Views on Life & on Equity Investing

Wonder, Wealth & Abundance

In quest for the stars

with 140 comments

The enjoyable adventure in pursuit for future multibaggers takes us to distant territories. SAST disclosures on stock exchanges’ website, promoter holding, spin offs, mergers, newspapers, magazines, blogs, industry experts, discussion forums or shops and wholesalers. I feel that over the next few years online marketplace can lend itself to a worthy source of information. I recently went thorough a book by a marketing expert for the online world – Everything I Know about Marketing I Learned From Google AMAZON 

 If you have not been sipping much on marketing lately you will be impressed with sheer novelty of ideas. Buffett who remarks, “Half of our advertising revenues go waste, but I don’t know which half”, may have to take back his words. Author has some information shared on website and affords the opportunity to go quite deep into this domain through links in the book. Emphasis is on social media to promote products.

A few standout stories are:

– Threadless is an online marketplace with 1.6 million+ followers on twitter. Its a crowdsourcing (someone calls this outsourcing on steroids) phenomenon where community designs T shirts, gets paid and promotes them. I call it a great story and brand.!/THREADLESS 

– Obama online and offline campaign was very well crafted and one of the main reasons of his success to US Presidency, worth reading about it. He used twitter, SMS, social media to the hilt and it referred to you as if its one on one conversation.

– Dell’s story is quite revealing. DELL had 100 employees tweeting on behalf of the company and after few years they became ROI positive with this online channel alone and customer service is no match to other media.

I feel a lot of consumer brand companies are in the dark not online in India but overseas and should be embarrassed with themselves and their lack of sophistication. I found Whirlpool and Marico Industries to be decent with social media in my couple of days of looking around Search Engine Marketing companies and their clients, other leading companies that call themselves consumer brands or superbrands should hang their head in shame, they are literally sleeping.

– In a couple of other books I read recently by Malcolm Gladwell ( Tipping Point; Outliers) story of Hush Puppies reached tipping point miraculously from 30,000 annual sales in 1993, by the time Wolverine, the owner company wanted to shut down the brand, something happened it to tip. In 1995 it sold 450,000 pairs and the next year four times that. All this despite zero promotion. Something happened that led this shoe to be sold in every mall of America, that is called social epedemic.

– Crime patterns, virus all have a dramatic moment when they can tip through a number of small incremental actions. Neighborhoods where 20% colored people live generally tip and all white folks move out. 

– 1987 was fax machine tipping point where it made sense for everyone to have fax machine

– Paul Rever’s ride, famous historical example of American freedom was most famous example of work of mouth epidemic

– Typical airline accident involves seven or more consecutive errors. Why Korean planes crashed most in 1990s is worth studying, nothing to do with quality of planes or servicing.

– Study the year of birth of all software czars Microsoft, Sun, Apple founders and a pattern emerges, which proves that not everything is done through hard work. Environment has to be conducive.

Written by amitdipsite

September 25, 2011 at 12:43 am

Posted in Uncategorized

140 Responses

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  1. Go to

    search ALL Departments and type free text: treadmill
    after viewing the results, type: elliptical

    Chances are that 30% of results on the page are from Johnson Health Tech of which Cravatex is master franchisee in Indian subcontinent. The eight+ great brands of Johnson Health Tech are listed at the bottom of page

    Johnson Health Tech is amongst top 3 companies in its field, and that's globally.

    Amit Arora

    September 26, 2011 at 5:59 am

  2. And the Livestrong brand is linked with the strong charity (cancer related) brand of Lance Armstrong. Also it was a learning for me that Johnson is based out of Taiwan 🙂

    Raja Panda

    September 28, 2011 at 12:53 am

  3. HI
    any update about GLOBUS SPRITS


    September 29, 2011 at 7:55 am

  4. Hi
    What is your view on Gujarat Reclaim Vs Apcotex ?


    October 1, 2011 at 7:49 am

  5. Hi Amit,

    Just wanted to ask you a general question regarding opening a NRI demat/trading account in India? Do you have any recommendations or suggestions for accounts with low brokerage charges?



    October 1, 2011 at 11:28 am

  6. Hi Vinod,

    Hard to say which one will perform better in a given year as both are quite raw material heavy businesses. I like Gujarat Reclaim more as employees cost is higher, other things being equal, I prefer very very high employee expense as a percentage of sales, meaning American/Europeans cannot compete with Asian labour rates ! GRRP is leader. Both are good generally but like GRRP more.


    Amit Arora

    October 1, 2011 at 9:41 pm

  7. Hi JB,

    Not sure about it as I did not research about Brokerage charges. But charges are higher for NRI account than local residents, so explore latter option also, your relative etc.


    Amit Arora

    October 1, 2011 at 9:45 pm

  8. Hi Amit,

    I believe you have sold your entire stake in photoquip. Just wanted to know any specific reason why you did that?



    October 2, 2011 at 2:14 am

  9. dude ur blog is totally awesome ..i mean going through all ur posts means developing as an investor as well as a good human too

    your scuttlebutt approach is amazing

    P.S. dnt go lazy on writing posts 😉


    October 2, 2011 at 5:51 pm

  10. Thanks guys,

    Photoquip: Still holding but reduced, not because I am bearish but because I am “trying” to time the stocks if not market. I still feel its better than a whole host of FMCG companies with dominant marketshare in its niche. Market isn't rewarding it right now and its an NPA.

    If we find something much more attractive, we should have no loyalty, nostalgia and rootedness towards any stock, house, property, investment. Having loyalty and attachment to people is different.


    Amit Arora

    October 2, 2011 at 8:35 pm

  11. Similar to Blueline buses in Delhi !!


    October 4, 2011 at 12:27 pm

  12. Cravatex bags ‘Best ERP Implementation’ category at InformationWeek’s ‘EDGE Awards 2011’ –

    Rahul Paliwal

    October 4, 2011 at 3:11 pm

  13. Hilarous ! Blue Line which was changed from Red Line (blood) ?

    Amit Arora

    October 4, 2011 at 7:58 pm

  14. Rahul,

    Thanks for the link, google alerts in India reach sooner than in NZ !

