December 2000: 30
December 2001: 30
December 2002: 25
December 2003: 120
December 2004: 100
December 2005: 170
December 2006: 190
December 2007:600

December 2008: 100
December 2009: 330
December 2010: 300
December 2011: 150
December 2012: 250
December 2013: 200
December 2014: 240
December 2015: 180
December 2016: 150

December 2017: 2200
December 2018: 3700
December 2019:

By checking above movement anyone can see how Cyclicals stock moves.
First cycle was from 2000 to 2007 where top made @600
Then after it takes 10 years to cross its old top 600 made in 2007 and made high 4400 in 2018.

CONSIDERING this it could surpass its 2018 high in 2027, till now it will trade in range and can make bottom around 600 which is its 2007 high.

So if you have bought HEG at higher level then you have to wait at least 10 years to cross its high 4400 and it can come down from cmp also.


1:Inflating Sales and adding inflated sales As receivables

2:Buying own company stock continously from open market which attracts public
Then selling high because public only know after 3 months.
EXAMPLE :Fiberweb, Shiva global

3:Creating many subsidiary abroad and giving advances and loans which is not audited by statutory auditor.

4:Inviting IPO with lots of advertising which comes always at high premium Then after diverting funds other than mentioned IPO activities.

5:Issuing bonus shares inspite of dividend
Even if there is debt burden on balancesheet, and equity Diluted.

6:Paying dividend out of borrowed money

7:Paying auditor for other services more than their audit fee.

8:Creating continously fixed asset using right issue or borrowed money even if top line not improving.

EXAMPLE :Kesar petro

9:Having related party transaction more than 20% of total revenue.


1:SALES growth
14.81 cr Vs 11.08 cr, up by 33%

2:Gross margin
42.33 % vs 41.15%, minor improvement in GM

1.59 lakh Vs 0.03 lakh
company has raised debt to expand its existing capacity and business portfolio

4:Power and fuel cost
2.92 cr Vs 1.86 cr, 58% gone up

5:Profit before tax
1.41 cr Vs 1.71 cr, down by 17%

1.17 cr Vs 2.12 Cr, down by 44%
So sales volume is no problem despite Almunium market crash this year, ALUFLORIDE sales gone up means demand for Almunium Fluoride sustained.
Gross margin still good even if company taking raw material through outer areas which is expensive.

The main reason for less profit was 1.56 lakh plus 1.06 cr Total 1.075cr additional cost.
However this cost will convert into profit in next one or two years because additional capacity will reduce Total fixed cost, improving bottom line.
If we add 1.075 cr in current profit 1.17 cr
Then it would be 2.24 cr Vs 2.12 Cr means upside in net profit.
However after result people don’t consider such thing by going in depth.
So alufluoride long term prospects still stronger, and nothing to worry
One can add if it comes below 90
Or Avg

Important thing is promoters have increased stake through preferential share which price was 86 so investors buying around this level should not be worried


Whenever we think of investing, the first thought comes about MULTIBAGGER stock.
Everyone keep dreaming about it, but how many are successful, even still i am waiting for my Multibagger stock.

Now you will ask why am I saying so
The reason is i am following disciplined approach of investing, which I have shared many times over social media.

STOCK market is always irrational, its movement depends on many factors macro and micro.
But still without caring of market you can earn good return provided you follow a focused and disciplined approach of investing.

Your target can come early if market is in good shape, but take more time if there is too much pessimism.

Lets see through an example

Suppose you bought a stock in January after having good research @100 considering its valuation should be @130.

Means you are expecting 30% annual return.
If stock touches 130 within a few month then
You should book and exit.

However chances are that it can touch 150 also
Or 110 also
But you must be disciplined to book only 30% which is better than any other asset Investment.

you can’t find MULTIBAGGER but you can still BEAT the market.

