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ETMarkets.com: Reading is important to make money in the stock market, says this value in-vestor, who takes more pride in introducing himself as an entre-preneur and columnist.
C h e n n a i - b a s e d S h y a m Sekhar agreed to talk to us on one condition: we do not flaunt big numbers. Some of his value picks have given multibagger returns over the past decade.
Sekhar has been active on Dalal Street since 1990, and he loves to spot quality businesses more as a passion than a way of making money.
Some of his early discoveries include Hatsun Agro, KRBL and Pidilite Industries; stocks he has been holding for more than a decade now.
Look at the performance: KRBL is up nearly 7,500% in last 10 years; Hatsun Agro 5,250% and Pidilite 900%. He bought KRBL first a decade ago and raised his holdings further in 2012.
He has also been holding Cera Sanitaryware and Jayant Agro Organics for last eight years and La Opala Glass for six. Shares of Cera Sanitaryware have climbed nearly 4,400% in last eight years to close at `3,219 on October 13, 2017, rising from ̀ 70 on October 17, 2011. Jayant Agro has climbed over 1,100% in last eight years, while La Opala RG is up 2,000% in six years.
ETMarkets.com could not in-dependently verify Sekhar’s holdings at present or back then. It may also mean he doesn’t have a huge portfolio currently. But this investor has a huge fan fol-lowing on social media, where he shares his thoughts regularly.
What’s the trick of the trade? How does his spot quality?
Three pillars — reading, ob-servation and experience — can make you successful, says Sekhar, 48. That’s true of any domain.
“Profitability, sustainability, management commitment and corporate governance are first things I focus on to spot a quality stock,” says Sekhar.
He admits stock spotting is not as easy as it may sound and there is no particular way of in-tentionally discovering them.
Intuition often works. Sekhar’s wisdom from two decades: “Learn to be intuitive and prac-tise thinking counter-intuitive-ly. Both need years of practice and are deeply personal pur-suits. It helps when you have to stand alone. Never become too close to corporate managements or fall too much in love with a business.”
And then comes a point when he gives it all away. “I started using Michael E Porter’s framework for stock picking in 1992. This lateral use of a business management tool in investing has stood me well over the past 25 years.”
American academic and econ-omist Porter is known for his generic strategies that describe how a company pursues com-petitive advantage across its chosen market scope.
Sekhar also follows Philip Fisher’s style of investing and has been deeply influenced by Walter Schloss, the man with years of practice in investing in small and micro-cap stocks.
Fisher belongs to the league of those very few super investors who have shaped ace investor Warren Buffett’s investing style. American investor Schloss is a well-regarded as a value investor and a notable dis-ciple of the Benjamin Graham School of investing.
Continued on MONEY MATTERS
How a Decade Spent in Picking an Investment Style Had Paid Off in Making Lots of Money
Our Bureau
Mumbai: Indian share indices ended 0.4% higher on Monday led by gains in telecom, oil & gas and banking stocks.
Gains in Asian markets also aided senti-ment, with Japan’s Nikkei posting its longest winning streak of 15 days in its history of nearly 70 years after the elec-tion victory of Prime Minister Shinzo Abe on Sunday.
Snapping its three-day losing streak, the Sensex ended up 116.76 points or 0.4% at 32,506.72. The Nifty reclaimed the 10,200 mark intraday before ending up 38.30 points or 0.4% at 10,184.85. The S&P BSE MidCap and SmallCap indices gained 0.4% and 0.1%, respectively.
Provisional data showed foreign portfo-lio investors sold shares worth `81.51 crore on Monday while domestic institu-tional investors bought shares worth `307.84 crore.
Telecom shares advanced after Reliance Industries’ telecom arm Jio raised tariffs last week, which is expected to bring in stability in the telecom sector going for-ward. Shares of Reliance Industries
ended up 3% at ̀ 938.10, with the company closing in on the ̀ 6 lakh crore market cap milestone. Bharti Airtel was the top gain-er on the Sensex, ending up 5% at ̀ 497.50.
Sensex Surges 117 Pts on Oil, Telecom Gains
Source: BlackRock Investment Institute
Anandi Chandrasekhar & Kailash Babar
Mumbai: Just after the Festival of Lights, shares of property compa-nies lit up Dalal Street on Monday on expectations that a raft of festive-season offers and increasing confi-dence among home-buyers would induce them to reach for their cheque book.
Realty stocks climbed as much as 18% on a day the broader gauges were flattish on resumption of trad-ing in Mumbai after the Diwali weekend. Kolte-Patil Developers, Sunteck Realty, Puravankara, and Sobha registered fresh 52-week highs, with buyers expected to re-
ward developers that have good completion and delivery records. Shares of Arihant Superstructures, Ansal Buildwell, DLF, Anant Raj, Godrej Properties and Peninsula Land also rose between 3% and 8%.
With the uncertainty around the implementation of Real Estate (Regulation & Development) Act now over, the formation of regula-tory authorities in key property markets has helped build confidence among home-buyers, analysts said. These factors, combined with low home-loan interest rates and rising affordability of residential units, could stoke a revival in demand in the second half of the year.
