Sunday, November 29, 2009

Market-casual thoughts

Today, I wish to talk on few investment concerns. At straight, every smoker knows that cigarette smoking is harmful to health and every drinker is aware alcohol is ruinous. We get these cautions on every packet of cigarettes or bottles of wines. But some of us consume the both or any, even after the absolute consciousness. The plain purpose of above words in such a blog, related to investment myths. Any way, we don’t have such cautions available on scrips. Majority of us treats investment advices on the way, chain smokers or heavy drinkers responds to the cautions quoted above.

The path of the market seems on a slipping floor. It is not showing any boldness, responds in a very sensitive manner like a teenager. Market is reacting to every related news with an antagonistic way. 300-500 points up or down of Sensex in a single session is none a matter to us. The market is even capable to bring down or up some 2000 points in just a week or in 3-4 trading sessions. What is going on?

My clients usually ask such questions. Few of them even ask for short term recommendations. But, I am not sufficiently expert to answer them in any condition. But I wish to spread few words my own. The path of the market is mysterious. I don’t think, any one can calculate the market’s future. But we still read a lot of expert views everyday in Medias. They predicts in their way, market is passing it’s own way. Majority of them come again shamelessly and blasts new bombs. I have a collection of their statements since last few years which I kept in separate folders by names, and it is really interesting when we look now. About predictions, the only possible thing is, we can reach on certain presumptions considering various aspects related to economy or market. Nothing else!

On the other side, the unpredictable nature is one of the most charming side of market. Just recall the days of year 2008. Market was declining day by day on global cues. Was there any attractions? And before that, market were on mountaineering, everyone were making money but short live, and lost than they made. Simply, the real allure of the market concealed in, expecting the unexpected. Everyone here is to make good money by fastest means. I don’t know any one, who buy stocks to play with hard earned coins.

A big percentage of investors enter in the market with a pre-assumption of immediate gains. But normally market sides them on the shore, like oceans do with scraps. Long term investment is an established and widely accepted strategy even if very less people follows. A very few short term/Intra day traders makes good money too, but less in size compare to the patient investment. Experts says, the current volatile market is one of the solid opportunities to make good money, after the previous extreme lows which most of us missed out. But, here again, I am not proficient in that way. But I wish to be….

Let us see, how people buy stocks? A large part of retail investors buy stocks while the market moves to north. The intention is to take positions before market reaches in higher levels. When a crash occurs, most of them sell out their entire holdings irrespective of company potentials, cause the scarcity to further declines. Probably these people pay heavy brokerage almost nearest to their gains in long run.

Some investors take their positions in upcoming market and sell out on nominal gains. If a crash occurs and stays for longer time, they even divert their funds to other investment options. These people never wish to stay their money idle.

A very few category of investors get pleasant while market is crashing or on inconsistency. They always keep a considerable portion of their money idle and sit on it calmly. When market crashes, or in between sucker rallies, they put their money and manage exit meeting their pre-assigned target with legitimate profit before next crash. It is the best strategy for short term traders, but not practical for everyone .

Some people buy stocks in batches while market crashes or responds erratic, sucker rallies bring the market again in heights, they stay calm, they wait for the next more solid crash to get the same stocks (on which they have downright faith) in lesser prices. They accumulate their favourite stocks in more genuine prices. These people come normally in the category of patient long term investors and who actually makes money in the real depth. I wish to be here. Moreover, interested to deal with people who keep this mindset.

I am always in favour of long term or patient investments, but I truly respect few day traders who make consistent gains. I personally know few such smart and hardworking guys. They work hard to keep pace with the market and doing extensive research before play the game. They unearth some positive news, collect maximum details on the news, company details, graphs, charts etc.. Then put their money with brave heart. Probably the result will be fruitful according to the positive reaction to the news/info. These are the people who benefits maximum from the minimum time. A real intraday trader should have an immediate decision making capability, utter braveness, a solid background for high risk tolerance, good knowledge on the scrip/company, charts/graphs, resistance levels, awareness of the farthest possible reaction levels etc… If you have it in you, go ahead and try your luck.

But, majority of my intraday friends are on the other side. They sit in front of the system by around 9 am or before. Looks like preparing for a 100 Mtr sprint. With 2-3 mobile phones (to avoid chances of missing even a single tip from their most [un]trusted sources) to receive tips, resistance levels, entry prices, intraday targets etc.. Or, some of them closely watches the initial moves of indices, and put their/broker’s money blindly… Usually, most of the days happens bad for them. Any slight negative news usually brings the market to heavy collapse and they compelled to sell out on lose. Sometimes, the market goes up, but the scrip they bought to south only.... Most of them cannot even deliver good stocks because they usually play with margins. The interesting thing is they surely discuss their sporadic gains with us, which rarely occurs, but the loses never. Next day they sit again to recover the earlier lose with a fresh guy’s tip mostly paid ones.

