Finding Multi-baggers the Basant Maheshwari Way

Finding Multi-baggers the Basant Maheshwari Way

Basant Maheshwari’s advice to investors who want to make a debut in the stock market is to focus on zyaada, because only that can lead to wealth creation

Most market gurus in India like to preach the virtues of patience and caution and urge investors to be happy with a 15 per cent return from equities. But not this charismatic Kolkata-based investor who has made a living out of stock market investing and has a large fan following – Basant Maheshwari.

Finding multi-baggers in the stock market is his passion and he makes no bones about it.

‘Paisa jaldi banana hai ki zyaada?’ Basant asked a packed audience of 300-350 investors at a seminar conducted by the Tamilnadu Investors Association at Chennai.

His advice to investors who want to make a debut in the stock market is to focus on zyaada, because only that can lead to wealth creation.

‘Most people start buying shares thinking they will make R2,000 or R5,000 a day. But that cannot change your life. What can change your life is making R2 crore or R5 crore over many years,’ he says.

Getting started
Creating that kind of wealth, he qualifies, will take a lot of time and dedication. First, you cannot consider stock market investing to be a hobby. It is a full-time activity. ‘Hobbies always cost you money,’ he quips.

Fascinated with markets since his college days, Basant worked for six years at his family firm before becoming a full-time investor.

His second bit of advice is to invest enough money in equities to make a difference to your wealth. ‘You are not poorer by 10 or 15 per cent in life. You are poorer by 10 times. So, you cannot create wealth by investing R50,000,’ he says.

But he advises starting small because to really understand equity investing, you first have to lose money. He did not make money in the market for the first ten years. ‘I used to buy low P/E stocks at their 52-week lows. If the price of the stock was in single digits, even better,’ he laughs.

He asks investors not to look to the stock markets for regular income. ‘Stocks cannot help you pay your tuition fees or electricity bills. For five years, a stock may do nothing. Then it may suddenly go up fivefold. Plus, a bank FD never falls 80 per cent in a bear market. But a stock has all the right to do so,’ he says, irrespective of whether a stock is a blue chip or a tiny cap.

Basant’s most successful stock picks were Pantaloon Retail, which he bought because he thought it could be India’s Wal-Mart, TV18, Page Industries, Repco Home and Gruh Finance. He bought Pantaloon at R7 and the stock went up to R875, but he sold it around R280.

Finding multi-baggers
So what are his secrets to finding such multi-baggers? He outlines three clear strategies.

One, look for companies with good cash flows and secular earnings growth. Avoid cyclicals. ‘What are the stocks that have made the most money in 20 years? Asian Paints, Nestle, Infosys, Marico, Dabur, Eicher Motors, Bajaj Auto,’ he reels off. He points out that you will never find a Sterlite, Tata Steel or Coal India in that list. Making money from cyclical stocks needs two good decisions: an entry decision and an exit decision.

He also asks investors to avoid regulated sectors or those with government intervention. ‘Take HPCL. We’ve kept hearing the deregulation story, but it has not made money in ten years.’

‘When we invest in markets, we suddenly become patriots. We say India needs coal, so let’s invest in Coal India. Or we have load-shedding in our city, so let’s buy power stocks. That’s the government’s job, not yours,’ he points out.

Highly regulated businesses don’t create wealth because the government has a welfare motive. He cites the example of Coal India, which sells coal at a huge discount to global prices.

Two, really good stocks don’t come cheap. Companies growing revenues and profits at an above-average rate always trade at a high P/E, at a premium to the market. He points out that L&T was never cheap. Nor was Page Industries, one of his multi-baggers. When Basant bought it during March 2009 lows, many blue chips were trading at 5-6 times earnings, but Page Industries was at a P/E of 16. He still went ahead and bought it. He feels that in sectors or businesses with strong brands and high entry barriers, high P/Es can be sustained.

As most of the money in markets is made by identifying secular trends, he also likes to bet on stocks at their 52 week highs! ‘When a new trend is unfolding, stocks belonging to the sector regularly make new highs. So anything that is at a 52 week high attracts my attention,’ he says.

Once you identify a trend (like software in 1994), it is best to go for the sector leaders, companies with strong cash flows and high return on equity, he recommends. ‘Don’t buy the poorer cousins in a sector. If you bought Infosys in the nineties you are wealthy. But if you bought Silverline or DSQ Software, you lost everything.’

