Friends,
It is an anamoly that people think that Technical Analysis is a good guider for the market movements
I would like to ask all those TA and THEIR FOLLOWERS where they were when they(TA’s) went wrong for 5 yrs straight?How many times has Deepak Mohini proved wrong?How many times he spoke in Media that we have entered the Bear Market.He spoke atleat 5-6 times not less from 2003!He went wrong all the way……I remember he use to speak about bear market on every big fall and he proved wrong. Who is responsible for the loss people made while selling everything like you are saying now( as written by our learnd fellow.Mr Ahmedsir) and market went up?Is Deepak Mohini responsible for that.....
He is an IIT by qualification…..
So how will you follow the TA?When they have proved wrong all the way from 3500 to 21000…..how can that theory be true?How many times Marc Faber went wrong?
Commom on , Mr Ahmedsir, I would like you to answer the questions…….Explain me how TA failed all along from 3500 to 21000…..Did TA’s said that we will touch 21k?
Or is it that TA are only dooms dayers ?Or they come out when they prove right and do not show when they proved wrong?Seems you also be in the same category….easy to critisize…..
Who is going to write against them?Have you ever wrote against those , likes Depaak Mohini, Rajat Bose,Sudarshan Sukhani etc?
Have you ever wrote against Morgan Stanely, CLSA,JP Morgan ,who were never bullish on India and went on giving bearish view? Is n't it a crime to give a sell call when market is going to go up?
Or is it only for the Bullish view people that it is pointed out?No Penalty for who gave bearish view all along and proved wrong?
Had they not invested in India?Then why they went on giving sell calls or over heated or overvalued market?
Mr Ahmedsir,You will have to give me explaination why you didn’t do that to them and why you singleout me for what you wrote….in a long comment which seems you just wrote especially for me….
I still say, TA is useless…..No one in earth of TA’s was able to predict the BULLRUN which took place and no TA were able to give the upper target.
Even no TA was able to predict the fall which we are seeing now so fast…..Mr.Ahmedsir, did chart showed such a big fall so fast?Tell me……
I hope Mr.Ahmedsir will reply me for each of my questions I have asked for and will not skip any point…..
Mr.Ahmedsir , I would like you to give answer in public what made you to write against me selecting from the whole OCEAN of investors.....even though I have always said due diligence is a must for everybody....I have even wrote at mmb in past that do not follow anyone including me, blindly.....then what made you to write against this blog....and not to others.....your explanation is eagerly awaited........
Monday, June 30, 2008
N Jaykumar of Prime Securities.........
Friends,
N Jaykumar of Prime sec is one speaker at CNBC whom I try to read or hear..
He has his view and not talk with a prejudice mind.
Last Saturday I read him at money control site along with Adrew Holland.
One reply to a question asked to him has interested me a lot.
I am pasting here for readers and make their own judgement as I am not a person whose opinion should be read or discussed…..
Read on:
Q: If indeed we are in a bearish kind of market, do you think we will go back to those 10-12 kind of PE multiples where we typically have bottomed out in the past? is it conceivable?
Jayakumar: Something needs to happen to make money reflow into these markets. While we painted seriously gloomy picture right through is that if you go back to participatory note (P-Note) writers-the big bulge bracket firms -virtually everybody will tell you that almost every single holding in any of the stocks has been lent out to be shorted. So virtually there is no borrowing available for somebody to borrow and short in the Indian markets. From that perspective, today you can actually argue that there is no incentive for the short to cover.
Having said that, at some point in time since the gains are reasonably recent, the shorts will have to start covering. So one bout of short covering and I am not sure which broking house would actually put out the thing seeing that USD 7 billion of stock has been borrowed and shorted. As those numbers are right and long only funds also come in, the upward pressure on the short covering itself could actually sees reasonably large size rallies.
The other thing is that India has fallen significantly more than most markets. Now just to look at the Dow or the European markets fall, I think makes for no sense whatsoever. Today we have fallen 3 times of Dow; the Dow is probably down 11%-13%; for the year we are down 35%. In that environment therefore, we will find reasons to bottom out nothing else for short covering reasons. Secondly, interest rates keep going up; maybe there is a squeeze in the commodity markets and the unwinding thereof. If these things happen - of course what is keeping a lead in all this is just like momentum drove us on the way up, there is a reverse momentum in some of the funds etc especially the hedge funds which are facing not just redemptions but lot of performance problems and if those problems translate into a greater squeeze, I think you are going to have maybe the capitulation-selling which you are seeing is happening in a sense in the markets.
So I think a lot of this has been because of the capitulation - a lot of it may have already happened especially the size of the short covering, which I think can potentially happen whenever it does. I do not know if it goes to 10-12 multiples. I had a bottom that was much higher than where we are today. But given whatever, this 13,500-14,000 could actually hold despite all the negatives and maybe we break down from there and maybe it tests a little lower. But I suspect in those range, it is conceivable - when you overshoot, it would actually go down to 12,500-13,000. But I would be very surprised if we did.
My comments:
If the figures are true of $7 bn borrowed stocks are shorted.........and has to be given back.....to the lenders and if Bears are breaking the prices with LOW VOLUMNES, then what will happen when crude will tank....and inflation willcome down as Inflation is related with the crude prices......
This means that when covering takes place then $7 bn worth of stocks borrowed are to be bought from the market and should be given back to the lenders.....A real buying will come.....which will be far far bigger then the actual selling of FII's of $5 bn...
Please take my view as a pinch of salt as I am accused of misguiding readers....
N Jaykumar of Prime sec is one speaker at CNBC whom I try to read or hear..
He has his view and not talk with a prejudice mind.
Last Saturday I read him at money control site along with Adrew Holland.
One reply to a question asked to him has interested me a lot.
I am pasting here for readers and make their own judgement as I am not a person whose opinion should be read or discussed…..
Read on:
Q: If indeed we are in a bearish kind of market, do you think we will go back to those 10-12 kind of PE multiples where we typically have bottomed out in the past? is it conceivable?
Jayakumar: Something needs to happen to make money reflow into these markets. While we painted seriously gloomy picture right through is that if you go back to participatory note (P-Note) writers-the big bulge bracket firms -virtually everybody will tell you that almost every single holding in any of the stocks has been lent out to be shorted. So virtually there is no borrowing available for somebody to borrow and short in the Indian markets. From that perspective, today you can actually argue that there is no incentive for the short to cover.
Having said that, at some point in time since the gains are reasonably recent, the shorts will have to start covering. So one bout of short covering and I am not sure which broking house would actually put out the thing seeing that USD 7 billion of stock has been borrowed and shorted. As those numbers are right and long only funds also come in, the upward pressure on the short covering itself could actually sees reasonably large size rallies.