I think its enough for now, usually I am hesitate to read lengthy contents, so hope my readers too.

Comments Please

Shabu Thachat –

Monday, November 23, 2009

Worthy reading - Part - I

Dear readers,

I have recommended considerable number of stocks through this blog to my readers. Today, I wish to recommend bit more beneficial support in the nature. It is a casual converse where I wish to introduce few best blogs/sites/links to my readers. I was in thought of such a post since few months, but I decided to do it right now, in response of certain queries from one my reader. The intention is clear, that I wish everyone have a close read to the following rich links who desires to approach the market in a legitimate way. I respects these people (blog owners) on the basis of their knowledge, experience and fidelity rather their degrees. I wish to appreciate the other side too, the generous effort to help the investing community without any fiscal anticipation.

It is a blog of Mr. Yogesh Chabria. I consider him as an outstanding personality in the segment and totally different from the crowd. I like the manner of his presentations which injects verves in your nerves.(I felt so…) He is one of the rare cerebrals I respects in the multitude of market experts . I don’t think I am proficient to rule out any of his posts. Find time to make a read to his entire posts or try in leisure. You will surely feel bit different.

Blog of Mr Kumaran Seenivasan, A true professional in the segment and I am following since the blog’s inception. I would not like to extol more about his articles considering the scope of misinterpretation of my intentions, but wish my readers must have a staid look to the following praiseworthy links.

How to select best stocks

When to buy a stock

When to sell a stock

Calculation of indices

Cash flow statement analysis

Balance sheet analysis

Buy & Hold strategy

Beating the Market

Multibagger concept

A lot more are there, but I am selective to assemble the basic but significant concepts to freshers. I have to introduce few more blogs in this row, but next time.

Knowledge is power…
Shabu Thachat -

Sunday, November 15, 2009

Hanung - A serious toy?

Dear Readers,

With out much introductory notes, I would like to talk about one of my favorite stocks. This post dedicated to unknown readers (other than my clients) who donated their own, from their gains on my previous recommendations. The company we going to discuss, is not comes under any established or conventional emerging sectors, but still I have good faith on this company, their business as well as on its able management.

In 1990, Ashok Kumar Bansal, a chartered accountant felt, he have tired of helping others to get rich, decided to strive something own with his own ideas. In search of a new "export item” he chosen two, liquid mosquito repellent and soft toys. Mr Bansal realized that the exports of the mosquito repellent would be restricted to Asia as “the lack of mosquitoes in the developed countries". That realistic thinking made the soft toys as the logical choice. It is important to mention that, there was no quota for soft toys at that time, since the category hardly existed in Indian market. (The vision)
With Rs 25 lakh borrowed from his father, Bansal set himself up in business. He has arranged a technical collaboration with Korea's Hanung Industrial Co. He also took up the Korean company's name for a simple, practical, but clever reason. "India was not associated with quality products then," he states. "We were seen more as a Korean company than Indian. That helped in getting orders." (Survival Technique)
Company Snapshot

BSE Code - 532770

Sector - Misc (Soft Toys & Home Furnishings)

CMP - 115.45(13/11/2009)

EPS - 24.57

PE - 4.70

BV - 121.29

FV - 10

52 Week L/H - 24.25/132.30

Buy Range - 85-110(Accumulate in every fall/SIP )

Ever High post 2000 - 300(Jan 2008)

Market Cap - 290.82

Chairman - Ashok Kumar Bansal

Promoter(s)’s holdings- 63.25%

HTTL is engaged in the manufacturing & exporting of stuff toys & home furnishing products. The business consists of soft toys manufacturing facility, home furnishing production facility and textile processing facility. The company is treated as largest producer and exporter of Soft Toys, Decorative Cushions and Room Furnishings in India. The company also launched a wide range of home furnishing with attractive colours, designs and fabrics. Hanung is the largest manufacturer and exporter of Non- Toxic, child safe stuffed toys in India.

HTTL has more than 100 distributors, more than 3,000 retail stores and multi brand outlets. The company has signed an export order tie-up with a leading US buyer for exporting home furnishing to the extent of USD 50 Million (about Rs 2,000 million) to be completed by December 2009. Further, the company has so far signed long term export contracts worth of $265 Million (about Rs 10,600 million). In April 2008, HTTL signed a MOU to acquire 100% stake in a Chinese soft toy manufacturing unit, having an annual installed capacity of 10mn pieces. This unit is said to have infrastructure to double Hanung's toy competency in the long run. It is expected that, this acquisition could further strengthen HTTL's international presence, improve its overall market share in the toys segment and will help to expand the overall margins.

