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How to Identify Moat?

An essential component of Warren Buffett’s investment strategy is his focus on what he calls “moats.” In business, a moat refers to a competitive advantage that allows a company to earn outsized profits. Like its namesake—a water-filled ditch—Buffett’s moat refers to a defensive barrier, but instead of protecting a castle, it helps prevent a company’s profits from being eroded by competitors.

Identifying businesses that have moats is central to Buffett’s strategy, and his advice to company managers is to focus their efforts on making moats deeper and wider. However, not all moats look the same, and evaluating a moat’s durability can be challenging.

How to find Moat?

At Sadhan, we have solved this question using Quantitative Tools. This is a ready to use excel template giving color coded answer to this all important question i.e. It Gives a GREEN Signal if 7 out of 9 parameters are in line with Warren Buffett’ Benchmark.

Get access to 2 hour Recorded Webinar on Moat and Sadhan Moat Calculator excel Covering:

  • What is Moat?
  • Types of Moats
  • Moat Framework
  • 9 Buffett Benchmarks
  • Sadhan Moat Calculator (excel Template) & How to use it?
  • Template applied on 20+ Live Cases
  • Some Moated Businesses
  • Questions & Answers

Fee: Rs 299 Only

Payment Methods:

  1. Gpay on 9999224715 (Amitabh Vatsya)
  2. UPI id: 9999224715@paytm
  3. Scan QR code below
You can share the receipt on whatsapp with 9999224715 and get link to recordings and excel !

Here is a brief coverage of the workshop :https://youtu.be/eG160uOJfzw


First Hand Course on Finance

1 Month intensive course with live classes on weekend

Never forget the 6-foot-tall man who drowned crossing the stream that was 5 feet deep on average. Basing your investment decision on second hand knowledge is dangerous.You need more First Hand Knowledge to base your decisions on.

Welcome to “First Hand Finance Course” from Sadhan !

Understand the nuances of:

  1. Profit & Loss Statement (with case studies)
  2. Balance sheet (with case studies)
  3. CashFlow Statements (with case studies)
  4. Sadhan Analysis Excel (integrated with Screener.in)
  5. How to Spot Frauds (with case studies)
  6. Key Ratios to analyse businesses

Course fee: Rs 3999 only

Date & Time: Sept-25, Oct-2, 9 & 16, 11:30 a.m. onwards + 3 hours of recorded video content + 4 case studies

Venue: TeachMint Platform

Registrations close at 2 p.m. on 24th Sept. Access to the recording will be given within 24 hours after the live session!


Sadhan Mentorship Program

“If you do not know who you are then the stock market is an expensive place to find out”

-Adam Smith

These words, spoken in 1723 are a timely reminder that stock prices can fall much faster than they can rise, hence the role of temperament becomes much much important. And temperament cannot be taught , but it can be learnt.

It can be learnt by observation! Virendra Sehwag used to say he learnt most when he started opening up with Sachin Tendulkar ! He learnt by watching him bat from the other side of the pitch !

Welcome to Sadhan mentorship program, If you want to learn investing not by recorded videos but in a LIVE Action packed programme where you will have access to my decision making tools, access to my complete portfolio as well as can question my investment decisions so that you can also develop your own investment framework like I did. And all of this not just by watching from the fence but actually investing with me, interacting with me !

Under this mentorship program you will gain excess to :

1. Customised Excel Tool integrated with screener.in ( saves time)

2. 20+ hours of Foundation Video content to step up your investment journey step by step

Investors toolkit

Financial Statement Analysis

How to read Annual Report

Basics of stock market

3. 20 live Zoom classes (every fortnight) covering

How to generate stock ideas

How to develop second order thinking

How to identify sustainable moat

How to identify Red Flags

How to conduct scuttlebutt

Simplifying Macro Factors, Market Cycles

My research hacks

Investment Checklist

Mistakes to avoid while investing

How to conduct management quality check

Art of Valuing a stock

Margin of safety

How to build your portfolio

3 Investment classics( The Intelligent Investor, Common Stock & Uncommon Profit ) with case studies

How to monitor your investment

Behaviour finance, biases and how to avoid them

How to identify next multibagger

Art of Selling: When to Sell

4. 12 Monthly Q&A sessions

5. 5 Sectoral webinars

6. The EndGame: Your Investment Framework

7. Access to My Portfolio with alerts

8. Monthly Premium Newsletter

“Price is what you pay, value is what you get”

-Warren Buffett

You can derive an infinite value from the mentorship as it is totally up to you to learn and grow, because I believe in sharing whatever I can to all and the testimony of this is Sadhan.

The Price of this one year program is Rs 34,999 only !

