tag:blogger.com,1999:blog-7004453.post5071557381108591320..comments2023-09-02T19:53:06.144+05:30Comments on Understanding and applying value investing principles: Brokerage firmsRohit Chauhanhttp://www.blogger.com/profile/00356455735241398199noreply@blogger.comBlogger8125tag:blogger.com,1999:blog-7004453.post-90035947884877074242011-04-15T23:18:45.748+05:302011-04-15T23:18:45.748+05:30Dear Rohit
What is your opinion on YES BANK ?
Re...Dear Rohit<br /><br />What is your opinion on YES BANK ?<br /><br />Regards<br /><br />Vinayakvinayaknoreply@blogger.comtag:blogger.com,1999:blog-7004453.post-74705398321430894212011-04-14T08:20:38.709+05:302011-04-14T08:20:38.709+05:30hi vikas
good to see you back on the blog. i am ge...hi vikas<br />good to see you back on the blog. i am generally very cautious in the finance space. an aggresive managament can really drive a company to ground.<br />if a bank or finance company is growing very rapidly, i get cautious and avoid it. on average i may miss some gems, but will avoid the blow up<br /><br />on taking my time - you are right on target. for all the reading and mulling, i may not even end up with a one idea :)<br /><br />rgds<br />rohitRohit Chauhanhttps://www.blogger.com/profile/00356455735241398199noreply@blogger.comtag:blogger.com,1999:blog-7004453.post-76645209791137718032011-04-14T08:18:09.154+05:302011-04-14T08:18:09.154+05:30hi valueinvestor2010
you are spot on. businesses l...hi valueinvestor2010<br />you are spot on. businesses like crisl are a class apart - crisil is a license to print money :)<br /><br />i am looking at the entire financial services space - banks, PE firms, brokerage, HFC etc. A lot of these separate companies are now converging. banks are now into broking, Housing finance, investment bank. similar broking firms are becoming nbfc.<br /><br /><br />its a very competitive space. i think either a very focussed or niche player will do well or we need large players like hdfc or icici which will do well on an overall basis<br /><br />rgds<br />rohitRohit Chauhanhttps://www.blogger.com/profile/00356455735241398199noreply@blogger.comtag:blogger.com,1999:blog-7004453.post-21575725182782652232011-04-14T08:14:48.670+05:302011-04-14T08:14:48.670+05:30Hi ansh
you are very right. the industry is very f...Hi ansh<br />you are very right. the industry is very fragmented is now consildating. it is now a scale and volume driven business. its becoming quite similar to basic banking in a sense - you dont make much money from plain vanilla products. there have to be additional services and efficiency in the business<br /><br />rgds<br />rohitRohit Chauhanhttps://www.blogger.com/profile/00356455735241398199noreply@blogger.comtag:blogger.com,1999:blog-7004453.post-73360178504881093692011-04-14T02:46:41.524+05:302011-04-14T02:46:41.524+05:30Hi Rohit,
Good post, nice to know that you're...Hi Rohit,<br /><br />Good post, nice to know that you're looking at the opportunities in financial sector as it is bound to benefit from India's growth. I think the retail sector is going to witness more competition.<br /><br />For example, I have seen DBS Bank (Singapore) is expanding very aggressively, have also seen many initiatives from HDFC, Deutsche Bank, IIFL..I mean from all kind of banks/firms.<br /><br />Ansh and valueinvestor2010 have made good points. One has to be cautious if it is a tier 2 bank or a brokerage firm because you never know what they're sniffing on. They make money on something but can loose on more on some crazy ideas as they get growth hungry or the competition forces to make risky bets.<br /><br />I know you take your time to make a decision..:-)<br /><br />Thanks,<br /><br />VikasVikas Ranahttps://www.blogger.com/profile/05508406035178681504noreply@blogger.comtag:blogger.com,1999:blog-7004453.post-39402825924971190382011-04-12T07:12:52.800+05:302011-04-12T07:12:52.800+05:30Hi rohit,
My topic for discussion is a bit out of ...Hi rohit,<br />My topic for discussion is a bit out of the way, not related to above topic but still pls have a look if its convincing. This is regarding Jocil chemicals, an andhra based company majorly into contract based business, making toilet soaps for ITC, J&J, HUL and others. Its growth has been very average in last 10 years from 60 crs to 330 crs in last 10 years. The attractive part is their stable and clean management and regular dividends and a low financial leverage history. Also their divercification into related fields to increase their effeciency as well as profit margins. They have power generation plants in wind energy and bio gass to generate a constant power supply. The negative part however is lack of pricing power since they are into a non-competitve business and exposed to volatility in raw material prices. However their sale have been increasing and are 3 times their market cap currently. It is trading at par with book value and at an price of 5-6 times trailing year earnings. Just wanted to have your thoughts on the overall picture and future procpects.VIKAS KUKShttps://www.blogger.com/profile/07801628829607740651noreply@blogger.comtag:blogger.com,1999:blog-7004453.post-78402490908535507042011-04-11T12:07:43.953+05:302011-04-11T12:07:43.953+05:30Hi Rohitji good to see a new sector however a few ...Hi Rohitji good to see a new sector however a few important points<br />1) Bull markets can lead to high trading volumes that give high earnings and a rosy valuation to brokerages.<br />2)Leverage is often hidden in subsidiaries, special purpose vehicles etc etc. So probably contingent liabilities should be studied<br />3)Valuing earnings for organizations like investment banks is difficult.You can't multiply units produced x price to get revenue :-))<br />4)The best financial organizations are firms that have legislative and reputational moats like CRISIL or Mastercard. Not sure about brokerages, investment banks etc.<br />Thanks, all the best and great work sir :-)valueinvestor2010https://www.blogger.com/profile/05498499726687143903noreply@blogger.comtag:blogger.com,1999:blog-7004453.post-10789733816207157732011-04-11T05:40:13.864+05:302011-04-11T05:40:13.864+05:30Hi Rohit,
I think very few new players will enter ...Hi Rohit,<br />I think very few new players will enter this industry/sector, due to intense competition between the existing players.This sector is also being commoditized, and there is very less differentiation between various brokerages.<br /><br />The key lies in identifying a good pick among the already listed players. Eventually only those companies which can expand their branches/retail base and which can leverage their brand name will emerge as good investment picks.Anshhttps://www.blogger.com/profile/12577979220646795251noreply@blogger.com