BhuvanChand Maddi

Stock Market daily notes

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bhuvanchand maddi
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2 min read

18-11-2023:

  • The process to be followed:

    1. Keep a track on your portfolio with 15-20 Max.

    2. Ride your winning horses and look at averaging up rather than averaging down.

    3. Stock allocation

      1. Minimum allocation should be 4-5 % (of your entire portfolio amount).

      2. The maximum allocation should not exceed 15% for a single stock. 20% is also acceptable in some cases.

      3. Sectorally not more than 30%.

    4. Don`t fall in love with any stocks. Be objective as well and have an exit strategy in place.

  • The process to be avoided

    1. Avoid investing in stocks where understanding the facts is difficult for you. (If you find any difficulty in understanding any sector then don`t involved in that)

    2. Avoid over-leveraged(companies taking huge debt) business.
      Eg: Adani, coffee day, etc

    3. Avoid companies with account manipulations.

    4. Avoid highly regulated sectors(susceptible to government norms, against pollution, chemical producing companies, etc)
      Eg: ITC is a good example when it is in the cigar business before diversifying.

    5. Avoid PSU

  • Identifying strength stocks

    1. Apart from the fundamental triggers in a company look at a catalyst for stock price movement.
      Eg: The catalyst of railway stocks is government funding. Super speed trains

    2. Movement in stock price because of positive event after the NEGLECT phase

    3. The upward trend starts after a period of time

    4. Look at the breakout after the Neglect Phase.

    5. Past Breakouts

    6. Present Breakouts

  • Market sectors:

    Level 1:(Easy)

    1. FMCG

    2. Platform-related business - CDSL, BSE, Nykaa, Zomato, CE info systems

    3. Retail industry -

    4. Building Materials - Cables& Wires, Steel, Sanitary

    5. Consumer Durables

    6. Hospital Industry - Narayana Hrudayalaya(learn Greenfield Capex, Brownfield Capex)

    7. Exchanges - IEX, MCX

    8. Automobile

    9. QSP(Quick Service Restaurant)

Level 2(Medium)

  1. Capital Goods

  2. Banking Industry

  3. Agrochemicals

  4. specialty chemicals

  5. Automobiles

  6. Cement

Leve3(Hard)

  1. Pharmaceuticals

  2. Life and General Insurance Companies (we are unable to value this company. We can review premiums we cannot predict death)

  3. EPC & Infra

  4. Telecom (AMny companies like Idea etc have huge debt because it was stuck for a long period)

  5. metals

  6. real estate

Note: Buying: Both Fundamental and technical are used.

Selling: Technical comes first (because FII and DII investors have information prior and they will exit from stock if any -ve news. So we can see that in the graph later news will be available to retailers like us)

#Stock market