Investment FAQs with Parimal Ade (Investment Satsang- 06) -

Here are some questions asked by the viewers in the Investment Satsang dated 21^st May 2021. These questions can provide you insights on some grounds. Please read these questions for knowledge purposes only and make any investment decisions only based on your research or the advice of your financial advisor.

Q View on Sun TV for the Long Term?

Parimal Ade:
• Favorable political stability has come in Tamil Nadu. There are good days to come.
• Politically inclined companies might have cyclicality by nature.
• Need to know internal things.

Q Why company care about the stock price in long run?

Parimal Ade:
• There are some tangible and tangible goals.
• If the company is willing to make a multi-million dollar company.
• As per today’s strategy the maximum market capital company makes number 1 company.
• In the future, if the company wants to raise money, by the offer for sale, for Follow on public offer, QIP for that they have to take money from the market.
• If the stock price is more then they can take more amount of money from the market. They can use this in the future. It’s not that all the companies will do this. But if the company requires capital then it will equity could be one of the options to raise money.

Q Views on TATA Steel and Metal stocks?

Parimal Ade:
• Initially, China was the exporter of steel but it was seen last year that they had started importing it.
• The problem that the govt saw in the economy. The maximum allocation of public investment needs to make it was in infrastructure to increase the demand.
• This is not just happening in China but also in the US and India.
• Hence steel demand has increased in coming times.
• It is doubtful that it might continue in the same way.
• The way the steel companies are behaving is at the peak. Extraordinary profit has been seen in this sector.
• There could be chances of profit booking. Need to be cautious unless you know the sector in a detailed manner.

Q View on Hero Motocrop for 5 years?

Parimal Ade:
• Hero Motocrop is the market leader. Hero Motocrop and Maruti are having the same situation.
• Overall there are a lot of challenges in 2 wheelers. Typically which is used for the daily commute and there is mass demand.
• There is the challenge of moped and electric vehicles.
• The run has already happened in this stock. But the growth in this stock is not seen but there is earning visibility.
• conservative investor can look forward to this stock.

Q How many stocks should we invest sector-wise?

Parimal Ade:
• 1 or 2 sector-wise stock is good to invest from the diversification point of view.

Q How to invest in bonds directly for a small amount?

Parimal Ade:
• AAA-rated bonds are good to invest in.
• It’s better to avoid doing directly these bonds. That much market is not developed, liquidity is another concern. There is a risk involved to stay in a bond till its maturity.
• The suggestion will be there to go with funds instead of bonds

Q Which is the best fund and why among QUANT ACTIVE FUND, PARAG PARIKH FLEXI CAP FUND, MIRAE ASSET Emerging Bluechip Fund?
Parimal Ade:

• All three funds are good. It all depends on the risk profile. It is good to have these funds from a diversification point of view.
• Quant Active Fund will not go drastically bad and very good as well.
• Parag Parikh Flexi Cap Fund 65% India and 35% abroad so one can invest.
• Mirae Asset Emerging Bluechip Fund entry is restricted. The performance is also good. Earlier it was a small and midcap fund now it is a large and midcap fund. Still, the company is not accepting new money. It is also not accepting lump sum money. As they are focusing on existing allocations.

Q View on KPIT at current levels?

Parimal Ade:
• KPIT is a good company.
• It is having a good thought process about automation. Their focus is majorly on the auto industry.
• Looking is the current scenario. which is changing towards the electric vehicle. In which automation is going to play a very important role.

Q If the inflation in developed and developing countries rises beyond expectation how can the investor hedge stocks, gold, silver, or crypto?

Parimal Ade:
• If inflation goes beyond control then at that particular time. Commodities could be a good option.
• In simple terms, if inflation increases the interest rates also increase.
• Floating interest rate funds could be a good option to invest in which rising interest could be beneficial.

Q How to invest in gold instead of SGBs?

Parimal Ade:
• The other options are gold funds, gold ETFs or physical gold which is usually suggested to avoid it.

Q In the long run telecom industry will be a duopoly, what could be the reason for the non-sustainability of VodafoneIdea as it holds 24% of the market share with 90% active users?

Parimal Ade:
·        The way the market share is going down that is a major concern.
·        After the merger of Vodafone and Idea, they were at No. 1 position which they came to 3^rd position.
·        Every quarter they are losing customers and upcoming quarter they could lose more market share which is a key issue with Vi.

Q View on Motherson Sumi Systems at current valuation. ?

Parimal Ade:
• The company is dealing very well.
• Due to electric vehicles, the company is positioning itself in the market.
• Visibility is looking good.
• The best part of this company is the inorganic growth opportunities it grabs.