Return of 500% in just 5 years.: January 24, 2011

Monday, January 24, 2011

BUY SHRIRAM TRANSPORT FIN AT CMP OF 723.10 WITH A STOPLOSS OF 700

WE RECOMMEND TO BUY SHRIRAM TRANSPORT FIN AT CMP OF 723.10 WITH A STOPLOSS OF 700 FOR A TARGET OF 753, 769 AND 778.

ABOUT MR. RAKESH JHUNJHUNWALA

Son of an income tax officer, he started dabbling in stocks while in Sydenham college and plunged into investing as a full time profession soon after completing his education (Chartered Accountant). 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. Between 1986 and 1989 he earned Rs 20-25 lakhs. His first major successful bet was iron ore mining company Sesa Goa. He bought 4 lakh shares of Sesa Goa in forward trading, worth Rs 1 crore and sold about 2-2.5 lakh shares at Rs 60-65 and another 1 lakh at Rs 150-175. The prices then went up to Rs 2200 and he sold some shares.

But he credits Madhu Dandavate's Union budget of 1990 as the inflection point for his investing career which quintupled his net worth. His privately owned stock trading firm Rare Enterprises, derives its name from the first two initials of his name and wife Rekha's name.

Under the guidance of Mr Radhakrishna Damani, he made a lot of money shorting stocks at the time of Harshad Mehta scam post 1992.

"My decision to aggressively invest in the asset class of Indian equities at the right time was a very important determinant of my success,” said Rakesh Jhunjhunwala.

Investment Philosophy

Although he claims to put only a minuscule of his networth on the table for trading activity, he has often leveraged his own capital and managed to make a fortune from his calls, more often than not. His stock picking strategy is influenced by the lessons from Mr George Soros's trading strategies and Dr Marc Faber's analysis of economic history. He endorses the thumb rule of 'trend is my best friend'.

He is the poster boy of the Indian bull run but admits to have been a bear in the Harshad Mehta days and believes that a person in the market should be like a chameleon. He calls the markets as temples of capitalism and believes that they are the ultimate arbitrators.

Much like Mr Warren Buffet, he buys into the business model of a company and for judging the longevity and growth potential, he gives top priority to 'competitive ability', 'scalability' and 'management quality' of the enterprise. The 'entrepreneur', according to Mr Jhunjhunwala is what makes an invaluable difference to his expected investment returns. According to Mr Jhunjhunwala, believing in the vision and the beliefs of the entrepreneur and validating the risks that may not be perceived by the entrepreneur are the key success factors for an investor.

Mr Jhunjhunwala has managed to identify numerous multi-baggers in the past decade, notable being Karur Vysya Bank, Praj Industries, Crisil, Titan, Nagarjuna, HOEL, Rallis, VIP and PSUs like BEML and Bharat Electronics, among others. The typical traits to look for while identifying potential multi-baggers, according to Mr Jhunjhunwala are - low institutional holding, under-researched and general pessimism about the stock.

RAKESH JHUNJHUNWALA ADDS MORE VIP IN HIS PORTFOLIO

DURING THE QUARTER ENDED DEC'10 MR. RAKESH JHUNJHUNWALA HAS ADDED 174500 OF VIP IN HIS PORTFOLIO. AS ON DEC'10 HE HOLDS 1,263,000 AND 554,500 OF VIP IN TWO OF HIS NAMES.

SHARE HOLDING PATTERN OF VIP AS ON 31.12.10

1	Sudhir Mohanlal Jatia	1,700,152	6.02
2	Rakesh Jhunjhunwala	1,263,000	4.47
3	Kiddy Plast Ltd	932,868	3.30
4	Kemp & Company Ltd	659,996	2.34
5	Ramgopal Textiles Ltd	578,445	2.05
6	DGP Enterprises Pvt Ltd	477,700	1.69
7	Jhunjhunwala Rakesh Radheshyam	554,500	1.96
8	Sidharth Mohanlal Jatia	323,295	1.14
9	Saint Honore Inde	500,000	1.77
10	The India Fund Inc	300,140	1.06

BUY SINTEX AT CMP OF 158 WITH A STOPLOSS OF 150

WE RECOMMEND TO BUY SINTEX AT CMP OF 158 WITH A STOPLOSS OF 150 FOR A TARGET OF 166, 171 AND 176.

BINGO ALL THE WAY! HITACHI REACHED OUR FIRST TARGET OF 223

ON 18.01.11 WE RECOMMENDED TO BUY HITACHI AT CMP OF 205 WITH A STOPLOSS OF 188 FOR A TARGET OF 223 AND 237. OUR FIRST TARGET OF 223 ACHIEVED. BINGO! ALL THE WAY.

BUY VIP AT CMP OF 585 WITH A STOPLOSS OF 560

WE RECOMMEND TO BUY VIP AT CMP OF 585 WITH A STOPLOSS OF 560 FOR A TARGET OF 622, 637 AND 648.

BUY UFLEX AT CMP OF 181.60 WITH A STOPLOSS 165

WE RECOMMEND TO BUY UFLEX AT CMP OF 181.60 WITH A STOPLOSS OF 165 FOR A TARGET OF 198, 207 AND 214.

TRIPLE BINGO! BANK BARODA REACHED OUR FIRST TARGET OF 865

TODAY WE RECOMMENDED TO BUY BANK OF BARODA AT CMP OF 842 WITH A STOPLOSS OF 825 FOR A TARGET OF 865, 883 AND 896. OUR FIRST TARGET OF 865 ACHIEVED. BINGO!

