BC MARKET CYCLE
Saved by @AnmolNarula11

Markets are all about patterns and tendencies that have an edge. Here are a few I have observed and learned over the years.

A Thread.

 Identify the Sector(s) of this cycle. Typically mid caps which are enjoying an earnings tailwind due to the external environment and you have a 3 year visibility into a 25% or higher eps growth. Will seem expensive throughout the cycle but will make big money.
Breakout post a genuine earnings surprise. Popularly called PEAD. Structural pattern. Works like a charm at all points of any cycle.
Serious debt reduction. Drives as much shareholder value as a high growth stock.
52 week highs across stocks in a given sector. Something is happening. Pay attention.
All time highs in ANY stock.
Spin offs and demergers. There is one whole book on this. Huge edge works more often than not.
New IPOs breaking out to all time highs a month or so after the listing.
Low capacity utilisation, negative profits and a turnaround in the sector - typically buy on first signs of turnaround.
Media pessimism about a sector reaching highs as per news reports in papers/mags while the sector in forming consolidating bottom or breaking out - huge winners here.
52 week low + insider buying + but no sector issues ie sector not likely to die or go into oblivion.
Large opportunity good execution and good management will always be overvalued, ignore pe and add them during corrections without waiting for pe to correct to "my value levels” which will never come.
3 years 50% test, Can this business trade 50% lower after 3 years? Can be done for predictable businesses only. This one by @BMTheEquityDesk
Can the profits (5 years out) in the future be equal to the current market cap? This was Ramdeo Agarwal if I remember it right.
Change in management (especially for financials but generally for others).
Playing the liquidity premium and discount in small caps in bull and bear markets. In bear markets they are oversold and and in bull over bought - hence small caps make for very good market cycle play
Fall after a sharp deterioration in margin due to temp factors, which is likely to bounce back.
This is the big one and may happen due one of the reasons above. Delta in RoCE leads to multi baggers - esp if delta is from single digits to two digits.
All engines firing. Improved margins faster cash flows and better asset turns which happen when cwip assets start sweating by @varadhar1
https://t.co/VPnK3xS2nA
https://t.co/DvOYLg95pt
https://t.co/8KVNjz9piP

More from Market cycle

Omar Abdel-Maged
Omar Abdel-Maged
@oabdelmaged1
Remember in March when all the headlines/'experts' were saying that the 10Y was going to hit 2% very soon, and it was going to cause this and that to happen, etc.?

No-one actually knows what interest rates or the economy is going to do & people are just terrible at predicting it

Howard Marks strongly believes that investing based on macro predictions is a bad idea (macro predictions are more often wrong than not): “I don’t believe in macro forecasts”, here's an extract from his memo earlier this year as well:
MARKET CYCLE
RS
RS
@RanaPratp
@unseenvalue @sahil_vi It is mean reversion for company's performance. Crowd thinking usually takes a belated u turn after the prices have retreated significantly.
MARKET CYCLE
Advertisement
Maitrey Patel
Maitrey Patel
@MaitreyPatel11
@contrarianEPS Today Wonderla ran like anything due to opening of its parks. Wonderla has one of the strongest balance sheet in tourism, travel, entertainment and hotel related space. Some unlock investment(not trade) do work if selected properly.
MARKET CYCLE
Sagarkumar Jain
Sagarkumar Jain
@sagarjain102
Though the old investors may not understand technology, the new investors do not understand risk.
MCap
Tesla: $1.02 trillion
Berkshire: $656 billion
Tesla's worth is ~1.5x that of Berkshire, though the revenue of Tesla is less than the profit made by Berkshire

Same old lessons.
MARKET CYCLE
Jiten Parmar
Jiten Parmar
@jitenkparmar
@Sanjay__Bakshi @katalystwealth Yes Sir. Extremely difficult to predict the top. Often top comes much before the best results. One needs to have some kind of strategy to exit. Maybe something like a multiple of replacement cost, P/B, historical upcycle margins, etc. But there is no exact science to predict top.
MARKET CYCLE

You May Also Like

Delilah S. Dawson
Delilah S. Dawson
@DelilahSDawson
Hello, writers! How about a thread on LITERARY AGENTS? How to get one, how to talk to one, how to keep one happy. Spoiler alert: I am 100% pro agent and can't imagine not having one on my side. 1/