    Rohan Batra is mentioned in that article, spoke with him once and found him quite humble and polite. Waiting for him to answer my questions, when he does will post them here. He studied in UK from Cass Business School, 3rd in UK. Divya Batra is more on Proline fitness side, so there is clear transition to third generation.

    Proline fitness has about 40% market share of fitness from organised market in India, so that position is stronger than its FILA position. But FILA is what Bata was in 2004.


    Amit Arora

    October 4, 2011 at 8:02 pm

  15. Hi Amit, So you started using Alerts! Its great tool…
    Alert may reaching to us earlier than you, but I think SUN must be meeting you first everyday..:-)

    Waiting eagerly on Rohan's response!!!

    Rahul Paliwal

    October 5, 2011 at 3:45 am

  16. Cravatex Management will not disclose much information extramural AGM. Here is what I could get out of a dozen or so questions.
    From: Rohan Batra
    To: Amit Arora
    Date: Wed, 5 Oct 2011 17:48:14

    Dear Mr Arora,

    See my replies below (in red) to a few of your questions. Due to the sensitivity of information in a public company I would not be at liberty to discuss in specific the majority of your questions.

    As to the business development of the product lines we will be adding them as and when we see an opportunity in the market however we are focusing on our core businesses for today.

    We are aware of what the Fila brand is doing globally and will act upon opportunities when we can.

    Both the fitness and sports markets are growing at a rapid pace and we hope to be a major player in them in the coming years.

    I apologise for not answering your questions in depth and I hope you understand the reasons behind this.

    All the best,


    From me:

    Dear Rohan,

    I and my family are shareholders with your company ………REMOVED

    Q 1. Plans for rollout of stores for Proline-Fitness and FILA over the next three years. Will they be self-owned or franchise owned?

    A 1. We have plans to roll out a number of stores in the coming years and they will be a combination of both franchise and owned stores.

    Q 2. How many of 51 Proline-Fitness stores are company owned and how many franchise owned in India. FILA in Korea has 400 franchise showrooms, can we not expand franchise showrooms of FILA in India so that others money is invested in shops ? FILA Korea is at #2 spot and ADIDAS is trailing them at #3 position for the past five years, something similar can happen in India with greater brand building focus, my next question follows from this.

    A 2. The majority of our stores are operated by the company with the exception of a few. We are aware of the success of Fila in Korea and with obvious consideration to the local conditions of business try and adapt our model and succeed in India.

    Q 5. Difference in positioning of a Proline fitness store compared to Fila store in terms of location( Tier 1,2, audience etc), store size , Budget allocation(Rentals ,working capital rqmts etc).

    A 5. Both are similar however fitness stores are larger.

    Q 11. Is it possible for Cravatex to get Titleist and Footjoy rights in India, after FILA Korea's Acushnet acquisition. Titleist has 69% market share and Footjoy has 57% market share in USA, they are worth every penny to fight for.

    A 11. As of now this has not been discussed as the acquisition only happened a few months ago.


    Amit Arora

    October 5, 2011 at 8:24 pm

  17. thnks for sharing amit.
    anything abt dilutions or capex?


    October 6, 2011 at 5:18 am

  18. They have not replied to this question. My feeling is no equity dilution but more borrowings. But their strength isn't manufacturing, but distribution network and after sales service. They did bring K-SWISS (supposedly #8 or so globally ) brand in 2004 to India which did not take off at the time, so maybe they will get more brands in their stable to take advantage of distribution network.

    Amit Arora

    October 7, 2011 at 3:52 am

  19. yes Sale-ability is important too which can be seen in case of Titan vs. Timex !!


    October 7, 2011 at 5:27 am

  20. Spoke with their distributor at

    told me that Dunlop Sports is doing well, for which Cravatex owns master licence in Indian subcontinent

    Amit Arora

    October 7, 2011 at 8:34 am

  21. My Goodness, K-SWISS is cool..How did you arrive on that? 🙂

    Rahul Paliwal

    October 7, 2011 at 9:30 am

  22. I went through 2002 Annual Report of Cravatex, K-SWISS is mentioned, response was not good and it was discontinued. Actually I had underestimated the tentacles of Cravatex, earlier I had feeling but now I am certain that will bring more overseas brands to India.

    Nassau is official football of Korea Football Association, represented by Cravatex in India

    So they will be more like Redington India of sports goods

    Amit Arora

    October 7, 2011 at 9:43 am

  23. Perfect analogy with Redington Indian to understand essence of Cravatex..I think this must be the frequency of Cravatex mindset, which we catch now..
    That's why they are absent from stuffs other than sports (From Fila to other groups)…

    Rahul Paliwal

    October 7, 2011 at 9:58 am

  24. Distribution's also have moat which we don't usually appreciate. Berkshire acquired a specialist distributor of electrical components

    If listed, we should rather own this
    rather than

    While brands come and go, distributor lives on.

    Amit Arora

    October 7, 2011 at 8:55 pm

  25. Great Free report on Sports Industry

    Amit Arora

    October 8, 2011 at 5:33 am

  26. does revenues of Proline Exports and Pro Apparels goes to cravatex books ?


    October 8, 2011 at 7:07 am

  27. Proline India, manufacturing, proline apparels are not part of Cravatex, they are joint venture with Bombay Dyeing

    Amit Arora

    October 8, 2011 at 8:38 am

  28. Hi Amit, Been a regular read only user of you blog. Very impressive stuff. Would you mind telling us which small cap stock you like the most?. I hold/track many of the stocks that are being discussed here but somehow not very convinced. ( And the likes of ttk/hawkins/titan/page etc are trading at a rich valuation)
    Btw I had cravatex too. but sold off recently with at a good profit (in % terms and not absolute gain:-))


    October 8, 2011 at 3:24 pm

  29. Thanks Gautham, My long term plan is not to convince others buy buyout 20-40% shareholding of micro caps, thus re-rate them myself.


