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Given the constant barrage of Memes around poor #SBI since past few days, decided 2 do some basic data digging:

For a 40lac cr bal sheet size, d bank is currently valued at ~1.75lac Crs

Nw come some #FunFacts:

1. Annual Salary bill is 45000crs. Yup, Mcap = <4x Wage bill!

1/n
2. Residual Val of Subs (aftr assuming a 40% Holdco disc) is roughly 75k crs. This was mostly less thn 15kcrs in 2012

3. Btwn 2012 - 2020 SBI's Mcap has been at a mean level of 1.6-1.8lac Crs. Despite value unlocking in subs!

4. Btwn 2012-20 raised 62k Crs at avg 241/shr

2/n
5. Another interesting statistic to watch:

The Prov / PPOP (Pre-Prov Op Profit) ratio has expanded sharply from 35% over 1997-2012 to 75% over 2013-2020

Basically when this ship turns, d narrative will swing wildly. & by d time folks accept d reality, curr px will b long gone
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Akshay Badjate
@abadjate
Don't want 2 play party pooper but while small/midcap stocks can continue ringing d cash registers on d long side 4 d nxt few wks, TBH IMHO this is d time to b CASHING OUT - Not d best of times 2 b pyramiding or hunting actively for "breakouts" & "long term buy ideas"

1/n
Sure thing stocks fell vertically by 50-70% and have risen 50-300% frm the bottoms.

But most of them are STILL down for the Yr.

Narrative, flows, liquidity notwithstanding, stocks are SLAVE to earnings grwth

While we may see a near term resurgence in demand

2/n
There is no way of telling hw much is pent up demand & hw much is d new normal. It is v likely tht we may see the new normal (frm a medium term perspective) adjusted lower.

Consider this - most stks were STILL trading at valuations abve their 2009/2013 troughs in Mar'20!

3/n
Read 20 tweets
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Akshay Badjate
@abadjate
The stock market is inefficient. Period!

People buy & sell in the stock mkt daily.

These people have their own underlying biases & perhaps flawed thought processes which makes them take those buy sell decisions

When a trade is exchanged betwn an inexperienced & a smart

1/n
Investor, it transfers money frm one pocket to another

But when 2 idiots make up d entire mkt while d experienced hands sit by d sidelines, what do u call tht situation exactly ?

The madness of crowds.

2/n
In the short run it's the collective decision making of the crowd that drives prices.

And most analysts (sell side or buy side) spin their logic / story around those prevailing prices.

It takes sheer guts to take d 'contrarian' route

3/n
Read 4 tweets
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Akshay Badjate
@abadjate
Let me tell u a story:

I am someone betwn d age of 35-45. Married. Hve a kid. Wife doesn't work. Am a higher/mid level exec wid a large Co.

I hve 5 yrs worth of savings in financial assets - stocks, bonds. I hve bought the flat tht I live in on a 20 yr loan in 2016.

1/7
Hve 2 credit cards. No revolvers. But hve a 5 Yr car loan for a nice car bot 3 yrs back & 2 EMIs running for an iPhone and a big tv purchased last Diwali.

Usually take 1 dom trip every yr & a foreign trip perhaps once in 2 yrs. Go to movies 2x a month. Eat out 2x a week

2/7
Worked hard last 2 yrs. Boss promised a good raise + bonus this yr aftr 3 tough yrs. Was considering gifting wife some jewellery on d upcoming anniversary & d kid a laptop on birthday. Was also looking to either bump up SIPs running since last 7 yrs (Am a patient investor)

3/7
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