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Is DMART better than these 2 growth stocks? - YouTube
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should you be investing in dmart because
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it looks like a kroger's growth story in
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india so if you ask yourself a question
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that okay why has remarked grown so fast
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very simple reason was that it ended up
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opening a lot of stores and this is not
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an indian stock that will go back to its
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previous prices at a brisk pace hi
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everyone so on today's video let's play
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a yes no maybe game so what do i mean by
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this so i'm going to do business
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analysis of three high growth stocks and
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you tell me whether we should be adding
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it to our portfolio maybe adding it or
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not adding it at all so just to set some
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context this will be a high growth high
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return strategy type of stocks these are
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called as x 200 x stocks which simply
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means that if you are looking to invest
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one lakh rupee with the expectation that
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it can go to one crore so these are the
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type of companies that you could
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consider picking so cathy wood is an
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investor who experiments with this
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investing style of x200x so just a very
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quick backdrop about her story so she is
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an american investor who is celebrated
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across the world i know a lot of people
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will say that she has lost of money this
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year etc etc true but in south korea
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retail investors call her money tree
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because of the returns that she ended up
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making in 2021 but yes her portfolio is
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very risky very volatile these are the
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returns of her portfolio that some years
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she makes like 150 percent return some
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years she loses a lot of money but net
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net she has been able to successfully
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beat the index so one could consider her
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to be a successful active investor and
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she adopts x 200x investing strategy so
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on this video i am going to speak about
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three simple things point number one
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should you consider doing x 200x
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investing point number two what is the
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nomenclature or basics associated with
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100x investing third and finally i will
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break apart three x 200x type of stocks
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so let us get the discussion started and
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also if you want to check some
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relatively low risk west or medium risk
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west you could consider checking it on
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wested these are free from my side and
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the link is in the description box so
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first and foremost let us quickly
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discuss should you be pursuing x 200 x
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opportunities you will say that okay
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this is a ridiculous question why should
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i not be pursuing x 200 x opportunities
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i keep on googling all day how to buy
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penny stocks i keep on googling all day
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that how to find multibagger i have
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joined 50 telegram groups so of course i
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should be investing in these x 200x
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opportunities okay so there are three
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critical points that you should know
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first and foremost x200x opportunity of
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any type will be high risk high reward
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strategy it simply means that if you are
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going and investing one lakh rupees in
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these type of companies it can
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absolutely go to zero or it could also
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become one crore rupee a classic case in
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point is something like bajaj finance
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now everyone will say that you know what
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bajaj finance is a great company you
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should buy it number one nbfc all that
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stuff but if you would have considered
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buying bajaj finance somewhere in let's
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say 2012 it was a fairly new company it
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did not have a lot of history you are
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betting on that company that stock could
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have gone to 100x or that stock could
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have become complete dust so the bottom
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line is that these are high risk high
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reward strategies so please curate your
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expectation
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in the past i have spoken about couple
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of high risk high reward stocks for
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example ngl fine chemicals amritanjan
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these are small cap companies they are
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likely to become very big it can also
