12 Stocks for your Long term Investments !!!
hello hello friends, I am your friend Vivek Bajaj, co-founder of StockEdge and elearnmarkets This video will make your life so easy, today I will explain you stock selection in simple words and also the name of the stocks my guest for today is in the market for a long time and he knows how to make money in the market for wealth generation hello Advait ji, hi Vivek ji, how are you, yes I am doing fine can I call you Mr. Arora? You can call me Advait, we are the same age group, so Vivek and Advait are fine so it is working like that. So you have business in 2 countries, and you are still in the market so when did you start with the journey of investment? I had a very interesting topic on capital markets, and at that time I had very limited knowledge of this at that time we used to do sector analysis and other ratio analysis and that time I did a project report on 2 major sectors of Australia, mining, and banking I so liked it that I went and bought a few stocks there, I opened my Demat account from there my journey of stock investing started, and then later I moved back to India in 2004 The market was at a high at the end of 2003 and it was 2004. Then I started taking interest in Indian equities so my journey started by default, and then I was living overseas in Bahrain so when you come back after 7-9 years, you don't get loans because you don't have beneficiaries Obviously, I was not getting any loan so I started investing, there is a product called LASS, which is a security used to keep the stocks on the mortgage and then take on a 50% explosion but today if you see those list of stocks, then you can pledge for LASS it will be worth more At that time the list used to be very short in BSE with a limited amount you needed to follow the list, you couldn't do it like that so by default it happened and I had to take stocks like Maruti, infosys and others I was not aware of the small-cap and mid-cap so they became my core portfolio it used to give a better return than nifty because the stocks used to be like this from the years 2004,2005,2006,2007, all these 4 years gave a 40-50% return I was lucky that I entered at the right time, I used to generate a surplus amount of money, part of it I used to put into my business and then the market the market is giving me so much so I see the risk-reward positions and give in to the market At that time I was not that aware so I took substandard stocks and the market is running everywhere you know at that time there were several stocks that were running from the infrastructure, and others there were many penny stocks and multi-baggers, so I have also done that mistake the market was down, so someone who has seen such a high phase had to see such a heavy collection Asian paints or Pidilite, have a pedigree but they are getting corrected the market made an image like that and the journey started going ahead that time you will realize the character of the person when they are selling or not we can't time that so please elaborate on what was going on in your mind during that time you are really shattered after this and then you are not able to understand what you studied in MBA if you see it then the stock market is volatile compared to real estate and others if you are into that course then you can do fine and you will be able to take the rewards maybe after taking that learning me and other traders can do better but this is all about the mindset you can't do the mistake of selling it that time, you cannot buy either but you do not have the guts to sell it the wisdom is just coming and all of us are just learning my core portfolio is there only but still, there are many small and mid-caps that I invest in I have made a principle that if the management is not ethical then I don't feel like doing it I felt this about Maruti few years back, it was 9500 that time, it didn't feel like it can stay there for long you need some reason, if it dents, you need money when you have to get out of the market you know people say when the market is running you have to do it like that it has a good pedigree and it is giving good results we can be okay with a 20-30% fluctuation this is from an academic point of view when we discuss these stocks, he is not a financial advisor I wrote this pinned tweet that time, many people like it and I was lucky you were able to see it it has my conviction, I have my confidence in them and those which I am able to buy my spirit and conviction are going down and according to that it will work I have also done a lot of research on that and we can discuss this later on basically larger caps with long term businesses should be considered what I like about Kotak is that it has so many subsidiaries, around 9-11, which will be enlisted later on the day they will start unlocking it will be a multibagger from that day I don't want to talk about the western concept, I will take it negatively now it is such a big enterprise, there are so many people in the system if one of your stocks is underperforming then what do you think at that time IDFC was separated and when it joined with others it was different and the stocks were going like that but axis, hdfc, Kotak were all going down, not down but underperforming I really liked it when it was 2000, also when it was 1200, and then when it was 1700 Kotak has been an expert in this field, it has been really low profile but it has stayed everywhere one of my portfolios is value investing, and my other satellite profile is focused on growth separating value and growth and making different portfolios for the same requires effort and you need to keep a balance if we have to take the exposure then we don't have to take for the cement, raw materials, and others in the real estate you have to see the growth from 5-10 years of the stock but there is no comparison between hdfc and bulls in India You will know that bajaj finance has the highest multi-baggers in the recent times they get a lot of feedback, look at their customer base and the company of hdfc is doing well they have taken a high risk, they know their customers really well if you see then bajaj finance has really outperformed the market this one has a very interesting story, if viewers have time then they can search for how this company started from a small house the thing about Asian paints is that the pigments and crude oil they use are volatile because the crude oil it's not that the stocks will become half, even if you see in the recent times A lot of new players are also entering this industry, I think JSW paints are also coming, Astral Poly is also coming into paints and people worry about it But, no I don’t think newer players can dent Asian Paints so easily The ROCs and returns that they are having are quite tremendous and it is a must-have stock in the portfolio. Again going back to HDFC Ltd as a proxy to the housing team, Asian Paints would be the second stock as a proxy to the housing team And yes this stock is not for 2 years or 5 or 10 years, this stock might get transferred from generation to generation.
