How I made $ 2,000,000 in the Stock Market – by Nicolas Darvas.

If there is one engrossing book that all Value Investors should invariably read it is this one :

How I made $ 2,000,000 in the Stock Market – by Nicolas Darvas.

This extraordinary book tells us about the most unusual success stories in the history of stock markets. Nicholas was a zero and did not know head or tails about stocks but slowly and gradually he slogged it out and eventually understood much about the markets and emerged a hero through losses, trials, tribulations and self – introspection.

I am reproducing below some interesting extracts from this book and hope this will encourage you to read the book from start to finish.

Darvas strongly believed that there is no such thing as cannot in the markets. Any stock can do anything and can mock at the best and brightest of folks on Wall Street / Dalal Street. So, even if Rakeshji continues to hold Titan thinking it will cross Rs.5000/= the market teases him when the stocks tanks in 3 digits abruptly. Well, Rakeshji;s prophecy may or may not come out to be true. But today, the stock closed at Rs.3568.30, up by Rs.263.05. By the way, Titan’s Net Profit margins are less than 10 per cent. Maybe, it’s a Tata company with great growth ambitions but at PE of 47 I would simply give it a pass.

Darvas also strongly believed that the crowd is more often right than wrong. He cites the case of one play of George Bernard Shaw wherein after the curtain falls everyone cheered and clapped except one man who also saw his play. GBS went upto him and said : “ Don’t you like my play?” The man replied : “ No, I don’t. “ Shaw said :” Neither do I, but what can the two of us do against all the crowd ?”

Moral : In the markets, learn to accept everything for what it is – not what you want it to be. You want the stock you just bought to rise and rise but it falls and falls. What do you do. Accept the fact you lost and sell out or hold on if you have reasons to believe that the stock will rise again. Darvas was good at cutting his losses quickly and swiftly.

Darvas is also of the view that there is no such thing as good or bad stocks – there are only rising and falling stocks and that one should hold the rising ones and sell the falling ones. And in order to do this, you need to bring your emotions – hope, fear and greed under complete control.

Darvas also subscribes to the view that if one horse is going to win, it will win, even if thousands of onlookers are cheering for another one. It’s like saying that over the long run Cairn will give better and greater returns even if millions are cheering RIL!

Nicholas Darvas is also humble enough to reveal the following:

• I was bound to be wrong half the time.
• I must accept this fact and adjust my ego accordingly.
• I must become an impartial diagnostic who does not identify himself with every theory or stock.
• I cannot merely take chances. Firstly, I have to reduce my risks as far as humanly possible.

Well, in order to know how precisely Darvas made $ 2,000,000 from the markets, you need to read the book from start to finish. Trust me, you will enjoy reading it and you may perhaps become the next Indian Nicolas!

This is one book that will give you the moral courage and confidence of doing the right things instead of being swayed by the Sensex and senseless 24x7 market gossip and grapevine that can dim your decision making process and encourage you to buy stocks that will stick to your fingers like TAR! Instead, learn to master the art of investing all by your self and be a self made winner like Nicolas Darvas.

Kishor S. Khot, [Kishor@hbjcapital.com], Equity Strategist, HBJ Capital Services Pvt Ltd

Lanco Infratech - you will neither lose your shirt nor your tie by buying this one

On January 05, 2011 Norges Bank on account Of Government Petroleum Fund bought 14,000,000 shares of Lanco Infratech at Rs 64 on the BSE. The CMP is Rs.55.20 / share. The 52 week range was Rs.74.70/40.80.

So what’s so good about Lanco Infratech that prompted Norges Bank to shell out INR 89.6 crores in these turbulent times to go for Lanco Infratech..

Without boring you about technicalities and bombarding you with numbers hard to digest, I am providing a brief over view of Lanco Infratech.

The company’s operations can be broadly be split into 3 broad categories:

• Core EPC business /Power business
• Real Estate
• BOT

Lanco’s internal orders (power projects) constituted a significant portion of the total Order book. The company’s external order book is diversified across the Road, Infrastructure and Transmission-line segments. If we have to believe the market grapevine, Lanco Infratech is likely to hive off power business into separate entity and will list the company in 2012.

Lanco Infratech Limited (LITL) EPC Division was recently awarded a Prestigious EPC Contract by a Moser Baer Group Company, for their 2 x 600 MW Coal Based Thermal Power Project through ICB.The Scope of Contract includes Complete Main Plant and BOP Package including Civil and Structural Works on Engineering, Procurement and Construction (EPC) basis. The Contract is worth Rs. 4,100 Crores..