The other thing is that India has fallen significantly more than most markets. Now just to look at the Dow or the European markets fall, I think makes for no sense whatsoever. Today we have fallen 3 times of Dow; the Dow is probably down 11%-13%; for the year we are down 35%. In that environment therefore, we will find reasons to bottom out nothing else for short covering reasons. Secondly, interest rates keep going up; maybe there is a squeeze in the commodity markets and the unwinding thereof. If these things happen - of course what is keeping a lead in all this is just like momentum drove us on the way up, there is a reverse momentum in some of the funds etc especially the hedge funds which are facing not just redemptions but lot of performance problems and if those problems translate into a greater squeeze, I think you are going to have maybe the capitulation-selling which you are seeing is happening in a sense in the markets.
So I think a lot of this has been because of the capitulation - a lot of it may have already happened especially the size of the short covering, which I think can potentially happen whenever it does. I do not know if it goes to 10-12 multiples. I had a bottom that was much higher than where we are today. But given whatever, this 13,500-14,000 could actually hold despite all the negatives and maybe we break down from there and maybe it tests a little lower. But I suspect in those range, it is conceivable - when you overshoot, it would actually go down to 12,500-13,000. But I would be very surprised if we did.
My comments:
If the figures are true of $7 bn borrowed stocks are shorted.........and has to be given back.....to the lenders and if Bears are breaking the prices with LOW VOLUMNES, then what will happen when crude will tank....and inflation willcome down as Inflation is related with the crude prices......
This means that when covering takes place then $7 bn worth of stocks borrowed are to be bought from the market and should be given back to the lenders.....A real buying will come.....which will be far far bigger then the actual selling of FII's of $5 bn...
Please take my view as a pinch of salt as I am accused of misguiding readers....
Saturday, June 28, 2008
Let us Discuss.......
A reader asked me a question and I have tried to answer it in my way....
Hi Rajeev,
As more and more negative news hitting on credit crisis, crude, politics. Can we expect any any rally in short term. In last market crash around 2001, it took 2-3 years for next bull market rally to start.This time, how can we expect rally this year itself? How is this crash different from earlier crash for recovery in such short duration.
Thanks
siva….
Let us Discuss…..
Well, credit crisis is concern.So is crude and politics.
Now we will take one by one.
Whether the credit crisis will remain there forever?
The answer is,it will not. It has to be donewith by passing of time.
Second thing is will Indian Market be affected by it or not?
Whatever damage is done is done maybe some more pain left,but it is not possible that they will keep on selling.Moreover the Oil Dollars are yet to reach Indian Shores….but they are going to come.They are just waiting on sidelines.
Now Crude.
Well, it may go higher to even $175 or 200 but speculation can’t go such longer.We have seen in Stock market.The demand in crude has rised by just 1% and will remain there for next couple of years.Means crude should come down as it is speculation.
Politics:
Well, I am reading that no one is ready to back Left on Nuclear Issue.Also heard that BJP can give support for Nuclear Deal……
The scenario is totally different from the 2001 year. At that time we were growing at just 3% GDP while even due to crude and commodities bull run we will be having GDP of atleast around 7.5 % if not more.So we are still at the double the rate of growing then in 2001 and that cannot be ignored by investors.Moreover in this period of turmoils only China and India are growing at much much higher rate then any world economy.
So to say, I think there is no reason to be bearish and think of 2001 year.
I have a discussion with one friend and he says that,
1)House Tap - The improving direct tax collection revenues of Govt of India
2)Ocean - The Huge Fiscal deficit.
3)Consider this - There is 71000 crore Loan Waiver. There is the 50000 crore (or more) Sixth Pay commission bill. There is the 95000 crore Fertilizer Subsidy. Then there is the 1 lakh crore rs plus Oil Pool Deficit funded through bonds.... all this is in one fiscal year - 2008-09....
4)Now rising inflation will mean more DA Payouts for Govt staff plus higher interest rates which means that Govt liabilities aka debt becomes costlier to service.
5)PC has been an expert in hiding the government liabilities through peculiar illiquid bonds hoisted on the PSUs and Fertilizer cos and these bonds are sold at a loss to institutions like LIC. This is nothing but Enronomics. All this is only going to increase money supply and reduce the value of money and any inflation has to be discounted through lower market valuations - espically for companies (like in realty sector) that are rate sensitives.
These were his concerns for bad market and Bear market….
I told him that if these are your concerns then we cannot see a Bull Market for years together, because the concerns you have shown are not going to go within a year or two but is going to remain for years together and hence I see no chance for a Bull market for years together.
And if he thinks that Bull market can again take place in a year or two( I write this because he is always bearish) then we should not talk of this concerns.
So the bottomline here is , the concerns and negative remains where it is and if market has to run it will run and no one on earth can stop from running.
It depends how your mind is.How you think.Positively or Negatively.
Remember that , Bear market are investors friends as he gets cheap……what he wants….as can be seen on horizen of Indian Market.No one knows the bottom.
There is another incident.One friend told me that Ashiana Housing has gone down from Rs 215 to Rs 70 and that is a loss of 70%.He use to buy stocks looking at growth, Management, earnings, Debit ratio and everything.He is holding that stock , maybe not…but I wrote him that in Bear market everything goes down.Hence there is nothing like good or Bad management or nothing like seeing in debit ratio,debt Free co etc…..
Even in bad market some stocks are making new highs like JPT Sec….
There are people who always wants to buy cheap and hence always write negative.They were bearish at 6500 level , at 9000 level and even at 21000 level…..
But I always say ,
“That is why I never ask for a Bear market.....because I know what happens in Bear Market.I have seen all since I entered in Stock Market in 1985......
While Bulls take 2003 to 2008 , means 5 yrs, Bears will take only 1 yr or 18 months to bring back prices to that level...and that is too fast by any means.....
Don't invite bears......I know there are arguements that we do not invite them , the environment is such, but as our saying goes, never invite trouble , otherwise it can really come at your doorstep.....
People asking/inviting for a bear Phase to buy cheaper will also be GRIND TO DUST and will horribly repent why they asked for that.....as there is no bottom in bear market….
Bears are more ruthless then Bulls.......
We all have asked for that and now we have to face it.........majority Rules everywhere......isn't it.....
Well, I have given my view and shared my experience ……that is my view…maybe I am wrong…..
Rajeev
Hi Rajeev,
As more and more negative news hitting on credit crisis, crude, politics. Can we expect any any rally in short term. In last market crash around 2001, it took 2-3 years for next bull market rally to start.This time, how can we expect rally this year itself? How is this crash different from earlier crash for recovery in such short duration.
Thanks
siva….
Let us Discuss…..