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happen that they can end up generating a
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lot of losses please do not come every
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day and say that you know what today my
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loss on xyz stock is this percent that
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percent if you can't even hold stocks
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for two months especially hundred x type
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of stocks it becomes a problem so
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probably this type of investing might
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not make sense for you you should do
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stable investing this brings us to
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second model that when you are playing
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100x game you should follow the vc game
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model what is vc game model let me give
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you a quick background so for example
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when vc funds invest in startups what do
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they do if they have one crore rupee
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they will divide that into 20 companies
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they will make five five lakh rupee
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investment across 20 companies now out
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of 20 companies 18 19 will go to
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complete zero but one or two companies
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that will survive they end up giving the
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investors or vc fund a gain of 100 x so
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they invested one crore rupee 18
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companies went to absolute zero so they
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lost 90 lakhs there but 10 lakh rupees
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survived so that ended up becoming 20 x
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so net net are they profitable the
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answer is yes and that is the reason why
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so much money is being poured into the
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vc ecosystem so that is the vc model and
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you are also trying to replicate the
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same in your portfolio so please
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understand that expectation it is funny
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that when people say that you know what
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you talked about like indiabulls housing
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finance i have lost like 90 percent of
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my portfolio because of indiabulls
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housing finance by who said that you
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should be going and investing 90 of your
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money in india with housing finance
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there is a reason why you build your
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portfolio slowly so please keep these
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basic basic points in mind if volatility
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is not something that you can digest
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please do not invest please curate your
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expectations sensibly point number three
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is called as flipping it simply means
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that you make money as a stock market
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investor if the following scenario is
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playing out so let me explain that by
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using the white board so let us consider
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the case of zomato and hypothetically
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assume that 90 percent of people do not
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believe in zumatos growth story as of
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now they think that the stock is
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overvalued it will not survive companies
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bad no one needs a product all negative
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negative things so what are they going
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to do these are naysayers they are
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non-believers they will not invest 10
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people let's assume that they believe in
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zomatos business model and they are
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going to invest as of now whatever the
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existing price is and by the way this is
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a disclaimer that i'm just picking
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zomato as an example please do not start
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saying that you recommended zuma to all
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that stuff so all right so let's
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continue with the example so in flipping
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what ends up happening is that let's
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take a scenario where after three years
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this situation changed that good news
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comes market is moving upward zumato is
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generating a lot of profits revenues
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then what will happen a lot of people
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from this category will migrate to this
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category and this is called as flipping
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and as a result even if let's say 30
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percent people from this category
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migrate to this category then the stock
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price will definitely go 4x5x right so
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that is the simple concept of flipping
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and flipping happens on volatile things
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volatile assets and that is the reason
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why there are investors like mr vijay
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kedia who love to invest in these x 200x
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type of companies they get a lot of heat
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and even investors abroad for example
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cathy vote they get a lot of heat
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because they are deliberately looking to
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buy these type of assets so with that
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viewpoint in mind let us move to the