DOUBLE BINGO! HANUNG REACHED OUR SECOND TARGET OF 234

ON 21.01.11 WE RECOMMENDED TO BUY HANUNG AT CMP OF 211 WITH A STOPLOSS 200 FOR A TARGET OF 221 AND 234. OUR SECOND TARGET OF 234 ACHIEVED TODAY. BINGO! ONCE MORE.

BUY BANK OF BARODA AT CMP OF 842 WITH A STOPLOSS OF 825

WE RECOMMEND TO BUY BANK OF BARODA AT CMP OF 842 WITH A STOPLOSS OF 825 FOR A TARGET OF 865, 883 AND 896.

BINGO! BRFL REACHED OUR FIRST TARGET OF 233

ON 21.01.11 WE RECOMMENDED TO BUY BRFL AT CMP OF 224 WITH A STOPLOSS OF 220 FOR A TARGET OF 233 AND 238. OUR FIRST TARGET OF 233 ACHIEVED. BINGO!

Subscribe to: Posts (Atom)

DISCLAIMER

Trading in stock market is very risky. Please analyze yourself what is your risk profile. This blog is not perfect. This is not an advisory service to buy or sell. The contents of “this blog” are only for educational purposes. No liability is accepted for any content in this blog.

The author is not a registered stockbroker nor a registered advisor and does not give investment advice. His comments are an expression of opinion only and should not be construed in any manner whatsoever as recommendations to buy or sell a stock, option, future, bond, commodity, index or any other financial instrument at any time. While he believes his statements to be true, they always depend on the reliability of his own credible sources. The author recommends that you consult with a qualified investment advisor, one licensed by appropriate regulatory agencies in your legal jurisdiction, before making any investment decisions, and that you confirm the facts on your own before making important investment commitments

SGRG – SIP: BE THE MASTER OF YOUR OWN DESTINY

Welcome to the World of S.I.P. (Systematic investment Plan).

Thanks to the massive amount of time, money and efforts put in by the Mutual Fund Industry over the years, investors are now very much aware of this technique of investing.

Lets revisit the logic of SIP. We call it SGRG-SIP.

In a SIP you invest a fixed sum at a particular interval ( say a month) over a given period of time. In SGRG-SIP, instead of choosing a regular MF scheme, we decide an Index Benchmark, which can be NIFTYBEeS, JUNIORBEeS, GOLDBeS, BANKBEeS depending upon your risk profile.

Disciplined Approach

The first benefit of a SGRG-SIP is that you imbibe discipline in your investments. On a given date of every month you buy the pre-decided index Benchmark. However, the amount to be invested every month keeps on changing i.e. It will be communicated by us every month. You don’t really apply your mind whether to buy or not. Just go ahead and do it.

Don’t worry about the timing

Let me choose the worst possible month in recent history – January 2008 I Hope everybody remember this month.

So we baptize you with fire, by making you begin investing from 26^th December, 2007, a sum of Rs 25,000 every month on the last day of the month. This you religiously do every month for 36 months i.e. 25^th Decemeber, 2010.

Lets see how the Nifty faired. The Nifty that was 6070 on 26^th December 2007 closed on December 26^th 2010 at 6013. This is a fall of 0.94%. And say you like Reliance a lot. The price of Reliance on 01.01.08 was 1445 and on 01.03.12 it was 811 down -43.80% over a period of 3 years.

But our’s SGRG-SIP in Index benchmark’s actually gave A WHOPPING Annualised Return of over 50% p.a. during the same period.

What we mean to say is since, we cannot track the working and performance of each and every scrip, when you fundamentally like a stock, you should like the stock more if the price falls, other things being same. But human psychology will ensure that you get jitters when the price falls. And expecting that the price will fall further you don’t buy. A further fall in price will validate your fears and you would wait for a still larger dip. One fine day the stock will bounce back, leaving you in a frown.

But a SGRG-SIP will ensure that your fear does not come in the way of your investment. This ability of SGRG-SIP to systematically buy Index Benchmarks at all levels ensures good returns in a volatile market. So honour the sanctity of a SIP.

Power of Compounding

The power of compounding will ensure that even small investments in early part of life will leave a giant footprint over a longer period of time. You don’t really have to save big. The stress is not on the amount, but on the need to start early. And even if you have lost considerable time, don’t worry. Today is a good day to begin ! Let us also dispel a myth that SGRG-SIP is only for beginners or for small investors. Nothing stops you from allocating even large sums for SGRG-SIP. In fact experienced investors would find it more useful.

SOME REAL FACTS ABOUT SGRG–SIP

PRICE	S&P	JUNIOR	BANK	GOLD	SILVER
	NIFTY	NIFTY	NIFTY	SPOT	SPOT
01.01.05	4484	2080	3531	6301	10415
01.12.10	9095	5871	11988	29035	55900
% P.A.	15%	26%	34%	52%	62%
SGRG %P.A.	58%	399%	679%	1201%	10000%

Here are some real facts about our SGRG – SIP. We have compared the prices of some of the Indexes and Top Commodities in the World market since 1^st Januray, 2005. Here also you will appreciate that SGRG –SIP outforms all the asset class mentioned below by 100% at least.

Be the master of your own fortunes.Write your own success story. Choose your own Index Benchmark, which you will be investing over a period of time. Since your returns will be function of what asset class you choose, ensure that you put in serious efforts in terms of understanding what you are investing in. Ensure that the Index Benchmark you choose match your risk stance and return expectations.