Well, credit crisis is concern.So is crude and politics.
Now we will take one by one.
Whether the credit crisis will remain there forever?
The answer is,it will not. It has to be donewith by passing of time.
Second thing is will Indian Market be affected by it or not?
Whatever damage is done is done maybe some more pain left,but it is not possible that they will keep on selling.Moreover the Oil Dollars are yet to reach Indian Shores….but they are going to come.They are just waiting on sidelines.
Now Crude.
Well, it may go higher to even $175 or 200 but speculation can’t go such longer.We have seen in Stock market.The demand in crude has rised by just 1% and will remain there for next couple of years.Means crude should come down as it is speculation.
Politics:
Well, I am reading that no one is ready to back Left on Nuclear Issue.Also heard that BJP can give support for Nuclear Deal……
The scenario is totally different from the 2001 year. At that time we were growing at just 3% GDP while even due to crude and commodities bull run we will be having GDP of atleast around 7.5 % if not more.So we are still at the double the rate of growing then in 2001 and that cannot be ignored by investors.Moreover in this period of turmoils only China and India are growing at much much higher rate then any world economy.
So to say, I think there is no reason to be bearish and think of 2001 year.
I have a discussion with one friend and he says that,
1)House Tap - The improving direct tax collection revenues of Govt of India
2)Ocean - The Huge Fiscal deficit.
3)Consider this - There is 71000 crore Loan Waiver. There is the 50000 crore (or more) Sixth Pay commission bill. There is the 95000 crore Fertilizer Subsidy. Then there is the 1 lakh crore rs plus Oil Pool Deficit funded through bonds.... all this is in one fiscal year - 2008-09....
4)Now rising inflation will mean more DA Payouts for Govt staff plus higher interest rates which means that Govt liabilities aka debt becomes costlier to service.
5)PC has been an expert in hiding the government liabilities through peculiar illiquid bonds hoisted on the PSUs and Fertilizer cos and these bonds are sold at a loss to institutions like LIC. This is nothing but Enronomics. All this is only going to increase money supply and reduce the value of money and any inflation has to be discounted through lower market valuations - espically for companies (like in realty sector) that are rate sensitives.
These were his concerns for bad market and Bear market….
I told him that if these are your concerns then we cannot see a Bull Market for years together, because the concerns you have shown are not going to go within a year or two but is going to remain for years together and hence I see no chance for a Bull market for years together.
And if he thinks that Bull market can again take place in a year or two( I write this because he is always bearish) then we should not talk of this concerns.
So the bottomline here is , the concerns and negative remains where it is and if market has to run it will run and no one on earth can stop from running.
It depends how your mind is.How you think.Positively or Negatively.
Remember that , Bear market are investors friends as he gets cheap……what he wants….as can be seen on horizen of Indian Market.No one knows the bottom.
There is another incident.One friend told me that Ashiana Housing has gone down from Rs 215 to Rs 70 and that is a loss of 70%.He use to buy stocks looking at growth, Management, earnings, Debit ratio and everything.He is holding that stock , maybe not…but I wrote him that in Bear market everything goes down.Hence there is nothing like good or Bad management or nothing like seeing in debit ratio,debt Free co etc…..
Even in bad market some stocks are making new highs like JPT Sec….
There are people who always wants to buy cheap and hence always write negative.They were bearish at 6500 level , at 9000 level and even at 21000 level…..
But I always say ,
“That is why I never ask for a Bear market.....because I know what happens in Bear Market.I have seen all since I entered in Stock Market in 1985......
While Bulls take 2003 to 2008 , means 5 yrs, Bears will take only 1 yr or 18 months to bring back prices to that level...and that is too fast by any means.....
Don't invite bears......I know there are arguements that we do not invite them , the environment is such, but as our saying goes, never invite trouble , otherwise it can really come at your doorstep.....
People asking/inviting for a bear Phase to buy cheaper will also be GRIND TO DUST and will horribly repent why they asked for that.....as there is no bottom in bear market….
Bears are more ruthless then Bulls.......
We all have asked for that and now we have to face it.........majority Rules everywhere......isn't it.....
Well, I have given my view and shared my experience ……that is my view…maybe I am wrong…..
Rajeev
Thursday, June 26, 2008
One more takeover in Media sector........
HDIL buys 51% in SAB media co
Stake To Help Realty Firm Gain 51% Control In Sri Adhikari Brothers’ Group Arm SABML & Technocraft Media
Our Bureau MUMBAI
REAL estate firm Housing Development and Infrastructure (HDIL) on Tuesday said it has acquired 51% stake in Broadcast Initiative (BIL), a Sri Adhikari Brothers group-controlled media firm, for an undisclosed amount. The BIL stake purchase will also give HDIL control over 51% stake each in two subsidiaries of BIL-Sri Adhikari Brothers Media (SABML) and Technocraft Media. BIL is a national Hindi news channel while SABML is operating a regional Marathi channel, Mi Marathi. Technocraft Media (TMPL) is in the process of starting a regional Bhojpuri channel. HDIL will route the stake purchase through its various group companies, a company statement issued here said. “The acquisition of 51% stake in BIL, SABML and TMPL is part of the group’s long term strategy of becoming a significant player in the fast growing media and entertainment space. The deal will prove to be an ideal entry point for the group, because of the vast media experience of Adhikari Brothers,” said HDIL chairman Rakesh Kumar Wadhwan. He added that HDIL has plans to create a bouquet of regional news and entertainment channels and to become a leading media conglomerate by entering into other assets such as film production, distribution and Studio facilities. The equity purchase from existing promoters will be followed by an open offer as per SEBI’s takeover regulations. Adhikari Brothers will retain a balance shareholding which may be up to 24% post completion of transaction, the company statement said. “Our partner ship with HDIL puts us on a new and much stronger platform to harness our capabilities and cope with the increasing competition in the national and regional broadcasting segment,” said Broadcast initiatives MD Makarand Adhikari.
My Comments:
There is one more take over in Media Sector and that is SAB TV .It again proves that Media is going to play a major role in world market .We have seen that ADAG wants to play a major role in Media sector as we saw ADAG taking over Adlabs Ltd , ETC Network Ltd etc and declaring that it wants to makes films that will includes Hollywood stars and will also have a director like Steven Speilberg and the amt put aside by Anil Ambani , ADAG gr is $1 bn…i.e Rs 4500 cr.
But the elder brother also wants the pie in Media.I somewhere read that the EX-MD of Adlabs , Mr.Manmohan Shetty , has joined Ril Media arm and seems Mukesh Ambani is also thinking big here.
According to what I have gathered HDIL management is also very near to Mukesh Ambani gr and seems that this a proxy takeover from Mukesh Ambani as he can’t go directly in Media sector as Anil Ambani is have stake and interest in Media sector.
