Friday, December 10, 2010

Asian paint:-Waiting for correction to buy stock is it good strategy?

Last more than year I am tracking stock of Asian paint. I like brand value and market share of Asian paint in industry. Also country like India where number of consumers is very large, demand of paint will remain firm. Also Asian paint major supplier of paints to growing Indian automobile industry.
While selecting any stock I always check track record of company on fundamental basis and what value company going to add minority stake holders(retail investor like me).Fundamentally Asian paint is sound company with strong management and good cash flow, but it is not always important that company making profit or not..But it is more important that company have tendency to share the profit with minority share holders. Dividend is the scale that I use to check this. Asian paint have very long track record of dividend. This is high dividend yielding company which makes me attract to buy share in Asian paint.
While making any buy decision I always look into price to earnings ratio of the share. Historically Asian paint have P/E value between 25-33.when I start look into this share it was around 1900.becuase I m very cautious about P/E ratio and have mentality to buy only when P/E is bellow 20 I keep watching the stock to see if P/E will come bellow 20 and I will start buying the stock.Unfortunitely my assumptions become wrong and stock moved from 1900 to 2700 in one year (i.e. 33% up) .
Finally I realized that if you found company with very strong track record, strong management, high dividend yield, brand value..Waiting with hope that “let the stock correct and I will buy” will not always work. Better we should initiate some position in such strong stock and keep buying systematically and if you are lucky enough to get such opportunity when stock corrected then buy more quantity. If you are long term investor who believe in fundamentals and strong management then price change of stock by 10-15% is really relative which should not going to change your view about company in long term.
Asian paint is good lesson for me..And finally I made my mind to buy Asian paint in stagger manners.

“Don’t Be always fearful…………..sometime it is good that you are little greedy”

Friday, December 3, 2010

My PortFolio

Tata steelMetal
dena bankbanking(PSU)
hindalcoMetal(Non Ferus)
larsenCapital Goods
bank of indiaBanking(PSU)
hindustan zincMetal(Non ferus)
Reliance IndustriesOil and Gas
SatyamIT(was opportunistic buy during Raju scam when price came down extremely Low)
Kalyani SteelForging and Rolling
Reliance communicationTelecommunication
Cairn IndiaOil and Gas
Bajaj HoldingHolding and Investment

Company in My Watch list

Asian Paint FMCG
TATA chemical chemicals and fertilizers
Exide auto ancillaries
clutch Auto Auto ancillaries
crompton greaves captial good
M&M finance NBFC
South Indian Bank banking Private sector

HDFC                      NBFC
Pedillite                     FMCG