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Patience is key to investment

December 14, 2004 17:57 IST
ak : Sir, dollar depreciation is a major threat for IT companies. Is it time to reconsider portfolio allocation to IT?
Ramesh S Damani : It is a threat. Unfortunately I don't know what the correct allocation should be.

Anjana : Hello Sir..Good evening..Any Opinion about Eveready Industry and George Williamson TEA..can we buy at CMP?
Ramesh S Damani : Hello everyone. Thanks for joining. Let's start. No view on the stocks.

Anjana : Sir..In Breweries..what u will prefer UB Holding/Mcdowell/Khoday/United Breweries..DAMANIS One Pick Please.ALso any Opinion about Appolo Hospital at CMP
Ramesh S Damani : At current price maybe Mcdowell, Apollo remain bullish. Own both.

Ramesh S Damani : Yes, trading buy.

rjsvj : Mr Damani VSNL is going done after reaching high of 235,is TATA's decision to sue govt going to effect this stock any further?
Ramesh S Damani : Not really. It is procedural.

Ramesh S Damani : I own it but would pass buying at these levels.

simplify : Last time - i had mentioned NIIT Ltd (not NIIT Tech)..Did you get a chance to analyse ? Seems like a great value play to me..
Ramesh S Damani : Not really. Been preoccupied.

BASANTMAHESHWARI : Pantaloon and trent trade at Pe's of 30+ I bought titan today Current year pe about 18 the jewellery business is growing at 40%+ and contributes about half of its sales. RONW is good and RJ holds about 8%.Your call?
Ramesh S Damani : They are having a good year and should do well. Also an extension of your retailing story. I own it.

optimist : Recently Tamsek holding of singapore and Meryll Lynch have picked up stocks of Jain Irringation. Is it a good buy at these levels? any comment on the future of this script as the present Govt is focussed on Agriculture.
Ramesh S Damani : Somehow I am not very hot on Jain irrigation.

optimist : there is a lot of talk about FII booking profits before Christmas which would impact the market. Your views please?
Ramesh S Damani : They are buying not selling.

Newbiesatstock : Sir Why should you book profits in shipping stocks, how will large tankers make a negative difference.
Ramesh S Damani : Watch it carefully, I am a bit uneasy with shipping stocks.

yadam : Hello Sir,Is it advisable to apply stop loss in a long term investment(1 yr) ?If yes what is the percentage loss do you advise as stoploss percentage!Thanks.
Ramesh S Damani : Generally know. Do your homework and have some conviction.

kvg : sir , last week you said you are studying on BOC . what are your views on it . can we buy at current levels.
Ramesh S Damani : I am backlogged at this point.

sunil : sir my sister is in a dilemma whether to take MARKETING OR FINANCE as specialisations in her 2nd year of MBA ..... she is a good student .... please suggest sir on what she should opt for
Ramesh S Damani : That depends on her personality. Is she outgoing or inverted? Does she like numbers.

sanujkadavil : SirUb holding merging its 10 subsidiaries with itself. They are allotting shares to ub America. Do you have any idea about ub America valuation. How much % of equity dilution happen after the merging???Do you think the news is good for ub holding. Becoz they are getting operating business like , ub global corporation etc.Finally thinks are looking that he is consolidating business , ie looks like value unlocking.
Ramesh S Damani : It does look like value is unlocking and things are moving. I don't have any details.

kalyan : Damanaji, I have a large holding of allahabad bank. Can you please let me know your view of this counter.
Ramesh S Damani : No view at this time. However banks have been on fire.

nirupa : sir,hope you are fine. I have picked up Balmer lawrie in the range of 160. the travell business constitutes, mainly Govt. officials and PSU officers regular tickets. It seems, the counter can go very bulish. only worry is that the floating stock is too small. can u throw some light on the company.
Ramesh S Damani : They are rebounding and logistics business is doing well too. Could earn an EPS of over Rs 25 this year. I own it.

Newbiesatstock : You call on the media companies like balaji and tv18, I know u like and recommend balaji. My sense is this sector this sector will have a lot of consolidation and could be valued significantly higher, with companies wanting a stake in our aviation, finance sector, media will have to go through a good re rating in the future. What's your view.
Ramesh S Damani : I am bullish, I own TV18, Balaji and NDTV. They will do well over the next few months

StockLover : In the last decade or so, most traders who bought the sensex in September and sold off between Jan and Feb, made more profits than those who were invested in for the long haul. Do you think this is a phenomena or just an aberration ?
Ramesh S Damani : I don't place much emphasis on timing the market. Not my cup of tea.

baracuda : did yu get the two reports i sent yu,im sorry about the nucleus one was not xeroxed properly by my asst irealised it when the docu had left,the article from economist does it make sense
Ramesh S Damani : Yes I did, I haven't read the Economist article yet.

sanujkadavil : SirEncore saying , they are going to sell 50,000 simputers in next 12months. Ie 12 fold jump from last years. Do you think it is possible. Even if they can sell 25000, most conservatively they can post a topline of 35cr and a bottomline of 6-7 cr. That works out a eps of 10. companies like moschip trading a t mkt/cap of 130cr , at 0 sales…Encore is also on the final stages of sofcomp project. Also couple of products on the pipeline. management is very strong and commited value. Do you think encore is a good long term bet.
Ramesh S Damani : I think it may be that they have good technical help and niche players. If they get some good long term contracts the stock will look up. I recommend an initial buy.

