A must read content..

Dear Readers,

I wish everyone of you have a close read, an article by Prashant Jain(HDFC-AMC), forwarded by one my friend Mahesh Pidshetti from Bangalore..

http://docs.google.com/viewer?a=v&pid=explorer&chrome=true&srcid=1EwnJp7HcxkFptBzMkF-AiVU5JLlVkj0evNDO6n8ic3DNPyvP5YqKSip__6o-&hl=en_US


regards
Shabu Thachat

Happiest ever decade !!!

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Dear Readers,

Another excellent year and a remarkable decade are departing. I wish you all a merry X-mas and a prosperous new year in advance, moreover wishing you the happiest ever decade ahead in your investment life. Investing in carefully selected Indian equities, taking part even at the current levels will be one of the consummate decisions for you in this New Year. Because India and its market is developing such an outstanding base of opulence to multiple your money in coming years.

Money simply doesn’t make money in the market. Money, even a small portion, with a better level of awareness will surely help you to achieve your goals. Internet, the largest and fastest knowledge base is in front of us at the cheapest cost. Today, knowledge is at our finger tips or we can unearth any information with in seconds. I think, its obligatory to keep up-to-date ourselves before any kind of investment decisions, especially in the current scenario. I personally know people who lost more than 50% as well gained more than 150% in the recent course of Sensex’s 9000-21000 rambles. So, wisdom matters. The awareness or reasonable understanding on your stock selections worthier than anything and it’s the most important point you have to carve on your brain at this New Year.

Stocks discussed a lot by media or experts may not beneficial for you always and generally they burn your fingers. You have to develop a reasonable decision making strategy considering the news and it’s probable impact on the share prices. Never ignore technicals, as these figures will give you an insight on the way how the company is performing. But you have to focus on the probable demand of the product/service offers by the company or weigh, how it can turn vibrant in the future.

I think, short term trading will be more hazardous in the days to come because of rising contribution of fastest communication means like internet/Mobile phones etc... And the increasing number of market participants as well high scale of volatility on indices will compel you to be faster than anyone. I know people who trade everyday as a routine and some others trades once in a while or so. The second category reacts only to accurate news thread after confirmation on the source and correctness of the information. Interestingly they are even ready to wait weeks for such a suitable event.

I am equally passionate on launch of this new decade with the previous extreme lows of market, where we had enough to hope. Its again the time is arrived to fill your bags with good scrips in small batches with an ownership mood. Its sure, the span of next 10 years or coming decade will reshape the face of our great nation and I would like to invite you all, to participate in this excellent journey and to grab your own portions.

Even after all the ongoing anarchies, I am keeping 100% confidence on our scenario and there is hardly anything visible ahead which enough to deviate my morale. Yes, further unbelievable corruption revelations might have there in future, but personally I am positive to all those processes. Cyclic refinement is one of nature’s unquestionable practices or we can take it as, cutting down certain weak or overgrown branches will surely boost the growth of core trunk.

The coming New Year and decade is one of the rarest occasions to us and I would like to stress on that point. It’s a time to forget all the failures and to adopt a cognizant and calculated strategy with a long term vision. Forget all the bitter experiences and look for a bright future ahead stepping with our promising financial system. Just focus on the size and power of one of the world’s most persuasive purchasing/consuming band of population. I think, the single reason is enough to up keep the trust on our economy.

Naughtily, I am keeping an inflated wish or it may be a cycle of economics. A recession born from us (not from US) on any possible grounds at a certain point of time in future, may be after some 10-15 years, which will trembles the global economy, like what we suffered of late. I am totally not interested to consider anything negative on our growth course prior that possible threat.

If you are an investor with long term vision, don’t bother much on Index figures or on its temporary wavering. An easy target for Sensex’s 30,000 is there with in a short span of time. A new journey for the market has begun few months back which might have take it to much higher levels over the next few years. Probably 35-40k levels over next 5-7 years is imaginable and I strongly believe its attainable.

The above statement is clearly not a prediction, but I am compelled to believe like after a close watch on the Sensex’s history of past couple of decades. I would like to place some interesting statistics on Sensex to convince you the possibilities of above said figures at my next post. Hope, it may help you to get convinced on the trend of overall growth trajectory of Indian market and relevant future figures too.

Before that, I wish every one of you have read the pages at following link, what people thinking on us.

http://www.ibef.org/resource/quotes.aspx

Once again, Wishing you and family a Happy and prosperous year ahead filled with peace, joy and wealth as well welcome all those who joined in the Portfolio Advisory Services in the month of Dec.

