​
​
​The Mindful Trader Newsletter​
​Issue #20 - September 3, 2023

On August 30th, Sandeep Maheshwari released a video.

How To Make Money Without Doing Anything?

​You can watch it here.​

He discussed the Power of Compounding, Investing, the Banking Sector & Stock Market.

He was referring to the fact that due to advancements in AI, there can be a potential threat to his Image’s business if not tackled well.

He mentioned that to diversify the risk, he invested a significant stake in a stock that he expects to grow on an average of 30% CAGR over a 10-year holding period.

Although he did not mention the Stock Name in which he invested, he did share some indirect information that helped me to figure out to a reasonable extent what that stock might be:

Let’s see the main points that he mentioned about his investment:

1. He mentioned that it is a banking sector stock (this itself is a big clue. Otherwise, there would be no chance to figure out what could be that stock)
2. He Invested in that around 6 months back, around Feb 2023.
3. He revealed that it gave him more than 50% return from the time he invested.
4. He also shared that investment gave a loss of around 10% in a month or two after investing.
5. He was referring to credit card examples multiple times where banks make money; it gives a hint that this stock is offering credit cards (which most of the banks do)
6. It’s neither Penny Stock nor Large Cap Stock (So it falls under the Midcap segment)
7. It is at a stage where Bajaj Finserv was 10 years ago (Key information that helped me to finalise the stock)

Okay, I know you are looking for the Stock name rather than reading all these points.

So, the stock name is (It’s just my guess)

​

​

​

​

​

​

​

​

​

“IDFC FIRST BANK”

​

​

​

​

​

​

​

​

​

I could be 100% wrong, but read the reason below to understand why I feel that there is a very high possibility that he invested in this banking stock:

First, we need a reference point of his buy price to get into more technical details since we know it must be somewhere around Feb 2023; that month, it is trading between the 53 to 60 range.

Of all the days in Feb 2023, February 2nd has the highest volume; considering that he invested a significant stake, let’s assume that he traded on that day; the average price on that day was around 58.

So, let’s consider 58 as his average buy price.

Now let’s look at the reasons:

1. Stock fell from 58 to 52 in 2 months, which is approximately a fall of 10% ( Satisfied )
2. Stock went up from 58 to 90 as of August last week (a few days before the video got released), which is a return of 56% ( Satisfied )
3. It’s a Midcap Stock with a market cap of ₹61,941 Cr. (Satisfied)
4. It offers a wide range of Credit Cards ( Satisfied )

Let’s look at the most exciting point now.

Let’s look at the monthly chart of Bajaj Finserv 10 Years Ago and compare that with the IDFC First Bank’s monthly chart as of now.

​

​

If you can notice, both of them almost show a similar price action structure, and both others created new all-time highs. Also, the price point is somewhere close to 90 to 100.

​
If you invested in Bajaj Finserv 10 years back, around 90, by now, it would have generated a CAGR of 32%. Currently, it’s trading around 1500.

​

This is 14 times the invested value, precisely what he mentioned in the video that he expects around 14 times with a CAGR of 30%.

​

If you want to see what Bajaj Finserv chats look like today, here is the Bajaj Finserv monthly chart.

​

​

In the short run, everything looks clumsy, but it all makes sense if you look at the bigger picture.

Because of all these reasons, I feel the stock he invested in is most probably the IDFC First Bank.

Even though I tried doing all these analyses for the rest of the bank, not even a single stock satisfied all the conditions this stock did.

If you want to try it yourself, here is the list of banking stocks.​

A few other key parameters of IDFC First Bank:

1. IDFC First Bank records 24.5% YoY growth in loans and advances, with deposits up over 44%. Read more here​
2. IDFC First acquires title sponsorship rights for all BCCI international and domestic home matches. Read more here​
3. No Red Flags Found (Source: Ticker Tape)

​

1. An Increase in Promoter Holding can be noticed from 36% in Sep 2022 to 40% in June 2023. It’s a good sign that the promotes believes in the Company’s growth potential.
2. No Dividends in the last 5 years - It’s a positive sign that the profits are being re-invested into the company’s growth rather than distributed to shareholders.
3. IDFC Bank looks to raise ₹20 billion in fiscal 2024 - This will help fund the bank’s growth. Read more here​
4. IDFC First Bank’s net profit jumps 115% to Rs. 605 crore. Read more here​
5. The last piece of interesting news that triggered me to do all these analysis is:

Adani investor GQG picks up a 2.58% stake in IDFC First Bank for Rs. 1,527 crore via a bulk deal on Sep 1, 2023, 2 days after the video is out. Read more here​

There could be no link between this bulk deal and Sandeep Maheswari revealing all these parameters on YouTube, but a 1500+ crores transaction is not a small thing to ignore.

However, there is no major momentum in the price that happened on Sep 1 because of that.

Disclaimer: I just shared all these analyses for educational purposes; everything I shared is public information.

I just connected the dots between them.

My stock pick can go completely wrong, and do not consider this as any sort of investment advice.

What do you think?

After reading the entire newsletter, what do you think about my stock pick? Is it making any sense? If not, let me know what other you think is a close match.

You can reply to this email and share your view :)

Thanks for taking the time to read the newsletter. Do share it with fellow traders if you are facing the same issue. Enjoy the rest of your weekend.

Until next time,

Happy trading! 🚀📈

​

Arun Bau
​CA, CFA Level 2 Candidate, Trader, Mentor

​

If you want to receive informative newsletters every week to level up your trading skills, you can add your email here.​

​
Lanco Hills, Hyderabad, Telengana 500086
​Unsubscribe · Preferences​