Blazing : Sir, I hope this is not a personal Question. But on Encore Software's website, it says RAMESH DAMANI owns apprx 1%. IS it you??? Sir Please Answer!!!
Ramesh S Damani : I do own the stock.

KRR : Sir, again another question which many many would be facing..... what to do with Mcdowell? upto what price should we wait... i feel there is still a lot of value left but i am not able to decide kind of a target... this is funny... but can you say a price you would give all your holdings? thanks :-)
Ramesh S Damani : I don't have a target at this point.

optimist : I missed the bus in many of your previous scipts....UB, Godrej, Honeywell et all. I have invested in Venkys and B Lawrie at current levels but they are not moving. In an overheated market (which the mkt currently is) would you also think there could be a downside to these stocks when there is a correnction?
Ramesh S Damani : You need to be patient. Stocks don't move up because we buy them.

BenGraham : Gillette: a classic Buffet company. Dominant marketshare, no rival in the horizon, sustained growth foreseeable for years to come. Only issue is whether the stock is overvalued currently. At CMP of 628, the stock has trailing P/E of 35. Is it worth a buy for a 3-5 year horizon?
Ramesh S Damani : Yes it is. I own it.

sanujkadavil : SirWhats going on tele data. Stocks are very volatile with huge volumes.Lots of news on teledata . looking to grow by acquisition .Even they are putting adds in a big way in cnbc. They are full confident to grow in very big way, then why promoter holding is too low , only 18%
Ramesh S Damani : I am not convinced about Teledata.

Ramesh S Damani : Good finance people can make a lot of money. Maybe that helps.

sunrams : sir are still holding bank of punjab. Is Kale poised for a jump like opto thank you
Ramesh S Damani : No, Kale is looking good on the charts.

Newbiesatstock : Sir VST industries at a MCAP of 300 Cr could be a multibagger over 2-3 years?(good take over candidate ?)
Ramesh S Damani : Looks cheap and so does Godfrey Philips. I own both.

StockLover :  I am not a trader either, but when something occurs for over a decade or so, don't you think there might be some logic behind this. Morever, this phenomena is not just limited to the sensex, it has occured even for the dow and Nasdaq. How strange.
Ramesh S Damani : Stocks don't look at the calendar to move. Be careful of the strategy.

sanujkadavil : sirIndiabulls trading at 900cr marketcap. Justifiable curret valuation. Unfortunately we don't have too much quality listed broking scrips. I think if India bulls value 900cr. Kotak sec should value 1500cr. They have 3times moe branches than India bulls and clocks 1000cr daily turnover , and huge institutioinal exposure. Ie we are getting kotak bank at 100rs.
Ramesh S Damani : India Bull valuation is streched.

mansss : Sir, KALE CONSULTANTS – Today's Business Line reported that Mr. Vipul Jain, M.D had sold 50000 shares some time around November 15, 04. Is he not confident of the prospectus of the company going forward? It gives a wrong signal. However, today the stock closed at upper circuit with huge volumes at both the exchanges. Pl comment.
Ramesh S Damani : I did not know that. Insider buying is more important than selling. One buys to make money. Only that, one may sell to buy a house, marriage etc

vikas : UB : I heard Mallaya is selling stake 26% for around 1400 cr. Do u think he can realize such huge value for 26%. If it is true then UB / Mcdowell are set of major re rating even from present valuation. Your comment please
Ramesh S Damani : Hey, that is what I have been telling you guys all along.
StockLover : Do you think Tata honeywell has a break out ? Are you bullish on this counter now ?
Ramesh S Damani : Yes. It did have a huge breakout.

nirupa : vesuvius was once recommended for a long term pick. but being the leader in refactories it has not rewarded the investors. Its a MNC and has a huge order book. The performance is excellent and is a divident play and bonus candidate for future. could u please analyse and advise for investment.
Ramesh S Damani : It hasn't ?? The stock is up 70% this year.