Wants to know why nifty falling and what would be target for 2019 to 2020. Read

07 jan 2008: 6200
P/E: 28.25
EPS : 219
P/B : 6.54
Book value :948
Return on equity : 23.10%

02 March 2009:2620
P/E: 12.70
EPS : 206
P/B : 2.22
Book value :1180
Return on equity : 17.45 %

28 August 2018:11739
P/E: 28.66
EPS : 409
P/B : 3.82
Book value :3073
Return on equity : 13.30%

26 Oct 2018 :10030
P/E: 24.12
EPS : 416
P/B : 3.19
Book value :3144
Return on equity : 13.23%

In last 10 years nifty return on equity reduced from 23 to 13 and the reason is book value increased because nifty companies didn’t maintain dividend payout as was in 2008.
So book value increased 3 times but earnings per share didn’t increase with same rate.
OVERALL nifty should trade around its return on equity between 18 to 20 P/E till March 2019.
Nifty can post eps around 480 with 13% growth rate and then it trading range would be 9000 to 9600.
Since stock market discount future earnings so with same rate @15% EPS for FY 19-20 comes around 552,if nifty trade @20 price to earnings then its target comes around 11040.
CONCLUSION :Nifty can come till March 9000 to 9600 but again touch 11000 till March 2020.

Basic of stock market for novice investors


1:If a company paying high dividend with moderate growth then
STOCK wont be give much returns but trade in limited range

2:If a company paying less dividend, then it must grow to raise stock prices, if it obtain to achieve growth more than retention then stock price rise

3:If a company not paying any dividend, then it must obtain high growth otherwise stock fall too much.

4:If a company not paying any dividend but growing fast then it stock price rise more than growth.

5:If a company paying high dividend along with obtaining high growth its Multibagger


Suppose you have a LAND which you want to sell@15 lakh.
A person comes for purchasing and buy this land @15 lakh.
After some time you got a news that your land valuation going to rise because there is some government projects coming surrounding nearby your land.
But this news is hidden and that person who bought your land unaware.
YOU give him a proposal to sell that land back @18 lakh.
He is happily ready to sell you because he gets 3 lakh profit.
YOU bought your land back @18 lakh
Since only you know the actual valuation of your land which is going to rise, you bought it back.

This is called BUY BACK when promoters think that their share is undervalued, having sufficient cash they BUYBACK.

In the above picture you can see an apple
Its single piece and only one person can eat.
Now we want it to distribute between two people so we cut it in 2 pieces.
Now each one can get easily half – half apple.
Now problem occurred there are 4 people and an apple cut in two pieces.
So we cut it again and make it into 4 pieces.
Now single apple has been cut and distributed between 4 people, each one getting one piece.
Apple valuation doesn’t change even if we cut it into 4 pieces.
But what changes is volume
Think apple as a STOCK
and Distribution as STOCK SPLIT
The whole process is called STOCK SPLIT WHICH DOESN’T NOT CHANGE UNDERLYING VALUE But only create liquidity.

Price to earnings concept in simple words

Suppose you are a business man and bought a plot in your city Costing 20 lakh to make an house for rental income which incurs additional 15 lakh.
So total cost of investment 20+15=35 lakh
Now you get 20k/month as rental income
So in one year you get 20000*12=2,40,000
Discount it 5% for maintaining it
So you get 2,30,000 per year
So it would take around 15 years to recover your initial cost.
think it as a company ABC
Then it should trade at price to earnings 15
Suppose you are a salaried employee in a company & taken loan for housing, car and other luxury and paying monthly EMI.
Suddenly something bad happens and you loose your job and unable to get any job in near future because industry in which you work facing slowdown.
This will lead to financial distress and lead to insolvency.
Put a debt laden company by replacing yourself.
Thats why first investment rule
Check debt to equity ratio first

What drives stock market

First situation :
You have bought APPLE ๐Ÿ @80/kg
Suddenly news came that Apple infected by some worms
Apple price drop upto 50
But did you buy overvalued apple?

Second situation : You bought APPLE ๐Ÿ @80/kg and suddenly news came that there is shortage of APPLE this year due to some factors

APPLE prices soared upto 110/ kg
Did you buy undervalued Apple

What caused rise and fall in apple price?