Lanco intends to have 15,000MW capacity operational by 2015. The value of the power portfolio is estimated to be close to Rs100 bn. Even if we were to discount this valuation by 10 per cent then the same translates roughly into Rs.38 per share

Four year topline CARG was 61.46 per cent and 4 year bottom line CARG stood at 46.41 per cent. Topline which was hovering around Rs.541 crores in FY07 shot up to Rs.5937 crores in FY10. PAT which stood at Rs.73 crores in FY07 spiked to Rs.486 crores in FY10. During IHFY11, the company churned total income of Rs.4167 crores and PAT of Rs.318 crores. [ figures for corresponding period of previous fiscal Rs.4121 crores and Rs.285 crores ]

The company has an Equity base of Rs. 238 crores and its Reserves were to the tune of Rs.2922 crores. The Promotors holding is 67.95 per cent and Institutional Holding is around 24.2 per cent. Which means that 92.15 per cent is in strong hands. So why not clutch these strong hands by buying a pie in this company. Besides, the gearing ratio is less than one which means you are buying into a company whose operating risk profile is manageable as company has enough leeway to take on more loans when the situation warrants to do so.

If you are able to buy the stock around Rs.50-55, then you will not only make 50 to 75 per cent returns over a year or so but you can as well give yourself a pat on the back for emerging smarter than the Fat Boys!

Before I sign off here are some simple things you need to remember off and on in order to make money in the markets:

“ Markets are never wrong, opinions are.” Jesse Livermore

" Simplicity in trading demonstrates wisdom. Complexity is the sign of inexperience."

" Do not think you are smarter than the market, you are not."

Happy Investing!

Kishor S. Khot, [Kishor@hbjcapital.com], Equity Strategist, HBJ Capital Services Pvt Ltd

Sterlite Technologies Ltd - Buy and hold for one year

Sterlite Technologies Limited is a play on industrial (telecom) and infrastructure (power transmission) capex in India. Solid demand is coming from other emerging markets, such as Latin America, Africa, Eastern Europe, and even Central Europe as well.

The company generated total revenues of Rs.2431 crores in FY 2009-10 as against Rs.2289 in FY 2008-09. PAT in FY10 was Rs. 246 crores as against Rs.90 crores in FY 09, a smart increase of about 173 per cent. During HY11 Sterlite Technologies generated total revenues of Rs. 1001 crores and PAT of Rs.113 crores. The corresponding figures pertaining to the previous half year was Rs.902 crores and Rs.100 crores respectively. Sales 5 year CARG stood at 31.98 per cent and 5 year PAT CARG was 43.84 per cent.

The following are three powerful triggers that will drive up revenues and marging in the years to come :

• Sterlite Technologies Limited, a leading global provider of transmission solutions for the power and telecom industries, and Jiangsu Tongguang Communication Co., Ltd. (TGCl), a leading provider of total transmission solutions for optical cable and IT industries, recently agreed to form a joint venture company –Jiangsu Sterlite & Tongguang Optical Fibers Co., Ltd. (“STFC”) in Haimen, Jiangsu Province, China to manufacture, market and distribute optical fiber used in the production of fiber optic cables.

• Sterlite Technologies Limited recently launched its new OPGW (Optical Ground Wire) solution. An optical ground wire (OPGW) is a type of cable that is used in the construction of electric power transmission and distribution lines. Such cables combine the functions of grounding and communications. The OPGW cable is run between the tops of high-voltage electricity pylons. The conductive part of the cable serves to bond adjacent towers to earth ground, and shields the high-voltage conductors from lightning strikes. The optical fibers within the cable can be used for high-speed transmission of data.

• Sterlite’s FTTH (Fiber-to-the-Home) solution comprises a comprehensive suite of passive equipments for central office locations, distribution and drop networks to connect SFUs (single-family units) and MDU (multi-dwelling units). Sterlite’s FTTH solution would be immediately available to telecom service providers, multi-service operators, system integrators and real estate developers in India, Middle East and Africa. The Company plans to soon launch this solution for all its global clients.

Telecom industry:

There is a strong momentum in optical fibre demand globally. Europe and Latin America have witnessed double-digit growth in 2010. The Indian government continues to focus on broadband penetration in the country and is planning to come up with a revised broadband policy with a new target very soon;

Power industry:

The XIth plan accounts for Rs190,000mn investments in the private segment, which is expected to rise substantially in the XII five-year plan. The company has seen strong demand from emerging markets such as Latin America, Africa and Eastern Europe.