Payment methods
1. GooglePay

Gpay no:+918409133711

Ac holder name: Ramanand Singh

2. UPI

UPI ID: amitabhv@axisbank.com

3. Bank Transfer

Current Account details:

Ac Holder: Wealth Sutra
Ac no: 5113087504
Kotak Mahindra Bank
Branch: Vasant Vihar, New Delhi
IFSC Code: KKBK0004613
Share the receipt on 9999224715 (whatsapp) or mail amitabhhelios@gmail.com 

4. EMI (Debit/Credit card)

Send us an email at amitabhhelios@gmail.com mentioning EMI . A payment link shall be provided


Sadhan Membership

Now we are 10000+ family on Youtube now ! Thanks a lot for your support and love on Sadhan .This association has resulted in 20+ multibaggers for me and likewise for thousands of our subscriber ! Here comes a shorten list:

But stock picking is just 20% of investing ! you need to hold your investment with patience and an until you develop conviction it is difficult to hold a winner stock and allow it to be multibagger. Here we can help you with this offering called Sadhan Membership where “Conviction & Right Allocation is the name of the game“.

Why You Should Join?

If you also want to be a disciplined investor like me then it would be FAR EASIER if you FOLLOW someone who have walked on this path and willing to share his unconstrained investment thesis/ antithesis when the time is just right for him to act and hence for you to follow and clone.

If you want to learn and invest with someone who has devised his unique investing strategies for example: I had started buying Sugar stocks in Jan 2021 itself and made a video during the same time which have resulted into 2 multibaggers in the portfolio !

How to Join FMP

“Follow My Portfolio”/”FMP” Membership from Sadhan involves following steps:

Step 0:
Please make a payment of Rs 10,999 + GST (Rs 12980 )p.a. to our Current Account

Ac Holder: Wealth Sutra
Ac no: 5113087504
Kotak Mahindra Bank
Branch: Vasant Vihar, New Delhi
IFSC Code: KKBK0004613

or you can Google Pay on +91 8409133711 (Ramanand Singh)

Step 1:
Share the receipt on 9999224715 (whatsapp) or mail amitabhhelios@gmail.com .Post confirmation of payment, I will share my Portfolio with Members Exclusively on Whatsapp

Step 2:
I will add you in Members only whatsapp broadcast so that you will start getting Transaction alert on Whatsapp as and when I buy/sell stock. You have to execute the trade in order to get benefit from the Membership. You will start receiving Bought & Sold alert on Whatsapp with Price and Conviction level on real time basis with Amount , Stock Name , Purchase Price, Horizon & Conviction in the below mentioned format

For Example If I bought 20 nos of JSW Steel at Rs 700 oneday and I am Highly convinced about stock performance and holding it for Long term then I will message :

20: No of stocks

700: Trade Price

Reference :Conviction

SC: Strong Conviction

MC : Medium Conviction

LC : Low Conviction

Reference : Timeline

LT : Long Term( above 3 year)

MT : Medium Term( 1/2 yr to 3 yr)

ST: Short Term ( upto 6 months)

Similar process will be followed if I sell a stock.

Step 3:

Additionally, I will also provide 10 Long term wealth creator stocks currently in Buy Zone as per my estimates on request from your side.

Step 4 :

If you want an independent audit of your holdings by Amitabh Vatsya then you can share your existing portfolio on whatsapp where I may give my view on some/all of the stocks (as the case may be) to the best of my ability.

Step 5:

After closure of the month , I will send exclusive Premium Newsletter discussing my rationale of buying new stocks and selling old stocks, as the case may be ! This letter will encapsulate the updated portfolio with complete profile so that member can take a stock in one go.

If you have any query with respect to FMP then feel free to reach us at amitabhhelios@gmail.com or whatsapp on 9999224715


Sector Analysis : Ferro Alloy a proxy on Steel

We are talking about Ferro Chrome – an alloy whose demand is linked to Steel!

Watch this video to understand the complete value chain:

Ferro Chrome are a type of alloys called as FERROALLOYS. Ferroalloys are important inputs for steel industry as these are used as deoxidizers and alloy additives in the steel manufacturing process .These alloys impart special properties to steel for ex: increase resistance to corrosion, improve hardness & tensile strength at high temperature, impart wear and abrasion resistance and increase creep strength etc.
There are three sub segments in ferroalloys
 Silico Manganese
 Ferro Manganese
 Ferro Chrome

The growth of Ferroalloys Industry is thus, linked with the development of Iron and steel Industry.
One interesting thing to note for an Investor is that : This sector is high energy intensive sector. It means power requirement to make 1 ton is very high. Ferroalloys Industry spends 40 to 70% production cost on power consumption. The power consumption per ton of ferroalloys production in the country varied from 3,000 to 12,000 kWh as shown below:


FERROCHROME
Ferrochrome when added to stainless steel to enhance its appearance and impart corrosion
resistance. For every ton of stainless steel (depending on the grade), there is 17-23% of chrome
content is required. Hence, if the stainless steel industry grows, the ferrochrome industry also
grows. Ferrochrome is produced by electric Carbothermic Reduction of chromite.