KRR : :-) you have always been reluctant about targets... more so with Mcdowell... but from what i have learned from you, it could fetch thousnad bucks... (market cap= turnover *3) as simple as that... but we need your signature at the end of the formula... would you sign it? :-)
Ramesh S Damani : Everyone needs to do their own maths. But look at valuations of comparable cos in China and the Phillipines, and you will get the picture.

sidhartha : One on hand - he is trying to acquire Show Wallace and on other hand he is selling Mcdowell-
does it make sense ?
Ramesh S Damani : A stake sale.

Ramesh S Damani : I would not know that, but if you are convinced, hold on. The stock will move in time.

susmita : goodevening sir , may I know ur view on DR. agrawals eye hospital...i read its recomendation it a good buy at the current level
Ramesh S Damani : Sorry don't follow it.

vikas : Mcdowell : is Mcdowell more valuable than UB . If UB is sold at such huge premium whats your idea about Mcdowell. Can we buy even at current rate
Ramesh S Damani : Beer license is more valuable.

sanujkadavil : SirGodrej is really buzzing. News on demerging og godrej global. And godrej remote services.also news that they are entering to biotech in a bigway.Do you think , if godrej demerges its BPO business , godrej shareholders will get the shares of BPO company
Ramesh S Damani : I have no news on that. My sense is that the company is doing well.

vikas : NUCLEUS : Is it your core holding. Would you prefer over Tata Elxsi or both have equal importance and return capacity
Ramesh S Damani : Both are core holdings.

PANTALOONS : Sir if your predictions go right the BPO will create a lot of middle class..Next big thig in India is retail.. especially BIG BAZAR.. owned by Pantaloons Its the next WALMART of India
Ramesh S Damani : Let's not get carried away. Wall Mart is an institution.

amandeep : has anyone noticed that all promos in CNBC akways have 80 percent of Mr Damani in it . Just speaks volumes of the fan following that you have.Thanks once again for the advice on Nucleus . do hope that if anything else comes to your eye you would share it with investors like us and help us realise our financial dreams . Though we not not of anyway of paying you back , except a BIG thanks.
Ramesh S Damani : That is thanks enough. I enjoy what I am doing and consider it a privelege and pleasure to help investors. Regarding the commercial, I hope they would pull it. I am tired of it.

BrijNiralay : Damaniji: Buffet says ' EPS are a smokescreen when the Cos equate the reserve cash to increase the equity base and increase EPS!!This focussing on Return on equity: a couple of stocks which hold value, dividends and maybe multibagger cap gains are : Grindwell Norton, Alfa laval, KSB pumps... Your views pls sir - Your avid fan!
Ramesh S Damani : Good point. Study what Buffett calls owner earnings.

susmita : , whats your tip of the week?
Ramesh S Damani : You should know better by now.

Ramesh S Damani : As I always say patience

lavanya : Sir, Just finished reading "The Wisdom of Crowds" - It was very interesting. Next suggestion please.
Ramesh S Damani : Influence by Robert Cialdani

RBGN : Happenings @ Reliance, your comments please
Ramesh S Damani : Whats the line in Apollo 13? "Houston, we got a problem".

BrijNiralay : Buffet says: Buy a business with value! Considering you had a billion dollars to only buy... which business in India would you buy as in washington post, Geico, Coca Cola - Your Value fan!
Ramesh S Damani : Oh I have given many such ideas over time. Read the transcripts.

JOEGRANVILLE : Ramesh,whatz ur view on insurance sector as a whole?How does cholamandalam looks to u???Thanks
Ramesh S Damani : Bullish. I think they are doing well.

anand : Would you swap some position in Blue chip comapines (as my dad)refers to them for fresh investment in liquor companies...How do i convince him????
Ramesh S Damani : Probably not. Wise investors bought early with a huge margin of safety. Buy in winter not duing summer for the stocks. That is the way we get value.

sureshmakhija : sir ji good evening sir i m holding hpcl right before the disinvestment after tah i als asked u u said that still it is a hold sir can u tell me that still it is a good candidate for hold or to sell and switch to another stock plzz reply thatnx
Ramesh S Damani : I would hold on.

AnandBhatt : Hi Sir,Tata Honeywell is starting to look good...
Ramesh S Damani : Yes.

Kiran : Ramesh, how do u valuate a stock? Is there any simple equation to valuate a stock based on Market cap, EPS, PE etc factors?
Ramesh S Damani : Nothing simple.

susmita : sir one last que. plz tell me ur views on arvind product & shree raj texchem.
Ramesh S Damani : I like both.

Newbiesatstock : I didnt attend the Masterclass am sorry but i dont think it was worth it for so techinicals and fundamentals, do they plan an only fundamentals? I was back in college i think we might invite you again seems like a lot of younger people (16-20) have developed an interest in the market. I might get intouch soon.
Ramesh S Damani : Sounds okay.

