Thread by @muralipiyer

#notes
With my last running options trade closed, now I can focus on some serious restructuring that I had started earlier this month.

First thing I am throwing out is BHEL.
It’s a wonderful stock that rains dividends.
But, it has too high a debt.
It’s a PSU with a large gestation period.
I don’t want to hold it in the current multi-year down trend.

#notes
Hindustan copper is not making sense.
I got the previous uptrend correctly. I got rewarded for it.
Global Copper prices are rising again. But stock is not rising.
My logic for that investment seems to be wrong.
So I am selling it.

#notes
I am on two minds on IOC.
I bought it with the expectation that it will do well while giving good returns.
I am sure it will rise to pre covid levels.
But even then, it still won’t justify effective returns.
Again a PSU. There are better PSUs.

#notes
Next up is concor.

I was certain it is a good company. A lot of container traffic, and traffic only going to rise. It was doing well in the past.
I had got upto 20% notional returns. I had added to the stocks.
But now, it’s down a lot.
And I don’t see any recovery soon.

#notes
NTPC I am not sure.
It’s giving me good dividends. If I had reinvested dividends, it might have done much better.
I think my holding in it was too small to effectively buy more with the dividends.
Price is still low enough.
I don’t know what to do with this.

#notes

Strangely, except for ITC everything under FMCG in my sector wise view is giving good results. (Good=better than inflation. Or better than 1yr SBI bank FD).

#notes

My revised strategy for continuing with learning #options.

Get a whole bunch of stocks with about 20% haircut. Pledge them for share as margins. I will continue getting the dividends as per the latest SEBI circular.
I already have liquidbees for some time of cash needs.

#notes
The idea is to learn #options well.
I have been using 75-80% probability trades only. So, I can easily make some extra money through options.
My problem so far is that the only management option I had was to sell at loss. That limited risk and hence the reward.

#notes

I have decided on the following exit conditions:
Sell:
ROCE falls below 10.
Dividend paying stocks reduce dividends.
Debt becomes unmanageable.
Assumptions change.

I can see a clear correction trend that lasts week(s).(profit booking)