Ferrochrome Demand
Ferrochrome market size is projected to reach USD 19150 Million in 2022 and is forecast to readjusted
size of USD 31070 Million by 2028 with CAGR of 8.4% during the review period. As it is a proxy on steel demand so let us understand first the demand drivers of steel sector.

International Steel demand

Steel demand shall remain high as in order to beat Covid most of the countries have to deploy funds into infrastructure building and infrastructure development without steel is virtually impossible. So there will be a huge demand of steel in market. Chinese Lunar new year is about to end so China will start producing and demand from china will increase.

Domestic Demand

Following the fresh lease of mines, the players have to pay a high premium for extraction of ore for majority of the production in India. This is likely to push up cost of extraction and keep ferro chrome prices firm.

Indian Govt. Steel Policy
India has 100 million tonne capacity at present and has planned to grow 300 tonne per annum. We will
see a growth in coming years basis the Key Targets detailed below:
 Domestic crude steel capacity is to be 300 million tonne by 2030-31 (122 million tonne in 2015-
16) entailing an investment of Rs 10Lakh Crore.
 Steel Demand estimated at grow 3-fold to 212 to 247 million tonne by 2030-31.
 Per Capita Consumption of steel to go up to 160kg by 2030-31 (from 61kg now).
 India to emerge as net exporter of steel by 2025-26.
 To domestically meet entire demand of high-grade automotive steel, electrical steel, special
steels and allow for strategic applications by 2030-31.


Ferro Chrome prices


When there is increase in steel prices there will be increase in ferrochrome simultaneously. But in October 2021 there is decrease in its prices (25% correction) due to Chinese Lunar New Year, as in this
month they produce as well consume it in its own country. It affected the market because 50% majority
of steel market is controlled by China. Global Stainless Steel companies are shopping for Ferrochrome in
very limited reserves in the market. Consumers are accepting higher offers and willing to pay premiums.
Price Outlook
 Domestic ferrochrome demand this week was sluggish due to buyers reluctance to book at
higher levels. Domestic offers, therefore, remained stable. In addition, ferro chrome prices also
remained stable due to muted Chinese demand owing to the Lunar New Year holidays.
 In addition, the cost of ferro chrome production has increased due to a hike in coke prices in
India – up by 11% m-o-m to INR 51,000/t from eastern region. This prompted smelters to raise
that offers, but buyers refuse any further hike due to unacceptable high prices.
 Additionally, UG2 chrome ore prices increased to $185/t CNF China as Chinese inventories
dropped to 3 million tonnes (mnt) from 4 mnt and producers expect robust demand after the
New Year holiday. So, an increase in chrome ore prices also supports ferro chrome prices.
Indian ferrochrome smelters are optimistic in terms of ferro chrome prices and demand as they
are anticipating good demand from Chinese buyer post-the New Year holidays.
Three Reasons Supporting High Prices

  1. South Africa: South Africa having 60% of Market Share and it is the Price Setter. Power
    Supply in South Africa has been a perennial issue from many years. Since 2008, South Africa has been facing power deficit. Currently they are running a deficit of 4000 MW (Power shortage of 4000 MW ) hence they are planning to raise power rate, and as we know this industry is totally dependent on power sector, so if there will be a hike in Power cost in South Africa then globally prices of ferro chrome will be high. As South Africa produces ore and Chinese company import ore and ferroalloy spelter situated in China supply Stainless steels from there, South African local spelter was against it as they are not in favor of South Africa economy. So they have tried to bring a legislation which they have proposed in budget. 20.5 % is the price increase applied for by ESKOM from 1st April 2022 for electricity. The Govt is considering a Tax on export of Chrome Ore which is still not announced as SA budget is on 23rd February 2022.
  2. Kazakhstan: In Kazakhstan there is civil unrest is going on so it may affect production.
    Kazakhstan also controls more than 10% of international ore supply.
  3. Turkey: Turkey is major exporter of European countries. Prices of ferrochrome in Europe is
    already high because turkey is unable to supply to them due to its own problems
  • Conclusion
    From Supply side these are the three factors as they are geopolitical in nature and from Demand side Lunar New year is going to end soon then China will start producing, demand from china will high so prices are going to be elevated for near term.If all these factors come into picture then prices shall go up in short term.
  • We think an Indian domestic company named IMFA Ltd is placed to benefit from this . Watch the video to know more: