The Best Investing option for GOLD!

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                Human loves Gold, Especially Women and Govt. it’s one of the most liquid assets in the world, Gold has been one of the most favorite investments by Indians from centuries, we are also in top 10 Countries holding Gold Reserves.

              As the Interest rates have seen the south side in Indian Markets, retail investors have found Gold to be one of the safest and easiest investment, that has a probability to beat the Interest Returns, with Safety and Liquidity in the Game, also Gold has always seen as a sense of prosperity and an emotional connect in Indian Families,

Interest rate going down, Gold Going up, and the economy in a tough time has yielded a great demand in Gold.

              This day as gold has started inching up in the extreme North Direction and doing it all-time high, a lot of investors do call us asking 2 questions:

  1. Is this the right price to enter in Gold?
  2. Which is the best instrument to invest in Gold?

Let us understand what GOLD has done for us over past Decade

Source: YEARLY GOLD CHART OF MCX

Gold has generated 2.70 time return in last 10 years, but the catch here is that from 2012 to 2018, good 6 years gold was at the same price, and there was nearly 0 Return (off course nobody would have hold equities if there is no return in 6 years, but gold we hold, right?)

We have many Gold investment options like:

  1. Buying Physical Gold – Jewelry
  2. Buy GOLD ETF/MF
  3. Buy Gold in MCX
  4. Buy Gold Sovereign Bonds
  5. Surprise!

Our whole approach when investing in other options than buying physical gold is where we can find security and more returns and that’s what is more imp.

Source: SPIDER ACE Data

As you see above 10 years data for Gold which is in White which has generated 273% returns, but the companies who do the business of Gold has given much more superior returns than Gold, Titan being one of the Undisputed brands in Gold business  PAN India with the highest market share has given 921%, outperforming 3.30 times vs Gold and  Muthoot holding the highest market of Gold Loan (which has practically near to 0 NPA Possibility) has generated 740% returns, outperforming by 2.70 times vs Gold.

Now why this has happened?

The simple reason is that Business Gets Valuation and that is the reason the Organized Leaders in the Gold business always will fetch higher valuations as the business of gold is bigger than the Business of Investing in Gold and they will, therefore, do much better in comparison to Investing in Gold.

So Next time when you or your family Questions should we invest in Gold? You know where you should contact

Disclaimer: •Investments in securities are subject to market risk and there is no assurance Or guarantee of the objectives of the Portfolio being achieved or safety of corpus. Past performance does not guarantee future performance. Investors must keep in mind that the mentioned statements/presentation cannot disclose all the risks and characteristics. Investors are requested to read and understand the investment strategy, and take into consideration all the risk factors including them financial condition, suitability to risk return profile, & the like and take professional advice before investing. Opinions expressed are our current opinions as of the date appearing on this material only.

Our Client, PMS, may hold the followed discussed securities, this blog is not an stock investment advise this is just for educational Purpose for more details visit http://www.turtlewealth.in

1,00,000% Returns!

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Amazon Just Completed its 23 Years of listing, undoubtedly one of the best wealth creation stock by the most popular company, used by millions of population has created  1000 Times returns, and that too in a country like USA.

After reading this I am sure you would be gazing, wish I would have invested in this stock and would have turned my few dollars into millions, sure this is good in dreams, but would it be possible if you were the lucky early investor in amazon?

Most Probable answer is NO, there are certain reasons for it and the main is volatility:

1. The stock fell 15% over three days 107 times.

2. It has lost 6% in a single day 199 times

3. It fell 95% from December 1999 to October 2001. (It took 10 years for amazon to come back to its All-time High which was made in 2000)

Maximum Draw down of Amazon vs Dowjones

In Investing  “Magic is not when you buy or when you sell, the magic is in PIVOT”

RoMe.

Now looking at this data, ask yourself the following questions:

  1. Would you be able to handle this type of volatility in the stock?

2. Would you be able to hold the idea about the company is great but seeing the volatility in price?

3. If you would have Exited the stock, but still have the guts to buy when it was reversing up in Price, Profits or People?

As it is not easy to build a company like amazon, the same its not easy to hold on shares which creates immense wealth but suffers volatility, because of nature of business!

In India we have certain 1000 times wealth creator stocks like:

  • Infosys, Relaxo Footwear, Balkrishna Industry, Bajaj Finance, etc (not an investment advise)

So the whole point is investing is not easy, its not linear, it is going to be a rough journey, if you have a process, you have a probability to create wealth or else you need to depend on the luck factor!

Let us assume from 100 IPO Investors, how many would have holding amazon till today, do reply in the comment section!

