Reviewing 2014

Happy New Year

2014 has been an eventful year. At the macro level, we had a new government, an enthusiastic new leader, a great bull run… and at the personal level, we attended many more AGMs, read more books and met many great intellectual minds in the investing world. We had the highest ever visitors on both Dalal-Street and Screener, together exceeding an average traffic of 1 million page views every month, with a total reading time of over 750 hours each day.

Top performers and learnings:

Last couple of years have been great for a stock picker as the market has well rewarded the companies with niche business models, consistent growth and good corporate governance. Companies with healthy cash flows and a passionate management have been re-rated at an unprecedented pace.

Growth stocks such as Astral Poly, Avanti, Ashiana, Kitex, Shilpa, Atul Auto, Ajanta Pharma, Poly Medicure and Mayur Uniquoters performed exceptionally well. ValuePickr community proved to be an invaluable platform to collaborate with dedicated fellow investors and bring out the best of discussions. It feels great to see Shilpa Medicare and Atul Auto getting mentioned even now as the high potential ideas in the Motilal Wealth creation study.

Value stocks such as Oriental Carbon, MPS, Canfin and Lumax Autotech too performed equally well. These were trading at a sheer undervaluation despite having a good business model with a healthy growth. Reaction to the SEBI’s call auction rule also provided us an opportunity to invest in few micro caps such as Premco Global, Dynemic Product, Freshtrop and Kovai Medical. They were available at throwaway valuations, consequently providing some fantastic returns. Key is to follow value, which is always there, whenever the general mood is dull 🙂 .

Worst performers and learnings:


GRP – A big learning has been that one should learn to detach oneself from their favorite idea. Though the stock hasn’t fallen since quite sometime, one has had to incur a lot of opportunity cost. The company continues to struggle and given the low natural rubber prices and demand, there hasn’t been any material improvement in operations of the company.

Cairn India – We got attracted by the statistical cheapness of the stock and the huge cash pile the company had been sitting on. It seemed a very safe idea with hardly any downside. But the stock subsequently fell almost 30-35% given the big fall in prices of crude oil. While it could not have been predicted, management’s action on cash also contributed to the fall.

Interesting articles:

Professor Bakshi’s lecture on Relaxo (along with the lecture on paying up) was a superb article which helped us in adding another tool as to how one should try and evaluate a company for a long term perspective. We never used to think like this before these articles.

Ian Cassel’s posts on Conviction to Hold and Averaging Up are also very good reads.

Do go through Charlie Munger’s AGM Notes, where Munger is (as usual) at his best.

We also recommend our readers to watch these movies:

Other People’s Money
Jiro Dreams of Shushi

We wish everyone a Very Happy New Year :).

DISCLAIMER: We are not expressing any opinion on on any of the stocks mentioned in the post. We are only sharing about what we think went right or went wrong in our analyses - it does not translate into a buy or sell call. The only opionion expressed in the above post is for the movies and articles.

The Best Ideas and stuff of 2012

Best wishes from Dalal Stree team

Welcome 2013!!!

Hello Friends, we wish you and your family a very Happy & Prosperous New Year!

2012 has been a good year for our financial markets with the sensex gaining over 25% this year and beating all other asset classes. The best thing was that the mid caps (the area we focus on) outperformed the broader markets and the high quality stocks were the major wealth creators. Those feeling that they might have missed the bus and it is late, have a look at this stat – markets are still 4% lower than they were 5 years back. It may be just a start of a long term bull market.

We went through the timeline and compiled the list of the best articles, learning and experiences of 2012. (They are not in any particular order):

Favorite Articles:

New Finance Blogs:

In 2012, we had some very interesting new finance blogs; we would love to congratulate them. We expect to see more new investing blogs in 2013.