And very huge strong condition on this. Now we come to like we have the lending king and you know you have the NBFC king in the same way we all know the stocks which everyone likes but everyone finds expensive. people used to say it is expensive on the day it was listed and today also it’s been 13 baggers in 5-6 years but today also, people consider it expensive. And if we talk 10 years from now, even then we would be saying that DMart is very expensive. Some stocks have a habit of being expensive, Asian Paints also comes under that. Pidilite also comes under that. There’s a reason for them to be expensive. First of all, you see the background, Mr. Radha Krishnan Damani what a leader he is.
Look at his business model, it is very similar to Walmart. You can call D-mart India’s theft Walmart. ‘Sell huge, sell fast’ is their motto and they have such a strong presence in this thing, they have such a strong presence in the retail segment They are having discounting strategies, they leverage the suppliers and you know that way we get the best prices. Today if the consumer gets something good and cheap, that's the best. And DMart is doing it so well and so aggressively, Vivek you see, I was watching their store growth for the last 4 or 5 or 7 years, look at their cash conversion cycle, the very important part here is inventory turnover days. Many people would know this but just to let you know that Industry’s inventory turnover days are 70 days
DMart, despite being so big, its inventory days are 30 days. Every supplier wants to deal with DMart even though its margins are less But he knows that DMart will give me my stock rotation, my volumes. And India’s growing economy, the retail segment sector has to run Even though p people say E-Commerce has come, the door delivery facility is there, everything is there but the basic model of DMart is there to stay, it will take many years for it to disrupt if it happens. And DMart is smart enough that if any disruption comes then it can connect with that disruption, It is debt-free, and again 13 bagger stock in 5 years, is expensive and will remain expensive and you know if viewers are comfortable they should then look into it with that sort of a view.
Next one, is not a company of Nifty 50, this is a bit small company. I have a bias toward this company because it is Gujrat-based. But this is a very low profile company, maybe people haven’t heard its name but what a pedigree! Lalbhai Company itself has a very legendary product profile. Their performance has been exemplary, spread across 90 countries, the company doesn’t come much in the news, management doesn't give interviews, con calls happen but they keep a very low profile. You will not see any kind of advertisement happening on them or PR is happening but is a tremendous company to go with, has been a great performer.
Luckily, to be honest, I could enter in 2005-06 when the stock was ₹200-250 just because I used to buy some ingredients from them for our company. But you see it is a debt-free company, growing consistently, and growth has increased over the last 5 years. Recently they have had a very good JV with Nouryon Chemicals so they are adding on to the new high-performance chemicals and high margins products. So I guess this company’s performance chemicals sector segment which is 30-31%, I think they are looking at increasing that to more towards the 40% range.