But seems that this sector is going to become very hot with takeovers and mergers.One should watch out for this sector.
Stake To Help Realty Firm Gain 51% Control In Sri Adhikari Brothers’ Group Arm SABML & Technocraft Media
Our Bureau MUMBAI
REAL estate firm Housing Development and Infrastructure (HDIL) on Tuesday said it has acquired 51% stake in Broadcast Initiative (BIL), a Sri Adhikari Brothers group-controlled media firm, for an undisclosed amount. The BIL stake purchase will also give HDIL control over 51% stake each in two subsidiaries of BIL-Sri Adhikari Brothers Media (SABML) and Technocraft Media. BIL is a national Hindi news channel while SABML is operating a regional Marathi channel, Mi Marathi. Technocraft Media (TMPL) is in the process of starting a regional Bhojpuri channel. HDIL will route the stake purchase through its various group companies, a company statement issued here said. “The acquisition of 51% stake in BIL, SABML and TMPL is part of the group’s long term strategy of becoming a significant player in the fast growing media and entertainment space. The deal will prove to be an ideal entry point for the group, because of the vast media experience of Adhikari Brothers,” said HDIL chairman Rakesh Kumar Wadhwan. He added that HDIL has plans to create a bouquet of regional news and entertainment channels and to become a leading media conglomerate by entering into other assets such as film production, distribution and Studio facilities. The equity purchase from existing promoters will be followed by an open offer as per SEBI’s takeover regulations. Adhikari Brothers will retain a balance shareholding which may be up to 24% post completion of transaction, the company statement said. “Our partner ship with HDIL puts us on a new and much stronger platform to harness our capabilities and cope with the increasing competition in the national and regional broadcasting segment,” said Broadcast initiatives MD Makarand Adhikari.
My Comments:
There is one more take over in Media Sector and that is SAB TV .It again proves that Media is going to play a major role in world market .We have seen that ADAG wants to play a major role in Media sector as we saw ADAG taking over Adlabs Ltd , ETC Network Ltd etc and declaring that it wants to makes films that will includes Hollywood stars and will also have a director like Steven Speilberg and the amt put aside by Anil Ambani , ADAG gr is $1 bn…i.e Rs 4500 cr.
But the elder brother also wants the pie in Media.I somewhere read that the EX-MD of Adlabs , Mr.Manmohan Shetty , has joined Ril Media arm and seems Mukesh Ambani is also thinking big here.
According to what I have gathered HDIL management is also very near to Mukesh Ambani gr and seems that this a proxy takeover from Mukesh Ambani as he can’t go directly in Media sector as Anil Ambani is have stake and interest in Media sector.
But seems that this sector is going to become very hot with takeovers and mergers.One should watch out for this sector.
Monday, June 23, 2008
Microsoft acquires Chet Kanojia founded Navic Networks..........
Microsoft acquires Chet Kanojia founded Navic Networks
Saturday, June 21, 2008
Washington: Microsoft has announced the acquisition of Navic Networks, a leading provider of television advertising solutions founded by Chet Kanojia, who is also the CEO of the company. Navic's technologies include sophisticated campaign management tools that use relevant data to optimize the delivery and placement of targeted interactive television media and through Admira provide a unified ad network for targeting audiences across television advertising inventory. With the addition of Navic solutions, Microsoft�s comprehensive advertising platform will be able to facilitate enhanced digital advertising across online and offline environments."Television media represents the largest percentage of advertisers and agencies' media budget today," said Brian McAndrews, senior vice president of the advertiser and publisher solutions group at Microsoft. "Together, Navic and Microsoft will deliver addressable television advertising solutions to help our partners better manage media spend by increasing advertiser reach and ROI, and maximizing publisher yield on television advertising."Together, Microsoft and Navic plan to consult and work with the key constituents in the television advertising industry to better understand how its campaign management and advertising platforms for digital television can help advertisers, content owners and distributors maximize yield and achieve their media objectives."Viewers across North America are engaging with relevant advertising and interacting with their TVs in ways never before possible. Joining forces with Microsoft will enable our common vision of addressable television advertising solutions to continue to flourish and better meet the needs of our industry partners," said Chet Kanojia, CEO of Navic Networks. "While our current business relationships will continue to grow, we look forward to extending our technology into a vast array of new markets and software solutions."With this acquisition, Navic Networks becomes a wholly owned subsidiary of Microsoft and will join Microsoft's Advertiser and Publisher Solutions (APS) Group, the group responsible for Microsoft's comprehensive advertising platform that spans all digital media including television and video advertising. The APS Group includes Atlas, a pioneer of Video-On-Demand advertising solutions.
My Comments:
I have been reading that Microsoft and Bills Gates in particular wants to takeover YAHOO! And according to me if they can get it at $38 that will be a great deal and the cheapest one too.When I see the price of Google at $550 and over and see the price of Baidu at $280 then I think Yahoo is going very cheap at $22…..
Bills Gates is very bullish on Internet Advertising sector and hence he is very keen to enter this sector through inorganic way.
So that is the reason that MS has takenover Navic Networks, a leading provider of television advertising solutions founded by Chet Kanojia.
Bills Gates believes and I also concur with him that Internet Advertising is going to be a big thing.People will not go to buy physically and waste Gas or petrol or time.They will do online and this sector is going to prosper like anything.
That is why I like Aftek Infosys very much because of its stake in a co which is a search Engine,named Seekport Internet Technologies.Google and Baidu are very powerful search engines and hence are valued high.
In dark horse section I like Netlink Solution Ltd.. a 1 paid up share at Rs 2.40….It has a search Engine named www.easy2source.com…
And I feel it is a dark horse in this sector…….
Saturday, June 21, 2008
Washington: Microsoft has announced the acquisition of Navic Networks, a leading provider of television advertising solutions founded by Chet Kanojia, who is also the CEO of the company. Navic's technologies include sophisticated campaign management tools that use relevant data to optimize the delivery and placement of targeted interactive television media and through Admira provide a unified ad network for targeting audiences across television advertising inventory. With the addition of Navic solutions, Microsoft�s comprehensive advertising platform will be able to facilitate enhanced digital advertising across online and offline environments."Television media represents the largest percentage of advertisers and agencies' media budget today," said Brian McAndrews, senior vice president of the advertiser and publisher solutions group at Microsoft. "Together, Navic and Microsoft will deliver addressable television advertising solutions to help our partners better manage media spend by increasing advertiser reach and ROI, and maximizing publisher yield on television advertising."Together, Microsoft and Navic plan to consult and work with the key constituents in the television advertising industry to better understand how its campaign management and advertising platforms for digital television can help advertisers, content owners and distributors maximize yield and achieve their media objectives."Viewers across North America are engaging with relevant advertising and interacting with their TVs in ways never before possible. Joining forces with Microsoft will enable our common vision of addressable television advertising solutions to continue to flourish and better meet the needs of our industry partners," said Chet Kanojia, CEO of Navic Networks. "While our current business relationships will continue to grow, we look forward to extending our technology into a vast array of new markets and software solutions."With this acquisition, Navic Networks becomes a wholly owned subsidiary of Microsoft and will join Microsoft's Advertiser and Publisher Solutions (APS) Group, the group responsible for Microsoft's comprehensive advertising platform that spans all digital media including television and video advertising. The APS Group includes Atlas, a pioneer of Video-On-Demand advertising solutions.
