Wrote previously about this here Looking at Nucleus Software’s massive eight years of yawning under performance made me look further back in its history. There is a lot wrong with the company and the company is generally compared with OFSS and Polaris. This may not be the right comparison, 80% of revenues of Nucleus are earned outside India.All continents account for nearly equal percentage of revenues now giving it multiple legs.Annual revenues and Profits Year Revenues INR Crores Profit After Tax INR Crores 2000-01 27 10 2001-02 40 10 2002-03 60 7 2003-04 54 10 2004-05 67 15 2005-06 94 28 2006-07 146 42 2007-08 288 61 2008-09 328 32 2009-10 291 38 2010-11 270 26 2011-12 282 35 2012-13 293 45 2013-14 346 64 2014-15 350E 65E The company is dependent on a very narrow and niche segment with lumpy earnings and marked by absence of growth for multiple years at times.- No Growth, Value Trap, Mediocre Management and a few more issues with the company.Positives:… [Read More...]

Unique and thematic businesses are characterized by steep PE multiples, disregarding DCF or other sane measures of value.This company (RADIX INDUSTRIES BSE: 531412) piqued my interest as it bids and sells hair ( remy hair ) donated in South Indian temples. Human hair sell for as much as 50 Lac INR per tonne. Industry size is roughly 2500 Crores INR.This hairy business get more hirsute as I feel the company’s share have already been cornered by promoters and their friends and family members indirectly leaving no value. Company is growing 100% YoY but the industry size / MCAP (300 Crores) of 8 times leaves little room for appreciation for investors as promoters bought shares for 2 Rs but have artificially kept the price inflated at 300 Rs.TTD sells human hair … [Read More...]

Hermes is a legendary company. A great company, however does not always translate into a great investment for numerous reasons.This is a fairly large and mature company with 37 Billion USD market cap. with stock up 15x in past 15 years, not bad.If you remember Warren Buffett’s money spinning antennae turned on when he saw a Rich Person smoking expensive Cigar during the depression era, salivating over the profits for the business owner.One of the prestigious products of Hermes is a Birkin Bag, costing as much as sports car, ~50,000 to ~80,000 USD. In Auctions it can go up to 150,000 USD. Money isn’t enough, there is a waiting list for many years. Birkin Bag is classic example of a Veblen Good (http://en.wikipedia.org/wiki/… [Read More...]

I wrote about this company as “The only company I like in Australia” two years backhttp://multibaggersindia.blogspot.com/2013/09/roe.htmlFor a developed country, it offered decent growth and was below the radar. Sadly, I only talked but not walked as the company was satisfied with 10% revenue growth. The stock has grown quite well backed by acquisitions, not only organic growth, and is 6 times up since 2013 when I wrote i.e. 210% CAGR.Even now no institution has evinced much interest in CAPILANO HONEY It is certainly hard to foresee such a strong performance from a mere low revenue compounder.But the 70% market share Capilano had in Australia, conjoined with 5% yield was screaming for attention.These days I am mulling a company which is … [Read More...]

Munger uses opportunity cost as a very frequently used tool.Munger opines that if you have the opportunity to purchase an investment that is better than 98% of all businesses, then you can use it as a filter to automatically eliminate the other 98%. Ultimately in the long run, investing world is full of toads that do not transform to princes.I wrote in 2013 about Unilever Nepal @ 10,000 NPR / share. The company is growing @ 20%, not less than it grows in any other emerging country.http://multibaggersindia.blogspot.com/2013/09/multi-generational-investing-idea-3.htmlNow, after two years of irrational bull market (not backed by productivity improvement) companies are over priced on every continent.Unilever Nepal (where FII investment is not allowed) is also trading at reasonable … [Read More...]

Having seen a large number of research reports, focusing on next 20-25% only, but on equities that went up several fold, are in stark contrast to how a long term investor should think and a great dis-service to long term investors. I read a statement recently, “Best investing articles are the ones that have nothing to do with investment”. I see this all the time, with investing newsletters venturing into philosophy.The problem I find with this statement is that the person in context has defined himself / herself narrowly as an investor. I have not. As a man shall not live by bread alone but by every word of ….., no investor shall live with stocks or financial analysis alone. It is too drab to focus on … [Read More...]

In a bear market, stocks may seem like mouthful of hot molasses, too sticky to spit out, too hot to swallow.While claims of creating material wealth are true in equity markets, emotional impact on full time dedicated investors is not well studied and reported. It pays to be a bull as markets are mostly up rather than down over long term.To be informed is to be empowered.You should know, if you are not already aware that equity indices may or may not move for 11 years (eg: Sensex) or 16 years( eg: Dow Jones) or even 25 years (eg: Nikkei) except for 1% of stocks (that we may or may not own). Person who has not read history is like a child, doomed to repeat mistakes (of … [Read More...]

What we call Organic Food was called Food by your grandparents. It is a trend that will continue to show up now, in my opinion.A couple of exemplary companies at the moment on my radar that I may miss being on the sidelines due to the Infosys nature of stock (high growth but equally high PE multiple).First is in the United States. Where Food Comes From Inc. It provides Organic Certification, Labelling, Third Party Verification http://wherefoodcomesfrom.com/WFCF is still a small cap at 65 Million USD market cap. The company will be engaged in McDonalds tracking and verification program and has lions share of market.On the face of it quite dear, 6 times revenues and 100 times earnings.Second is an Australian company, just noticed … [Read More...]

How to use the J Hook Patterns in Trading Often you get in an uptrend when trading and you just know that it is about to pull back or do a trend reversal.  Thus the J Hook becomes your best friend. Robert Hooke FRS was an English natural philosopher, architect and polymath. He originally discovered what became the J Hook pattern. He made contributions to human knowledge spanning Architecture, Astronomy, Biology, Chemistry, Physics, Surveying & Map Making, and the design and construction of scientific instruments. The J-hook starts with a strong uptrend that produces stronger than normal returns in a short period of time. The J-hook provides some simple profitable applications. The first uptrend usually shows candlestick sell signals when the initial upmove comes to … [Read More...]

I had written a blog post five years back (in 2010) on how your family can own 70% of Indian listed and unlisted companies here http://multibaggersindia.blogspot.com/2010/12/how-your-family-can-own-70-of-india.htmlIn the previous article in 2010 I touched on how you could set up a foundation, where nobody could touch the capital, convince your next five generations to continue to compound money on value investing principles and accumulate over 70% of the financial wealth of India.I though it was time to raise the bar 🙂 , being a big fan of DIY, methinks, why depend on your family office / foundation, rather why not do it yourself, and why limit to India, why not the entire planet.IndependenceWhen I started getting greedy for … [Read More...]

Predicting Market Turns with Price Action If you watch market action closely you will pick up on a reliable market pattern.  Strangely enough it is almost totally independent of the time frames you use.  It does not matter if you are using 1 minute 15 minute, one hour, daily or even weekly time frames.  Watch this video or any of your charts on any stock, ETF, or index and research this for yourself.  You will find that the market reverses itself after runs of 3-4-5 or 6 consecutive trends.  Technically this is called the Reversion to the Mean.  After a short run like this it seems to just run out of gas. 3-6 bars from William F. McCready on Vimeo. .dpsp-networks-btns-wrapper.dpsp-networks-btns-content {margin-bottom:20px !important} … [Read More...]