Cairn - Vedanta - interesting situation

protrade

Active Member
#1
Recently, oil prices have been moving up. Also, Cairn got an extension on its Barmer block in Rajasthan. This should have had a positive impact on Cairn stock - however, what's happening is that the stock is coming down!

The reason is that Copper and other metal prices have been coming down.

Because of the merger between Cairn and Vedanta, and because of the way the terms have been set, Cairn and Vedanta are moving together. And since Vedanta is under pressure, Cairn also has been coming down. And this makes Cairn available at a very attractive price relative to the prospects for the company!

However, even if you buy Cairn at an attractive price, it will be converted to Vedanta when the merger closes! At which point, you will lose the benefit :)

How would you play this transaction?
 

protrade

Active Member
#3
Requesting not to open multiple threads.

You can open a single thread something called "Market Analysis by Protrade" and post all your analysis on the scrips/indices in that thread.
I know some people do it that way - but that is not the way forums are designed to work! If I just create one thread for all topics, people who are not at all connected to one topic will be forced to read this. With my current approach, someone can just read the title, and decide whether the topic is of interest to him/her, and participate only in whatever they decide to.

For instance, if you are interested in Cairn or Vedanta, then you can look at this thread, otherwise ignore it. At least I think that is the way forums are designed to work.

The trouble is there are some others who consolidate all posts, into threads like "My picks". And then it becomes like the entire activity in the forum happens inside one thread!
 

amitrandive

Well-Known Member
#4
I know some people do it that way - but that is not the way forums are designed to work! If I just create one thread for all topics, people who are not at all connected to one topic will be forced to read this. With my current approach, someone can just read the title, and decide whether the topic is of interest to him/her, and participate only in whatever they decide to.

For instance, if you are interested in Cairn or Vedanta, then you can look at this thread, otherwise ignore it. At least I think that is the way forums are designed to work.

The trouble is there are some others who consolidate all posts, into threads like "My picks". And then it becomes like the entire activity in the forum happens inside one thread!
Forums are designed to work in nested ways,many members who use this sensibly and save forum space.

http://www.traderji.com/technical-analysis/69380-charts-day-282.html#post674412


The other approach is to create a thread for every scrip or every bit of news and create hundreds of threads as there are thousands of scrips.
 
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protrade

Active Member
#5
Forums are designed to work in nested ways,many members who use this sensibly and save forum space.

http://www.traderji.com/technical-analysis/69380-charts-day-282.html#post674412


The other approach is to create a thread for every scrip or every bit of news and create hundreds of threads as there are thousands of scrips.
@Amitrandive - something like Daily Charts, Daily Picks, etc, it makes sense to continue in a single thread. But if you have totally disconnected topics - with the only connection being the person posting - does it make sense to put it all into one thread?

Classic case - I have some follow up information on the "INR..." thread - please check it out, could be valuable. If I put this under Cairn-Vedanta, how on earth will people make sense of it?
 

sam_u6

Active Member
#6
pro trade ji,
say for example there is 100 stocks available in nse,ur analyzing atleast 50 stocks ,and posting ur views,, which will have 50 new threads in forum,and if taken jubilant food for example. think after 1 successful trade setup ,u will touch that thread hardly rare next time,instead of doing it ,one thread of ur view will be easy for u and also others to track it...ofcourse people not follows u finds difficult,but for the people who follows u ,its very easy to dig the same thread
 

protrade

Active Member
#7
pro trade ji,
say for example there is 100 stocks available in nse,ur analyzing atleast 50 stocks ,and posting ur views,, which will have 50 new threads in forum,and if taken jubilant food for example. think after 1 successful trade setup ,u will touch that thread hardly rare next time,instead of doing it ,one thread of ur view will be easy for u and also others to track it...ofcourse people not follows u finds difficult,but for the people who follows u ,its very easy to dig the same thread
Sam_U6,
Isn't that how forums work? If a thread is not touched for some time, it goes down the list, and the active threads stay on top? What is the problem if there are some inactive threads at the bottom, say on the second page?