    Amit Arora

    October 8, 2011 at 11:19 pm

  30. Hi Amit…

    How do you JK Tyre and Talwalkers at current levels… Though it is a season play,it is available at very reasonable valuation. Holding it for 2 years …one can expect a 2 bagger atleast.. What's your say on buying it on dips for long term???

    sandeep maddali

    October 9, 2011 at 4:31 am

  31. Cravatex looking for franchisees for it’s Proline Fitness brand and considering Pan India presence


    October 9, 2011 at 9:45 am

  32. Mr.White&White out of AK Cap


    October 9, 2011 at 11:05 am

  33. He has 2.35% holding as on july'11 in AK capital. where did u get latest info on shareholding.


    October 10, 2011 at 4:18 pm

  34. Recommended reading this book: ZURICH AXIOMS

    The only argument against it is author recommends selling too early and not making multibaggers.

    One of the best quotes from book:

    “Worry is not a sickness but a sign of health – if you are not worried, you are not risking enough.”

    “Always play for meaningful stakes – if an amount is so small that its loss won’t make any significant difference, then it isn’t likely to bring any significant gains either.”

    “Resist the allure of diversification.”

    “When the ship starts sinking, don’t pray. Jump.”

    “Human behaviour cannot be predicted. Distrust anyone who claims to know the future, however dimly.”

    “Never hesitate to abandon a venture if something more attractive comes into view.”

    “Optimism means expecting the best, but confidence mean knowing how you will handle the worst. Never make a move if you are merely optimistic.”

    “Disregard the majority opinion. It is probably wrong.”

    Amit Arora

    October 11, 2011 at 4:13 am

  35. “Disregard the majority opinion. It is probably wrong.” –

    Should I invest in airline stocks? The majority has been and will always be against the aviation sector…


    October 12, 2011 at 4:25 pm

  36. Hi Ansh,

    What are your motivation for airline sector stock ? Which one ?


    Amit Arora

    October 12, 2011 at 8:19 pm

  37. Hi Amit..

    You didn't provide your opinion on JK Tyre and Talwalkers at cmp??

    sandeep maddali

    October 13, 2011 at 1:35 am

  38. Hi Sandeep,

    At cmp JK Tyre is superior to Talwalkers.


    Amit Arora

    October 13, 2011 at 7:11 am

  39. Hello Amit,
    Fortis Malar have posted good results.

    Which one will move ahead between TTK Healthcare and Fortis Malar hospital in your opinion?



    October 13, 2011 at 12:15 pm

  40. Hi Amit,
    Any view on Honda Siel Power Products? It is a debt free company and cash rich, it seems.



    October 13, 2011 at 8:14 pm

  41. Hi Amit

    New to your blog and found it wonderful. I had some concerns for the photoquip, if you could plz sort it out.
    In the AR-10, Auditors had mentioned that Co. has given interest free unsecred deposits of Rs. 68.71 Lakhs and advances of Rs 12.61 lakhs for capital assets to concern in which directors are interested. Directors have also increased their fees from 55 lak to 77 lak without any mention of it. Raw meterial cost in 09-10 & 10-11 has gone up by 45-50% though sales increased by only 30-35%.


    October 14, 2011 at 1:25 am

  42. Honda Siel: Looks Okay, but technology companies don't retain lead for long time.

    Photoquip: Those are valid concerns

    TTK Healthcare is better than fortis malar in my opinion.


    Dunlop Sports (Squash) Facts:

    Dunlop is the only Ball used in all international professional competitions.

    Approximately 95 % of all squash balls sold are manufactured by Dunlop

    Amazon search proves it.

    Amit Arora

    October 14, 2011 at 8:06 am

  43. Hi Amit,

    Mayor International are official licencee in South Asia for Slazenger sports equipment, apparel and shoes. Can we benefit by means of any listed company in India?


    October 14, 2011 at 11:17 am

  44. Hi there,

    I knew about Slazenger with Mayor but we can't play through listed companies.

    You could play sports through:

    Pantaloon Planet Sports retail – now merged.




    or upcoming IPO which has Levi's and Nike manufacturing and retail though not exclusive


    I don't think I will subscribe to it.

    Amit Arora

    October 14, 2011 at 10:11 pm

  45. Hi Amit,
    Thanks a lot for your clarification


    October 14, 2011 at 11:47 pm

  46. SSIPL, in FIR looks interesting…I mean NIKE is of course the leader in the its Segment and if SSIPL can manage Master Franchise then nothing like..Do you see that fire in their management?

    Rahul Paliwal

    October 15, 2011 at 6:37 am

  47. Hi Amit,
    A.K.Capital Services future outlook look wonderful but what concerned me is the negative free cash flow generated by the co. in the last 5 yrs. though the co. is in service sector. May be I am missing something, would be thankful if you clarify the same


    October 15, 2011 at 6:51 am

  48. Corporates owe AK Capital money for debt, it raised during the year at cut off point of 31st of March, so the debtors have grown quite a bit. Can be a concern.

    SSIPL's financials don't look strong. Promoter have to be enthusiastic to bring the company to this height in 15 years. We can wait for 1-2 year after listing.

    Amit Arora

    October 15, 2011 at 11:33 pm

  49. Hi Amit,

    No new posts for long time ?
    Eagerly waiting… 🙂



    October 16, 2011 at 7:18 am

  50. heyy amit,doesnt international travel house look promising?????????
    1.its a ITC group company which is consistently growing at CAGR of 35% over last few years..
    2.Consistent dividend paying with a good amt of promoters stake..(61.3%)
    3.Low p/e of around 8 and a good book value..moreover operating in a unique space..what do you feel about the same?????
    will be helpful if you dig a bit deep into it…:)


    October 16, 2011 at 11:45 am

  51. Thanks for the opinion. ABM KNOWLEDGDWARE & NESCO seems to me to be in niche busineess with past few years avg. growth at CAGR 50% and near term expansion on the way.