Demand and supply
Think the same works for stock market

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How can a business create a MOAT

I will not take your important time to make you understand what’s MOAT.
Just read a short story

Suppose I have a juice shop which runs during summer.
AROUND my shop there are many other juice shop because it’s low capital intensive and anyone can set up.
I sell 20/glass while my competitors selling @18/glass.
Now you ask why am I selling 20 per glass while my competitor @18 per glass.
Why people are paying additional 2 per glass

The reason is during summer the sun is too hot
And there is a large tree where my juice shop situated and the tree ownership belongs to me because it’s before my house.
This tree is too big and provides natural air and shade to people who come to drink juice during summer.
While my competitor shop on the roadside where
Neither any tree nor anything which can resist sunlight and give shade.
Thats why they are charging 18 per glass while I am charging 20/glass.

Thats why they are operating at less margins while I am operating at high margin.
Thats why they have low turnover even if product rate is low and i have high turnover with high margin.
The big tree is my MOAT and giving me an edge over my competitor and sustainable for long term.

Don’t fear even if Bear

The pain of seeing portfolio down by more than 20% is more than any pain felt physically.
And its very sad because our hard earned money involved in this.
But can we stop it going down?
I think no, the reason is, market works over supply and demand.
When demand more even poor stock start hitting UPPER CIRCUIT that’s called Bull market, but when supply more even quality stocks lacks buying, that’s called bear market which is going on.
So the next question when this ends
GENERALLY bear market always brings opportunity but unfortunately no one knows when this will come up.
BEAR market last 9 to 18 months.
The worst bear market in 1929 last after 3 years in America.
BEAR market always shorter than bull market but its gives pain too much even in short term,eroding all investors wealth.
So how to cope with
If you have money then tap the opportunity
If you dont have any money then just hold and let it pass.
If you feel tough to watch then better to don’t away from market for 2 or 3 month.
Because market could fall more, and so the stocks.
The fall in stock not because of changes in fundamental
Company is not going to close
Products not going to be outdated
The only reason is no one buying.
YOU can see just 5 volume traded and stock down by 5%,because there is no buyers.
BEAR market is part and parcel of investment, you should be always ready for it.
Nowadays you dont like study,
You don’t like motivational post
Since the outcome missing
You want the result.
Investment is not a one day game but its marathon never going to end.
If you want to win the emotions, let the market decide your judgement , not in short term but 100% in long term market will realize the value of quality.

2008 crash vs 2018 crash


2008 crash started from Oct 2007 and last in June 2009.

Basically 2008 crash was due to global factors unlike 2018 crash which is causing due to domestic factors.
29 sept 2008 stock market crash happened because Congress rejected bank bailout bill and which was considered recession in US economy

Collapse of Lehman brothers
Collapse of HOUSING sector
FII SELLING from emerging markets
FALL In ruppee
Reserve Bank of India decision to hike the cash reserve ratio and repo rate
Looser of 2008 crash
Jai corp
Jp associate
Gvk power
Mahanagar telecom
S kumar
Karturi global
Jm fin
Lanco infra
Gammon infra
Indiabull real estate
Reliance power
Nifty fall from 6200 to 2900 in 10 month almost 50%
Small cap index fall from 5200 to 1400 almost 70%
2008 bear market started from Oct 2007 and last in June 2009.



Imposition of long term capital gains tax
Mutual fund categorizion
Rising bond yields
Rising crude prices
Depreciation ruppee
PNB banking fraud
Rising NPA
Corporate governance issues in many companies leading to auditor resignation
IL&FS scam
Burden of increased subsidy
Poltical uncertainty for next year general election
Strengthening Dollar
FII SELLING from emerging markets
BUBBLES in small cap and mid cap stock
small cap index fall from 9600 to 5900(40%)
Nifty fall from 11800 to 10300 (13%)
Big Looser
8k miles
Yes babk
MANPASAND beverage
PUNJAB national bank
Reliance capital
Motilal oswal
Indiabulls ventures
Reliance infra
Shriram transport finance
Bank of Baroda
Rama steel
Sumeet industry
Rain ind
EICHER motor
ADANI port
Tata motors
Indiabulls housing
2018 crash started from Jan 2018 and can last till March – April 2019.
However investors neither loose in 2008 if they had quality stocks nor loose in 2018.
2008 crash ended many stocks from infra and real estate, while 2018 crash ended many stocks from Nnfc and banking sector.