His logic is that companies that generate strong cash flows can pay out higher dividends. So even if the business is dull for a while, investors receive dividends. ‘Dividends are life jackets to stocks. Dividends are tax-free and they keep growing,’ so they establish a floor to the stock price.

When to sell
His final piece of advice is not be in a hurry to ‘book profits’ as this is how people lose out on the biggest wealth creation opportunities of their lives.

He advises holding onto stocks for years as long as the company’s profits are growing. It doesn’t matter if it remains at a high P/E.

‘If a stock you bought for R100 goes to R150, you rush to sell it. If it goes to R60, you hold on and wait for it to come back to R100. That’s how you lose money. If you buy property and its value goes up, you don’t sell the kitchen and say the bedroom is now free! Why are we so insecure about making money in stocks?’ he jokes.

He explains that many people who have become rich through equity investing bought 15-20 stocks many years ago and just didn’t sell them. Of the 15, 12 ‘would have become junk.’ But 3 stocks would have turned out multi-baggers!

The problem with frequently ‘booking profits’ is that you have to keep finding new ideas to invest in. ‘If you get one idea every month, there’s something wrong with your strategy. Good ideas come to you occasionally, once in six months or a year.’

He rounds off his session by saying that stock market investing, unlike investing in gold or bank deposits needs knowledge. ‘If you don’t have a good idea about investing, just go to a mutual fund. It won’t pay off like individual stocks but it will still work out better than bank deposits. Just consider the opportunity cost. Good funds have managed 22-25 per cent, which is still better than 8 per cent.’

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NIFTY: BE READY FOR ROCKING DECEMBER-2017

*NIFTY:* *BE READY FOR ROCKING DECEMBER-2017*

I’m expecting NIFTY50 will cross 10500 level by November expiry. And as per economic calendar few events will be in December like…

DECEMBER – 2017

5-6 Dec – RBI Policy
9 Dec – Phs 1 Gujarat Election
12-13 Dec – US FED Policy
14 Dec – Phs 2 Gujarat Election
18 Dec – Gujarat and Himachal Pradesh Results

So I’m assuming, all come outs will be positive from these all events and in that case, market may touch the mark of 10800 level on positive cards (And may Hold few days for buildup positions). So at that time may be all OUTLOOKS will be positive and very pinky.

But, as we aware market had started journey from 6955 level to reach 10500 and above level. As per me, “if we are talking 6955 as a point A and 10500 is a B than NIFTY50 moved around 50% within 22 months (Feb-16 to Dec-17)”. So, NIFTY50 will take a RETRACEMENT for next journey. Above 10500 will be for SELL and DISTRIBUTION ONLY.

And I believe, main game is in derivatives market not in Equity Market. So, I’m expecting and assuming that, F&O position will provide indications and hopefully we can understand that properly AND at on right time. SO, *BE READY FOR ROCKING DECEMBER.*

I think this is also a big indication, *BIG TRADE HAPPENED (21-11-2017)*: Nifty Dec 9800-PE traded 18.15 lac shrs @ 31.25 with NIFTY-NOV-FUT reference of 10350.

I’m expecting market is likely to give a big fall in December month around 10-15% from the High (around 10800 (10650 is a benchmark level) + or – 100 pts).

*THIS IS MY PERSONAL VIEW AND FOR EDUCATIONAL PURPOSE ON MY ASSUMPTIONS BASED ONLY*

NIFTY: Looking For Insights & Wisdom!

*NIFTY: Looking For Insights & Wisdom!*

Yesterday, NIFTY50 bounced back from 9687 in spot level and that was a good support also for market before crossing 10K mark. There is no any good data in domestic front right now, agreed on that. Despite domestic flows, people believe, these flows may not able to hold NIFTY50 because; FIIs are aggressive sellers as valuation wise and on weak Rupee. But I believe, we need to focus on long term story or stock specific story, like government spendings on Infrastructures, housing for all, Rail Infra developments, lithium batteries and electric vehicles and defense. I also believe, people are looking historical data to predict weakness or weak months for stock markets. I read somewhere, *”We’re looking for insights and wisdom, not hard laws and proofs”*. So, I am expecting something different from everyone, If institutions having cash (MFs have approximate 48500 Cr. cash on ended of Aug-17) because, lack of investments ideas or valuation issues. Market came down around 4.75 % (Nifty50 High 10170 to Nifty50 Low 9687) on FIIs heavy selling of around 22,423 Cr till in this month. And if any further down fall will be the best opportunities for institutions to deploy cash in market and they will definitely supports the good story base stocks.