    October 18, 2011 at 12:35 am

  52. Blink – By Malcolm Gladwell
    Interesting work of non-fiction, it is about how a brief glance or thin slice can score over months of research. Real world examples such as fake statue bought by museum could not be disproved by months of research whereas a quick peek by experienced archeologists validated phoniness in a snap. We all have biases, take the tests to believe it
    Tall and handsome individuals are more likely to get CEO roles, to prove it – only 14% of US males are over 6 feet tall and 3.9% over 6 feet 2. But 33% CEOs of fortune 500 are over 6 feet tall and a 38% of them over 6 feet 2. Some of worst US presidents were chosen on this parameter.
    Physiology of how autism is triggered in brain and that it can also affect us under extreme stress such as shooting, danger makes for interesting read. Several other snap judgment decisions that firefighters need to take do not leave room for extensive planning.
    A singer Kenna, whom all top musicians from U2 to Stevie Wonder pick in their judgments and willing to share the stage with does not take off on radio stations.

    Amit Arora

    October 18, 2011 at 8:05 am

  53. Here is verbatim from the book on Coke vs Pepsi challenge and fiasco by Coca Cola.

    In the early 1980s, the Coca-Cola Company was profoundly nervous about its future. Once, Coke had been far and away the dominant soft drink in the world. But Pepsi had been steadily chipping away at Coke’s lead. In 1972, 18 percent of soft drink users said they drank Coke exclusively, compared with 4 percent who called
    themselves exclusive Pepsi drinkers. By the early 1980s, Coke had dropped to 12 percent and Pepsi had risen to 11 percent—and this despite the fact that Coke was much more widely available than Pepsi and spending at
    least $100 million more on advertising per year.
    In the midst of this upheaval, Pepsi began running television commercials around the country, pitting Coke head-to-head with Pepsi in what they called the Pepsi Challenge. Dedicated Coke drinkers were asked to take a
    sip from two glasses, one marked Q and one marked M. Which did they prefer? Invariably, they would say M, and, lo and behold, M would be revealed as Pepsi. Coke’s initial reaction to the Pepsi Challenge was to dispute its findings. But when they privately conducted blind head-to-head taste tests of their own, they found the same thing: when asked to choose between Coke and Pepsi, the majority of tasters—57 percent—preferred Pepsi. A
    57 to 43 percent edge is a lot, particularly in a world where millions of dollars hang on a tenth of a percentage point, and it is not hard to imagine how devastating this news was to Coca-Cola management. The Coca-Cola
    mystique had always been based on its famous secret formula, unchanged since the earliest days of the company. But here was seemingly incontrovertible evidence that time had passed Coke by. Coca-Cola executives next did a flurry of additional market research projects. The news seemed to get worse. “Maybe the principal characteristics that made Coke distinctive, like its bite, consumers now describe as
    harsh,” the company’s head of American operations, Brian Dyson, said at the time. “And when you mention words like ‘rounded’ and ‘smooth,’ they say Pepsi. Maybe the way we assuage our thirst has changed.” The
    head of Coke’s consumer marketing research department in those years was a man named Roy Stout, and Stout
    became one of the leading advocates in the company for taking the results of the Pepsi Challenge seriously. “If
    we have twice as many vending machines, have more shelf space, spend more on advertising, and are
    competitively priced, why are we losing [market] share?” he asked Coke’s top management. “You look at the
    Pepsi Challenge, and you have to begin asking about taste.”
    This was the genesis of what came to be known as New Coke. Coke’s scientists went back and tinkered
    with the fabled secret formula to make it a little lighter and sweeter—more like Pepsi. Immediately Coke’s
    market researchers noticed an improvement. In blind tastes of some of the early prototypes, Coke pulled even
    with Pepsi. They tinkered some more. In September of 1984, they went back out and tested what would end up
    as the final version of New Coke. They rounded up not just thousands but hundreds of thousands of consumers
    all across North America, and in head-to-head blind taste tests, New Coke beat Pepsi by 6 to 8 percentage
    points. Coca-Cola executives were elated. The new drink was given the green light. In the press conference
    announcing the launch of New Coke, the company’s CEO, Roberto C. Goizueta, called the new product “the
    surest move the company’s ever made,” and there seemed little reason to doubt what he said. Consumers, in the
    simplest and most direct manner imaginable, had been asked for their reaction, and they had said they didn’t
    much like the old Coke but they very much liked the new Coke. How could New Coke fail?
    But it did. It was a disaster.

    Amit Arora

    October 18, 2011 at 8:08 am

  54. Coke drinkers rose up in outrage against New Coke. There were protests around
    the country. Coke was plunged into crisis, and just a few months later, the company was forced to bring back
    the original formula as Classic Coke—at which point, sales of New Coke virtually disappeared. The predicted
    success of New Coke never materialized. But there was an even bigger surprise. The seemingly inexorable rise
    of Pepsi—which had also been so clearly signaled by market research—never materialized either. For the last
    twenty years, Coke has gone head-to-head with Pepsi with a product that taste tests say is inferior, and Coke is
    still the number one soft drink in the world. The story of New Coke, in other words, is a really good illustration
    of how complicated it is to find out what people really think.

    The concluding part is on listening music with heart and ears as opposed to eyes. Women in Europe did not have the right to play leading trombone due to deep rooted bias, court cases did not resolve the matter. The revolution that opened to doors were behind the screen tests, blind to the eye where judge could not see the musician, nor could react to the way they hold instrument – snap judgements had failed to select musicians on merit until then.

    Amit Arora

    October 18, 2011 at 8:09 am

  55. That's pretty ambitious, Stag Int wants to grow sales 10 times in 4 years

    Amit Arora

    October 19, 2011 at 6:54 am

  56. is it true that Cravatex imports the gym equipments? If yes wont the depreciating rupee hurt margins?


