How to Invest in Cyclical Stocks with Case studies

YOUR SPEAKER

Jiten Parmar

Mr. Jiten Parmar is a value Investor, and the co-founder of Aurum Capital, a SEBI-Registered Investment Advisory company. An entrepreneur and a passionate long term equity Investor. Jiten has been investing in the US markets since 1993, started in the Indian Equity Markets in 2002. As an investor, he focuses on Small and Midcap stocks, and works in the stock market by understanding business cycles and preparing strategies to invest in cyclical/commodity stocks.


IN CONVERSATION WITH

Mr. Vivek Bajaj

The passion for data, analytics and technology is what makes Vivek Bajaj a financial market survivor. The journey as a market participant started in 2002 when the first trade was executed in the options contract of ITC. Life was simpler and easier during that time. Since then technology and Big data have taken over totally. As an early adapter to the complex tools, Kredent was formed to capitalise on the opportunities. He is co-founder of StockEdge and is committed to bring simplicity in the complex world of market data. He is a Chartered Accountant, Company Secretary and an MBA from IIM Indore. He is a part of various committees of exchanges and regulator and he has been an active contributor in the evolution of Indian Derivatives Market.


About this Face2Face:

In this continuation of our Face2Face video, we have with us Mr. Vivek Bajaj, co-founder, StockEdge, Elearnmarkets, continue his conversation with Mr. Jiten Parmar about the fundamentals of value investing, by taking up some informative case studies on cyclical investing and how to choose the best cyclical stocks for our investment.

We will start this video with a revision of the basics of a good value investing, especially when cyclical stocks are involved, and how we can gain an edge over the stock market with a positive attitude even during a bearish phase in the stock market.

Next, we will talk about the basic definition of contra thinking and how we can use it to our advantage in long bearish phases in the stock market, to find the best cyclical stocks investments for us.

Next, we come to the main focus of this video where we will begin with the exhaustive case studies to show how cyclical investing, combined with the basics of value investing, can help us find the most profitable opportunities in the market.

In the first case, we will see a case with a graphite company, to see how herd mentality can affect our profits in the long-run, and we will see how the trade in the case study will play out for each type of investor, and when should we enter and exit with such underlying circumstances for the stock.

In the next case, we will see a trade in a paper company. Mr. Parmar will show us his logic behind his entry and exit in the trade to show how he uses the fundamentals of value and cyclical investing to figure out the right time to exit a trade. We will also see this justification through the stock prices in the case study.

With a case study on two polyfilm companies, we will take a look at the various fundamental parameters that can make a cyclical industry stand out to retail value investors, and the importance of catching the right timing to attain the best value for our investment. We will learn about how cyclical stocks give us a great advantage by giving us periodical opportunities for profitable long-term investing.

With a mining company, we will see how a boost in sales has helped investors find a value investment, and how the cash and asset holdings can affect our decisions to invest in them.

With such more case studies, we will explore the practical applications of each basic rule-of-thumb when it comes to value investment and cyclical investing.