Investment Checklist by Balakrishnan R

Generally keep away from companies if there are some issues like:

– Promoter holding below 30%
– Continious diversifications or acquisitions
– Professional managed with no owner and high ESOPs
– Accounting policies that are aggresive
– Lack of free cash flow – hard to find in a finance company
– Huge divergence from industry trend
– Rising debt levels
– Rising level of ‘other loans and advances’ or ‘inventory’ or ‘debtors’
– Any sectors or business I do not understand
– Too many subsidiaries and associates
– High level of pledging of proter shares
– Low level of income tax payments
– Margin changes that seem too good to be true
– Frequent visits to capital markets – a true red signal
– Third generation family and multiple successors

Stories:
– Bartronics
– Raymonds
– Alembic
– First Leasing
– Arvind Mills
– Distilleries
– Plywood

Resources:
Making Sense out of Annual Reports:

Learn to Invest Safely in Stocks:

RJ Exclusive Summary

– 2018 will be the year of consolidation for markets
– IBC, GST will benefit the indian economy
– Believe BJP will form the govt in 2019
– Look at specific opportunities, not at sectors
– Flow of local money into the market is just the beginning
– Domestic flows are the best indicator of confidence in India
– Percentage of savings flowing into the market will only rise

– Oil prices can upset India’s fiscal policy
– Believe oil will stabilise around $69-70/bbl
– Don’t see further weakness in the rupee
– India won’t be affected substantially by global trade wars
– Potential growth in consumption stocks are priced in

– Would be careful in buying some mdcap stocks at current levels

Pharma:
– Pretty sure that the worst is over
– Positive about domestic branded pharma biz

Banking:
– See unprecedented growth story
– Good banks with legacy problems are very attractive investments
– ICICI Bk carries a lot of characteristics of HDFC Bk in terms of CASA
– Betting on ICICI Bk, Federal Bk and Karur Vysya Bk
– NBFCs more than well-valued

Metals:
– Betting on Tata Steel
– Extremely bullish on Tata Steel

Health:
– Lot of growth opportunity in Health Insurance
– Prefer Health Insurance over hospitals

Affordable Housing:
– We are underestimating its +ve impact
– Don’t think real estate prices will rise, but expect volumes to grow

Agri:
– Support govt’s decision to announce MSP for crops
– Govt must allow corporate sector in farming

Source: CNBC

The Big Bull Rakesh Jhunjhunwala talks to Shereen Bhan about midcaps, pharma and banks. https://www.youtube.com/watch?v=k53vpbYf53c

Howard Marks: This is a time for caution

Billionaire investor Howard Marks things the market’s current valuation if “lofty”.

Marks, who called the financial crisis, just told his clients in a note that now is “a time for caution”.

The investment expert advised that his clients move into lower-risk investments.

Mark did emphasize that he isn’t exactly sure when a correction will happen, saying “it feels like we’re in the eigth inning, but I have no idea how long the game will go no”.

In that same letter to clients, Marks said that the surge in bitcoin is just another sign of a bubble brewing.

Marks’ firm Oaktree Capital has $99B of assets under management as of June 2016.

THE BOTTOM LINE

MARKS SAYS ‘THIS IS A TIME FOR CAUTION

Watch video: [OakTreeCapital]

Source: CNBC