    October 19, 2011 at 7:13 am

  57. Correct, it can hurt

    Amit Arora

    October 19, 2011 at 7:15 am

  58. stag eyeing 10% market share ? what batra's eyeing ??

    I went to a Gold's Gym here in my home town which opened last year. But I could not find the equipment from johnsons, they were from Cybex ??

    could you confirm they still have the tie up with Gold's ?


    October 19, 2011 at 10:52 am

  59. All these alliances for “money” are changeful and not long lasting. Body Solid in your previously posted article is no longer with Cravatex/Proline Fitness but with another company in India. Cravatex has alliances with all Gyms Gold's, Talwalkar's, Fitness First etc. but no fitness company in India has an exclusive tieup with fitness equipment provider. Office/Builders are as big / bigger than commercial gyms.

    About Targets:

    Outstanding companies that deliver super extraordinary returns, and have beaten Coca Cola, 3M, Johnson and Johnson, GE, Procter and Gamble etc for a 20 year run on stock market are the ones that have leaders who don't give targets on media. Those leaders are extremely humble but with steely will power and very firm resolve, they hire better leaders than themselves, take no credit but blame. They appear almost shy, quiet and reserved but have obsessive madness to win. More info in Good To Great by Jim Collins.

    Many Tata companies keep setting targers like TCS and TRF but hardly meet them.

    Amit Arora

    October 19, 2011 at 10:29 pm

  60. Amit Arora

    October 20, 2011 at 9:19 am

  61. outliers by malcolm gladwell is also a good book ..this book shows various factors which have worked in making of a great personality and takes examples from diverse fields


    October 20, 2011 at 12:02 pm

  62. Yes, Outliers is quite good. Luck is important, hard work is pre requisite.

    Amit Arora

    October 20, 2011 at 8:15 pm

  63. Hi Amit..

    Request you to come up with a nice list of scripts say 10-12 to invest for long-term on futher decline in market… say when nifty reaches around 4200 to 4300 on nifty…

    sandeep maddali

    October 22, 2011 at 3:56 am

  64. Dear Amit,

    I am Eagerly waiting for your new post for this Deepavali.

    Thanks & Regards


    October 22, 2011 at 6:46 am

  65. Both FILA and Dunlop were sponsors of Japan Open 2011 in October

    I came to know in hindsight from someone who watches tennis told me of FILA being main sponsor of dresses/uniform.

    Brand is with Itochu (50 Billion $ in revenues) in Japan

    Amit Arora

    October 26, 2011 at 4:26 am

  66. Hey Manjunatha,

    A lot has been written on investing already, I can post summary of my thoughts of what I have read recently

    Thanks and regards


    Amit Arora

    October 27, 2011 at 12:55 am

  67. What do you think about RS Software, the numbers are quiet good for last few years and seems to be a turnaround case with high return ratios and low valuations?

    SS GB

    October 27, 2011 at 12:45 pm

  68. Depending on size of portfolio, family dependence and age group RS Software can be allocated 1-5% of portfolio. They have strong dependence on single client, VISA, B grade IT company but love their sweat shop style employee costs relative to sales. Like it very much at the price but unable to bet big. I used to be very averse to portfolio diversification but not so much now. Good for one time gain.

    Amit Arora

    October 27, 2011 at 8:17 pm

  69. Dear Amit,

    Requests your views on Patel Airtemp at current levels.


    October 28, 2011 at 1:49 am

  70. Engineering companies have disappointed due to lack of switching cost/stickiness, repeat orders. Patels Airtemp – To be avoided.

    Amit Arora

    October 28, 2011 at 2:45 am

  71. Hawkins result is pathetic @ 25 PE ratio, its a generation stock for grandchildren, not for aggressive investors.

    This is kitchenware company with hunger and burning passion, function without style will not take off, but reverse will –>

    Growing at 100%- 200% per year, not listed though,

    There are companies like this listed on BSE India, but no research house follows them, try harder..

    Amit Arora

    October 29, 2011 at 10:30 pm


    Magppie is growing at 200% per annum, Hawkins has no passion relatively speaking, Magppie intends to grow 400% this year, now you understand the vilification of Hawkins.

    The term that I'd coin for TRENT or HAWKINS is “DADA Stock”, in Hindi Dada mean grandfather, we respect them culturally. In West Bengal DA or DADA is marker respect for elders and seniors. But what has intellectual society of West Bengal done to themselves, just speaking from economic standpoint.

    Amit Arora

    October 30, 2011 at 8:17 pm

  73. Amit,

    I am curious to know what has changed fundamentally changed for Hawkins.

    You were bullish on hawkins earlier this year but after this result , your view has turned -ve.



    October 31, 2011 at 7:35 am

  74. Shri,

    Nothing has changed fundamentally for Hawkins, that itself is a problem. I was bullish only in March 2011 @ 900 Rs range, I have not mentioned Hawkins here:

    Has Hawkins got Twitter Page ? Facebook ? Direct Selling Model ? Any brand extension ? 80% revenues is through cookers which isn't going to make it great company until it thinks beyond cookers.

    Amit Arora

    October 31, 2011 at 7:54 am

  75. hi amit..

    have u had a look at Avanti Feeds……. lot of buzz s going on Vannami shrimp quality and potentiality of the aquacultre etc… do u think it has got potential in it..or is just a seasonal play ??

    sandeep maddali

    October 31, 2011 at 3:39 pm

  76. sir,
    Should one invest in FUTURE VENTURE INDIA LIMITED for long term?


