Thursday, 13 November 2014

Planning to post a List of stocks that must be Avoided.

Hi Friends, 

This is an appeal to all genuine long term investors...


I strongly believe that it's not just time to find next multibagger, but also to trace / identify all potential multibeggers inorder to help new comers who want to invest long term in fundamentally good madcap / smallcap companies.


We are moving in bull run and lot of crap stocks (majority are penny stocks)  are moving like anything. Lot of them (promoter / operator) are fooling retail investors (some of them publishing extra ordinary results but not providing a penny as dividend!! but increasing their pledge etc..) and lot of new comers fall prey to these market frauds.
  


"Only when the tide goes out do you discover who's been swimming naked." - Warren Buffett



And I strongly feel that its the duty of us to warn about a company, if we see all the read flags.

Sure we can see / categories companies to minimum three classes / cases.

Case 1. We are sure about it - fundamentally strong companies.

Case 2. We are not sure about it - ( may be a genuine company, but not sure).

Case 3. We are again sure about it but this time it’s a fraud company, and must be avoided.

And my aim is t make a list of Case 3 companies.

Any willing person can contribute to the comments by naming the company with 1 or 2 line reason behind categorizing them to this list. Later, I will finally publish and manage a list of these types of companies.

  
 My sample list of companies, as examples.

1.     FCS Software

Reason:- Lot of frauds, mainly fraud with issuing warrants to doubtful foreign parties, and they sell later it to Indian retailers!

2.     Kappac Farma


Still trading with a value more than 600 Cr MCap, with no sales and promoter holding!

I request all my readers to give any name of such company which you believe is a crap / fraud one.  


PS: The list will be published later after my study and once I get a sizable number.

Also note these companies share price may appreciate (short to medium term) due to other reasons but not related to fundamentals!!

23 comments:

  1. Hello mvpp,
    My first post on this blog.
    Regarding arrow coated products which you have researched a lot. We have seen royalty income improving consistently.
    My question is... Is this royalty income on
    1)Annual fixed
    2)On time payment or
    3)Proportional to sales of patented product by patent buyer

    Can you share your views please.

    ReplyDelete
    Replies
    1. Hi Vivek,

      It all depends on the type of contract they make.

      Normally patent and royalty income is proportional to sales / production of the patented product by the agreed patent user; so matches with your third point.

      rgds

      Delete
    2. In Arrows case also its not one time payment,
      but looks like related to production of the patented items.

      Delete
    3. Thanks :) hope our assumption is right bcz it shows products are in demand even in india.

      Delete
  2. Hi Mvpp , During may I was little crazy after seeing this kind of market and did all stupid.Need advise on what would be the best (If there) strategy. Invested 1 lkh on all these
    1. Gvk(18.5) 2. Tata Power (100) 3. JP Power(25.5) 4. Era (28) 5. Parsvanth(33) . Eventhough there are better companies , I feel the worst part is the price that I purchased for . Initially I used to do trading when these companies are low , but later on by the time I decided for investment the rates end up high.Not sure what needs to be done as lot of money got stuck.I can wait for long term if it is worth.GMR & Unitech sold in loss to release funds.Please advise

    ReplyDelete
    Replies
    1. Hi Sridhar,

      Best option in stock market is always SIP in quality companies.

      Then your portfolio allocation misfired since its too much based on few sectors only.

      Not strictly tracking any companies apart from Unitech, so not in a psitin to comment abut long term potential of these picks.

      rgds.

      Delete
  3. There are two methods of teaching .
    1. Tell somebody what to do
    2. Tell someone what NOT to do.....
    I believe in the first method , which directs someone towards the correct path, and the other is a wasted effort. If one is taught to buy the right scrips, obviously he would be eliminating the wrong ones....
    It is a personal opinion..... Not intended to hurt anyone...

    ReplyDelete
    Replies
    1. I understand ur point correctly, appreciate the point and no hard feelings at all..

      But my point is even though we tell kids do that and this, some time we warn them don't do this and that.. My idea is also similar :)

      Delete
    2. That exactly is my point. We feed all negative ideas into the fresh minds, because we were treated in the same way...Learning something good is easy.... It is the un-learning of these negative inputs which is difficult......
      Law of attraction says.....with whatever you fill your mind, the mind will take it , understand that is your need......feed it with positive things, you get positive results.... With negative thoughts , we get negative results.....
      Why only children? Did anyone told you to stop learning because you were old?
      OK, you did a few mistakes, bought a wrong scrip. Do not think of it on a daily basis....if it is that bad, simply remove it from your portfolio.....think of something better.....Enjoy.....

      Delete
    3. I am thinking you are not getting my point. Let me clarify

      Point 1. I fully agree with you that we should be positive and need to have the skills

      Point 2. But that doesn't mean we shouldn't learn what to avoid. (In life also). If we had felled in a gutter (or failed earlier on an incident) that gives us experience and if we share it with others, there is learning opportunity and they can avoid that potholes.

      We too learn this way also, otherwise we may be falling in every gutter in our life. But we escape lot of it just because we learn from our parent / gurus, and they help us in avoiding some problems and making our life journey more smooth.

      So according to me both part are important.

      Hope this time its clear from my perspective [this is my view, and not asking you to agree with me :) ] .

      Delete
    4. A class is going on. The English teacher was giving a lecture .
      Teacher: There are No combination of Two positive words in English that gives a negative meaning .
      BackBencher:: " YEAH! RIGHT"

      Delete
  4. Hai mvpp myfirst post on this blog ur view on smartlink networking

    ReplyDelete
  5. Hi Ravi,
    Smartlink a decent bet, but may take time to revive and average management quality.
    rgds

    ReplyDelete
  6. Hi,
    Any view on SKM?
    This time herd mentality overweighing.

    ReplyDelete
    Replies
    1. It had a long run.. let it consolidate.. :)

      Delete
    2. Dear MVP

      what is your expectation on SKM price stabilization range? It cannot understand the peoples mentality, when UC always people behind it to buy, when it is in LC no people are buying ? what is this type trading , can you explain , why this type of tarding nature? Does it indicates any operator driving this stock or people mentality like blind following others?
      Looking forward for your vauble comments plz
      regards,

      Delete
  7. Shree hari chemicals, bhageria

    ReplyDelete
  8. sir

    ur view on ahmednager forging bought at 480 plz suggest

    ReplyDelete
  9. Sorry, not tracking above three stocks
    rgds

    ReplyDelete
  10. Hi all, I think instead of posting few from the lot, it may be better to give a detailed list of crap or doubtful companies. Hopefully will do once time permits.

    rgds

    ReplyDelete
  11. Ybrant digital. Negatives - many acquisitions and PnL shows taxes paid, but no actual tax outflow in cash flow seen

    ReplyDelete
  12. How does someone reach you via email

    ReplyDelete