Happy Investing!

RoMe!

For Disclaimer and Product details visit: http://www.turtlewealth.in

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Mother of Black Swan!

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In the Financial Markets we are much more aware with the term called “Black Swan” – an unpredictable or unforeseen event, typically one with extreme consequences, I have read almost all the Black Swans that has happened from the Tulipomania from 1600 till date, but what happened recently it has never happened in the History of Financial Markets.

The market does excesses, and all the previous Black Swan was the result of Excess Greed, Leverage and lack of Discipline, but this one is just different and something which was never in control.

So we all have this famous saying how much a stock or commodity can go down? 0 that’s it right? So many of the Retail investors buy penny stock as they think the worst it can do is to 0, nothing more than that, same in Options maximum premium can erode to 0, if 2 months back If i would have told you that a Commodity or a stock that can go below 0, you would have thought I am coming from a different planet all to gather right?

Crude Future Price closes as low as 1 Rs. on 20-04-2020
But that happened and I believe it was the “Mother of Black Swan”, due to privacy issue I am not naming the Client and the real quantity, but this has happened in real, I am sure we will learn the biggest lesson of our life from this blog!

Lets us name the Client  Mr Jain, he bought 100 Contracts of Crude oil Futures at an average price of 1000 Rs. i.e. 10000 Crude (100*100) valued to 1 Cr. = Total Value of the Contract, as per our basic common sense the maximum loss of Mr. Jain would be 1 Cr. Only, but this time something happened where the whole Financial Industry was stunned, the exchange gave out the closing of the contract in Negative Value, which is unprecedented, so Mr Jain who had 1 Cr. Of Maximum approach had a loss of 1 Cr. + 2.8 Cr. (2884*10000) = 3.8 Cr., now no exchange nor any broker have a Risk Management of Negative Pricing, the broker would have maximum earned 1 Lac Rs. of Brokerage from the Trade that too Maximum, now it has ended up In a bad debt of 3 Cr., now the fight will go for years!

MCX Cricular for the Negative price of Crude

Most of the Investor/Trader bought Crude Futures on the logic of Catching the Falling knife, crude has decreased so much, and it may not go down more as it is the essential commodity of the world, as it will be a good short term trade for few bucks, also it is lock down so can make few quick money by trading on tho this, as the axiom says “Commodity prices cant go to Zero”, there are various reasons why Crude went in negative territory, but the fact is that buyer lost money that too below the gravity and that sums up for all!

  1. Never say Never, anything and anything is possible in the Financial World!
  2. Risk Management should be the most important virtue in the place of Return Management.
  3. Never hold stock on a  view that it is near to zero, what the maximum loss?
  4. Ask for the Maximum Risk In your portfolio vs. What’re the maximum Returns?
  5. Don’t catch the falling knife, most of the time you will be injured, this time some one was killed!

Regards,

RoMe.

Disclaimer: This is just for Education and Knowledge purpose, for knowing more please visit http://www.turtlewealth.in

When will this END?

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In 1994 Surat was effected by Plague (which has much higher mortality ratio comparing to corona), nearly 60% of the population left surat, the total death was 52 which was much lesser than the fear, at that time there were no WhatsApp, email, social media, etc. still, humans have proved over a period that “We worry more of Diesease than the Death”, we do everything in excess when we like a certain business we give excess valuation to the stock like the business will never see a downturn for 1- 2 decade same way when we see panic we sell our stocks like the business will end up tomorrow, we have seen both of this emotion in last 30 days.

It is said, you are known in markets by the Seller Circuits and the number of crises you have witnessed & surpassed, this is my 5th Seller Circuit and believe me, all came without informing, all 5 were sharp, unprecedented and the most common was when you see in hindsight all were a great opportunity of learning not to do the same mistake which was done in last seller circuit, this time it took 12 years to give us that hit, every time the reasons were different but the human behavior was the same, there was one common factor and that was Big IPO, this time it came out from nowhere, and till today no one knows when it will end, but from my learning of last 1.5 decade this is are the basic factors that I am extremely confident about:

