Thread by @AnandableAnand

#tatapower

a thread

If you are seeing the raging bull market for the first time, then first thing you need to understand is, who you are

If you are holding #tatapower or any power stocks or commodity stocks in your long term portfolio then you are playing MOMENTUM

+

For any time frame, momentum investing, a stop-loss is a must,

you cant become a Buffett bhatija and later on become Buy-hold investor when such stock start going down

Power and utility companies all over world, cant expand their operations and topline as fast as a bank or an ecom company like Amazon or FB

They cant leverage their balance sheet beyond a point because of the law,

Most of their sale is through long term PPA (20-25 yrs)

so they have already sold power to various entities like state govts for next 2 decades

their input prices varies alot as commodity cycle goes

Because of this fact, most power and utility companies give 5-10% return on a decade average basis

Plus expansion and setting up of new plants requires huge cash outlay, stuck for years and winning the bids depends on political sentiments

So they cant plan 3x or 5X ahead in an instant, its a slow grind, of take it as it comes

Coming back to #tatapower,

in last crazy bull run of 2008 also it went up many fold from 2006-2008,

While #nifty itself went up 3 times, yes 3 times, so every cat and dog was chasing the sky, including power companies

Then came the crash, all stocks went down, #nifty went from 6600 to 2200 within a year,

Eventually nifty and all banks, IT etc recovered within a year to make new highs,

No

Nope

Not #Tatapower

So know who you are, and exit such stocks before music stops

Oh, when will the music stop?

That NO one knows, but u can have trailing SL on this

Below is the monthly chart of #tatapower

It took 12 years to make a new high

Remember, you have to RT (and not like ;)

the first tweet in this thread, if you like such threads from me

https://twitter.com/AnandableAnand/status/1447811276613115904?s=20