KRR : why do you want CNBC to pull off ad... you look handsome for your age :-) P.S.: i am a normal man.
Ramesh S Damani : Unfortunately, no ladies have called me? (Ha, Ha)

susmita : sir one last que. plz tell me ur views on arvind product & shree raj texchem.
Ramesh S Damani : Remain invested.

vikas : Mcdowell : what is thr right valuation of mcdowell if u compare it with china's and philipines counterpart. we dont have figures if u can help us
Ramesh S Damani : I could, but investors should do some homework. Makes them wiser.

KRR : Sir, I keep wondering about this but always forgot to ask you.. today someone poped it up and i am asking this... Did you ever get any sound idea from the whole bunch of people here? :-)
Ramesh S Damani : Yes, about psychology, about the market and investors.

BASANTMAHESHWARI : Did you get a chance to read "conquer the crash"?If so your comments on how realistic that prediction of the Dow going down to 1000 is?Faber recommends that book for reading though!
Ramesh S Damani : Not yet.

sanujkadavil : sirSir. Did you gone through abee- info consumables ltd and champagne indage ltd. How is looking these stocks. Are you expecting a turnaround is slowly happening in abee. Champagne indage , they are leading India into a major wine exporting nation
Ramesh S Damani : Abee looks good. Send me a balance sheet if possible.
Newbiesatstock : I am making a list of publications i should read always this is what i have - Fortune,Business standard, economist. Anything else you think i should add to this.(some indian business magazine perhaps ?)
Ramesh S Damani : Barrons and Financial Times

Ramesh S Damani : Look at the gas sector.

BrijNiralay : Damaniji: One last question plsCapital gains v/s Cash Flow. Your preference pls - Your Value fan
Ramesh S Damani : Please rephrase the Q.

baracuda : ihave realised that MARGIN OF SAFETY are the 3 most imp words in investing i doubt anyone can deny it.,so is there a margin of safety in say gillette
Ramesh S Damani : I believe so.

susmita : thanks a lot sir. i`ve earned good profit from all ur suggestion. thanks once again for ur time to time valuable advice
Ramesh S Damani : My pleasure.

san : Sir I am new to the stock market. Can I play in the day trading
Ramesh S Damani : No.

BrijNiralay : Damaniji: Buffet would buy TISCO :is one bet with Business value, Good ROE, Dividend, expansion, Owner earnings, great Mgmt team and shareholder value: Your take Sir - Your Value fan
Ramesh S Damani : Maybe, but it is a cyclical commodity business which he frowns upon.

HROY : Sir, I am continuosly following your advice, Can I go for TATA Tele services (Maharashtra)?
Ramesh S Damani : Yes it is a bit risky.

BenGraham : Geometric: The management has set some very ambitious targets for revenue growth for the next two years. Most analysts dont think they can do it but the management has always delivered in the past. If the predicted growth materialises, the stock is undervalued. Its an old favourite of yours but worth entering now?
Ramesh S Damani : I would take a look at it.Unfortunately Rs/$ does not help them.

BrijNiralay : Damaniji: In stocks/ business whats your trading strategy: Capital Gains or Cash Flow since for Cash flow we need to get to the point where we sell at over valuations. Do you like Buffet have any parmanent holdings (Nevel sell) - Your value fan
Ramesh S Damani : Not at this point. Cash flow is quite important.

KRR : Sir... VST Industries ... 300 Crores for BAT subsidiary... that all you said last week.. can you throw some light on it? thanks in advance :-)
Ramesh S Damani : I was pointing out to the obvious value.

PANTALOONS : Sir do you think the bull run based on fundementals or emotiions and greed and retail invsetors burn their hand.. some brokers are suggesting 8000 next year
Ramesh S Damani : Bull run looks solid to me.

vikas : MACMILLAN : Any new news , still languishing . Do u think it will finally reward like Tatta Honeywell
Ramesh S Damani : That is the hope.

Newbiesatstock : There was a deal i think morrocco a year or so back the takeover was at a much larger value, i cant recall the numbers
Ramesh S Damani : Yes, it was for a cigarette co.

amit : hello sir ,I `m bit late today.would you mind going through the script of dr agrawal`s eye hospital & tell me ur views.
Ramesh S Damani : If i get a chance.

Neha : Hi Mr Damani , dont really follow stocks , my brother just keeps screaming whenever you are on TV . Just have to say that if good looking brokers had sgares Id put my money on you.Just a Thanks on behalf of my moronic brother who I never think would bother to THANK you . He has never looked happier than off late considering the money hes made , so he says from your advice
Ramesh S Damani : Wow. That makes my day. Thanks.

Neha : If I were to start investing and had a really small amount , what would you advice , Would you be able to give a lecture at Sophia mumbai ??I can try and plan one with the profs
Ramesh S Damani : I would like that. Thanks all for joining and see you next week. Bye.

Ramesh S Damani : The best book on ivestment but a difficult read.