  1. When a Stock breaks more than 42% from its highest peak, 92% of the time it will never come back to its Peak! (Turtle Research)
  2. The biggest rally will come when mass starts to sell and get out rather than buying more (still I am getting calls what to buy)
  3. This is the 1st time from 2014 after the market crossed 2008 highs of 6400 NIFTY it has entered in bear zone.
  4. If the stock breaks the lower circuit lows (i.e. on 13th March) and closes below it with its 200 DMA is negative are seriously bearish stocks.
  5. The stocks which will do a new ATH in the current scenario will be “Dabbang”!
  6. A great business will recover faster than the mediocre businesses 
  7. In this type of market, you come to know how strong is your EQ (Emotional Quotient) and your IQ, most of the time EQ takes over IQ and mass exits at the bottom.
  8. Where markets will go no one knows, so don’t try to predict markets, and ask pundits about what will happen next, rather just focus on the learning and executing.
  9. Buying 20% now and in parts, parts are one of the most mediocre strategies, if you are confident you buy, if you aren’t don’t, there is no HALF Pregnancy!
  10. It’s the 1st time in History that NIFTY has fallen 16 days consecutively without closing higher than the previous day.
  11. The strength of the NIFTY is at the lowest level from its Inception (1990).
Source: Spider Software – NIFTY Daily chart from inception!

God Bless us all!

Regards

RoMe!

Disclaimer: This blog is only for Knowledge and education purpose, all stories are true and not fictional, should not be taken as a recommendation, please consult your Fund Manager for the same, the author is a Fund Manager of SEBI Registered Portfolio Management Services for more details http://www.turtlewealth.in

Wimbledon’s Risk Management System.

Wimbledon undoubtedly one of the most amazing game to watch for, it is the oldest tennis tournament in the world and the most prestigious, though I have a shallow interest in Tennis its on my bucket list, recently I was going through some of the articles and where my eyes popped up on this story, and I thought it is something I should share with my readers. (FYI (not a investment advise) the towels of Wimbledon is made by our Indian Gujarat Company)

Wimbledon was going to start from June 29 this year, and its one of the game where you need a lot of money to watch, it tickets are from 1000 to 20000 pounds ( 95000 to 19 lac rs.) (depending on the match) and they make a revenue of 250 Million$, but it’s the 1st time after world war II that Wimbledon tournament has called off due to the virus.

But whats Interesting in this? Wimbledon risk and finance subcommittee insisted on a pandemic clause nearly 20 years ago (that’s crazy isn’t it?) so from last 17 years. Wimbledon used to buy nearly 2 Million $ worth Pandemic insurance for last 17 years and paid nearly 34 Million$ as a premium where the possibility of Pandemic in the world was near to 0, still it continued, this time because of the Insurance they took it will receive a whopping claim of 141 Million$ (1 Million $ = 7.5 Cr. Rs.) estimated to cover its losses they have to suffer because of cancellation of tournament, Whooping isn’t it?

But let’s understand the thought process behind it, a committee to come to a point to take insurance before 20 years for a PANDEMIC which is the rarest to happen and for 17 years continuing to pay a big premium of 2 Million$ equals to 34 Million$ which has no return on it, what a risk management system it would have and the perseverance to follow it, for nearly 2 Decades, is just commendable, today we all would be feeling wow 141 Million $, its so great, but it has also taken the pain of paying 34 Million $ in premium for last 17 years, where the whole world would have thought they are doing the stupid thing and wasting 2 Million $ a year and making the insurance company richer.

When it comes to our Wealth Management Division, and we consult our client for the Security Basket – Most of them require High Life insurance as they are the single bread earner or you need a pump in your health insurance, may be you need a better business insurance etc. we have got feedback from intelligent people that it’s a waste of money and nothing happens, also when we research a company we check do they have adequate insurance for something uneven happens to the factory or to the facility, we have also seen families to stop Health Insurance just because they have paid premium for 10 years and never used the insurance service not only individuals but most of the companies in India don’t have adequate Risk Management Systems because we never think and sit on the uneven risk that we can get in our life, business or profession, we just go with the flow, trust on god and our luck, but it’s a serious need of the hour for all of us to sit and think what are the risk ahead in life, business, health etc and to plan like Wimbledon team, maybe for certain years we have to pay that heavy premium that can be painful, but something irrational like this happens it may save us from the biggest financial blunder.

The same happens to us at Turtle Wealth after this fall in stock markets and seeing great companies which were great just 15 days back fall 40 – 50% in just a fortnight gave us a serious thought about the risk management system we should create in our portfolio, as it is told “we make the smartest decisions in bad times, and stupid moves in good times”, we created so superior risk management system for our PMS that PMS in adverse situation can’t go below 18% of the invested amount, that would be one of the biggest USP of our fund.

Wimbledon Pandemic insurance is one of the best stories we need to ask our-self that are we managing the unseen risk in our life or not?

Regards

RoMe.

The new Era of Wealth Creation!