We are positive on our fundamentals stocks MOIL, TRIVENI ENG, WEST COST PAPER.

And, looking some stocks good at CMP Ashok Leyland, JSW Energy, HUDCO these all have good story or technical view.

Happy Investing!!!

Kind Regards,

Nifty Likely to Surprise Again?

Nifty50 is trying to hold above 9600 levels from last 3 days, GDP numbers were surprising for all bulls.

As I am trying to read all data from expiry, whole last week of May-17 expiry was full of negative news and FIIs were seller at every level. Than after Nifty had given strong expiry closed at 9500.

FIIs had sold out around 30 Lacs Nifty50 Future in last 3 days and currently options side, around 59 Lacs OI in 9500-PE option and after that highest OI 60 Lacs at 9400-PE. And call sied highest OI 45.43 Lacs in 9700-CE and 41.79 Lacs in 9600-CE. So data is very clear and indicating that, this is a fight between bulls and bears. So market may take some time and clear the trend on events. As per me currently Level-1 9550 and Level-2 9450 are most important for market for up move. FOR June is a long month for expiry; all companies had provided their results so no negative balance on results, monsoon likely to normal as per estimates.

So, I believe, Nifty50 likely to surprise again all of us and likely to touch 10000 by this month. But, this is my personal view only. Hope for the Best with finger crossed.

Opinion: “Situation Is Better Than A Statistic!!!”

Opinion: “Situation Is Better Than A Statistic!!!”

I was trying to write from last 4 to 5 days, I tried very hard to find this, putting your thoughts in front of others with direction are also hard. I understood that from this. But, I found this. I am really very surprised; people are still waiting for down fall because numbers are not giving indication. I heard from many people they are asking, where are the numbers? And saying Market can’t go up without numbers, may fall like same as earlier 2008 & 2001. And market is going up without hearing that negativity.

But I am really very positive on market not because of I am running with trend but, remember those situations. Those both falls in 2001 and 2008 were different situations. Those situations are not here. I would like to share something which I read in 100 Baggers. I think this is the best match with current situation. “There is a Wall Street saying that, a situation Is Better Than A Statistic”. Relying only on published growth trends, profit margins and price-earnings ratios is not as important as understanding how a company could create value in the years ahead. India is growing faster than among and even can grow faster if policies problems can removed which are coming from old government from many years. We have a big domestic consumption story among the all others. Government have full power to clear all problems. And I have a faith that, government is on right track and if right track is there than numbers will be come out not today but tomorrow surely.

My last option was after FED hiked March (16-03-2017). I am trying to read again & match that with current momentum. (Opinion​: NIFTY may touch 10000 to 10500 level in 4 months. http://wp.me/p7kWKP-64 ). Now I think market is really waiting for some big trigger and that will be a big move and may be in range of 9850 to 10000 by end of June or first week of July and by the end of August market will be in range of 10200 to 10800.

But, Approach should be conscious and must stay optimistic. Don’t react as a blind. Need to check, Company can grow for longer periods. Management should be stronger for good growth and focus should be clear on business and aware about all changes in domestic and global technology and environment. We don’t want KODAK till bankruptcy or SATYAM COMPUTER with us. We need same like Amazon & Google. Our market can pay as same like “Baahubali”. Just focus and find out growth stories and faithful managements.

(Note: This is just my personal opinion only)

Kind Regards,

Atul Vitha

“Every Problem Is an Opportunity to Buy”!!!

“Every Problem Is an Opportunity to Buy”!!!

President has given a nod to an ordinance giving greater powers to the Reserve Bank of India to tackle mounting bad loans. So, as per me, Government is ready to solve each and every problem one-by-one. So feeling like; “Every human problem is an investment opportunity if you can anticipate the solution”. This will provide more confidence to FIIs to pump more money in Indian market. And already domestic funds are getting around 5000 cr each and every month and so they are also aggressive buyers. As earlier, I am expecting attraction will be continue in Cements, Power, auto components with fertilizer and OMCs, this is I personally feel. Currently fertilizer stocks looking very attractive may give very strong growth in 1 to 2 year prospective same like sugar stocks.