    November 3, 2011 at 2:35 am

  77. amit,
    it can be really good for us, if u can write a post summarising your investment philosophy in small caps…..eps growth, market size,how to limit downside risk etc etc….
    i am very inspired by the way you have dropped insights on how your investing philosphy has been shaped over time,your influences and other things



    November 3, 2011 at 11:50 am

  78. Mathematics is elegant, spent some time with Fermat's Last Theorem, still have not got time for the general proof but link below explains specific exponent, it dodged mathematicians for 358 years's_Last_Theorem

    Stocks: I don't think there is any one style or short answer, like taste everyone have their own preferences. I would however say, its best to avoid 40+ PE or at times even 30+ PE stocks no matter how strong the company, how bright the growth prospects, ignore popular companies, true you may miss WALMART, INFOSYS but so what ? As long as you compound @ 20%+ per annum you will be comfortably wealthy.

    Buy 100 stocks upto 1% portfolio of RS Software or Cera Sanitary Ware, WIM Plast is far superior and safer to owning 20-30% of ONGC or Jubilant Foodworks, 3M India, Nestle or any company in the name of Buffett's portfolio concentration strategy. Even I do that at times due to greed, but that's where the balance is required. There are simply a lot of great oppurtunities in India, there is no need to hold 5 or 10 stocks.

    Amit Arora

    November 5, 2011 at 2:50 am

  79. Hi Amit,
    some concerns on cravatex.
    1. profit margin is very low
    2. in think they are more of a distributor of branded products than a brand. so it might remain a cheap stock
    3. you mentioned about hawkins not having presence in twitter/fb etc. but if you look at cravatex's website its not impressive. even their copyright text not updated and shows 2009.

    disclaimer: i am tracking cravatex and will probably buy after the results.


    November 6, 2011 at 7:16 am

  80. Page Industries is trading at 30+ p/e – is this an exception?


    November 6, 2011 at 4:25 pm

  81. By the way many value investors like John Neff, Walter Schloss – work with the same philosophy of buying lots of small & cheap companies in small proportions without having a concentrated portfolio.


    November 6, 2011 at 4:32 pm

  82. Dear Gautham and Deepinsight,

    Corrrect, Page Industries is an exception, George Soros also makes several small bets, wont double the money next year or have a slightest possibility but suitable if one is content with 20-35% growth.

    Cravatex has no IT skills, their website is broken too, not shoes appear. Another concern for Cravatex is negative cash flows ! which I am also tracking closely. I concur, even I am not impressed with their social networking stills either. They must have spent couple of crores on Advertising, if I were running a company, I'd hire 4 dedicated social networking employees and PR people than blowing money on Ad agencies. It all boils down to in house drivers where almost all companies are a big ZERO.

    Amit Arora

    November 6, 2011 at 8:39 pm

  83. Hi Amit,
    Any views on symphony limited?


    November 7, 2011 at 11:40 am

  84. dear amit,
    even if assuming one being a full time individual investor…
    how is it feasible to track growth or events in so many companies


    November 7, 2011 at 7:19 pm

  85. Dear ABC,

    Very good question, its not imperative to hold 100 stocks, 20-25 are sufficient, five are not. Argument is that rate of change is increasing and industries will rise and fall in years not decades, as they have until now, in near future. Even staid industries will experience higher change like information technology. So portfolio concentration will be less likely to work. Until now I have had a less than 10 stock portfolio but it will have to change, or I'll learn in a costly way.

    The “litmus test” of creating portfolio is creating is for some needy person from his own money and not yourself. We need to ask ourselves, how would we create portfolio for our house maids from their money. Its easy to buy 3 stocks in personal portfolio.

    Symphony risk reward is not favourable, not worth investing. I like to invest only in companies that have chance of PE re-rating with an exception of Page Industries.


    Amit Arora

    November 7, 2011 at 8:08 pm

  86. Can you elaborate on your “mighty” conviction on Page?


    November 7, 2011 at 10:35 pm

  87. Hi Amit, after being in consonance with many of your great ideas, finally I disagree with your view on Hawkins. Which makes me smile as it opens an intresting and contrasting stock to track. : )


    November 8, 2011 at 3:19 pm

  88. Hey Safir 🙂

    I am not short on Hawkins. Happy to be wrong for you, I feel 2 Cravatex shares + 3 Astral Poly Technik Shares will do better than 1 Hawkins Share over next two years, so we have something tangible to compare.

    Again you can be right 🙂 but you wont be way off, and I wont be wrong by a huge margin. So, lets give each other 31st December 2013. Hawkins could be a family holding FD for children but I am in more hurry.


    Amit Arora

    November 9, 2011 at 2:30 am

  89. Quotes from a book 'Bull' by Maggie Mahar

    “There are many things worth dying for, stock picking isn't one of them”.

    “It took me 30 years to become overnight sensation”

    My quote:

    Definition of a good work is to leave a trail more than use of left hemisphere of brain to feed oneself.

    Amit Arora

    November 9, 2011 at 6:56 am

  90. Value of 'Good to Great' by Jim Collins exponentially reduces after goes through 'How The Mighty Fall' by same author. A key learning is that there are few ways to rise but numerous paths to folly. In this work author covers what makes an organisation great, not just good. Eleven organisations that outperformed the market by 3:1 over a period of 15 years are documented.

    – Larger-than-life, celebrity leaders who ride in from the outside are negatively correlated with taking a company from good to great. Ten
    of eleven good-to-great CEOs came from inside the company, whereas the comparison companies tried outside CEOs six times more often.

    – Change in leadership is the key to becoming from good to great. Rohan Batra 2009 Cravatex ?

    – No systematic pattern linking specific forms of executive compensation to the process of going from good to great

    – Choosing P&G as a company to compete with has enormous advantages, either you will perish or forced to achieve greatness, eg: Kimberly Clark

    – Jim Collins uses a neutral word like Level-5 leader, rather than servant leader – an individual who blends extreme personal humility with intense professional will. Leaders of this type are found at the helm of every good-to-great company during the transition era.

    – It is very important to grasp that Level 5 leadership is not just about humility and modesty. It is equally about ferocious resolve, an almost stoic determination to do whatever needs to be done to make the company
    great. Companies interest come before self interest.

