Friends,
There has been a huge slide in sugar scrips over the month. This is partly in sympathy of the markets in general which have been no better and also due to weakness in sugar prices. The point I wish to tell you here is that the Oct-Dec 09 quarter for most companies has been generally good for the most sugar companies and has added decently to book values along with the profits of sugar season ending in Sept 09. The 52 W high/low for Balrampur Chini is 168/42 and for Bajaj Hind it is 243/39. You may find this for other scrips of your interest. We plainly see that the present level of price at 105 and 150 for Balrampur Chini and Bajaj Hind is safe for investment simply on the strength of book values and the prospects of industry not still bleak to the extent that there will be any further erosion in values of sugar stocks.
Should there be any improvement in open market sugar prices these scrips would handsomely reward the investors getting into them right at this stage. Renuka Sugar has even gone on to acquire sugar company in Brazil which would make it an international giant but I am unable to assess at present stage whether it will be rewarding proposition to investors and hence do not recommend this stock at this stage from my side. I hope you had appreciated when I told you to be out of sugar stocks when they were ruling at their highs. Now you may be boldly acquiring back your sugar stocks and sit tight.
Happy Holi to you all.
Hari Om,
Krsna Khandelwal
BIRDINFO Stock Rx - A prescription for stock market
8 comments:
I remember someone recommending buying Bajaj Hind @ 232 on 9th Jan.
Price of BH nose-dived to below 160.
Hmmmm..........
and stop-loss triggered saving you gentleman.Now it the time to buy again.
Hmmmm......
I think Mr Anonymous doesn't play markets seriously for how he could not remember the stop losses to be applied as per our system, now the time has come to enter back so the small loss is about to convert into big gain but only for the one who are serious about investing/trading...kbk
Respected Sirs,
From a non-serious player:
"Stop-loss" has become the easiest and most convenient excuse/panacea for every Tom, Dick and Harry of a market-analyst.
So, one can safely advise some non-serious player like me to buy or sell any stock with 'stop-loss'.
If things work out well, "Bingo, I told you so. See how smart I am", says the wise-ass analysts and Gurus of the market.
If not, "oh, didn't you use the stop-loss?"
Heads I win, tails You lose.
With due respect, such quackery can be done by anyone.
I challenge you to name ANY stock, repeat ANY Stock -- and I will advise you to buy or sell with a stop-loss.
For example, " sell RIL @ 1,000 with a target of 990 and a stop loss of 1010"
Alternatively, "Buy RIL @ 1,000 with a target of 1010 and SL of 990"
See, how easy that was!!!!
So, what's the big deal?
Time to take criticism in the right spirit instead of casting aspersions on your followers and accept that things didn't turn out the way you had anticipated.
To err is human -- and we, at least I am human.
I know that we are getting this free advice from you without favor or fee for which we are grateful to you but....
Chalo, jaane bhi do yaaaro!
Using seat-belts while driving is indeed something else but the analogy holds up, both are designed to prevent catastrophic or overly undesirable outcomes in a situation where you realise you can be wrong, you can make a mistake with damaging outcomes. The question of definition does have merit as my definition may be different from yours, as in our view you may also use a stoploss, not necessarily as many books define them but a stoploss none the less.
A stoploss in our definition is a point in time or price, where the initial perceived outcome is no longer viable, or circumstances that prompted the entry of a trade have changed adversely.
We may not use fixed price stoplosses either.
Sirs,
Wl respond to u in the evening.
Meanwhile, let me make an "expert prediction':
DHAMPUR SUGAR,
Buy CMP Rs.97.50 Stoploss Rs.95 Target Rs.105
Let's see how my "prediction" turns out by this evening.
Ciao!
Continuing with the stop loss:
1. SL is undoubtedly a good tool to minimize losses before they become catastrophic. However, for an investor, not a day-trader, SL is very impractical to implement in India as SL has to be put on a daily basis unlike a permanent one in US.
2, I believe that a 25% stop loss is appropriate for most investors. Because, with taking the price down 25% or more, we don’t need to second-guess it by buying more. We can assume that there is something about that company or the sector or the market mood that we have failed to understand. At these times, it is better to swallow our pride and cut our losses.
This approach is much more "practical" for common investors like me.
We are happy that Mr Anonymous has poured his emotions out. We are sorry if he has suffered for want of full understanding of our system. We hope he is aware that the stock markets get influenced due to govt actions/announcement and no body can know it in advance and hence the stop-loss is always advisable. In our system the stop-loss is not to be applied straight away but if the recommended stock underperforms against the broader indices ie Nifty/Sensex etc by 3 % and 5% (ie in two stages). This takes care of the specific weakness developing in the scrip concerned. This is very scientific and should be strictly adhered to.
We even analyse the losses entirely if the transaction done is immediately informed in follow up after the recommendation and as per the recommendation. This will enable us to keep a constant vigil and advice according to the developing scenario, but for this the party concerned has to be a paid subscriber.
We do not think, you would be appreciating this as it seems that the criticism is coming just for the criticism's sake. Many traders/investors have profited but my Anonymous friend does not seem to benefit. It may be due to his own defect in execution/timing of trades and his not being open to follow the advice in its entirety. How else he misses out straight chances of profit making. Further we advise that a minium of five stocks should be invested in as per the size of investiblle funds and a maximum of twenty stocks should be invested in.
We invite him to shed all reservation and take advantage.
In the end, we presume that our friend does understand the basic character of stock markets and does not remain in his own paradise where no body is responsible for losses and gains have to come in all circumstances.
We hope the seriousness will be maintained instead of just trying to find faults. We invite him to assess every recommendation and tell us even hypothetically how there would be a loss as per the advice in times between the period of two advices.
There is yet more to the system. When you have got out of a trade due to application of stop-loss, you also have your money back in hand to try the other scrip.
Even batsman like Tendulkar miss to make a century but does it make him useless player.
We, however, do apologize for talking straight and not mincing words. Afterall its your valuable money involved.
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