Considering the past track record and the ongoing capex plans of GOI and private sector, the stock can give 50 to 75 per cent returns in about a years time. The scrip is currently available at a reasonably attractive valuation of PE 9.62. While the scrip peaked at Rs.124.20, it is being beaten down like most stocks and is trading at around Rs. 69/share. Buy on dips and you will get decent returns. Anil Agarwal does not promise investors the moon but he does ensure that his empire is run by smart folks who deliver the goods. And that’s what investors look forward to on a q-o-q and y-o-y basis.

Kishor S. Khot, [Kishor@hbjcapital.com], Equity Strategist, HBJ Capital Services Pvt Ltd

New Year Offer - 50% Discount Offer ends Today (10th Jan'11)

Dear Readers,

Thanks a lot for your overwhelming response to our New Year Offer till now, however we would like to bring to the notice of all those who wish to avail the offer that TODAY i.e. 10th Jan'11 is the Last Day for the above 50% DISCOUNT OFFER.

While the actual cost of Four 3D stocks, PSP and MMP is given below, we are offering you 3 options to chose from and based on your profile, requirements and portfolio size, we will help you chose the best. Contact us or SMS us at the below provided contact details, so that you avail the best package and service from us.

Four 3D stocks = Rs 10,000
Penny Stocks Package (PSP) = Rs 15,000
Money Multiplier Portfolio (MMP) = Rs 20,000

Option 1

• PSP + Four 3D stocks = Rs 12,500 (Till 10th Jan'11)

Option 2

• MMP + Four 3D stocks = Rs 15,000 (Till 10th Jan'11)

Option 3

• PSP + MMP + Four 3D stocks = Rs 22,500 (Till 10th Jan'11)

For complete details on 3D stocks, PSP and MMP, visit - LINK


If you have any queries drop a mail at info@hbjcapital.com/ info@multibaggerpennystocks.com or call us at

• 09818866676 (24X7) or
  
• 080 65681134 (Mon-Sat 10 AM to 10 PM)
• or sms "HBJ MPS" to 56161
  

We will get back to you and help you chose the best option based on your profile and requirements.


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Happy Investing,

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FARMAX - A defensive bet in turbulent times

FARMAX headquatered in Hyderabad, started out as a small business firm, and under the innovative entrepreneurship of Mr.M.Srinivasa Reddy at the helm, FARMAX emerged into a successful business enterprise.

Farmax is into manufacturing and marketing of FMCG products. The company manufactures Personal Care and Food Products. The company has made deep penetration into rural and semi-urban areas.

Some of the brands of Farmax are Today toothpaste, Today FX Gel, Monsoon Non Sticky Coconut Oil, D’lite Pasta, Cas Lime Soap, CAS Sandal Soap, Premium Deo Beauty Soaps, DU Detergent Bar & Powder, Deevena Chakki Atta and Deevena Sugar. The company also proposes to sell Farmax Toned Milk very shortly.

The company has excellent distribution network and a broad product range backed by state-of-the-art manufacturing facilities. Though the company faces tough competition from the MNC’s and local biggies, FARMAX has exhibited its ability to take on the giants by generating steady sales on a q-o-q basis.

Sales in 2009-10 Rs. 64.52 crores [ previous financial year Rs.19.89 crs ] and PAT of Rs. 2.44 crores. [ previous financial year Rs. 0.42 crs ]

Farmax’s Sales increased by 16 per cent during HYFY11 to Rs.36 crores as against Rs. 31 crores in HYFY10. PAT increased by about 79 per cent to Rs.2.56 crores as against Rs. 1.43 crores during the same period.

Though Farmax’s Debt Equity ratio is less than 1 and Net Margins are pretty low at 3.79 per cent, working capital management appears to be improving as is evidenced by lower Inventory holding days and Receivables Days.

The stock is currently trading a low of Rs.11.46. Even at this low price Farmax is the costliest FMCG stock available on the bourses. But as the company is moving in the right strategic direction by focusing its strengths in the rural and semi urban area, the stock can go up in the weeks to come and can even double or triple from current levels since FMCG stocks are the best defensive picks in these turbulent times.

Kishor S. Khot, [Kishor@hbjcapital.com], Equity Strategist, HBJ Capital Services Pvt Ltd

OUR BARGAIN STOCK PACKAGE IS NOW AVAILABLE FOR RS.5000 PER ANNUM

OUR BARGAIN STOCK PACKAGE IS NOW AVAILABLE FOR RS.5000 PER ANNUM


GET 2 GREAT STOCK RECOMMENDATIONS EVERY MONTH – HOLD 1 FOR 3 MONTHS AND HOLD THE OTHER FOR 3 YEARS

“Bargain Stocks Package” – Long & Short term Offerings….

