Slow Compounding

BSE small cap 🔵 vs Nifty 50 🟡 What do you observe here? Credit: Solidarity

Marcellus' New Entries Rainbow Hospital (Little Champs) Trent (CCP)

GMM Pfuadler Earning has fired, price remained at the same level. Results: PE has come at the to 10 years average. Recent rally in small cap has pushed the stock price upwards. Concall was interesting. Company will reach their revenue and profit guidance before time. Now, after long sleep, stock looks attractive once again. Disclaimer: No position.

Kotak Securities' caution on mid and small cap segments.

Asian Paints I grouped with colleagues on Sunday and finally ended up in the theatre to watch the Jawan movie. 😯 I don't know if anyone has watched the movie in this group. I remember seeing the ad of Asian Paints repeatedly. It was not something played during the ad break. In the movie scenes, like the road banner, the magazine kept on tables, etc., Asian Paints were all over the place!

Shooting the stars Even though the profit of HDFC bank has been as per expectation, the share price has remained stagnant. It sometimes gives an opportunity to load up and make returns with minimum risk. This type of statement is very common and many are talking about it. I found something interesting in the small cap mutual fund category. As we have seen, the small cap universe is on uptake for the last couple of months. Obviously, the downturn will come some day. And it will be brutal than time because the small cap index will go down by 40-60%. To make the market beating return in this space, you have to do two things: 1. Time the market 2. Play safely with mutual funds. As the first point is impossible to get right, the second point comes to the rescue. You will wonder why. Continue reading please. In smallcap index level, all are small cap companies. However, in a small cap mutual fund, it's not all small cap companies. 20-30% can be large cap companies. Example: Nippon India small cap (30%), SBI small cap (25%), Axis small cap (30%). When the selling happens, due to liquidity issues, fund managers can't sell large volumes of small cap companies. In this bad time, 20-30% large cap companies give oxygen to the fund managers because selling in high volumes for these companies is no tough job. If you are reading attentively, you may get this question in your mind. Well, because of this 20-30% of large companies in small cap companies, the return will not lag the index!? Answer is No. Because you can play safe and can play value bets in large cap companies inside your small cap mutual fund portfolio. For example, HDFC Bank appears as top holding in Quant Smallcap fund and Nippon India small cap fund. Fund managers are tactfully increasing the oxygen in the portfolio while maintaining the value bets. SBI small cap fund is playing the same game in a slightly different route. Guess the largest holding of SBI small cap fund. It's Nifty 50. Allocation 6.5%. On the other hand, the small cap offering from Kotak, Axis or ICICI directly do not own the large position in large cap companies inside their portfolio, they are loaded in the midcap segment. (Which is more risky than the large cap). Obviously, when the drawdown will happen, it won't take hard time to figure out why one will sink deep. Important lesson: When everyone is measuring upside, those who tackle the downside better will stand taller.

Promoters Buying Greenpanel industries Lincoln Pharma Max India NRB Industrial Bearing If you remember, the name of Lincoln Pharma appears in the last post also.

Fundamentals of Smallcap If someone doesn't believe in fundamentals, PE ratio can help where we roughly stand in the cycle. A picture paints a thousand words..

Small Cap 100 Index We have had a steep runup since March with the 6th continuous month of serious gains. The trigger that caused this runup was probably: 1. Cheap Russian crude 2. Strong Rupee 3. Easing inflation and 4. Relatively benign macro. Some of it at least might be changing just as we near crucial resistance in the smallcap indices - usd-inr breaching 83 (not a big problem of a runaway decline since we have good reserves and can defend), crude breaching 90 and russia crude imports declining in Aug, as Russia has cut production. So most of what to me were good positives when the market seemed to be bottoming last week of March are now reversing and that too right post a frenzied runup in everything. Credit: Bull therapy, valuepickr

CDSL - Good Report

Promoters Selling 1. Tatva chintan 2. Ultramarine pigment 3. Usha Martin

Promoters Buying 1. Minda Corporation 2. Lincoln Pharma 3. Adani Power

Though making money appears to be easy in the stock market, there are numerous ways one can go wrong. A constant reminder we should always remember.

Long Journey Ends! Uday Kotak has resigned as CEO and MD of Kotak Mahindra Bank. Look for a New CEO begins.