Five point to select an investment advisor

Source :PHILIPS fisher


Step 1. Divide all investment men who are being seriously considered
as a source of investment advice into two classes.

Those who are fundamentally more interested that a particular transaction to your long-range benefit than they are in the fee, commission, or profit they
will make from that transaction,

and those for whom making this fee,
right now, is the larger part of the motive behind the specific move they are proposing.

ELIMINATE at once anyone who does not clearly
Step 2. Ask any prospective financial adviser about his basic investment
philosophy, that is, what he is going to try to do for you and how he proposes to go about it.
Eliminate anyone whose long-range
objectives are different from your own.

Step 3. Ask for specific details of how you are considering the company for investments.

Find out what he is doing to keep in touch with what is going on inside
the companies whose stocks he recommends you to buy, not just now,
but after you have bought them,

and while you are holding them. See
how carefully he watch the management factor rather than depend largely upon published financial statements after such
statements (which are results, not causes) are available to the entire
financial community.

Remember it is knowing important facts before they are known to the financial community as a whole that is the
greatest source of important profits or the avoidance of important loss.

Never forget that a brilliant investment mind acting upon meager and
inadequate knowledge will produce results far inferior to an ordinary
but reasonably competent investment man who has full knowledge of
the significant facts about a company at a time when most others do not.

Step 4. If you already own a group of securities, see whether a
prospective investment adviser has equally positive opinions about
whether you should sell or hold each of them.

No one can have access
to such an endless amount of real background data that he can be
an expert on all the stocks listed on the various exchanges or commonly
traded over the counter.
Therefore, when confronted with a
list of stocks not previously bought at his suggestion,
an HONEST INVESTMENT MAN frequently has a TOUGH PROBLEM . He can leave his NEW client in stocks which have a good reputation but about which he IS not adequately informed.

On the other hand, he can be frank with
his client, tell him that he can only be responsible for investments he
really knows and leave it up to the client whether he wants to switch
the stock about which neither of them has adequate knowledge (and
which may nevertheless be an excellent investment) into something
which may be no better but which the investment man is in a position
to watch intelligently.

Usually the investment man who is most FRANK about what he does not know is the one who has thorough knowledge
about something else.
The man who in the investment field pretends to know everything about everything is the one who can be quite dangerous.
Similarly, never expect an investment man to be qualified to pass an opinion on all possible common-stock purchases.

Step 5. Learn what you can of the record of any investment man
under consideration. Eliminate those whose performance appears to
have been poor in relation to the action of the general market for
the period under study.

In this connection, keep in mind that some of the most spectacularly successful common stock investments may take as long as several years before they commence to prove themselves
in the market.

Therefore ignore, one way or the other, any record of performance that is of less than three yearsโ€™ duration.

Also, do not ask a prospective candidate for handling your investments to give you
references in this connection unless you know him quite well.
It is inevitable that he will do better for some people than others.
It is only human nature that he will refer you to some for whom he has
done particularly well.

However, if you can find people whom he has served over the years, what they have to tell you may be extremely
Then, if the record is not good but otherwise you are impressed with both the man you are considering and the investment Man behind him, go into the matter a little further.

Sometimes an investment manโ€™s record will appear poor, primarily because the client partly follows rather than fully follows his advice.
Thus, some investors commit the major financial folly of being unable to resist taking small profits.

Against all advice, they grab a few pointsโ€™ gain and are sold out
of a brilliant investment long before it triples or quadruples.

Hence, they have no large gains to far outbalance the occasional loss that
is inevitable with any common stock adviser.
To blame an investment man for this, when it is done against his advice, is of course
ridiculous.f a brilliant investment long before it triples or quadruples.

Hence, they have no large gains to far outbalance the occasional loss that
is inevitable with any common stock adviser.
To blame an investment man for this, when it is done against his advice, is of course