Long term recommendation]: 12 issues of “BARGAIN STOCK PICK" per year - Long term wealth creating Stock with potential return of 200-300% in 1-3 years holding period. A class of stocks that are widely overlooked by Street but can yield massive returns. These stocks will have limited downside.

[Short term recommendation]: 12 issues of “DEFINITE INCOME STOCK PICK" per year - Short term stocks with potential return of 25-50% in 1-3 months holding period. You can invest in these stocks for a descent regular income.

Contact: Mr. Sandeep Jain, COO & Head Strategy at 91 80 65681133/34, +91 98867 36791 for any information/clarifications

Last Day of New Year offer: Get 50% Discount and ensure the safety of investments against any market correction with our four 3D stocks !!!

Click on the above image for clear view

Dear Readers,

Thanks a lot for your overwhelming response to our NEW YEAR OFFER - FLAT 50% DISCOUNT. Hope all interested readers availed the same.

In case you missed out and wish to avail the same, we would like to bring to your notice that Today i.e. 5th Jan 2011 is the Last Day of the New Year Offer.

PSP - Penny Stocks Package

For complete performance update and details on PSP click – LINK

Download some of the previous reports - LINK


MMP - Money Multiplier Portfolio

Money Multiplier Portfolio is an Offline Portfolio Management service. This differs from the regular PMS in the sense that you will be managing your own money and you will be buying and selling stocks in your de-mat account, however you will be doing so based on our guidance.

We will be guiding you what to buy, when to buy, how much to buy and similarly we will be guiding you when to sell, what to sell and how much to sell. You will be relieved of the decision making process and we will ensure that you buy only good stocks and make good returns on your portfolio.


Click the following link to download a sample copy of MMP - LINK


In case you have any queries/doubts regarding the above 3 options, call us 24X7 at 09818866676. Based on your profile and requirements, we will help you chose the best option.


For payment mode/options – LINK {You can make the payment & send an email to Info@hbjcapital.com with payment & package/offer details or Call 09886736791}

- TEAM MPS

BARGAIN STOCK PACKAGE

Dear Investors,

We are pleased to inform you that our unique Bargain Stock Package is now available at a deep discount and the annual subscription charges are now Rs.5000/= instead of Rs.10,000/=

Value investing is an investment paradigm that derives from the ideas on investment and speculation that Ben Graham & David Dodd began teaching at Columbia Business School in 1928 and subsequently developed in their 1934 text Security Analysis. Although value investing has taken many forms since its inception, it generally involves buying securities whose shares appear underpriced by some form(s) of fundamental analysis. As examples, such securities may be stock in public companies that trade at discounts to book value or tangible book value, have high dividend yields, have low price-to-earnings multiples or have low price-to-book ratios.



High-profile proponents of value investing, including Berkshire Hathaway chairman Warren Buffett, have argued that the essence of value investing is buying stocks at less than their intrinsic value. The discount of the market price to the intrinsic value is what Benjamin Graham called the "margin of safety". The intrinsic value is the discounted value of all future distributions!

At "Indian Value Investors" (IVI) unit of HBJ Capital our focus has been on "finding an outstanding company at a sensible price" rather than generic companies at a bargain price.



“Bargain Stocks Package” – Long & Short term Offerings….

1. [Long term recommendation]: 12 issues of “BARGAIN STOCK PICK" per year - Long term wealth creating Stock with potential return of 200-300% in 1-3 years holding period. A class of stocks that are widely overlooked by Street but can yield massive returns. These stocks will have limited downside.

2. [Short term recommendation]: 12 issues of “DEFINITE INCOME STOCK PICK" per year - Short term stocks with potential return of 25-50% in 1-3 months holding period. You can invest in these stocks for a descent regular income.

Delivery Model for various offerings….

1. A Dispatch date will be announced in advance during 1st week of every month.

2. On the Dispatch date, a detailed mail carrying the report is mailed to all the subscribers.

3. An SMS alert is sent informing the stock selected.

The annual subscription charge of “Bargain Stocks Package” from IVI is Rs 5,000/- or $110.



Different Payment Options....

Online Payment Gateway: http://hbjcapital.in/payment.html

Kishor S. Khot, [Kishor@hbjcapital.com], Equity Strategist, HBJ Capital Services Pvt Ltd

Wishing you all a terrific 2011

May this New Year gift you with tons of cash, happiness and joy. May Providence make all your dreams come true in 2011 and may Providence give you the courage to play the markets with grit and determination.

Kishor S. Khot, [Kishor@hbjcapital.com], Equity Strategist, HBJ Capital Services Pvt Ltd