Kind Regards,

Atul Vitha

Himadri Speciality Chemical Ltd ( BSE Code: 500184; CMP: 56.00; BB Code: HSCH IN)

Himadri Speciality Chemical Ltd ( BSE Code: 500184; CMP: 56.00; BB Code: HSCH IN)

About Us

· Himadri Chemicals & Industries Limited is more than just the largest coal tar pitch manufacturing company in India

· It is a carbon specialist, developing coal tar by-products and derivatives (advanced carbon material, carbon black, corrosion protection and naphthalene)

· The Company addresses growing needs of sectors like aluminium, graphite, infrastructure, lithium-ion battery, tyre and rubber applications

· The environmentally conscious company has also invested in 2.5 MW of wind power generation in Dhule (Maharashtra, India)

Coal tar distillation

Pitch

Features

Coal tar is a by-product generated while processing coking coal into low ash metallurgical coke in a recovery-type coke oven plant. Coal tar accounts for around 3.5-4% of coke produced. Coal tar pitch is a complex chemical with 22 chemical and physical properties obtained through coal tar distillation, which involves the conversion of coal tar into a variety of intermediate chemical products. The residue is coal tar pitch, which is further processed into quality coal tar pitch of desired chemical and physical properties. At, Himadri, coal tar pitch is derived from the processing of high temperature coal tar using state-of-art technologies.

Applications
Grade Applications
Aluminium grade pitch In pre-baked anode and Soderberg in aluminium manufacture
Graphite Grade binder pitch In graphite electrode manufacture
Graphite Grade zero QI coal tar impregnating pitch In graphite electrode, nipple impregnation and UHP grade electrode manufacture
Mesophase pitch In needle coke, carbon/carbon composites, advanced carbon material and carbon fibres
Special pitches In refactories carbon paste, paints/ultramarine blue and water proofing, among others
Qualities and specifications

Binder Pitch of aluminium & graphite industry Download PDF

Impregnation pitch for graphite industry Download PDF

Mesophase pitch (under development)

Special pitch Download PDF

Packaging

Pitch is marketed in solid and liquid form. Solid pitch is available in bulk bags and jumbo bags. Liquid pitch is supplied with the help of the Company’s dedicated fleet of specialised tanker. Himadri also has bulk liquid pitch terminal to load up to 6,000 MT at Haldia port and is currently constructing a new liquid pitch terminal at Lonkou port in China, capable of loading 12,000 MT of liquid coal tar and pitch.

Contact: tarproducts

Naphthalene

Features

Naphthalene is used in the manufacture of SNF, beta naphthol, phthalic anhydride, tanning agents, moth balls and domestic disinfectants. During the distillation process, approximately 8-9% naphthalene is recovered for use dye and organic compound intermediates in fine chemicals and pharmaceuticals. Globally, coal tar is the major source of naphthalene.

Applications

· Dyes and dyestuff intermediates

· Tanning agents

· Super plasticiser manufacture, as a raw material

· Pharmaceuticals

· Disinfectants (especially in households)

Qualities and specifications

Technical naphthalene Download PDF

Refined naphthaleneDownload PDF

Packaging

Available in solid flake form and packed in 50 kg and 500 kg HDPE bags.

Oils

Features

Different fractions of oils are produced during the coal tar distillation process ranging between boiling point 180ºC and 350ºC

Applications
Grade Applications
Light creosote oils In paints and asphalt liquefying, manufacture of phenolics disinfectants
Wash oil/Wood preservative oil In benzene extraction from the coke oven gas and wood preservative as BS 4164, AWWA C203 and IS 15337 (2003) standards
Anthracene oil In carbon black manufacture as a feedstock and in coal tar enamel manufacture
Qualities and specifications

Light creosote oils Download PDF

Wash oil/Wood preservative oil Download PDF

Anthracene oil Download PDF

Packaging

Available in liquid tanker and 200 kgs drums.

