“Rakesh Has Bought Spice Jet Shares, Should I Buy?”

21 December 2014

“Rakesh Has Bought Spice Jet Shares, Should I Buy?”

Greetings from Hitesh! We keep on receiving questions from our readers and it is a pleasure to take up the issues which can be helpful to all other investors also. With this intention in my mind I am dealing above question from my regular reader.

Let me deal with this issue in my own style.

Do you get attracted to a Girl because she is Beautiful?

Just think. My understanding and experiences tell me the other side of the story. It tells me - since we are attracted towards a girl – she looks beautiful to us!

How Does This Apply To Our Following of Rakesh?

We have an inbuilt attraction for Rakesh and when he buys anything – we feel that we should also buy the same!! Many people buy it also.

If they know – some FII is buying some stocks – they will buy that also!!

In short – these people are in search of some super short cut to profit and they would do such nonsense thing only to blame their luck later on.

What is our call on Spice Jet?

It has a negative net worth of around Rs.1000 Crs as on March 2014. If you add up the losses of the lost two quarters it will be around Rs.1500 Crs plus. If we add up another loss of approx Rs.300 Crs for this quarter it will be around Rs.1800 Crs.

The most funny aspect of the Share market is – the company still has a Mkt cap of Rs.950 Crs.!!

Will you buy this company?

Let us understand some fundamentals of  RAKESH:-

He and only he is the right person to give you the answer. However, from the outside I have following issues to bring to your notice.

1.  Most Media puts his net worth above USD 1 billion. Approx Rs.6000 Crs plus at current conversion rate of USD. He invested Rs.13 Crs in spice jet last week!! It’s like you have Rs.6000 in your pocket and you are buying a Packet of biscuit worth of Rs.15!!

2.  Many times we go to an opening of a shop and we buy something as a token for Muhurat!! The objective here is to please the relative or friend on whose shop you have gone and not the object you buy!! Am I right?

3.  Most media guys are telling he has done a mistake!! But if you know above two reasons – can you call it a mistake?

4.  Rakesh is Rakesh because of his trading skills and not his investment skills. Just see his portfolio!! TITAN, Lupin, Crisil and Rallis accounts for more than 80%. Rest all other stocks have yet to perform and he has the holding capacity and patience to wait for N number of years. Do you have?

What Next?

We always tell our clients to use the common sense over and above all the fundamentals and technical you have!!

Those who do not use the common sense are the easiest pray for the market operators!!

You are free to do what you think fit to do.

If our way of thinking makes sense to you, you are welcome to follow us –join us. Do write to us and we will come back to you.

Have a Great Weekend.

Follow me on Twitter @hiteshmparikh Or on Whatsapp - +91-9869425399.

Live With Passion…Invest With Passion.

Hitesh Parikh.