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second part of our discussion that what
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are some of the key features or traits
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of these x 200x type of opportunities so
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according to me there are five specific
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traits of x 200x type of opportunities
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so first and foremost that the size of
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the company should not be huge even if
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it is huge it should have the potential
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to grow exponentially for example amazon
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is a fairly big company but can it still
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go 100x i don't know for sure whether it
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will go to 100x but there is a lot of
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steam left in the company because they
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are expanding to new industries new
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opportunities but traditionally speaking
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if you identify a company which is
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fairly young which is not very much in
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size then it can grow to become really
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big a classic case in point is
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amritanjan it is a small cap company and
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it can potentially become really big
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after a few years if it keeps on
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generating good business and continues
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to do good work now comes the second
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thing that the industry should be a
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growth industry for example right now
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automobile industry is a industry which
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we can't say is a growing industry from
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a conventional sense for example
[424]
companies like maruti they have been
[426]
market leaders in conventional space not
[428]
in electric vehicle space now the entire
[430]
industry it is given is going to change
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to eevee so we can't say that the
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conventional automobile industry is a
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growth industry so this is the second
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key trend that please pick a growing
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industry third key thing that the
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company should have opportunities to
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expand a classic case in point is
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started out in terms of opening dmat
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trading account now they are moving into
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different line of businesses they have a
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lot of cash sitting on their balance
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sheet so these type of expansion
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opportunities should be present with the
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firm fourth point is called as tam or
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total addressable market since we are
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trying to play the vc game as i
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explained on part one time simply means
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that how big the industry can grow so
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that becomes the total addressable
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market for example right now in the ev
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sector in india what is the time or the
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total addressable market size honestly
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it is not that big because consumers in
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india are very cost conscious or price
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conscious so unless the ev sector
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pricing point comes down dramatically
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the time or opportunity in india from an
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ev segment point of view will not grow
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magnificently then comes the fifth and
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final point that if the industry is
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transformational then it can create a
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lot of impact a classic case in point is
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hdfc bank or private banking in india so
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before private banking in india there
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were only psus punjab national bank sbi
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etc etc then over time these private
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banks came in and they transformed the
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industry using what using tech
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especially digital banking so they used
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to settle the payments very quickly
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clear the checks very quickly and that
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transformed the industry so these are
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five specific trades if you see that in
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any stock then probably it is a hundred
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x opportunity now with that lens let us
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speak about three specific stocks so i
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will speak about two u.s stocks and one
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indian stock so let us discuss the first
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stock which is called as ui path a lot
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of you have commented akshaya the ui
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path has been crushed by 50 this that
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you have already made a video on that
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yes and i still stand by the stock so
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let me discuss the updates on ui path so
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first and foremost what is it that
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uipath does so in very simple easy to
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understand language it is an rpa form so
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rpas are basically bots these are
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intelligent automated workforce so to
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say that can replace manual labor a
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classic case in point is that for
[554]
example right now you might have data
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entry operators which are sitting
[558]