So they can increase the margins and they are doing a lot of value additions, so it’s a good stock in the chemical space to look into The next sector, ya this is the MNC Honeywell Automation. This is one stock that if you believe in India's growth story, will become a great manufacturing hub India will export to the world well, there will be an infrastructure boom in India, population growth is happening, necessities of people will increase, mineral, mining, infrastructure, power, defense all these sectors, we have to buy a very experienced player of all these sectors, who is present in all. So that is Honeywell Automation, see their growth over the last 5 years, it has a growth of 25% and above, and they maintained consistent margins. And Vivek, the biggest thing I find about Honeywell Automation is, a few years ago12-15 years back, it used to be the Tata Honeywell Group. After that, it became Honeywell Automation and now its international parent company has started Honeywell Automation as a manufacturing hub for the world.
Because labor is cheap in India, A lot of products are exported to Europe and US, they are also into home automation, their automation products are used in Chemical Refineries. goes into Gas too, they have a good supply in the Middle East also. So what used to be from Europe and the US, in the last 20 years that whole setup has been brought to India by these people. And you see that’s why the growth of Honeywell Automation over the last 15 years, this stock is almost a 15 bagger, 12, 14 baggers, It was ₹2000-2500 stock around 2004. Today it is for ₹40,000. This is because they were able to do all the world's sales from India, from the Indian company. That was the biggest advantage. And I think even more is going to happen in the near future. Till today these people who were supplying Hi-Tech Automation in the world, now need it the most in India. Because of the way the country is developing, it is one of the best MNC stocks I like. People think that it is overpriced not on the valuation front but on because it’s ₹40,000 for a stock.
But don’t see that, see that maybe this stock will be worth ₹1 lakh. So you know because they don’t split, the bonus that’s why they seem to be expensive but it's a tremendous MNC to own. There’s one thing, you know as you are saying, I am seeing the charts of the stocks as well, so I can see that the majority of the stocks which you’ve said now, have no momentum in them. Like Honeywell is also running on low, HDFC is also low, Kotak too is on low. So I'm trying to understand that an investor like you who works on the long-term theme and believes in holding onto them, How do you deal with the situation when the stock is underperforming, without any momentum? What do you do at that time? What do you think about those stocks? I have understood one thing, Vivek. When the mutual funds buy the stocks, they have pressure on them that they don’t know the horizon of the client whether it is 3 years or 5 years, or 7 years.
Mutual funds have the pressure that they have to give an outcome of 12% or 13% or 14% or 15% growth similar to the market. In my case as or direct investor, our scenario is that we don’t want a return for every year. I’ll give you an example, Vivek. Let's take the example of Escorts. Escorts was around the range of ₹100 for almost 7-8 years, ₹100-110 and I had it in that time also. After that, in the next 5 years, Escorts has given I think from ₹150 range to 18,000. ₹1800 sorry, so it has given a 15 times return in next 5 years. 4 or 5 or 6 years and before those 5 - 6 years, almost nil return. So that lumpiness, so we have an idea that the lumpiness will be there. Maybe the market Sensex will be 75000
And Honeywell Automation will be stuck at that 40,000 only but I know that because it has a pedigree like this, its past is like this, its future is so bright that it will catch up. When he will do it is not in your hands or mine, in fact, even the market doesn’t know to some extent when will that become fancy but we’ll see Escorts along with them. Sir, look at Tata Motors. It was doing nothing, has debt, has that issue, and 50 other problems but when it started moving, it was unstoppable. So that’s not in our hand but yes I don't know much about momentum, technicals are not my area but yes fundamentally I can't go wrong with stocks like these. It needs a lot of patience, a lot of conviction to hold onto a stock which is say, Honeywell is giving a negative return of 6% from last year, HDFC has a negative return of 4% from last year, Kotak has a negative return of 3-4% from last year, so it needs so much conviction to hold onto your stock which is not performing. I mean hats off to investors like you, who have such conviction.
And I know in long term you people earn a lot of money. I mean be it, big investors, like when I was talking to Vijay Kedia Ji, more or less the same thought process he also said that the stock will fall so much that it’ll squeeze your inner confidence, such as Tejas. He was saying to me that everybody is seeing that I had invested in Tejas
2022-04-08 06:09
