#036 – How much is too much?

I came across three things this week and all of them made me ask a very similar question to myself.

How much is too much?

Let’s start with the first one.

DHFL.

Between Monday and Tuesday of the week that went buy, shares of DHFL were hitting Upper Circuit.

Whenever a stock hits Upper Circuit, it means a very simple thing – the demand for that stock is significantly higher than the supply.

It was no surprise that the Equity value was going to be wiped to 0 and lo behold, the NSE was swift in announcing on Friday that the shares will not be available from trading from 14th June 2021.

Second.

An analyst bashing the management on a Concall.

Again, how much is too much.

Being a part of 23,325 WhatsApp groups related to information and discussion around stocks my phone kept buzzing with people reaching out to me and talking about how a senior analyst ended up bashing the management of Sun TV for reducing the dividend payout.

While I am always a big fan of shareholder activism, but something that was going on in my mind w.r.t. my thoughts were captured in a parallel world in this short thread.

Third.

As IPO season is around and every new day a new company is getting listed, this time we saw a steel company announcing it’s issue.

Suddenly, we saw that there was a big run-up happening in a few metal stocks in the small cap names. Stocks like Sarda energy, Godawari Power and Ispat almost ended up gaining in double digits on Friday.

For the forhcoming week, our internal team at Alpha Swing has identified a potential swing trade in a different metal stock. You can find out more about it here.


Where do we see the markets headed?

This week’s technical views have been encapsulated here.

(If you’re a swing trader, you will enjoy reading our weekly swing trade newsletter. 

The latest edition published on 13th June, ’21 is accessible here. To check a sample premium version, you can click here.)

WEBINAR UPDATES*

This week we did a deep dive on understanding Divis Labs.

Before we attempted to understand Divis and the whole CDMO space, we looked at headline numbers of two global giants in this space.

Lonza & Thermo Fisher.

The market capitalization of these companies are ~58bn and ~112bn USD respectively and they trade at multiples of 28-56x of their earnings.

While the global peers have grown in low single digits, Asian peers have managed to grow at almost 20+%, India being at high double digit.

Find out more about the deep dive here.

(*These are exclusive to members of The 0.01% club. Still on the free plan? Consider upgrading your membership today, here.)

TRANSPARENCY INITIATIVES

At Beta to Alpha, we have always strived to keep adding exponential value to whatever it is that we do. As a part of our Transparency Initiatives, we have disclosed our portfolio holdings and the price tracker of all the stocks we have covered in our webinars.

Find out more about these initiatives by upgrading your membership.

There is good news! You can access the Dashboard here.

STOCK ROOM SUNDAY | EPISODE 13

Today we completed episode 13 of Stock Room Sunday.

We talk about the basics of NFTs!

While Vishal talked about one interesting technical setup alongside his view on the index, I ended up looking back on music streaming and an interesting presentation on Sony from 2019 by a hedge fund.

VIDEO OF THE WEEK

Balaji Srinivisan is one of the finest thought leaders in the space of looking at the future of technology.

Here’s the link to the video that talks about the future of economies.

BOOK OF THE WEEK

This week, I once again go back to reading The Psychology of Money. In the interest of probably recommending it for the fourth time, maybe you and hopefully I, complete reading it this time.

SONG OF THE WEEK

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About the author

Saket Mehrotra

Number cruncher, avid reader, coffee connoisseur, book store hopper & Metallica fan. An active follower of Sensex since 2009. CA, CS by profession.
Senior Associate - Equities at Tusk Investments. Ex - PMI, ITC.

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