If I was a big time stock market advisor, I could create my own thread, and people can come there for my advise! But I am not anyone big. I just post some thoughts I have about some stocks - whoever has some thing to say about what I post, will reply on that thread.

If I post disparate topics in same thread, it is literally impossible for people to understand which comment is for which post. Which reply is for which comment, etc.

Ideally, you will see greater participation from the community. If you see my thread on Reliance (Big Brother on the move), or Jio (subsciptions) - they see activity by others - because those topics people also are interested.

When I post about Coal India, some people comment. But when I post about Cairn-Vedanta, looks like no one is interested - so this kind of side discussion happens :)

I believe I am doing the right thing - by creating a separate thread for each topic.
 

mastermind007

Well-Known Member
#8
@Amitrandive - something like Daily Charts, Daily Picks, etc, it makes sense to continue in a single thread. But if you have totally disconnected topics - with the only connection being the person posting - does it make sense to put it all into one thread?

Classic case - I have some follow up information on the "INR..." thread - please check it out, could be valuable. If I put this under Cairn-Vedanta, how on earth will people make sense of it?
@amitrandive and @protrade

Both of you are correct, but from a limited perspective only.

When analysis is predominantly technical, It is usual (and more appropriate) for the poster to open one thread and all his analysis (of all stocks of his interest) can go there. This approach is better suited for technical analysis since it focuses solely on data available in market and analysis is based on charts. If such analyst is able to apply his idea to more stocks, his idea is more general purpose and more likely to be better.

Even fundamental analysis of stock which is based on published P&L reports can go in same way. I can look at EPS of share and decide whether it is good buy or bad buy or I can compare EPS of stocks in same sector to do the picking.

What protrade seems to be doing does fall under "fundamental analysis" but he is relying on information that is not always numeric in nature. In his appraoch, each stock is like a living breathing person. If he were to post his analysis of COALINDIA, TATAMOTORS, RELIANCE, TATASTEEL and CAIRN in same thread, people would understand neither and inter-leaving of posts would completely worsen the thread further.
 
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protrade

Active Member
#9
@amitrandive and @protrade

What protrade seems to be doing does fall under "fundamental analysis" but he is relying on information that is not always numeric in nature. In his appraoch, each stock is like a living breathing person.
Thanks Mastermind007!

Let me explain my logic slightly deeper, so people understand clearly. I consider this to be the ground up value approach of investing.

First find businesses that are doing well - especially businesses where the market and the analysts are not seeing some factors that could influence the business. Or maybe, where there is something wrong, but there is some scope for turnaround in the future - again, something missed by markets and analysts.

Out of these businesses, find ones that are trading at discount to their peers, and at discount to the market. This makes sure that the idea gets tighter.

Thirdly, do a basic technical check - even if you are not bothered about the technicals, the reality is that many others are - and that creates its own problems. For instance, a stock like Reliance could see extra resistance against psychological levels like Rs 1000. You won't get much mileage buying the stock at 990, however good the prospects are - might as well wait for a decisive break over 1000. Or some other such levels based on other tech indicators.

The stocks that meet all these criteria, would typically give you excellent performance. But don't just leave it at that. Because there is an opportunity cost to money. To overcome the opportunity cost, you can consider putting on covered call positions, etc, on some of these names - so that even if stock stays where it is, or moves marginally down, you can still make some money. And anyway, you can put on the covered call relatively cheap - your share position itself serves as the margin.

On top of all this, you need to make sure that your overall market direction is correct - despite all these things, if the market direction is drastically wrong, you could get taken to the cleaners. But that's where the covered calls also help to some extent. Some traders could also use the premium generated by the covered calls to buy some index puts - to protect against market direction risk.

Finally, avoid high beta stocks - typically a stock that moves up or down too much, could be operator manipulated. You don't want to play that game - because you will always be the bakra in that game.

With this sort of systematic structure, you are best positioned to beat the markets handsomely - every single time, or at least majority of the time. The beauty of this structure is that you don't need to worry about stoploss, target, etc - as long as your fundamental idea is sound and market direction is not too dicey, you are fine.

Wars are not won by the strongest armies. The wars are won by the armies that know which battles to fight, and which to simply avoid.
 

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