Comment please...

Shabu Thachat – sthachat@gmail.com

Do it now!

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Dear Readers,

As I said in one of the previous posts, a decision to invest in selected Indian equities will be a milestone in your investment life because India has such a rock-solid pedestal to compound your money in coming 5-10 years. In better words, such a decision or putting your money (cautiously) in Indian market will change not only your life but of the generations to come.

The whole world is anxiously monitoring the growth magnitude of China and India, the powerful BRICS duos. I am not feeling any sense of surprise in the growth of China because they are better disciplined in every facet. They are moving on a strict and closely controlled path of growth where decision making & strategies are in the hands of permanent people, Government or ruling Party. The concept discipline will work well in almost everywhere for a handful period and I believe that’s the fundamental platform of China’s growth chronicle.

When we talk about India, I believe, we have achieved much more than China in the midst of a constraint and complex scenario of democracy. Here, decision makers are assigned for just five years, very stunted period to plan/execute solid projects with long term vision/dynamics. Even, that time frame is not assured for them. Economical policies are entirely contrary between players/possible rulers. Most of the time, we are unable to even select a single party/team to rule us with clean majority. The annoyed Red Tapeism is another greatest real-time practical barrier and demoralizing factor to the entrepreneurial community. The list of constrictions are lengthy, but we are still growing in a fast pace! Is it not incredible? I am realizing the term “Incredible India” mostly in this point of view because our growth model is incredibly unique and exceptional.

Coming to the point, if I start to type the known statistics, this article will insufficient to explain about our growth forecasts. But still I wish to do that in bits. Broadly, 30-35% of our population will going to participate in the equity market, directly or indirectly with in the coming 5-10 years where the percentage stands now is just below 2. More than 100 Indian companies have US $1 bn market Cap now, will boost to 300-400 with in the time frame. About 1100 Indian companies are enjoying FII investments now, will precede to 1800-2000 by 2020. Around 135 Fortune 500 companies have R&D facilities in India will hike to > 300. These figures are continuously hiking in a fast pace. What else you need to put your faith in our market? or to invest in our own terra firma?

If you are not yet started investing in equities, you will soon be... And I am sure; every one of you must do that, if not now, later with the crowd. I wish to converse certain basics related to Stock market investment for the non-equity investing community. Following lines are again intended to freshers or who plans to invest in equities considering the above facts. Check the links concerned will aid you better.

It is better if you have basic knowledge on market concepts or you should be a bit familiar with this contour before stepping to invest in shares. You must achieve basic awareness from any sources, if you are serious to invest in equities. I am not talking about investment/trading tips from unreliable sources, rather the general knowledge including technical terminologies related to market.

The website http://www.investopedia.com/ especially the following sub-links may help you in a great manner in this purpose.

http://www.investopedia.com/university/buildingblocks.asp
http://www.investopedia.com/university/
http://www.investopedia.com/dictionary/default.asp
http://www.investopedia.com/search/searchresults.aspx?q=stock%20picking

You can dig knowledge as much from this site depend on your passion. The subject specific links will guide you to a wonderful world of equity market jargon.

Further, let us see, how we set up investment in shares. A PAN card is essential to invest in shares. You should have a PAN (Permanent Account Number) card to invest in any form of equities or attaining a PAN issued by Income Tax Department is a mandatory to every kind of investment related to equities. If you don’t have one so far, you can apply for that through an agent with a photocopy of your election ID Card, Address proof, and Photographs with less than Rs.100/-. It takes normally 10-15 days to attain the PAN after your application submitted. Fill the form correctly according to the instructions because it is your fiscal Identification which might have more significance in the days to come. You can learn more on the importance as well as statutory norms on PAN related issues at the link. http://www.tin-nsdl.com/

The first step is over. Now a demat/trading account required to start your investment. Check the link http://demataccount.com/ where you get a better idea on various issues related to the term. It is nothing but an account which keeps the shares you owns in electronic format. With a photocopy of PAN Card, Identity proofs, 2 Photographs with bank account details, you can approach any broker/sub broker to start a Demat/Trading account.

The next important step is to find a good broker who has a valid SEBI registration. There are hundreds of brokers and sub brokers existing but opt one or two who suits your requirements. I also wish to connect the phenomenon, “Increasing number of equity firms in India” to explore the unleashed potential of share market investments. Why share broking firms are budding in such a fastest pace? I would like to compare this trend with the previous IT boom era where thousands of IT companies launched to tap the theme of time. The growing numbers of financial firms are one another symptom or fidelity of our market prospective. They knows better the opportunities ahead and in effort to emit the maximum with the time ahead.