Why would you want a literary agent?
* you want to be traditionally published
* you want someone experienced to help guide your career
* you want to learn how to edit like a pro
* you want to sell foreign and movie rights
* you want answers to your newbie questions 2/

Why you might *NOT* want a literary agent:
* you want to self publish
* you're not willing to compromise on your edits
* you don't think their expertise is worth 15% of your advance
I... can't think this way. Literary agents have been crucial to my career. 3/

So, how do you get a literary agent?
1. Have a finished, revised, edited, polished manuscript.
2. Write a query letter for your book
3. Send your query to agents who rep your genre and are open to submissions
4. Repeat steps 1-4 until you're offered representation. 4/

So, let's go through those four steps. First of all, you must have a finished, revised, edited, polished book, and it must be sellable. That is, you can't sell a 600k picture book or a 40k adult Fantasy, etc. You must read extensively in the genre you're writing. 5/
WRITING
The Troll Zoo
The Troll Zoo
@TrollZoo
1. This is "Hollie The Card".

She's a Doctor, Physician, PhD, MA, Clinical Psychologist, Hospital Consultant, PTSD consultant, Long Covid Consultant.

(Thread)


2. Although sometimes she’s also an AUTHOR and English Academic.


3. A Hospital Consultant and ex Gymnast.

(Pinterest public profile)


4. A Physician, Doctor, or hospital consultant.

A “Hospital Consultant”, would probably mean a senior doctor, in the UK at least.


5. Hollie changes her Twitter picture and bio so often, it’s hard to keep up with her qualifications.
TWITTER
Advertisement
Jaya_Upadhyaya
Jaya_Upadhyaya
@Jayalko1
SRI KANTESH HANUMANTHA, KADARAMANDALAGI (KAR)
#bharatmandir

KANTESHA means Prabhu full of brightness.
Here, Sri Hanuman appears with a front face and sparkling eyes. Earlier, the village was also called KANTESHPURI on the name of Kantesha Hanuman.


Several thousands of years ago, Hanuman lived in this village. He once saw the Sun and mistaking it to be a fruit, began flying towards it. Since then, this village came to be known as Kadara Man Dalagi. (Kadar means rays, mandala is cluster of rays).


It is believed that King Janmejaya had set up the shrine to get rid of his difficulties.
There is a small pond on the right side of the kshetram where Teppotsava (Float festival) is celebrated.

Kanaka Dasa has praised Sri Kantesha in his various poetic compositions.


Kanaka Dasa was the first devotee to popularize the power of Kantesha. It is said that once Kanaka Dasa was deeply wounded in a battle. To seek blessings, he visited Tirupati but Sri Venkatesha appeared in his dream and advised him to see Kantesha first before seeing him.
ALL
Conviction | Patience
Conviction | Patience
@unseenvalue
H was always unseen in S2NL :)

Those who exited at 1500 needed money. They can always come back near 969. Those who exited at 230 also needed money. They can come back near 95.

Those who sold L @ 660 can always come back at 360. Those who sold S last week can be back @ 301
UVLEARNINGS
Anu Satheesh
Anu Satheesh
@AnuSatheesh5
Beautiful story of Shri Krishna, Mata Rukmini & Satyabhama which teaches the importance of Bhakthi.
Devotion is important than anything.
#bhakthi
🕉
Satyabhama, royal princess was very proud of herself. Rukmini was very humble, her devotion was pure to Shri Krishna.


One day, Rishi Narada( Kalahapriya) arrived in Dwaraka and met Sathyabhama. In between the conversation he hinted that Krishna exhibits affection more to Rukmini than her. Worried Sathyabhama asked what can should be done to gain Krishna's undivided attention.
@SriramKannan77


Narada asked Satyabhama to make a vow, that she will hand over Krishna to him as a slave, if she cannot trade wealth equivalent to Krishna's weight. Narada thus convinces Sathyabhama that Krishna will admire her for sacrificing all her wealth for him.


Sathyabhama was sure that she have enough wealth to balance Krishna.

She went to Krishna and told about her vow to Narada. Krishna patiently listened to her and accepted the challenge. Satyabhama arranged to bring large scales to weigh and brought all her precious jewels.


Krishna patiently sat on one plate of the Scales (tula). Sathyabhama started piling up the gold, jewels on the other plate. She kept adding more and more wealth, but the pan with Krishna did not even budge. Even after keeping all her jewels the scale did not move a little
RELIGION