Every bear markets give an immense opportunity for a new era of Wealth Creation in Financial Markets, there will be new sectors, new entrepreneurs, new stocks which will create immense wealth, I heard a veteran of stock markets, and he fairly told that every decade comes with 10 stocks which grow more than 10x and you have to find 2 of them, but the fact here is that the stocks which were great wealth creators in last bull markets hardly some will be in the new markets, the stocks which did great in Harshad Mehtas era 1990’s didn’t do great in Y2k IT Bubble, the stock which did great in IT bubble were not immense wealth creator in Housing Bubble time of 2008, and the stocks which did great in 2008 were not great in last bull market like I still remember in 2008 when everything was going for a toss, stocks like HUL, PNG, Nestle, etc were showing up strength and the defensive stocks like this created 10x wealth in last 10 years, that’s just majestic!

In 2017 the commodity and the chemical stocks like RAIN, HEG, Gujarat Alkali did 5 to 10x upside, eventually came at the same price it started, I still remember we moved out of Rain at 300 and shifted our investments to Nestle, that time it was judged as a stupid decision but today one of the most brilliant moves of History of Turtle Wealth, so market may again inch up but the millionaire dollar question is will the stock selected will be a wealth creator or a profit creator, are you buying for 10x or 10%?

In this fall there are 4 types of companies:

  1. Great Company, TINA category (There is no alternative) near to 0 debt, superior leadership in markets this type of stocks has corrected average 20-25%
  2. Good Companies – decent companies doing fairly we which have corrected 35-40%
  3. Mediocre Companies – 50-60%
  4. Bad Companies – 70-80%

Now most of the human mindset will go forward for buying the 3rd and 4th type of companies to make the fast chunk, and nothing bad in that, but 90% of probability is that they will never be a wealth creator, because it will take them to average 700-800% to come back to its peak, which is merely impossible, I still remember in 2009-10 people were still betting on real estate, infra, power, which never created wealth in last decade, stocks like Bajaj Finance, Speciality Chemical, FMCG, etc were not wealth creators in 2008 rally, as we summarize that the wealth will be created in 2 categories:

  1. The 1st type of companies – Great Companies, these companies have shown character in the current markets.
  2. The new companies which are showing promises, by their Price and Profits showing stable growth and discounted by the mass, e.g. Stock like Bharat rasayan went 80x in 5 years.

So this article came to my mind is when a friend of mine called me to ask which stock I should buy, and my recommendation was some of TINA Companie (the 1st type of companies), but he was like rohan give some great companies, and I was like Jay this are great companies, as he told no give me companies like Bandhan Bank, or Tata Motors, that time I understood that he is not here for 10x but 10% and as usual, my answer to him was, I am not great at 10% profit trades I am great at 10x wealth calls.

So on Monday if you are going to buy anything think 10times before where your money is going to be allocated, in my latest podcast I had summarized the 6 biggest falls of financial history, and the most common thing is after every fall there has been an unbelievable recovery in the world, as such humans are meant to grow and grow sustainably, but the players will change, so kapil dev can be the best player but will you pick him or Virat Kohli in your current team is what we need to answer to ourself and take the call.

If you like this blog, do share, Subscribe and forward to you near and dear ones.

Regards

RoMe!

Disclaimer: This blog is only for Knowledge and education purpose, all stories are true and not fictional, should not be taken as a recommendation, please consult your Fund Manager for the same, the author is a Fund Manager of SEBI Registered Portfolio Management Services, for more details kindly visit www.turtlewealth.in

IS#2: “Promoter with Pistol”

Back in 2011, I used to be a Research Head of a Regional broking House, we were a small team of 5 (from them we 3 still work together at turtle), over the period I have learned to be extremely honest and to the point rather than to be Diplomatic, so we used to research on Stocks, Commodity, Derivative, IPO’s, etc, IPO has been always one of the most attractive parts for a retail investor back that time and still today, we made research report on most of the IPO’s and people took our recommendation seriously.

In January 2011, came an IPO which was a local company IPO where I knew the person and the company (won’t name because of compliance reasons), as our normal routine team we made a research report on it, the company had the worst numbers I can ever witness and the worst was Debt to Equity Ratio for more than 5:1, and no way on the earth this stock could create wealth for my investors, as simple the rating went to “NEGATIVE” and the report was made with utter honesty and no bias of knowing that company, after the research was completed our team member Jigna Patel (who was part of Turtle core Team, now shifted to USA) asked, should she circulate it? and I without a single thought told YES, we flashed the Email, SMS, and Recommendation to nearly Thousands of investors and hundreds of trading terminals.