Contact: tarproducts

http://www.himadri.com/coaltar.php

Aluminium Industry

Aluminium is the metal of the future, combining lightness with strength, electrical conductivity and corrosion resistance. The widespread use of aluminium extends to the aerospace, automobile white goods, food and beverage packaging. Owing to the many applications for this metal, primary aluminium production throughout the world has been rising steadily for many years. Coal tar pitch is used as binder for production of carbon anodes which in turn is used in the electrolysis process of extracting aluminium from alumina by the aluminium industry. Aluminium plants can only be successful with binders of constantly high quality. Himadri is a preferred vendor, delivering high quality binder pitch (solid and liquid) just in time to aluminium plants.

Graphite industry

Coal tar pitch is used in the production of graphite electrodes (used in steel production) as a binder, and impregnating agent, increasing electrode density and strength. After the aluminium industry, the second largest consumer of coal tar pitch is graphite electrodes (which are used in electric arc furnaces). CTP constitutes around 40-42 percent of a graphite electrode by volume, with a large part of the balance being accounted for by needle coke/CPC (calcinised petroleum coke). CTP is used as a binder and impregnating material in electrodes at a high temperature to fill and cover pores, enhancing electrode life.

Infrastructure Sector

Concrete is one of the most important and versatile building materials of recent times. Himadri produces naphthalene-based super plasticisers that have revolutionised the use of concrete. Super plasticisers improves cement mix by dispersing cement particles, improving its flowing properties and making it easier to handle and feed to even the most remote corners of a building. These substances also reduce processing times and increase the strength of the concrete. With the construction sector booming, Himadri therefore plans to boost its super plasticiser production capacity and expects annual growth rates in excess of 25%.

Tyre sector

Global carbon black consumption is growing at 3-5% annually. Southeast Asian countries are growing at a pace of more than 6% annually. Carbon black is one of the main raw material for tyre industry and increases tyre grip on road. Its low resistance and minimum abrasion loss makes the highest safety possible. Himadri, with its latest state-of-the-art technology, is ensuring rubber compound with minimum grit and top ranging modulus.

Lithium-ion Batteries

Himadri is one of the few companies in the world to develop the technology to manufacture high-quality advanced carbon material which enjoys downstream applications in the manufacture of lithium-ion batteries. Lithium-ion batteries are used across all portable electronic devices like mobile phones, video cameras, notebook computer and palmtops; they also find application in hybrid vehicles and electric vehicles. The primary batteries are replaced by high energy lithium-ion batteries. Toyota including many other car manufacturers has already begun to test the lithium-ion batteries for car start-up applications. Lithium-ion is a low maintenance battery, an advantage over peers. The self- discharge is less than half compared with nickel-cadmium, making lithium-ion well suited for modern fuel-gauge applications.

Power sector

Power has been universally recognised as one of the most important inputs for economic growth and human development. There is a strong two-way relationship between economic development and energy consumption. India has been traditionally dependent on thermal power, which constitutes about 63% of the current capacity. The balance is contributed by hydroelectric (25%), nuclear (3%), and renewable (9%) energy sources. The overall power generation in the country increased from 704.469 billion units in 2007-08 to around 723.794 billion units in 2008-09 (2.74% growth).The growth was significant for the hydro (8.38%) and thermal (5.57%) sectors while nuclear power generation declined 12.3%. Himadri is emerging as separate power division. A power plant of 15 MW is being set up with green and clean energy. The power plants are eligible to carbon credits.

Paints and coatings

Carbon black is a key raw material that enhances the performance of rubber, inks and paints. Himadri produces carbon black engineered to meet the needs of these end-market applications. Himadri’s carbon black can be used in a wide variety of coating applications. Although its definition is simple, a coating can be sophisticated in terms of composition, curing chemistry and application performance. Industrial carbon blacks are used in a variety of applications, including printing inks, toners, coatings, paper and building products. Purposes for using industrial carbon black include pigmentary, electrical, UV absorption and theological properties.

Plastics

The Company has designed different carbon black varieties for various plastics applications. The range of applications is diverse but it is not limited to basic colour concentrates for pigmentation, electrostatic dissipation, fibres, film, pipe, UV protection/stabilisation and wire and cable compounds.

Dyestuff Sector

Himadri produces naphthalene which is used in products of dye intermediates such as H-Acid, Beta Napthol and reactive dispersing dyes. We use these dyes as colours in our everyday life.

Source: http://www.himadri.com/

Kind Regards,

Atul Vitha