HTTL continues to record sturdy order flows even in the midst of an uncertain export environment. Entering in long-term contracts with organized clients is not a common practice in the textile industry, as international retailers lean to alter their sources of supply based on fast changing fashion trends. HTTL has managed to enter into 2-3 year contracts with its clients. In milieu of concerns of a slowdown in the US imports, the long-term mode of such contracts provided greater visibility to Hanung's revenue flow. At present, HTTL has a healthy order build up of Rs. 1350 cr. of which Rs. 1060 cr. are long term orders, which are executable over a period of 2-3 years (be patient)


The ISO 9001-2000 certification

International Standards like EN-71, ASTM and BS-5665.

IKEA has certified as I-WAY and 4-SIP vendor.

Target Group USA’s approved vendors.

Wal-mart certified factory and their approved vendor.

JC Penny USA certified factory and their approved vendor.

CHF Industries USA client.

The Metro Group of Germany’s ‘Approved Manufacturing Practice Certificate'.

Lillian Vernon Corporation of USA’s 'Certificate of Appreciation'.

SPLASH, the brand for domestic furnishings, was started in 2004. Mr Bansal says. "What took the toys business 17 years to achieve, the furnishings business has given us in just three years" . In very short time, HTTL has managed to export 90% of its production of Home Furnishings to all major markets including, USA, Europe & Latin America.

Client Base


Shopper’s Stop
Big Bazar (Pantaloon group)


America Pacific
Springs Global
Britanica Home Fashions
CHF industries
Kojo Worldwide


Ikea Sweden
Debenhams UK
Wal-Mart ASDA UK
Metro Group Germany /Italy
Marko Group - Poland
Francodim France
Carpenter Sweden
Loja do Gato preto Portugal

Latin America

Sodimac Home Centre Chile

Right now, Hanung is preparing Christmas-themed toys and shaped cushions (Santa Claus, snowmen and reindeer) for Europe and North America. In India, on the other hand, while big cats are a perennial favorite, the current craze is cartoon and animation characters. The company has also discovered the potential of film merchandise, apart from becoming a licensee for Disney characters, the company tied up with Percept Picture Co to manufacture Hanuman toys based on the recent hit animation movie.

One of the biggest reasons for Hanung's success is its cost management strategy. It saves on raw material by entering into long-term contracts with suppliers. Its plants are located in tax-free and special economic zones, leading to substantial tax savings. "Competition is growing. But we hope to be a Rs 1,000 crore (Rs 10 billion) company by March 2010," says Bansal. (The sheer Confidence)

My View on the scrip

I am very much confident on this company and it is one of the “possible multibagger” scrip from my hot list due to following reasons:-

a) A company which have order book value is several multiples of it’s market Cap.

b) The consistent growth rate.

c) Monopoly in domestic market.

d) Attractive current valuation

e) The reputed high net worth foreign/domestic client base

f) The efficient, intellectual and visionary management like Ashok Kumar Bansal.

g) The company which most responsive to trends

Mr Ashok Kumar Bansal is an innovative and one of the intelligent entrepreneurs in our country. I strongly believe that he will keep additions and deletions with his business according to the changes of his surroundings as well as trends. The goodwill and reputation of the company/products in domestic and international market is really envious.

A bit personal and about the realaiability of their product, I have bought a Teddy Bear some seven years back for my son is still with us unharmed.... and his younger sister plays that....It is glad to have some shares of HTTL next time, while you buy a teddy bear for your kids from Hanung's range.. In my view, this scrip has all that vital characteristics to be a multibagger!.. minimum 4-5 times…Lets see....

It seems, Mr Ashok Kumar Bansal is fully aware about the following famous qoute of Charles Darwin:-

"It is not the strongest of the species that survives, nor the most intelligent, but the one who most responsive to change"

Comment please..........

Shabu Thachat


Saturday, November 7, 2009

Patience - Pays


Dear Readers,

What are the essential traits for a smart investor? Let me answer this question in my own way.

In my view, the first and foremost quality of an investor is having good knowledge. Generally, he must have sound knowledge on his entire investment stratum. Here, the word knowledge is pervasive from the updated information on the intact subjects to the expertise he attained by experiences which may useful to him as an investor. Broadly, he or she should have updated wisdom with in the sphere.

