels.
Once a good quantity is purchased in a correction, SIP can be done on a regular basis.
CIPLA
This is a very reliable counter for investors. But, this is no news. It has been such for decades now. Please note that the trick is to see how it suits us; what we intend to do with it. We cannot have the same "play" for Cipla as we have for Bhel !
Cipla is different. It is a very stable scrip. It has given sharp corrections only twice since 2000. It corrects 50% odd percent in the worst times.
The reason it feels special is because of the given economic circumstances which entail rising "cost of money" and operating costs and shrinking profit margins. In such times, zero debt companies should be given special importance.
Cipla's Statements are straight-forward and impressive. They are like a metronome:
1) Showing steady growth in Sales by 10 to 20% each year.
2) Giving small and fixed dividends which is a wise thing to do. If the company can better utilize retained earnings by giving strong ROE, and shareholders are confident about the management then there is no reason for them to clamour for dividends.
3) Is a strong and established brand which is the most important thing for long-term survival. It cannot be achieved, but can only be attained.
4) Zero-debt: This factor adds a lot of stability to the share price. It takes the sting out of doing business.
5) GPM > 20% shows a strong presence of Moat. ROE >15%...
And all of the above happens every year... without fail.
I admit, I was generally bullish in 2012 hence thought of CIPLA as a laggard/dullard. But, not anymore. Its fundamentals are impressive and it is a safe stock. I will buy it at 250 t0 300 levels.
Once a good quantity is purchased in a correction, SIP can be done on a regular basis.
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Sridhar posted a good write-up.
Hello Sridhar,
Your article was insightful. It puts in words what a lot of people feel.
In it, I found myself fixated on one projection: "I am looking at improvement in the Economy only from mid 2014.". That is within an year. It appears optimistic.
The situation is very bad from the inside. This month we saw a massive exodus by the "Retail Client" category. However, the Index is still at decent levels only because FII have held on.
The two categories, FII and Retail, look at different parameters to take major decisions. FIIs, I suppose, are driven by availability of cash and are opportunist, whereas Retail guys (HNIs, Props etc) have their own money to manage and are mostly India centric.
Retails have cast their vote, the sign is on the wall. The economy is doing badly. So it is not the hope of growth that it keeping the FII, it is availability of cash.
If FED increases interest rates which will channel liquidity into US Bonds, then sharp correction will ensue in India. If this correction catches momentum then things will turn for the worse.
And how likely is that to happen?
In my opinion, very! FED wants to increase rates but is waiting for an opportune time. It showed its intention in the last meet and the world markets crashed hence it had to rescind. US has zero interest rates right now and the only way to go is up.
Hello Sridhar,
Your article was insightful. It puts in words what a lot of people feel.
In it, I found myself fixated on one projection: "I am looking at improvement in the Economy only from mid 2014.". That is within an year. It appears optimistic.
The situation is very bad from the inside. This month we saw a massive exodus by the "Retail Client" category. However, the Index is still at decent levels only because FII have held on.
The two categories, FII and Retail, look at different parameters to take major decisions. FIIs, I suppose, are driven by availability of cash and are opportunist, whereas Retail guys (HNIs, Props etc) have their own money to manage and are mostly India centric.
Retails have cast their vote, the sign is on the wall. The economy is doing badly. So it is not the hope of growth that it keeping the FII, it is availability of cash.
If FED increases interest rates which will channel liquidity into US Bonds, then sharp correction will ensue in India. If this correction catches momentum then things will turn for the worse.
And how likely is that to happen?
In my opinion, very! FED wants to increase rates but is waiting for an opportune time. It showed its intention in the last meet and the world markets crashed hence it had to rescind. US has zero interest rates right now and the only way to go is up.
Last edited:
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