My Comments:
I have been reading that Microsoft and Bills Gates in particular wants to takeover YAHOO! And according to me if they can get it at $38 that will be a great deal and the cheapest one too.When I see the price of Google at $550 and over and see the price of Baidu at $280 then I think Yahoo is going very cheap at $22…..
Bills Gates is very bullish on Internet Advertising sector and hence he is very keen to enter this sector through inorganic way.
So that is the reason that MS has takenover Navic Networks, a leading provider of television advertising solutions founded by Chet Kanojia.
Bills Gates believes and I also concur with him that Internet Advertising is going to be a big thing.People will not go to buy physically and waste Gas or petrol or time.They will do online and this sector is going to prosper like anything.
That is why I like Aftek Infosys very much because of its stake in a co which is a search Engine,named Seekport Internet Technologies.Google and Baidu are very powerful search engines and hence are valued high.
In dark horse section I like Netlink Solution Ltd.. a 1 paid up share at Rs 2.40….It has a search Engine named www.easy2source.com…
And I feel it is a dark horse in this sector…….
Saturday, June 21, 2008
Market at the cross Road.........
Friends,
Yesterday was really a bad day and it was really really scary.More bad news are seen in International world market.More sub prime crisis seems to follow and we can see more down side.I can't say what can be the bottom ,though personally I feel market should not go below 14k.
But then anybody can go wrong and I am no God to predict such things.I am here just to share my view and there by help readers here.
Personally I am holding all my position though Ramesh Damani is still bearish on market.This is the one person I use to read as he is a genuine person who will at least not purposefully misguide people.
I am keeping my fingures crossed and wait for the Crude to tank.It is going to happen, sooner or later.The speculation has been so high that it has to fall.
Well, almost all the bad news are factored in our Indian market.Now only good news should come in for play , like good Tax collection numbers,good IIP nos etc........
India Growth story is in tact which is more a domestic comsumption story then depending on wrold trade, like export.There is still much to be done in Infrastructure sector, Power sector etc....The country which lacks in Infra structure sector has got a bright future as if she has to compete with the world then she has to do things that have not done in past.
The recent meltdown is not due to bad results , it is due to the selling of FII's that is making the difference.But the silver lining that I am seeing is , after so much selling coming from FII's , market has still been able to sustain the level of 14700.
Maybe it can be violated for a brief period of time but the day is not far off that we again make a U turn and see a good rally.
I firmly believe that as market can't ignore bad news constantly and go up and up, like we saw from Nov/dec/Jan,and tanked, market also can't ignore good news constantly.I am a firm believer of a LT bull run of Indian Market.
What one should do is anybody's guess.Always be at comfort level.One should have no sleepness nights under any circumstances....and that is the bottom line.......
Be on side lines and wait for the picture to get clear....see how FII's reacts as Lehman Br is almost on verge of a collapse and trying to find funds to survive.There can be some more casualties in Financial sector of world market.So better be catious.
But don't get scared....that is the last thing one must do.........
Best of Luck to all......
Yesterday was really a bad day and it was really really scary.More bad news are seen in International world market.More sub prime crisis seems to follow and we can see more down side.I can't say what can be the bottom ,though personally I feel market should not go below 14k.
But then anybody can go wrong and I am no God to predict such things.I am here just to share my view and there by help readers here.
Personally I am holding all my position though Ramesh Damani is still bearish on market.This is the one person I use to read as he is a genuine person who will at least not purposefully misguide people.
I am keeping my fingures crossed and wait for the Crude to tank.It is going to happen, sooner or later.The speculation has been so high that it has to fall.
Well, almost all the bad news are factored in our Indian market.Now only good news should come in for play , like good Tax collection numbers,good IIP nos etc........
India Growth story is in tact which is more a domestic comsumption story then depending on wrold trade, like export.There is still much to be done in Infrastructure sector, Power sector etc....The country which lacks in Infra structure sector has got a bright future as if she has to compete with the world then she has to do things that have not done in past.
The recent meltdown is not due to bad results , it is due to the selling of FII's that is making the difference.But the silver lining that I am seeing is , after so much selling coming from FII's , market has still been able to sustain the level of 14700.
Maybe it can be violated for a brief period of time but the day is not far off that we again make a U turn and see a good rally.
I firmly believe that as market can't ignore bad news constantly and go up and up, like we saw from Nov/dec/Jan,and tanked, market also can't ignore good news constantly.I am a firm believer of a LT bull run of Indian Market.
What one should do is anybody's guess.Always be at comfort level.One should have no sleepness nights under any circumstances....and that is the bottom line.......
Be on side lines and wait for the picture to get clear....see how FII's reacts as Lehman Br is almost on verge of a collapse and trying to find funds to survive.There can be some more casualties in Financial sector of world market.So better be catious.
But don't get scared....that is the last thing one must do.........
Best of Luck to all......
Friday, June 20, 2008
Jayaswal Neco.....My call vindicated......
Jayaswal Neco has come out with excellent nos and once again my call on Jayaswal Neco has been a great success.
Jayaswal Neco has posted a profit of Rs 38 cr as against Rs 10 cr last year..So the rise is as good as fourfold. On yearly bases also the profit has increased from Rs 22 cr to Rs 85 cr...that is also a 4 fold rise...year to year.....What more one wants?
This is called exponential growth and that is where I see it early and give a call to buy early.
I can under no circunstances justify the future growth looking at present results which use to come dull.......
Only after sometime it use to surface......
I have written enough on Jayaswal Neco......
Giving an EPS of 3.33 on qr bases and EPS of over 7 on year end Mar 08 base I think Jayaswal has long way to go and I remember I gave a call at mmb at just Rs..17....after which it touched 84 and again retraced back to 22 to give a chance to buy and again it has doubled....
Jayaswal Neco has posted a profit of Rs 38 cr as against Rs 10 cr last year..So the rise is as good as fourfold. On yearly bases also the profit has increased from Rs 22 cr to Rs 85 cr...that is also a 4 fold rise...year to year.....What more one wants?
