Sunday, January 17, 2010

Stocks and Women

Sorry friends that I am unable to write regularly these days, but will continue to post articles whenever I get time. Some of my recent recommendations that came in August 2009 (http://www.stockanalysisonline.com/2009/08/market-watch-opinion-piece.html)
are doing pretty well and I am reasonably sure others stocks mentioned in that post will also follow suit if you stick with them for another 3-5 years. Parekh Aluminex, Genesys International Corporation and Madras cement from that list are doing pretty good and in fact Genesys has given 175% return from the date of posting. In the recent days, not so much has happened in the market front but whenever something of significance happens (in terms of investment) I will post my views for sure.

I always wondered why women’s participation in stock markets is way lesser when compared to other industries and I think stocks and women, both have too much in common, so it seems Men are supposed to chase them down. This article is written in a lighter vein and I hope whoever reads it enjoys the comparison and have fun. But I assume that this article might require some very good understanding from the reader as well as things are not very explicit and there are endless possibilities to correlate every point to many things.

What are common between them?

Both are “unpredictable”. Too many people are chasing too few items and you never know whether you will come out successful.

Day to day “Fluctuations” are very common even though fluctuation in women does not happen tick by tick as in the case of stocks, but when that happens it could be more than what the stocks experience.

Good ones and Bad ones are there for the taking in both the cases. Your destiny leads you which one you end up picking. Pick the wrong one and you are done!

Men love both. Probably that’s the reason, “Value” increases for both and sometimes it is sudden as well particularly when the “Earnings” go up.

“Hidden Gems” are found in both and you need to do some research to identify. People who are great in spotting them often buy the ones whose “intrinsic value” and “Margin of Safety” is higher.


Some are “Very Expensive” and some are “Less Expensive” in both the cases. Buy the expensive one and more often than not your return is subnormal. But buying the “Less Expensive” one also does not guarantee you the supernormal profit. The answer is it depends, may be on your fate.

Note: I did not post the pictures to show you any symbolic depiction. BELIEVE ME! Now you definitely know why they are so many companies on the street, so do the stocks!
Both are “very risky” and “extremely volatile”. If you do not play your game well, you will end up losing everything. Both have the capability to erase your entire wealth. You will never get back what you have lost, but can be substituted sometimes.

“Board room” fighting’s are very common in both and often times the Chairman is forced to accept the decision of members. Otherwise board room coup is on the cards.

“Splits” are very common in both and 1:1 and 1:2 are more common than 1:5.

“Bonus” issues can happen depending on the timings.

It will be “Heart Breaking” when you lose in both.

You can definitely experience a “Crazy Peak” and “Unnerving Fall” in both the cases. Peak is always followed by a fall and the cycle happens all the time as long as you are dealing with them. Sometimes all these happen with reason and sometimes not.

If you are in search of them, you need to consider on a “Consolidated” basis and not on “Standalone” basis in both the cases. Because there could be some “Hidden Risk” or
“Hidden Value” on a consolidated basis. If it is a "Hidden Risk" then forget about the comeback.

Both have “Maturity” period and you need to wait for it.

Men become attached to both can’t get rid of it even when your life becomes miserable.

What are not so common?

You can have many stocks legally and unfortunately you can’t have many women legally. “Illegal Holdings” are fraught with danger.

Stocks are highly regulated (can be regulated) and traded on the exchange and you don’t want to do the same for Women. If you do that, Ambani’s, ND Tiwari, Mallaya and Tiger Woods will win and you lose! You don’t stand a chance. If you think you can get at least the bad one, there comes Lakshmi Mittal, who has the habit of taking the bad ones and converting them in to great asset.

So many things are very common between them and you might think great investors and stock market kings can master women too and you can’t be more WRONG! Simply impossible to anyone. But the reverse could be true. If you have mastered women, then you might become successful in stocks.

How to handle?