  • Alpha Ideas – Nitin shares the best of the finance articles, videos and reports – everyday
  • Safal Niveshak – Vishal simplifies the teachings of the investing geniuses and makes them understandable in Indian market’s context
  • Value Investing by Dhwanil – Discusses value investing stock ideas with a clear thought process
  • Safir’s Picks – Safir is an opportunist investor, always with many interesting and winning ideas in his pockets (do follow him on Twitter too)

Best Videos:

Best Company Visits:

  • Astral Poly Technik – We met with the dealers and plumbers in Ahemdabad to do groundwork and were amazed by their feedback for a strong conviction
  • GRP – We were amazed by sincerity and knowledge of the management. Looking forward to attend AGM of 2013 too
  • Mayur Uniquoters – The grip and vision of the management on the business helped us in increasing the conviction

Our Best performers during the Year (with percentage change):

  • Astral Poly Technik (171%) – The growing brand presence and stock discovery led to high returns
  • Atul Auto (142%) – Company went pan-India from its home market of Gujrat
  • Liberty Phosphate (134%) – Favorable government policies for SSP sector led to mis-pricing opportunity
  • Mayur Uniquoters (130%) – Fantastic financial ratios along with growth led to a good re-rating
  • Apcotex (101%) – Earlier part of the Asian Paints group, this company did well on growth and dividends

The close runner-ups were up 100% each: Poly Medicure, Indag and BKT

Market learning of 2012:

Earlier we had a lot of focus on undervaluation while looking at a stock ideas. Now we have also started giving more weightage to the business quality and the scale of opportunity available. The three of the worst performing ideas were: Piccadily Agro, Faccor Alloys & BNK Capital

The common thing among all of them was that though they were good on ratios temporarily, but they had a poor business model or management.

Developing ideas for 2013:

Screener Developments:

During the year, we experimented with lots of ideas and things. We are highly excited about the developments on Screener and the feedback of users. Our favorite features of Screener are:

  • Export to Excel – Screener is the first website in the world to provide such a customization functionality
  • Alerts for Screens – We love to set the email alerts for the favorite screens in the Screener to keep an easy track of the latest results

Plans for 2013:

We are expecting the credit rate-cuts in early 2013 and are optimistic about the markets ahead. We plan to create more new tools to make investing happier and easier. We hope to discover more new stocks ideas. And above all, we look forward to your comments and support!

Wish you a very happy and prosperous new year ahead.

Best Wishes

Investing and maximising savings

“The gold and silver import at US$ 61.5 billion has recorded a growth of 44.4 per cent during 2011-12” (that is over 3 lac crore rupees).
“Trade deficit for 2011-12 had hit a record $185 billion” (that is over 9 Lac crore rupees).

Gold & Silver Bullion

Money is a very important thing in life. The more important thing is to maximise, improve and maintain the standard of living. There are many ways to do it and I would share my dad’s experience on how to do it easily & conveniently.

The most important thing is to plan and save your wasteful expenses and maximise your earnings & savings, and to put this saving into regeneration. Regeneration as in seeds or corn, that multiply itself after sowing. Thus protect your money and learn investing.
Continue reading Investing and maximising savings

Article: Using Accounting Ratios to Find Better Investments

Hello Friends,

I wrote an article on the using of accounting ratios to find better investments after completing my CA for The Chartered Accountant Journal. The same has got published in the May 2012 edition. It covers few important benchmarks, some rules of thumbs and a brief about other important financial variables. Happy to share it with you all.

Using accounting ratios to find better investments from The Chartered Accountant Journal

An Insight of a Term Loan Evaluation by a Bank

The evaluation process by banks are one of the most comprehensive evaluations and can be used to evaluate almost any company. The presentation below tries to cover this process in few slides. The various topics covered include evaluation of companies, management rating, economics, risks and cash flow study.

Continue reading An Insight of a Term Loan Evaluation by a Bank

“5 Trading Mantras” from Dad

Formal education will make you a living; self-education will make you a fortune. – Jim Rohn

DAD had been into the markets for more than past 25 years. He successfully surfed the tides when others struggled. Being a broker cum investor for more than past 25 years, he has more experience than many books might teach. Below are his “5 Trading Mantras” which you probably have never read in any book of investing.

Continue reading “5 Trading Mantras” from Dad