Enhancement made in writing journal

 Sooner I will be sharing my complete portfolio of stock investment and review them each time in H1 and H2.

if I have made a entry and exist for a company stock I will also write my note the reason for exposure / exist taken.

Note: I will not be writing my entry and exist the moment I make or break into a stock it will be purely twice in H1 / H2 as this is not to influence others to buy/sell the same but its more of journaling my thoughts process about companies and what made me to land or fly away from it.

start of H1 - end of H1

start of H2 - end of H2 

Learning from 2020

lot of learning made in 2020 here are some  key of them which I had noted for improvement.

when it comes to taking decision on investing in bear market I did failed in 2020.

I failed to add / increase my exposure to quality company like allcargo / polyplex during 2020 lockdown disruption it was all  in my mind but didn't have the courage to make the decision.

both of this companies performed better then expected during the Q2 / Q3  of 2020 probability is high they will in upcoming years.

Failed to take exposure in pharma companies during bargain stock price I was convinced  pharma will perform in 2020 as this is necessity to keep the supply chain available of medicines globally.

reason no courage to make the decision.

Lesson learned : I need to enhance my thinking process which is needed  for investing to get clarity of thoughts for decision making.

bear market and disruption are the best opportunity  to invest in quality management who can stand still and increase exposure when company are performing well during uncertainty.

lost patience in one of the quality company stock polyplex and made a early exist.

Lesson learned : question why you want to sell ? if the answer is uncertainty then hold that moment erase all the noise.

I have enhanced my approach to get clarity in  decision making process here is my key question and checklist I consider to take exposure for companies

1) why do you want to invest ? is it growth / stories / or your own thought process that brought you to this companies ?

if its story then better to trade on story rather then parking money for long.

if its your thought process then take a next steps for checklist for long exposure

2) is cashflow / balance sheet supporting ? 

how much % of operational cash is getting converted ? is it on higher side 15 to 20% + ?

what % of  operational margin it makes ? 25 to 30% + ?

3) is the company investing in its growth and how its investing via debt / equity or cash usage ? 

if its via debt / equity question why is not using cash available ? no cash available then how is the companies sustaining in the industries ? check other companies in the same industries is it same case ?

past investment scenario how it was done and its performance ?

3) is the company paying dividend ? what is the yield ?

no dividend question is why ? if no dividend and I assume it must be using the money for investing in companies growth ? if not then where is the money going ? is the management eating up the cash via higher payments to them ? check employee cost ?

4) is it a cyclically scenario of company  ? commodity based product ?

yes - then long exposure cannot be made - set a target when to sell once exposure is taken as commodity based product are cyclically like crude / steel / cement / chemicals .

no - is it a monopoly business or in the top 3 franchise of its industries ? any dependences of its product in market ? what can cause failure for monopoly business ? what is the probability  of such failures ?

5) study on management team ? can it be trusted  ?

- increase research about management team / search interviews / read con call details / annual reports.

check how well is the management answers the queries raised are they making too much forcast for growth ? do they acknowledge the gaps or failures made or just cover up the story ?

if it passes this condition I take exposure in the companies when the stock price is at bargain range.

is financial sector showing sign of improvement ?

 As lockdown is relaxed more are more people are now stepping to buy their own personal transport and own house for living ?

not all of the people are buying with their money in the bank ? mostly via borrowing money from financial institute 

all cooperate sectors has already show +ve sign in there quarter result which means cooperate are also paying interest back to financial institute as normal phase. 

which means financial sector will revive in next coming 6 months. 

take position in this sector with strong franchise and balance sheet. 

if work from home is new normal which sector you can bet on ?

 

people dont need to commute to work place or the frequency for travel will be less .

people will be relaxing at their desired home location saving time / energy / money

people will stop buying home near their work location or prime locations

properties prices in prime location in city will reduce  as most of them will start living in more favorable  places where they get more space for living and its desirable for them.

check on companies which are providing quality apartments and space for living as sales of properties will increase in low cost areas.

check on companies which provide building materials

home loan rates are reduces now / seller have started providing discounts 

all sign are in favor to boost the sales so bet with better margin of safety.

Opportunity in lock-down and covid19 epidemic ?

  what are the option available to buy now since the market index has already reached pre covid19 level ?

 will there be correction ?

 

the probability is high for market to give some correction and this can be used as an opportunity to enter and take big position

 1) Entertainment industries 

2) API industries for pharma 

3) Alcohol beverages industries 

4) Chemical industries 

  I am hopeful all this industries will start there revenue sequentially once solution to current epidemic is found permanently.

 Remember market always discount stock price before the revenue start so better to calculate the risk ratio and position yourself.

Once  situation is back to normal I hope banks can generate there revenue as well so keep an eye on it as well and calculate your risk ratio when to take position.

Best time to take learning lesson ? now or never ?

It doesn't matter whether learning need to be in investment domain or personal life or something else. Every problem also gives opportunity to overcome it and take learning. Current situation not only in country but across the globe COVID-19 problem has created this opportunity

Opportunity for companies to take lesson how much digitization is important for growing the organization, there were so many companies which were not in a position to handle such pandemic bcoz they didn't take digitization seriously and now they got a hit to understand why its important as well as many government agency.

Organization which had workplace culture will sooner adapt work from home and it will be as normal going forward.This helps organization also reduce cost to employment / office space.
It give them option to hire resource across the regions which also give them opportunity to hire highly skilled resource for work.

Voice calls to move to video calls.
Papers to move to digital content.

Educational institutes moves to online classes this will also reduce cost of education and have well skilled teachers to be hired across the global.
Congested transport mediums will get de-congested directly reduces the impact on environment.

Opportunity for leaders / politician to think whats important for the country to be strongest in the world or survivor together ?

Money managers needs to be think is money in the bank important since they only by essential needs what needs to do with such high income ? move them to enhance people's life ?

Each one of us need to learn and change our perception we had related in regards to time, life, money.

Its true practical situation is best teachers in life than risk analysis we keep doing in our life against every aspect of life.

Coronavirus threat or opportunity for investor in stock market ?

The current situation linked with  coronavirus has pressed panic button on global markets
for an investor who look for opportunity to invest with margin of safety this is time to place your large bet safely , since the price value for this companies goes cheap.

the virus has also impacted people's life since there are lot of people who work on daily / weekly / monthly wages and due to lock down situation their source of earning is impacted and this is across the globe.

the virus will definitely fate away its just a matter of time where administration is fighting to bring the spread under control and scientist are look for creation for long time vaccination or drug to fight for this virus as a permanent solution.

look for sectors/companies which will get impacted due to this situation and place your bet.

Auto / Logistics / Chemicals / Export/Import are some of the example sectors which will see financial impact and we should use this opportunity.

Personally I would suggest better take precaution to avoid travelling or being around travelers since the people who are infected they themselves doesn't know whether they are the carrier or not.
Maintain personal hygiene and also spread awareness not fear in this situation.