    – Level 5 leaders set up their successors for even greater success, they are more like plow horse than show horse

    – Companies that achieve extra ordinary results do not decide destination in advance, but get right people on the bus, wrong people off the bus. People debate and decide the destination.

    – Some companies succeed due to a single leader like Lee Iacocca for Chrysler – genius with a thousand helpers, fall after leader leaves.

    – Getting wrong people off the bus is as important – The only way to deliver to the people
    who are achieving is to not burden them with the people who are not achieving

    – One of the immutable laws of management physics is “Packard's Law.”
    It goes like this: No company can grow revenues consistently faster than its ability to
    get enough of the right people to implement that growth and still become a great company. If your growth rate in revenues consistently outpaces
    your growth rate in people, you simply will not-indeed cannot-build a
    great company. Mannapuram Finance ?

    – Managing your problems can only make you good, whereas building your opportunities is the only way to become great.

    Amit Arora

    November 9, 2011 at 7:24 am

  91. – Put your best people on biggest opportunities not your biggest problems

    – Think of first who, then what, key seats have to be with right people.

    – Good teams debate vigorously

    – Throughout our research, we were continually reminded of the “hardiness” research studies done by the International Committee for the Study
    of Victimization. These studies looked at people who had suffered serious adversity-cancer patients, prisoners of war, accident victims, and so forth-and survived. They found that people fell generally into three categories:
    those who were permanently dispirited by the event, those who got their life back to normal, and those who used the experience as a
    defining event that made them stronger.s3 The good-to-great companies were like those in the third group, with the “hardiness factor.”

    – Stockdale Paradox : Optimists die first in torture chambers and prison. Retain the faith that you will prevail in the end AND AT THE SAME TIME Confront the most brutal facts of your current reality.

    – A company does not need to be in a great industry to be a great company

    – Hedgehog vs Fox, one good thing, common denominator vs many things, great companies do one thing very well

    – Flywheel concept is touched upon, a heavy wheel that takes a while to turn, moves only with persistent effort in same direction

    Amit Arora

    November 9, 2011 at 7:52 am

  92. Dear Amit

    Thanks for sharing your knowledge.

    I have learnt a lot in last 3 months.Probably I am in a stage where you were 2 years before.I would like to share and discuss with you lot of points.When I get time, I will mail you.

    Thanks & Regards


    November 9, 2011 at 3:59 pm

  93. Dear Manjunatha,

    Please do share..


    Amit Arora

    November 9, 2011 at 6:54 pm

  94. wow NHAI's $2bn bond managers Sbi cap and AK Cap !!


    November 10, 2011 at 2:17 pm

  95. hey amit bro,cravatex results are out…spectacular numbers…both sales n profit hve risen by 75 percent…evn aftr the depriciation in rs…eps has not done badly too…how to you analyse it?????huge thumbs up acc to me…yo reply awaited…


    November 14, 2011 at 8:08 am

  96. Hey Bro,

    Since subsidiary is wholly owned and will not be listed in near future, we need to look at consolidated numbers:

    – Consolidated sales are up 136% from 23 Crores to 53 Crores

    – Subsidiary breaks even just in second quarter of operations, hires more QoQ

    – Consolidated net profits up 88% from 1.64 Crores to 3.08 Crores

    – Consolidated EPS for Q2 12 Rs


    I feel Rohan Batra is driving it aggressively and 90% shoes companies worldwide go bankrupt due to inventory mis-management, so keep an eye on it

    However, potential is franchise network

    I feel FILA has not even reached 5% of its potential sales in India (500 – 1000 Crores in a decade)

    @ 130 Crores market cap downside is limited

    On a side note: After Safir's comment, I had a deeper look into Hawkins and the old men saw the world zoom past them by, in an anachronistic and reactive manner they have begun hiring manpower which is the right course ( first who, then what). So, they can potentially reach where TTK Prestige is today in 5 years time, by then TTK would be 3+ times bigger.

    Amit Arora

    November 14, 2011 at 8:32 am

  97. main que is will such good results drive the big guns in ??


    November 14, 2011 at 9:11 am

  98. Probably not at 130 Crore MCAP but at 400 Crore they will consider, so company has another 2 years to prove itself, by then we could be on another 3 bagger. We need to ask ourselves if Johnson Health Tech. – Asian Leader – will not make profits then who will ?

    Amit Arora

    November 14, 2011 at 10:31 am

  99. even i was concerned about depreciating rupee, but since it has an overseas subsidary its clearly working in Cravatex's favor and should continue to do so in the short term.


    November 14, 2011 at 12:48 pm

  100. Hi amit,
    Do you know any of the investments of vinod khosla in india other than SKS. If yes then thats sounds intresting. Capable person insights are always futuristic. Real innovative guy.


    November 14, 2011 at 1:45 pm

  101. Rupee depreciation surprise plus fact that they have not paid to suppliers, thus having cushion of current liabilities 47 crores to match current assets. Cash in hand is comfortable 9 crore.

    Amit Arora

    November 14, 2011 at 10:57 pm

  102. Vinod Khosla invested in Praj Industries as well. He invests in futuristic technologies, innovative bacteria, designer bugs, bio fuels, ethanol etc. Takes years to recoup investment with many small bets…

    Co-incidentally he was providing seed capital to companies in New Zealand and was here two days back

    Its all about confidence and comfort level in technologies, its much safer to be with slow moving technologies or taking advantage of under investment in market moods.

    He can add tremendous value to a 3.5 million $ deal out of corpus of 1400 Million $, thats 1/400th bet of portfolio and apply best practices and global learnings to a local company, we as retail investors cannot do that other than piggy backing.

    Amit Arora

    November 14, 2011 at 11:22 pm

  103. Enjoy the videos of an innovative New Zealand company that pitched Vinod Khosla recently:

    Amit Arora

    November 15, 2011 at 12:07 am

  104. What u feel should be total sales of FILA from rest of world. As per now it seems like 50-50 from both India and ROW.