This is called exponential growth and that is where I see it early and give a call to buy early.
I can under no circunstances justify the future growth looking at present results which use to come dull.......
Only after sometime it use to surface......
I have written enough on Jayaswal Neco......
Giving an EPS of 3.33 on qr bases and EPS of over 7 on year end Mar 08 base I think Jayaswal has long way to go and I remember I gave a call at mmb at just Rs..17....after which it touched 84 and again retraced back to 22 to give a chance to buy and again it has doubled....
Thursday, June 19, 2008
Khaitan Electricals.......cmp.....Rs.55.15..code:504269
Friends,
A new call to Buy Khaitan Electric.....going very very cheap.....Buy this stock for multibagger return......
Gave a call to buy on High Energy Battery at Rs 170......seems the upward movement has started after some initial hicupps......
There was some movements today.
I again give a buy call on Laxmi Electricals and India Glycols.Buy both for a multibagger return in 2 yrs time.......
Best of Luck.......
Not to write ...buy at your own comfort level.......and with due diligence.......
A new call to Buy Khaitan Electric.....going very very cheap.....Buy this stock for multibagger return......
Gave a call to buy on High Energy Battery at Rs 170......seems the upward movement has started after some initial hicupps......
There was some movements today.
I again give a buy call on Laxmi Electricals and India Glycols.Buy both for a multibagger return in 2 yrs time.......
Best of Luck.......
Not to write ...buy at your own comfort level.......and with due diligence.......
Wednesday, June 18, 2008
Assam Co.........Now recognized.......!
Friends,
A Wellknown analyst ,Mr.Mudar Patherya,has come out with a buy call on my old call of Assam Co. Mr.Mudar Patherya writes for Business Standard for Monday Smart Investors guide and also comes at CNBC for his picks....
I am pasting it for readers which I have taken from Moneycontrol site.....
What more do I want that my call is now recognized by the analyst and am sure some Reports will also come out from some brokers house......
Q: What’s the story with Assam Company?
A: Everybody is complaining about oil. Prices of oil have risen and people can’t manage the budgets. Everybody’s afraid crude may hit USD 200/bbl. You need a hedge and that hedge is Assam Company. The hedge could well be Cairn, it could well be various other stocks but I like Assam Company because nobody expects it to do anything great in oil so the PE is quite reasonable. I have been tracking this stock for a fair amount of time and they never got beyond USD 150-160/bbl a day, Barrel of Oil Equivalent (BOE).
I think the last quarter or the last few months have actually gone upto USD 1,500-1,600/bbl a day. I suddenly see there is some critical mass happening here. It’s not going to end at USD 1600/bbl a day. The kind of reserves that they have in the Amguri block they can potentially go upto about USD 20,000-25,000/bbl a day for a number of years. So it’s not just a significant spike in one year and thereafter fade down. They can actually move upto about USD 25,000/bbl and stay there for a number of years. The interesting characteristic is that oil prices are high and it could get higher but in this business, the cost of production would not be more than USD 20/bbl even in the worst comes to worst come scenario.
So you are looking at a very interesting delta. You are looking at an average realisation of USD 130/bbl and you are looking at a total all told cost of USD 20/bbl. So you got a delta of USD 100/bbl given whatever happens, in the present circumstances. If you then calculate that, a part of this is going to be gas, and a part of this is going to be the oil. Gas is going to be a lower realisation, oil is going to be a good realisation all things considered you are looking at some humungous numbers.
The interesting part is that this is sustainable because this just keeps coming out of the ground and then there is nothing that the management- even if it were a bad management, there is nothing you can do to stop the money from flowing in. The interesting characteristic of an oil company is, when it comes in, it really comes in. People don’t make money; they get wealthy, just sitting on oil stocks.
Can it happen in this case? Firstly the company is not necessarily cheap at today’s valuation and given the kind of results that they have shown, Rs 900 odd crore valuation. The value of the reserves at today’s levels is at about USD 1.4 billion and that’s a fair amount of money.
Is the company going to get that much of money out onto the balance sheet? I think you will have to start tracking the stock on a quarter-by-quarter basis. You have got to start taking a look at its capex programme. The more the capex increases, the more is the oil starts coming out and the more the money that is transferred to the balance sheet in the P&L account. The management is actually talking about raising its output from about USD 16,00/bbl a day to about USD 3,000/bbl by the end of 2008 and very close to about USD 5,000/bbl by March 2009. Going ahead I would expect it at about USD 8,000/bbl a day by the end of 2009 or 2010. That’s going to be very significant in terms of revenues and more significantly in terms of profits.
Q: What’s a good price target to work with an Assam Company having crunched the numbers?
A: I have not been able to give a discounting to this mcompany. The company comes in with a fairly interesting past, it’s been in tea it and had a number of subsidiary companies( Raima ,I wrote this to you, u remember?). My understanding is tea is going to have a good year but nobody is looking at tea. I think the company is now going to get its act together nad clean up its balance sheet. The company is probably going to have a better quality of Board, a stronger governance initiatives. So once that happens it’s anybody’s guess as to what happens with the PE. Normally I am a safe man, I go with PEs of 5-7.
When you look at very humungous Pes, it becomes a little difficult but in this case we are safe. So there are two kinds of upsides that we are looking at; earnings upside and if you get a PE upside that’s going to be a very interesting kicker. Assuming that the sky falls on everybody’s heads and we actually live with a USD 200/bbl in a day scenario, this might be an effective hedge to have.
A Wellknown analyst ,Mr.Mudar Patherya,has come out with a buy call on my old call of Assam Co. Mr.Mudar Patherya writes for Business Standard for Monday Smart Investors guide and also comes at CNBC for his picks....
I am pasting it for readers which I have taken from Moneycontrol site.....
What more do I want that my call is now recognized by the analyst and am sure some Reports will also come out from some brokers house......
Q: What’s the story with Assam Company?
A: Everybody is complaining about oil. Prices of oil have risen and people can’t manage the budgets. Everybody’s afraid crude may hit USD 200/bbl. You need a hedge and that hedge is Assam Company. The hedge could well be Cairn, it could well be various other stocks but I like Assam Company because nobody expects it to do anything great in oil so the PE is quite reasonable. I have been tracking this stock for a fair amount of time and they never got beyond USD 150-160/bbl a day, Barrel of Oil Equivalent (BOE).