Patience is the key in both the cases. You have to wait for a long time to reap the benefits and when that happens, the society might feel you have achieved something but you might not!

“Long Term Investment” works better in both the cases and they perform better overtime. So some sort of “Fundamental” analysis is very much needed.

“Short Term Investment” is more risky in both the cases and only very few people have mastered and that too not because of their brilliance. Some kind of “Technical Analysis” might help you to gain in a short term and definitely it will be temporary. The performance can’t be repeated.

Stay away from “Day Trading” as it has very serious consequences.
Hope you all enjoyed the fun comparison and if you are a women reader, you are welcome to post the comment like "Stocks and Men". It will be really interesting to see your perspective.
Kumaran Seenivasan.

8 comments:

Pradeep,  January 21, 2010 at 4:42 AM  

Hi Kumaran,

wish you a very good & profitable year -2010.

I came across your blog recently...wow interesting .


i'm an young fella in my early 20's
and a small investor.
i would like to get some advise from you on my holdings.

i have the following stocks:

GMR Infrastruture
NTPC
IDEA

I bought GMR & IDEA at quite higher levels in 2008 ( Rs.175 & Rs.129 respectively).

I have interest in GMR (believe in it's value unlocking in future) and NTPC

IDEA - i know this is going to be a market underperfomer for years due to pricing war in telecom.waiting to exit this counter.

i have interest in the following are the stocks now:

ICICI BANK
Airtel
REL Power (after reading your post added to my list)

i would like to have your suggestions on the following:

1. bharthi airtel - is this a good buy after indian telecom is flooded with telecom companies at current levels of (300-350)

2. what about GMR infrastructure ? do you think it will deliver ? but there is not much talk about this company now?

3. what is the optimum level to buy icici bank ? (i believe that value is in it's subsidairies)


Regards,
Pradeep

Arvind,  January 21, 2010 at 11:43 PM  

So you're saying that handling one well qualifies for handling the other (no pun intended)?? Looks like I've got bright prospects in the stock market then!

Kumaran January 22, 2010 at 8:28 AM  

Arvind,

It could be a necessary condition but not a sufficient condition. The problem is, to handle the one, which you are good at, men does not need to have brain(sometimes should not have) but to handle the other, men definitely need some. Anyways, try and let me know the result.

-Kumaran.

Kumaran January 23, 2010 at 11:06 AM  

Pradeep,

In the infrastructure space, the valuation has already gone up and even otherwise I am not a big fan of GMR. I like other good players like IVRCL, Jaiprakash Associates, Supreme Infrastructure or related cement companies because of their established revenue stream. In power, Yes. NTPC and Reliance are good stocks. Reliance might give good returns in the long term. You can also add Adani Power which is going to be one of the largest power producers in the country.Among telecom stocks, Bharti is good at current levels but growth is muted in telecom stocks going forward.Among banks, my best bets are Axis Bank, Yes Bank, Bank of Baroda, Bank of India and Federal Bank.

Hope this Helps.

-Kumaran.

Shabu's January 26, 2010 at 7:22 PM  

Dear Kumaran,

Nice read.. and interesting comment session(Arvind). I appreciate your sense of humor to unearth the similarities.. two of the most mysterious topics in the globe.

Yes.. Day trading have very serious consequences, what in case of strict stoplose? :-)

karuppiah January 30, 2010 at 12:52 PM  

Can you please compare Mangalam Cements with madras cements? which one looks better?

Kumaran January 31, 2010 at 10:16 AM  

Karuppiah,

Mangalam looks very good in terms of valuation. Brand presence and annual revenue is better with Madras Cements. But I think, both will give decent returns. In terms of valuation, I sure think Mangalam Cement looks better than Madras Cements.

-Kumaran.

Divya February 28, 2010 at 1:53 PM  

Good job sir !! Hats off to u for ur valuable contribution... impressed by ur personal reply for all the seekers.. I would be in the line in two months wen i start earning and invest in stocks....


Keep going!!!

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