After 5 min, I got a call from my boss, what you have done? why I have done it, and he was sounding extremely worried and not happy, and after some minutes I was told that the promoter of the company may come to shoot me with a  pistol, and I was like man, you must be kidding! But actually, he was coming, there was a small meet which happened and I was told to be underground, I was underground for 2 days.

After 2 days, things got settled, and the IPO got listed, the stock went doubled and most of the investors on the street thought I was wrong on my research but the stock got listed with erasing almost all profits!

This image has an empty alt attribute; its file name is chart.png
Source: Spider Software (Monthly Chart)
source: screener.in

Moral of the Story:

As a Fund Manager or advisor, you have to be utterly honest with whats the fact than the emotions you carry while researching a stock

When everyone says it is good, but when the fact says it’s bad, it’s bad!

A bad company can give you profits, but a great company only can make you Wealthy!

Debt is something that cannot be ignored, it’s something to be worried about!

Disclaimer: This blog is only for Knowledge and education purpose, all stories are true and not fictional, should not be taken as a recommendation, please consult your Fund Manager for the same, the author is a Fund Manager of SEBI Registered Portfolio Management Services.

My Dad’s Story!

Stories have been one of the most interesting attributes of a human life, we born & die with nothing but stories, being a father of 2 daughters & Entrepreneur storytelling Is the one attribute I have learnt, we all are fantasized by the stories happening around in Investing World, and I have tried to pile the stories which are close to my heart, which are related to Finance, Investing, we all can learn from and make the most of it.

“Charity begins from home” as let me take the 1st story which is the closest to my heart and it’s my Dad’s Story, I always heard stories of people who got Infosys, Reliance, Wipro shares from the cupboard, where the father or forefathers invested and turned overnight Millionaires, I in my wildest dream never expected this to happen with me, my dad has been one of the most conservative investors I have ever witnessed, he doesn’t like to lose a penny and so he had always preferred a BANK FD (that too PSU’s only) over any investments, his simple philosophy is to live a modest life, and have passive income higher than the expenses he needs, he still doesn’t use an AC or a Car.

In 1992 he had to take 1000 Rs. from an acquisitive, but that person gave him 100 Shares of Aarti Organics (now Aarti Industries), which he kept aside, as in the 90’s to track stock price was not easy, he kept for years just as a dead investments where he was getting small dividends and he was all happy about, that was the only Shares he had old over the years, and he never told anyone about, as because he didn’t even expect any returns out of it.

Original Physical Share

In 2010 when we had some family gathering and my dad asked me whats the price of Aarti Organics? And I was like why? he told the whole story, I saw the price was 20 rs. and I was like its worth 2000 Rs. so we both didn’t take any interest in it and just bypassed the conversation, but in 2016 he called me again to ask that he has not received the dividend for this year, so what he should do, I told one of my team members to check in the case, and we found this:

On date 100 shares today has turned to 2400 shares, and the price is 1000 rs. i.e. 24 lac. With nearly 30 to 40k Dividend i.e. an average of 100% returns only by dividend YOY (Year on Year) when I told that to my dad, he never believed it, but finally, the fact was the fact, so the CAGR Return comes to 32% in last 28 years, not including DIVIDEND Income, Whooooooooping right??

 

Source: Spider (Yearly BSE chart)

This are some interesting fact of Aarti Industries (this chart is Split, Bonus, Dividend adjusted Chart):

  • For the 1st 10 years, the price was the same, so if he would have counted on every year’s interests he would have sold it for sure, as Bank FD was giving above 12% return year on year.
  • Till 2013 i.e. good 20 Years there were no major returns in the stock, the major return came in last 7 years from 40 to 1000, the rule of compounding played a very important part over here.
  • In these 28 years, everything happened, in the world, scams, government change, war, etc. but eventually the if the company did well it had to appreciate.

What’s the moral of the story?

  • There are only 2 people who make money in markets “Duffer & Disciplined”, my dad could be both, but I believe this was a piece of sheer luck that outplayed him.
  • He could have invested in junk stock and today it would be just papers without value.
  • One should never invest like what my dad did, betting of luck vs hard work and intellect.
  • There are many companies which get to 0 and very few like aarti which turns to a hero.

So what’s the status right now?

              We have still in physical share, will we exit if the company stops growing? YES, we will, as the focus is not to fall in Love with the Company!

Disclaimer: This blog is only for Knowledge and education purpose, all stories are true and not fictional, should not be taken as a recommendation, please consult your Fund Manager for the same, the author is a Fund Manager of SEBI Registered Portfolio Management Services.