I think the last quarter or the last few months have actually gone upto USD 1,500-1,600/bbl a day. I suddenly see there is some critical mass happening here. It’s not going to end at USD 1600/bbl a day. The kind of reserves that they have in the Amguri block they can potentially go upto about USD 20,000-25,000/bbl a day for a number of years. So it’s not just a significant spike in one year and thereafter fade down. They can actually move upto about USD 25,000/bbl and stay there for a number of years. The interesting characteristic is that oil prices are high and it could get higher but in this business, the cost of production would not be more than USD 20/bbl even in the worst comes to worst come scenario.
So you are looking at a very interesting delta. You are looking at an average realisation of USD 130/bbl and you are looking at a total all told cost of USD 20/bbl. So you got a delta of USD 100/bbl given whatever happens, in the present circumstances. If you then calculate that, a part of this is going to be gas, and a part of this is going to be the oil. Gas is going to be a lower realisation, oil is going to be a good realisation all things considered you are looking at some humungous numbers.
The interesting part is that this is sustainable because this just keeps coming out of the ground and then there is nothing that the management- even if it were a bad management, there is nothing you can do to stop the money from flowing in. The interesting characteristic of an oil company is, when it comes in, it really comes in. People don’t make money; they get wealthy, just sitting on oil stocks.
Can it happen in this case? Firstly the company is not necessarily cheap at today’s valuation and given the kind of results that they have shown, Rs 900 odd crore valuation. The value of the reserves at today’s levels is at about USD 1.4 billion and that’s a fair amount of money.
Is the company going to get that much of money out onto the balance sheet? I think you will have to start tracking the stock on a quarter-by-quarter basis. You have got to start taking a look at its capex programme. The more the capex increases, the more is the oil starts coming out and the more the money that is transferred to the balance sheet in the P&L account. The management is actually talking about raising its output from about USD 16,00/bbl a day to about USD 3,000/bbl by the end of 2008 and very close to about USD 5,000/bbl by March 2009. Going ahead I would expect it at about USD 8,000/bbl a day by the end of 2009 or 2010. That’s going to be very significant in terms of revenues and more significantly in terms of profits.
Q: What’s a good price target to work with an Assam Company having crunched the numbers?
A: I have not been able to give a discounting to this mcompany. The company comes in with a fairly interesting past, it’s been in tea it and had a number of subsidiary companies( Raima ,I wrote this to you, u remember?). My understanding is tea is going to have a good year but nobody is looking at tea. I think the company is now going to get its act together nad clean up its balance sheet. The company is probably going to have a better quality of Board, a stronger governance initiatives. So once that happens it’s anybody’s guess as to what happens with the PE. Normally I am a safe man, I go with PEs of 5-7.
When you look at very humungous Pes, it becomes a little difficult but in this case we are safe. So there are two kinds of upsides that we are looking at; earnings upside and if you get a PE upside that’s going to be a very interesting kicker. Assuming that the sky falls on everybody’s heads and we actually live with a USD 200/bbl in a day scenario, this might be an effective hedge to have.
Tuesday, June 17, 2008
Are you Fortunate or Unfortunate.....!
Are you Fortunate or Unfortunate.....!
Two ChoicesWhat would you do? You make the choice. Don't look for a punch line, there isn't one. Read it anyway. My question is: Would you have made the same choice? At a fundraising dinner for a school that serves learning-disabled children, the father of one of the students delivered a speech that would never be forgotten by all who attended. After extolling the school and its dedicated staff, he offered a question: "When not interfered with by outside influences, everything nature does is done with perfection. Yet my son, Shay, cannot learn things as other children do. He cannot understand things as other children do. Where is the natural order of things in my son?" The audience was stilled by the query.The father continued. "I believe that when a child like Shay, physically and mentally handicapped comes into the world, an opportunity to realize true human nature presents itself, and it comes in the way other people treat that child." Then he told the following story:Shay and his father had walked past a park where some boys Shay knew were playing baseball. Shay asked, "Do you think they'll let me play?" Shay's father knew that most of the boys would not want someone like Shay on their team, but the father also understood that if his son were allowed to play, it would give him a much-needed sense of belonging and some confidence to be accepted by others in spite of his handicaps. Shay's father approached one of the boys on the field and asked (not expecting much) if Shay could play. The boy looked around for guidance and said, "We're losing by six runs and the game is in the eighth inning. I guess he can be on our team and we'll try to put him in to bat in the ninth inning." Shay struggled over to the team's bench and, with a broad smile, put on a team shirt. His Father watched with a small tear in his eye and warmth in his heart. The boys saw the father's joy at his son being accepted. In the bottom of the eighth inning, Shay's team scored a few runs but was still behind by three. In the top of the ninth inning, Shay put on a glove and played in the right field. Even though no hits came his way, he was obviously ecstatic just to be in the game and on the field, grinning from ear to ear as his father waved to him from the stands. In the bottom of the ninth inning, Shay's team scored again. Now, with two outs and the bases loaded, the potential winning run was on base and Shay was scheduled to be next at bat. At this juncture, do they let Shay bat and give away their chance to win the game? Surprisingly, Shay was given the bat. Everyone knew that a hit was all but impossible because Shay didn't even know how to hold the bat properly, much less connect with the ball. However, as Shay stepped up to the plate, the pitcher, recognizing that the other team was putting winning aside for this moment in Shay's life, moved in a few steps to lob the ball in softly so Shay could at least make contact. The first pitch came and Shay swung clumsily and missed. The pitcher again took a few steps forward to toss the ball softly towards Shay. As the pitch came in, Shay swung at the ball and hit a slow ground ball right back to the pitcher. The game would now be over. The pitcher picked up the soft grounder and could have easily thrown the ball to the first baseman. Shay would have been out and that would have been the end of the game.Instead, the pitcher threw the ball right over the first baseman's head, out of reach of all team mates. Everyone from the stands and both teams started yelling, "Shay, run to first! Run to first!" Never in his life had Shay ever run that far, but he made it to first base. He scampered down the baseline, wide-eyed and startled. Everyone yelled, "Run to second, run to second!" Catching his breath, Shay awkwardly ran towards second, gleaming and struggling to make it to the base. By the time Shay rounded towards second base, the right fielder had the ball ... the smallest guy on their team who now had his first chance to be the hero for his team. He could have thrown the ball to the second-baseman for the tag, but he understood the pitcher's intentions so he, too, intentionally threw the ball high and far over the third-baseman's head. Shay ran toward third base deliriously as the runners ahead of him circled the bases toward home. All were screaming, "Shay, Shay, Shay, all the Way Shay"Shay reached third base because the opposing shortstop ran to help him by turning him in the direction of third base, and shouted, "Run to third! Shay, run to third!" As Shay rounded third, the boys from both teams, and the spectators, were on their feet screaming, "Shay, run home! Run home!" Shay ran to home, stepped on the plate, and was cheered as the hero who hit the grand slam and won the game for his team. "That day", said the father softly with tears now rolling down his face, "the boys from both teams helped bring a piece of true love and humanity into this world".Shay didn't make it to another summer. He died that winter, having never forgotten being the hero and making his father so happy, and coming home and seeing his Mother tearfully embrace her little hero of the day!