Study the brokerage structures on various trade types and decide the best one/two which suits you. The most important think is, try to find such a broker who values your hard earned money in all respects even if you are investing a very nominal amount. It is harder to find such one, but you have to find a team who cares you and your funds. Short list 3-4 best brokers after close research and discuss with their customers on the service aspects etc... It is also an important decision, how you are going to make buys and sells. If you are capable to do your own, then you are safe and it is the most decent way to invest.

Thats all for now. We will discuss some more on the topic later….

Comment please….


Shabu Thachat – sthachat@gmail.com

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Patience - Pays

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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.

Sesagoa

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

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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 : http://www.bseindia.com/

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.

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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)

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Comment please...

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Dream Journey

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First of all, I am sorry for not posting articles by last few weeks. I was busy with some official assignments as well as setting up a Portfolio Advisory Service as my own. I got several enquiries during this period asking new posts and recommendations, but could not fulfill the same.

There were almost 70 stocks I mentioned through out this blog till the date . An average gain of more than 135% made by these stocks compared to the Sensex 85% from their recommended prices. Thanks for all those readers who invested and experienced considerable gain from the recent rallies, especially to those who expressed their gratitude by Phone or via mail.

I am keep doing my own research and exercises, searching good stocks as well as future multibaggers to invest and maintaining my portfolio as well as some of my client investor’s to their best satisfaction. Let me describe about my Portfolio Advisory Service and a bit of motive behind it.

Its important to have an ambition (dream) in the life. Ambition is a necessity for success in the life. May be ambition drives some mad, but it helps some to achieve success in their goals or rather ambition helps one to achieve perfection in life up to an extent. Ambition is the driving force in life. Basically it is the product of mind, the outcome of the multiplication of one’s desires. It is something imaginary and is concerned with his or her future.

Ambition is something what we dream of to achieve in the future, a time which is yet to come. It sets a goal to be reached or a target to be achieved at. What a person is ‘Today’; and what he or she wants to be ‘Tomorrow’, is in fact the Ambition. This is the journey of desires which starts from “Today” and aims at to reach “Tomorrow”. The question then arises, how one has to go, how far to go, how fast to go, where has to make a turn, where has to make certain stops etc… with all the possessions and means available with him. It is the “desire” which turns into “Dream”, compelling someone to be in action.

The rationale of above lengthy preface is, “I have such a dream !”. I am working on that by last few years. The dream is nothing else; wish to be a Billionaire. (a dream). I have my own reasons for setting this target time frame. There is lot of example ahead of us. The legend Rakesh Jhunjhunwala who started his career with $100 in 1985. I am not underestimating the value of Rs. 5000 in the year 1985, but any way, It was less than Rs. 5000.

[[He started his career with $100 in 1985 when the BSE Sensex was at 150. He made his first big profit of Rs 0.5 million in 1986 when he sold 5,000 shares of Tata Tea at a price of Rs 143 which he had purchased for Rs 43 a share just 3 months prior. He made his first million in an iron ore mining company Sesa Goa whose shares he bought at Rs 27 and sold at Rs 1,400]]

Source - http://en.wikipedia.org/wiki/Rakesh_Jhunjhunwala

Incredible! Is’nt it ? I am very much encouraged by his success story as well some others’ in this row. It was definitely not the luck only. It was the sheer hard work brought them at this point. It is not a matter how much money you have to invest. The matter is you are keeping such a burning desire within you or your started dreaming. It’s good enough that having a dream, better you are keeping alive it and best to work for it.

So I am working hard on it.

I am confident on my mission to identify undervalued stocks which can be multibaggers in the long run.

I am anxious to dream where technology will bring us in future and by which we benefits.

I am am eager to learn the fast changing passionate trends of our youth in every sectors/fields.

I strongly believe in the following great quote:-

A Dream is not that you see while sleeping.A Dream is that which not let you sleep until its worked out.

I have such a dream, and it is not letting me sleep virtually. Do you?

"A BILLION" its a lot, I least care the bigness, I am working on that, I know that, its not easy to reach, but according to me, this vision keeps me active everyday...I have to do it, I am ready to sacrifiece some my likes for that... shortly... no way back!

sthachat@gmail.com

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