‘HOLD’ was our decision on Lincoln Pharma when we last reviewed the stock in February 2024 as the market price then (₹690 per share) was slightly higher than our estimated fair value. Major headwinds perceived then were the persistently slow pace of earnings growth, sluggish capital allocation, and mediocre working capital management. Now six months … Continue reading Lincoln Pharma: Despite Recent Gains Odds Seem Favourable
Contentment about our investments and money matters is determinant not of what is on the outside but of what happens inside of us. The underlying motivation behind most of our investment endeavours is not just the money but the plethora of opportunities that money opens for us. The bigger house, faster cars, better neighbourhoods, and … Continue reading Finding Contentment in Your Investment Journey
I was positive about Control Print when we last discussed it in February 2024 after its Dec. 2023 quarter results, however, I discouraged buying the stock due to its elevated price. The stock was trading at ₹968 per share then; it now trades at ₹800 per share – down 17.35 per cent in six months. … Continue reading Control Print: Earnings Slowdown a Major Headwind
The interest rate hikes of 2022-2023, and recent warnings and actions from authorities to curtail excessive risky behaviours suggest so. The S&P 500 index, representing the top 500 listed companies in the United States, is down 5.65 per cent since 16 July 2024, the day it made an all-time closing high of 5,667.20. The index … Continue reading Are We at the End of a Stock Market Boom?
The prolonged period of low market interest rates led to risky financial behavior and accumulation of risk in the financial system, particularly evident in the high growth of unsecured retail loans by NBFCs. These easy times, with low interest rates and high credit growth, have raised concerns about financial stability. The push for rate cuts amidst robust economic growth and high inflation may exacerbate these excesses and make the system more fragile.
“An effective investment philosophy” was his answer when Howard Marks, the renowned investor widely revered for his investment memos, was once asked about the reason behind his investment success. The answer made me curious about my investment philosophy. I worried about not having one. If I do have one, what is it? I do believe … Continue reading Refining My Investment Philosophy: A Journey
Despite a sombre financial performance in FY24, TCPL’s stock gained 43 per cent during the financial year. The valuation expanded to a PE of 19.55 and a PBV of 3.72. Normally, a stock’s price is expected to underperform during periods of declining operating profitability, unless the stock is undervalued. In other words, it is reasonable (and justified) for a stock to deliver superior returns even during periods of declining profitability if the stock was undervalued in the first place.
The purpose of the financial system is to support the ‘real’ economy by facilitating transactions, majorly through credit and money supply. But on certain occasions, the financial system would dissociate from its principal purpose and start functioning for its own sake – its expansion and survival. Unfortunately, the financial system gets seized by many ill effects if dissociated from its primary purpose. Precariously high asset prices, credit booms, capital misallocation, and financial fraud are a few of the ill effects.
This edition of our analysis, dated 19 June 2024, discusses the investment prospects of these stocks: Dynemic Products, RACL Geartech, and Kovai Medical Center.
The low rates prevailed from 2008 until 2022 were a result of central bank interventions in response to the financial crisis. However, these interventions deviated from the prudent path, fostering economic distortions and financial imbalances. Modern central bankers' adherence to price stability and inflation targeting, driven by a flawed understanding of history, has contributed to these issues. The repercussions of this flawed monetary policy are soon to be felt as the economy transitions to a more normal monetary condition. This transition is expected to bring about necessary corrections, albeit painful in the short term, and lead to positive long-term consequences.
AMN CAPITAL 