    November 15, 2011 at 5:30 am

  105. As per my estimates FILA in India alone should do 250+ crores of revenues before 2015. Management does not guide. They have licence for Sri Lanka, Bangladesh, Pakistan and Middle East as well, so fair to assume 30% outside India revenues if efforts are invested. But India itself is huge market, is where they need to focus.

    I feel this stock can still change one's life even though its been five bagger in the last 18 months. Its capable of doing 26 Crores Net per annum, in 8-10 quarters i.e. 100 Rs EPS. Let it start franchise network and our Fund brothers will pile on. So sit tight. PE, who knows 15-40 anywhere…

    Amit Arora

    November 15, 2011 at 5:59 am

  106. hi amit,
    what is your your source of new ideas…i dont really feel u might be using screeners….are u a completely bottom up player ?


    November 15, 2011 at 1:44 pm

  107. amit, do u know how much revenues came from fila business for cravatex this quarter ???


    November 15, 2011 at 3:00 pm

  108. That's for Asia , but what abt from west ?
    BB (UK) was considered to do 40cr turnover from FILA in Europe and Ireland. I guess they will surpass their guidance by miles as FILA is more known name in West than in East..


    November 16, 2011 at 5:10 am

  109. Oh you mean globally ? There are few Korean brokerages tracking them closely, they are going to do 3 Billion US $ Globally by 2013. i.e. 15,000 Crores INR – India should contribute at least 5% of Global Revenues (750 Crores INR), hence @ 130 Crore Market Cap its no brainer, Panasonic, Dunlop, Johnson Health Tech, Rental Property is icing.

    Amit Arora

    November 16, 2011 at 5:39 am

  110. Hi amit,
    Have a look at this company 8K Miles software services. Interesting business model & upcoming technology i.e cloud computing.,with strong future growth. Recently company moved into the hands of foreign promoters. From then its showing robust Q'ly results.Wht is ur point of view?


    November 17, 2011 at 1:09 pm

  111. amit, what kind of business Cravatex's overseas business subsidiary is involved into?? More importantly, what kind of revenue do u feel that subsidiary could generate in the next couple of yrs ?? Also, do u follow tokyo plast??


    November 22, 2011 at 1:35 pm

  112. BB UK is doing marketing and distribution of FILA in selected channels. I have no idea on UK revenues except for what management guides.

    Confirmed from Cravatex that they sell Dunlop Sports but not Dunlop Shoes yet.

    But not:

    Avoid Tokyo Plast when mainstream stocks are so cheap.

    Amit Arora

    November 23, 2011 at 8:31 am

  113. Let google work hard for you. Select google search which auto completes for ex:

    If it redirects you to regional site, India, NZ at bottom right hand side, re-select USA as location.

    Try typing a few words, so they auto complete. Type 'tennis racquets' without quotes and you should have top five brands in world and sport stores.

    Related searches for tennis racquets:

    Brands: Prince | Wilson | HEAD | Babolat | Dunlop
    Stores: Midwest Sports | Tennis Warehouse | Tennis Express| Racquet Depot | Sports Authority

    Another tip: Try google trends, though results are not reliable, for ex: Wrigley's has 90% market share but Trends does not capture this well.

    It can display seasonality very well !

    Amit Arora

    November 23, 2011 at 8:39 am

  114. actually, tokyo plast's growth has been too good to ignore in my view and not to forget its still quoting at dirt valuation. And to top it all depreciating rupee would give bumper profits to the company. yes they have never given dividend but probably i know why ….


    November 23, 2011 at 8:44 am

  115. What the world is searching on ? Another nice arrow in your quiver: Google Insights

    Amit Arora

    November 24, 2011 at 9:00 pm

  116. Tipsarevic's gift to FILA, beats ATP #1 Djokovic

    Sports Contract with top player is as much as 75 Crores INR in tennis and 450 Crores INR in Basketball.
    Johnson Health Tech is one of the most amazing companies including story of Peter Lo. They way they pour themselves into their business..

    View in detail their monthly news section:

    Amit Arora

    November 25, 2011 at 8:39 pm

  117. hi amit, as cravatex is distribution business , what if the foreign brands stop distribution tie up with them , what i m trying to make a point till which period do cravatex hold exclusivity for distribution of FILA,TREAD MILLS?


    November 26, 2011 at 6:09 am

  118. Sir, any scrip you like in Mid-cap Pharma?


    November 26, 2011 at 7:12 am

  119. Cravatex have been selling FILA and Johnson Health Tech products and all India after sales service of 200+ employees. Franchising cant be taken away overnight as foreign partner has no presence.

    Either foreign partner will take equity stake in company or form another joint venture etc which we will see if that happens. Like Honda has done with HERO meanwhile it became 100 bagger from 1995 onwards.

    Amit Arora

    November 26, 2011 at 8:07 am

  120. Johnson Fitness in news for overtaking Nautilus the 800 pound gorilla in global fitness as the new #2 just behind Icon Fitness now

    New dt: 22 Nov 11

    Amit Arora

    November 26, 2011 at 10:16 am

  121. By 2014, FILA hopes to rank as the world’s fourth-largest sportswear firm (behind NIKE, ADIDAS, and PUMA) with $3 billion in annual sales.

    Amit Arora

    November 26, 2011 at 8:35 pm

  122. can cravatex became 20 bagger from here? Wt is your views on integrety of management?


    November 28, 2011 at 6:41 am

  123. Who knows about 20 baggers but aiming 5 bagger in 5 years should be sufficient. 1 lac become 6.2 crores in 20 years at this speed. Its already a five bagger for me, bought @ 100 but most at 250 and expect another five bags.

    Amit Arora

    November 28, 2011 at 8:54 pm

  124. why photoquip is not paying any tax?


    November 29, 2011 at 10:32 am

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