• Sectors which are unaffected due to any slowdown or in other words, non-cyclical sectors should be preferred.
• Which are having good demand of their products / tailwinds in their favour. IT/Pharma is the recent example.
(2/n)
How to select stocks for your long term portfolio :
A Thread 🧵⤵️
(i) Selecting the sectors
(ii) Selecting the companies
(iii) How to review and decide
(iv) Perfect time to exit/pyramiding
Do Like and Share to help us educate maximum investors.
(1/n)
• Sectors which are unaffected due to any slowdown or in other words, non-cyclical sectors should be preferred.
• Which are having good demand of their products / tailwinds in their favour. IT/Pharma is the recent example.
(2/n)
• Always check for proxy plays, Example :
- Realty boom - Building materials, Appliances, Cement (Proxy)
• Sector which is the need of the hour - Renewables.
(3/n)
• 2 ways to select the companies :
- Based on past financials / historical data
- Estimating forward valuations
• By analysing past data, you can identify the company which performed the best, can be classified as the leader.
(4/n)
• For example, leaders in various sectors :
- Diagnostic - Dr Lal Pathlabs
- Amines - Alkyl Amines
- Cement - Shree Cement
(5/n)
- Sales Growth (5 years) > 15%
- RoCE > 15% or RoE > 12%
- Net Debt/Equity < 0.1
(6/n)
• Based on recent quarterly earnings and management's guidance, you will have to project the future earnings.
• In this case, sectorial tailwinds must be in favour of the company.
(7/n)
- OPM in improving trend (last few quarters)
- Avoid capital intensive sectors (such as metal)
- Management guidance and their execution
- Sectorial tailwinds in favour
(8/n)
• Check the quarterly earnings and attend con-calls.
• Review their Half-Yearly and Yearly results where company posts balance sheet along with CFO statement.
• Compare the guidance given with what they delivered.
(9/n)
- Trade Receivables - Significant increase - Negative
- Cash + Investment Value - Increase - Positive
- OCF conversion from EBITDA - High - Positive
- Working capital cycle & management
(10/n)
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MDZS is laden with buddhist references. As a South Asian person, and history buff, it is so interesting to see how Buddhism, which originated from India, migrated, flourished & changed in the context of China. Here's some research (🙏🏼 @starkjeon for CN insight + citations)
1. LWJ’s sword Bichen ‘is likely an abbreviation for the term 躲避红尘 (duǒ bì hóng chén), which can be translated as such: 躲避: shunning or hiding away from 红尘 (worldly affairs; which is a buddhist teaching.) (https://t.co/zF65W3roJe) (abbrev. TWX)
2. Sandu (三 毒), Jiang Cheng’s sword, refers to the three poisons (triviṣa) in Buddhism; desire (kāma-taṇhā), delusion (bhava-taṇhā) and hatred (vibhava-taṇhā).
These 3 poisons represent the roots of craving (tanha) and are the cause of Dukkha (suffering, pain) and thus result in rebirth.
Interesting that MXTX used this name for one of the characters who suffers, arguably, the worst of these three emotions.
3. The Qian kun purse “乾坤袋 (qián kūn dài) – can be called “Heaven and Earth” Pouch. In Buddhism, Maitreya (मैत्रेय) owns this to store items. It was believed that there was a mythical space inside the bag that could absorb the world.” (TWX)
1. LWJ’s sword Bichen ‘is likely an abbreviation for the term 躲避红尘 (duǒ bì hóng chén), which can be translated as such: 躲避: shunning or hiding away from 红尘 (worldly affairs; which is a buddhist teaching.) (https://t.co/zF65W3roJe) (abbrev. TWX)
2. Sandu (三 毒), Jiang Cheng’s sword, refers to the three poisons (triviṣa) in Buddhism; desire (kāma-taṇhā), delusion (bhava-taṇhā) and hatred (vibhava-taṇhā).
These 3 poisons represent the roots of craving (tanha) and are the cause of Dukkha (suffering, pain) and thus result in rebirth.
Interesting that MXTX used this name for one of the characters who suffers, arguably, the worst of these three emotions.
3. The Qian kun purse “乾坤袋 (qián kūn dài) – can be called “Heaven and Earth” Pouch. In Buddhism, Maitreya (मैत्रेय) owns this to store items. It was believed that there was a mythical space inside the bag that could absorb the world.” (TWX)