manually inputting a lot of data on the
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computer excel spreadsheets now can you
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replace this workforce using computer
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bot softwares etc that is what ui path
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is consistently doing now what is the
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time or total addressable market size of
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this company or this opportunity because
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it is working on a transformational tech
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so the total opportunity as per several
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research point comes out to be around 60
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billion dollars which is a fairly big
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amount now ui path right now is not a
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very big firm because rpa as an industry
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itself is not very big and also its
[588]
stock price has been crushed by roughly
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57 percent in the last six months so
[592]
does that mean that ui path is a very
[593]
bad firm the answer is no you need to
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take a slightly more nuanced view so the
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word of the day today is nuanced let me
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know what does that mean and i will show
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you three specific charts associated
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with that so here is the first chart and
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this research was done by gartner and it
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still puts ui path at the top when it
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comes to rpa so if you believe in rpa as
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a technology and if you feel that
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mundane manual work is going to replace
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by robotics or intelligent software then
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ui path is still a very very strong
[620]
company this is point one point two if
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you take a look at this chart these are
[624]
the latest quarterly results for uipath
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and what you will see is their total
[628]
customer base has increased their large
[630]
scale customer base has increased their
[632]
total contract value per contract has
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also increased and also the best part is
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that their dollar based net retention
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rate is 138 what it simply means is that
[643]
last year if ui path was selling its
[645]
service at 100 rupees now it is selling
[647]
that same service for 138 rupees for
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that same client and clients are still
[651]
buying it and they are still able to
[653]
retain their clients so you will say
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that okay this is such a great company
[656]
then why did the stock price get tanked
[658]
by 57 percent okay is it an internal
[660]
fault or is it an external fault so to
[662]
say so first and foremost please
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consider the fact that companies like
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apple have corrected by 25 30 already
[668]
and those are trillion dollar companies
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so a smaller company like uipath falling
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by 55 56
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is not the end of the world second key
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point the u.s stock market in 2022 have
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been the worst performing stock market
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in the last 45 50 years so since 1970
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u.s markets have not performed as badly
[687]
as they have in the first half of year
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2022 so please consider all these facts
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and curate your expectation and you let
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me know in the comment box that is it a
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yes is it a no is it a maybe stock now
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let's move on to the second stock which
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is an indian stock and it is called as
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dmr now this is not a detailed stock
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analysis of dmart if you want me to make
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a detailed video on dmart let me know i
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will make a detailed video but here is a
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very quick outline on what is happening
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on dmart so first and foremost what is
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it that dmr does so dmart owns chain of
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hypermarts and they are expanding quite
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aggressively all across india in fact
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from 2015 to 2020 they expanded quite
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aggressively and it generated a lot of
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interest in dmart stock in very simple
[726]
words they are trying to create
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something called as hyper mods now what
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is a hypermart there are two standout
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features one is that they are trying to
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provide things at a very inexpensive
[735]
price so this is the first thing second
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key thing is that they want to open
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really big stores for example you might
[741]
have seen a company called as decathlon
[743]
doing the same in the u.s companies like
[745]
walmart or krogers are expert in terms
[748]
of doing it and if you consider kroger's
[750]
growth story now here is the stock price
[752]
chart for krugers and you will see that
[754]
the stock has given exponential returns
[756]
and is still continuing to do really
[758]
well so this brings us to the discussion
[760]
that should you be investing in dmarc
[762]
because it looks like a kroger's growth
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story in india so if we remove all the
[766]
bells and whistles and look at a very
[768]
fundamental fact as to why dmart will
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grow or not grow here is an over
[772]
simplified analysis and again let me
[774]
know if you would want me to make a
[775]
detailed video on this so first and
[777]
foremost ask yourself a question that
[779]
why did dmart's stock price grow a lot
[782]
so let me take you to dmart stock and
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you will clearly see that over the last
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five years its stock price return has
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been 279 percent which is a very
[789]
fabulous growth rate considering the
[791]
fact that from its peak the stock has
[793]
corrected by 40 percent so if you ask
[795]
yourself a question that okay why has
[796]
remarked grown so fast very simple
