What are the Best Tyre Stocks?

Actual Question:

Which is the better stock in tyre stocks for 1 year time horizon?

Answer:

Automobile tyre

Dear Friend!

I have evaluated tyre companies and could not find a single one suitable. The operating profit margins are low across the board. If profitability is good the liquidity and solvency ratios are poor. 

See the comparative study of four tyre companies:

Tyres	APPOLLO TYRES	MRF	PTL Enterprises
Operating Margin %	12.61%	14.60%	88.43%
Gross Profit Margin	9.76%	11.40%	86.92%
Net Profit Margin	5.03%	6.76%	42.81%
ROI	16.23%	19.87%	21.69%
Return on Long Term Funds	27.04%	27.47%	28.72%
Long terb debt/ equity	0.26	0.26	0.53
Total Debt Equity	0.32	0.40	0.53
Current Ratio	0.87	1.34	0.44
Quick Ratio	0.35	0.82	0.40
COMPANY PERFORMANCE (FOR FURTHER STUDY)	REJECTED	REJECTED	REJECTED

Finally the big question arises that when you can buy excellent companies with 50% PAT margins from other sectors at very reasonable valuations, why should one invest in tyre companies struggling with PAT margins below 10%? 

As far as your next point of investment horizon is concerned, one year is nothing. A good investor does not buy shares for one year but for the lifetime. Purchasing even a single share is like owing the business 100%. Will anybody start a new business with a time horizon of one year?

Please read the book “The Intelligent Investor” by Benjamin Graham. Learn value investing. Become rich and wealthy slowly and safely over a long time.

Suggested Further Reading:

• Buying shares is easy – decision to sell is the most difficult
• Blogger
• Miracle of Compounding

Thank you,

With Best Regards

Anand

Is Algorithms Based Trading Safe?

Actual Question:

Sir, Is Algo trading suitable for layman like me?  If it is, which is the best knowledge center and best software, Ambibroker or Zerodha or Omenys?

Answer:

Shocked man staring at losses incurred through algorithmic trading on margin

Dear Friend!

Algorithm (Algo.) based trading is not good for anyone. There is no best knowledge centre, no best software. It is all hoax. If it were not there will be millions of billionaires. Why will IT companies struggle hard to make software - they can simply make money from stock markets?

Forget about Algo., even ordinary trading in stocks or commodities or currencies is pure speculation and extremely dangerous.

What is your objective?

Getting rich?

There is a much simpler, surer and safer way to riches and wealth!

Learn and become a value investor.

How?

Read the book “The Intelligent Investor” by Benjamin Graham.

There are a number of good websites / blogs, including my own blog “Wealth Vidya” where you can learn and practice value investing.

Open a Demat Account and online stock trading account and start investing in good stocks for the long term.

Get rich slowly but surely and safely!

Suggested Further Reading:

• Day Trading Definition
• Margin Trading Definition
• Value Investing Portfolio, “Portfolio 2K15”
• Value Investing Resesrch Reports
• Free Downloads of Company Research Reports

Thank you,

With Best Regards

Anand