The second aspect as well as the true subject of this post is “Patience”. I wish to discuss about this key topic with an investor’s angle. Patience is one of the most indispensable and must have element for any investor. Please relate the following lines with an investment angle rather than the logical harmonizing of the word “Patience”

The Dictionary (Webster’s) defines “being patient” as follows:-

(a) Enduring pain, trouble, etc. without complaint
(b) Calmly tolerating insult, delay, confusion, etc.
(c) Showing calm endurance
(d) Diligent, Persevering

Patience can be described as a state of endurance under intricate circumstances. In other words, keep yourself stubborn towards delay or provocation without being bothered or distressed. The word “Patience” can also interpret as a decision making quandary which involves both the options of either a small remuneration in a short term, or a more precious return after a long period of time, pointing to the worth of waiting, You can realize with in nearly all of the investment options, delayed rewards are persistently on the higher side than the price of immediate gains.

When come to the stock market investments, the big money is not laying in the buying or selling but it is veiled in the waiting, or we call this patience. Turning a scrip in to multibagger is also not a process of some few weeks. In other words, we have to give enough time to the management whome you selected after a strict and an exhaustive process. The concept is closely related to high end of patience and the reward must be fruitful. I think, majority of the investors are aware about this fact, but a very few or rare percentage practicing it in the real life. It is hard to stay consistent with your beliefs between the frenzied and provocative crowd of experts. But you have to!.. It is not an easy exercise to keep you idle, between the extensive internal or external provocations. The internal emotions also play a big role in the decision making like greed etc.. If you controlled yourself, the hardest part is over. Here I wish to list the third important quality of a smart investor, `faith’ or we call the confidence.

Let us see how these three essential elements related to each other. The word “patience” is very much synonymous with the “faith”. You have good faith in you, that is the reason you are keeping good patience towards your decisions. The sheer faith probably restricts you to act against provocations. The faith again closely associated with your “knowledge”. To have patience means to have faith in your selections, decisions, knowledge and above all in yourselves. Again, the faith or sheer self-confidence is a distilled product of true knowledge you attained. You can see, how these three terms are related to each other, the Patience, Knowledge and the Faith. Please read the para again, if you wish to take it as a serious note.

I wish to compare the investment in stocks with growing a seed. You have to let the seed to sprout, gradually to a plant on the way to become a huge tree. As you know, the tree has much higher value than the seed or the early plant. Certain trees bestows you delicious fruits through out its life as dividends. If you can grow a forest or a farm in this sense, it will endow with an unmatched returns or it may change the life of your coming generations.

Following are the very few worthy examples of the fruits of patience in recent past. I have placed the turn around value of Rs. 10000/- at the bottom of each scrip.


Price in Oct 2001 - Rs. 41.70
Price in May 2008 -Rs. 4390.00
Returns - 10427.58% (7 Yrs)

Rs. 1052758.00

Bharati Airtel

Price in Nov 2002 -Rs. 21.50
Price in Jan 2008 -Rs.1010.00
Returns - 4597.67%(5 Yrs)

Rs. 469767.00

Electrothem India

Price in Jun 2003- Rs. 2.45
Price in Jan 2008 -Rs. 619.00
Returns - 25165% (5 Yrs)
Rs. 2526500.00

Bajaj Electricals

Price in April 2003 - Rs. 20.00
Price in Oct 2009 -Rs. 835.90
Returns - 4079.50 (7 Yrs)

Rs. 417950.00

Crompton Greaves Ltd

Price in Sep 2001 - Rs. 18.10
Price in May 2006 -Rs 1225.00
Returns - 6667.96%(5 Yrs)
Rs. 676796.00



Axis Bank

Price in Jan 2002 -Rs. 25.70
Price Jan 2008 -Rs. 1291.00
Returns - 4923.35% (6 Yrs)

Rs. 502335.00

Data courtesy :

There are hundreds of scrips in this category and it is not possible to list the entire. I am not disregarding the complexity on decision making on the entry or exit point in such stocks rather wish to illustrate the power of patience.

Do you believe, you have such diligence in you to devour the fruits of patience?

Learn the art of patience. Apply discipline to your thoughts when they become anxious over the outcome of a goal. Impatience breeds anxiety, fear, discouragement and failure. Patience creates confidence, decisiveness, and a rational outlook, which eventually leads to success - (Brian Adams)


Comment please...



The blog is associated with information on Indian stock market and author’s investment view points on various emerging stocks/sectors. The contents discussed in this blog are purely my own personal opinion and in no case weigh it as any kind of recommendation for stock market investment. The sheer purpose of this blog is to educate the interested community on market related subjects based on my experience and I am, in no way, responsible for investment decisions based on the contents described in this blog.

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