[798]
reason was that it ended up opening a
[800]
lot of stores now why did they open up
[802]
so many stores one of the primary
[804]
reasons was that they got to purchase
[806]
land or enter into property arrangements
[808]
where the real estate prices were very
[810]
cheap and real estate prices over the
[813]
last 10 years had been very very cheap i
[815]
have made several videos on that topic
[817]
now what is happening the real estate
[819]
prices are going up in india due to the
[822]
macroeconomic conditions that stock
[824]
markets have become very volatile
[825]
cryptos have become very volatile people
[828]
are looking for safer options to invest
[830]
real estate market had been lagging for
[832]
the last 10 years and now it has started
[834]
to bounce back now you will ask me that
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okay what is such a big deal with this
[837]
dmart is still a great company yes it is
[839]
a wonderful company take a look at this
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chart they are 10 year profit
[842]
compounding has been great their sales
[844]
growth has been great and no doubt it is
[846]
a wonderful company but the issue right
[848]
now with the company is that it cannot
[850]
expand too aggressively why because its
[852]
goal is to create bigger and better
[854]
stores unfortunately the new contracts
[856]
or expansions that they will be
[858]
undertaking it will hit their margins so
[860]
as a result the stock has already
[862]
corrected by 40 and this is not an
[864]
indian stock that will go back to its
[865]
previous prices at a brisk pace simply
[868]
because of the fact that dmac's growth
[869]
story will be shaped up by the fact that
[871]
how much is the real estate prices in
[873]
india and whether or not they can
[875]
continue to expand their super store
[877]
strategy now does this mean that you
[878]
should invest not invest i will not give
[880]
any verdict is it a maybe yes no you let
[883]
me know in the comment box another
[884]
related point and please take this
[886]
snippet with a grain of salt this is the
[888]
information that you will find in some
[889]
of the media houses i don't know to what
[891]
extent this is correct or not they talk
[893]
about insider trading within dmart
[895]
stocks and they have categorically
[897]
pointed out to the fact that ramakhan
[899]
bheiti has sold 193 million worth of
[901]
shares at a price of
[903]
3880 rupees per share right now it is
[906]
trading at 3 400 rupees since this
[908]
information is out i am not verifying it
[910]
please do some legwork at your end to
[912]
verify this news and take a call
[914]
appropriately now let me move on to the
[915]
third and final stock for today which is
[917]
coinbase now coinbase is a listed u.s
[920]
crypto investment firm now you will say
[922]
that you know what crypto market is that
[924]
okay so then you don't invest there is
[925]
no big deal in terms of investing or not
[927]
investing in coinbase there are 100
[929]
other companies just understand the
[930]
logic it might be applicable to other
[932]
industries also whichever industries you
[934]
are researching so first and foremost
[936]
there is a lot of negative sentiment on
[937]
cryptos simply because of the fact that
[940]
all the things that were considered as
[942]
growth assets are getting crushed
[944]
cryptos to begin with they were the
[945]
highest growing assets back in 2020 2021
[949]
phase as a result they have corrected
[951]
the most similarly dmart great growth
[954]
asset unfortunately corrected the most
[956]
so anything that was commanding rich
[958]
valuations got crushed and coinbase
[959]
accordingly got crushed with it now what
[962]
is coinbase business depends on so first
[964]
and foremost it literally depends on
[965]
trading volume of cryptocurrencies you
[968]
can clearly see this from the graph that
[969]
whenever there is more positive
[971]
sentiments in crypto currencies coinbase
[973]
trading volume goes up in other
[975]
scenarios when these sentiments are
[977]
negative trading volume of coinbase goes
[979]
down now let us consider the quarterly
[980]
result performance is it happening that
[982]
you know coinbase has lost a lot of
[984]
steam the answer seems like a yes and no
[986]
simply because of the fact that you can
[988]
clearly see that overall transactions
[990]
have come down from 2021 to 2022 period
[993]
but if you compare it to q3 of 21 there
[996]
has been a definite growth right it's
[997]
not as if that there is a secular
[999]
decline in the number of transactions
[1001]
that are happening now you might ask me
[1003]
that okay what is the major mode or
[1004]
competitive advantage of the firm very
[1006]
simply put that it is a listed us
[1009]
regulated cryptocurrency buying platform
[1011]
so which is very very big and a mouthful
[1013]
so i'll break it apart they actually
[1015]
work with regulators because it is a
[1016]
listed company in the us so people who
[1018]
are sitting on the fence they are not
[1020]
completely pro crypto not anti crypto
[1022]
they just want to get little bit of
[1024]
exposure to crypto they buy and invest
[1026]
in something like coinbase and also in
[1028]
terms of the transaction volume in the
[1030]
us which is one of the most prominent
[1031]
cryptocurrencies market because china
[1033]
has banned cryptos but uss pro crypto
[1035]
that is what it seems they will regulate
[1037]
cryptocurrencies more specifically
[1039]
stable points to begin with and that
[1041]
will increase the regulatory compliances
[1043]
on coinbase so this is a pivotal
[1045]
movement for a company like coinbase
[1047]
because if the regulations turn
[1048]
favorable in the us it has a massive
[1050]
growth trajectory because the industry
[1053]
is expanding so since coinbase is an
[1054]
industry leader in the us so it will
[1056]
benefit immensely from regulation now
[1058]
does that mean that the stock has no
[1060]
risk the answer is no because the
[1061]
competition is growing people are moving
[1064]
to zero trading fee commission model
[1066]
even in crypto currencies very similar
[1067]
to how companies have moved to zero
[1069]
brokerage in stock market same thing is
[1071]
happening in the crypto market so this
[1073]
crushes the margin for something like
[1074]
coinbase and also newer firms are
[1076]
getting into the market for example ftx
[1078]
is there finance u.s is getting into the
[1080]
market so the competition is likely to
[1082]
go up having said all this one singular
[1085]
point that you should remember in terms
[1086]
of taking a bet in something like
[1088]
coinbase is that right now gold's market
[1091]
cap is roughly around 10 trillion
[1092]
dollars cryptos market cap right now is
[1095]
roughly at around 2 trillion
[1097]
so if crypto entire cryptocurrency
[1100]
market cap goes up to gold's market cap
[1103]
there is a 5x growth so this industry
[1105]
will at least exhibit 5xx growth and
[1108]
then you can figure out whether these
[1109]
companies are going to grow or not
[1111]
despite having high competition so this
[1112]
is where i will leave the discussion i
[1114]
will not give my verdict whether you
[1115]
should be buying it not buying it what
[1117]
am i doing on it please do a little bit
[1119]
of legwork investing is a serious game
[1122]
it is for serious investors if you just
[1124]
watch basic videos and invest you are
[1125]
doing yourself a disservice please stop
[1127]
watching basic videos on investing if
[1129]
you are a basic investor please invest
[1130]
in index fund please invest in mutual
[1132]
funds please invest in fds please invest
[1134]
in basic instruments if you have a
[1136]
little bit of time effort energy and are
[1138]
willing to learn and take accountability
[1140]
for your investment do consider
[1141]
researching about all these stocks i
[1143]
feel it is a great time to pour in money
[1145]
i am actively looking for more good
[1147]
businesses to invest and i am literally
[1149]
investing on every fall so in case you
[1151]
want to check i have talked more about
[1152]
my portfolio on this particular video so
[1154]
do give it a go and you will understand
[1156]
more about my investing style and it
[1158]
will help you curate yours i hope you
[1159]
enjoyed this video please press the like
[1161]
button and i will see you soon
[1182]
you
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