“Sales have bottomed out and with
the economic growth, demand is likely to rebound from here,” said Alok Ranjan, head (PMS), Way2Wealth.
Brokerage firm Edelweiss Securities said that key regulatory uncertainties — RERA and GST — are no longer factors determining off-take. “We expect an uptick in residential new sales in the coming quarters across key markets…This, we believe, is likely to be driv-en by favourable macros, low inter-est rates, improving affordability and significant pent-up demand,” Edelweiss said in a note.
It believes that interest rate sub-vention for first-time buyers from the middle income group may in-centivise fence-sitters to buy homes. Edelweiss also said that it expects office space demand to remain strong.
Shares of Godrej Properties, Sobha and Kolte-Patil have appreci-ated between 109% and 219% since the beginning of the year. Kotak Institutional Equities expects Sobha to report volume growth in its 2018 earnings. The developer’s operating cash flow will remain positive, but debt may increase on account of some land payments, it said.
“While both these regulations (RERA and GST) will be beneficial for the sector, in the short to medium term, the decline in sales volumes and a fall in prices could lead to pres-sure on margins and a squeeze on valuations,” said Amit Agarwal, re-search analyst, Institutional Equities at Nirmal Bang.
STOCKS GAIN as much as 18%; Kolte-Patil, Sunteck, Puravankara & Sobha hit fresh 52-week highs
Hopes of Recovery in Residential New Sales Ignite a Realty Rally
MSCI India 846.01 0.57MSCI EM 2426.68 0.10MSCI BRIC 620.68 0.17MSCI World 8160.32 0.03SX 40 19558.66 0.00Nikkei 21696.65 1.11Hang Seng 28305.88 0.64Strait Times 3349.8 0.27
Prices per Troy Ounce ($)
GOLD RATE
Nifty 50 10184.85 0.38Sensex 32506.72 0.36
At 7 pm ISTValues in US $, Gross
STOCK INDICES % CHANGE
*At 10.30pm, After adjusting for import duty, Indian spot gold lower by $ 3.81 to US Comex gold price on Monday. The premium on local gold is due to tight supply following import curbs.
US India
OPEN 1281.50 1411.11
LAST* 1276.40 1407.85
FOREX RATE (`-$ Exchange Rate)
OPEN
65.08
LAST*
65.02
Market Trends
Market on Twitter@ETMarkets
BlackRock’s list of top geopolitical threats BlackRock is watching three in particular: the North American trade neogtiations, North Korea, and the deteriorating US-China relations.
Major cyber attack
Major terror attack
A World of Risk
CCOOLLOMBIAOMBIA
CUBACUBA
SSLLOOVVAKIAAKIA
North AmericanTrade TensionsThe fourth round of NAFTA renegotiations ended this week, with Mexico and Canada rejecting what they view as harsh US proposals. The next round of talks are scheduled to take place in Mexico next month. Our base case is that successful negotiations will be completed in early 2018. However, our hopes for this outcome have recently diminished given tough positions from US negotiators and threatening rhetoric from US President Donald Trump. Market risks are biased to the downside given that a good outcome is priced in, in both Canadian and Mexican markets.
South China Sea Confl ictWe see frictions between the US and China heating up over time. In the short term, tensions could rise if Chinese President Xi Jinping pursues an even more nationalistic agenda. Economic tit-for-tats could lead to an erosion of relations—and have sector-specifi c effects.
Fragmentation in Europe
Escalation in Syria and Iraq;Gulf Confl icts
North Korea Confl ictWe view N Korea’s missile and nuclear weapons programme as a major threat. Though we see a low probability of an all-out war, the costs are too high on all sides. Instead, we expect the US to intensify its “peaceful pressure” campaign and leaning hard on China to participate. We see the crisis straining US-China relations just as economic tensions are rising.
Russia-NATO confl ict
Markets are calm, but there are many geopolitical risks simmering
Beating VolatilityMarketsET
FINDING VALUE‘Steel, niche tech and pharma look attractively valued from a contrarian viewpoint’
Company CMP (`)
%Chg*
Kolte-Patil 264.35 18.54
Sunteck 378.35 16.67
Godrej Prop 663.70 3.09
Sobha 516.00 8.99
Purvankara 97.40 9.93
New Life
*Change in share price on Monday
Wall Street Opens at Record Highs
US stocks opened at record highs on Monday after Japa-nese Prime Minister Shinzo Abe’s em-
phatic win in weekend polls, while US Treasury 30-year bond yields hit session lows. On Monday, the Dow Jones Indus-trial Average rose 25.07 points, or 0.11%, to 23,353.7, the S&P 500 lost 0.36 points, or 0.01%, to 2,574.85 and the Nasdaq Composite dropped 14.60 points, or 0.22%, to 6,614.45.
— Reuters
MONEY MATTERS
India Should Perform as Well if not Better than EMs
Q&A with Factor LLC’s Peter Brandt WWW.ETMARKETS.COM
MUMBAI, TUESDAY, 24 OCTOBER 2017