AND NOW A LITTLE FOOTNOTE TO THIS STORY: We all send thousands of jokes through the e-mail without a second thought, but when it comes to sending messages about life choices, people hesitate. The crude, vulgar, and often obscene pass freely through cyberspace, but public discussion about decency is too often suppressed in our schools and workplaces. If you're thinking about forwarding this message, chances are that you're probably sorting out the people in your address book who aren't the "appropriate" ones to receive this type of message. Well, the person who sent you this believes that we all can make a difference. We all have thousands of opportunities every single day to help realize the "natural order of things." So many seemingly trivial interactions between two people present us with a choice: Do we pass along a little spark of love and humanity or do we pass up those opportunities and leave the world a little bit colder in the process? A wise man once said every society is judged by how it treats it's least fortunate amongst them.
You now have two choices:1. Delete2. Forward
May your day, be a Shay Day.
My Comments:
In general people are not ready to think that they are fortunate enough to have the opportunity to have no physical problem and they takes it for granted that GIFT of GOD and always try to redicule or belittle others who are less fortunate in life.
That is why I have underlined the line which is in red letters.
They always think that what they have achieved is because of their planning and because they work very very hard in life.But even after working very very hard it is not always possible to get the full results and sometimes even it becomes a futile effort.But the successful always says that they must have not tried this way or not have tried that way....he must have not put 100% in what he did etc etc.......he should have done this ,he should have done that and what not advices he will get.....but after all it is the luck that plays an important role in one life.One big support from someone and your life is done.....that is what needed....some gets support in form of a Bank loan, some gets support from a friend, some get it from an unknown person.....there are many ways it can come......
The bottomline here is "always be humble for your success.Remember that SUCCESS is not your owns effort......IT IS VERY VERY DIFFICULT TO DIGEST SUCCESS."
One should always remember that he is fortunate enough to have success.If he would have been handicapped from birth like Shay then what he would have done?What success he could have been able to achieve?With a physically and mentally deabled position what one can do?When one can't run or even walk properly or can't even think properly, what success one can have?To be successful one has to think but when one is mentally disabled like Shay, how will one do that?
I have wrote some times back that only Bill Gates can only open a Philanthropic institution , a drop out collegiate.Those who too much qualified can never do that , ofcourse with some exception like Narayan Murthy,because they always think that the success is because of their own cleverness....and no one on earth helped them.They did it on their own,but as I said earlier that they forget GOD...who gave them no handicaps to fulfill their dream.......
So as such God also do not give that much cleverness or insight to everyone to get fulfill ones desire.So it is a God gift to those are very good acadamically and has made a good earnings but then they have no business to belittle or say anything to anyone what they feels and if they do then they should have courage to tell to the world...that Yes, I am arrogant....and I feel what I have achieved is on my own.....and hence I am not here to help anyone.......as no one helped me....So what ever one achieves is not all his.....
Be Humble....
Moral :
Fortunate people should also think of Unfortunate ones.....
Monday, June 16, 2008
One more reason for Oil to go down.........
Friends,
I read this somewhere else and am pasting it here for readers to have a look at it....
Perticularly who are bullish on Oil and bearish on stock market....
Authorised and Regulated by the Financial Services Authority.
Registered in England, Partnership Number OC303480.
Pine Copse, Whitmoor Common, Worplesdon, Surrey, GU3 3RP
The Absolute Return Letter
June 2008
The Untold Story
“If you look at the facts, they show that the price of oil is about supply
and demand”
Henry Paulson, U.S. Treasury Secretary
A cat amongst the pigeons In the rather mundane world of investments, rarely has oneindividual caused as many ripples as Michael Masters1 did when, only a couple of weeks ago, he chose to share his thoughts on commodity prices with the distinguished members of the U.S. Senate Committee on Homeland
Security and Governmental Affairs. If ever a cat was put amongst pigeons…
Masters merely suggested that speculative demand is behind much of the recent rise in commodity prices and that U.S. lawmakers must curb speculators’ access to commodities if they want to get commodity price inflation under control. The debate is reasonably straightforward. Are commodity prices driven by economic fundamentals (i.e. a function of supply and demand) or are speculative investors (primarily pension funds, index funds and hedge funds) to “blame” for the stratospheric rise of commodity prices in recent months? I actually touched on this subject in last month’s letter and do not intend to repeat myself. However, it appears to me that a number of hard facts have been swept aside, as the move in oil prices has become rather one-sided in recent months. Even if you believe in the concept of Peak Oil2, it is important to recognise the fact that oil prices, like all commodity prices, are sensitive to economic up- and downturns. In the following I intend to take a hard look at those arguments underpinning
the bull story on oil prices.
The Supply and Demand Story The notion of Peak Oil has led many to believe that global oil
production is actually in decline. When I did my research in preparation for this letter, I was astonished to learn how many socalled ‘experts’ seem to confuse Peak Oil with global production
decline. In reality, global production has risen every year since 2002 and it continues to grow. Peak Oil is a local phenomenon (at least until now), with large oil producing countries such as the United States, Venezuela, the United Kingdom, Norway and Indonesia all in terminal decline.
1 A U.S. based hedge fund manager.
2 Peak Oil is a concept originally conceived by the late Dr Hubbert, an American geophysicist. All the way back in 1949, he predicted that fossil fuels would have a strictly limited life span (and he was widely ridiculed for this prediction). He defined Peak Oil as the point in time when the maximum rate of production is reached, after which the rate of production enters its terminal decline.
According to the U.S. Energy Information Administration (EIA), global output this quarter should reach 86.2 million barrels per day (mbpd). And it doesn’t stop there. Following a couple of years with limited production growth, total output is likely to accelerate again soon as new oil fields come into production. It is now estimated that well over 3 mbpd will be added between now and late 2009 (see chart 1 below).
Chart 1: Estimated Growth in Oil Output
Source: EIA, Short-Term Energy Outlook, May 2008
The EIA estimates that, by the second half of next year, daily production will be approaching 89 million barrels. Meanwhile global demand continues to be robust if you believe the stories which run in the mainstream media almost daily. In fact, as you can see from chart 2 below, demand growth has been slowing steadily since 2004, and some estimates now suggest total consumption to grow by no more than about 0.3 mbpd in 2008. It is also worth noticing that the new production will be kicking in at a point in time where global economic growth is likely to be slowing down.
Chart 2: Annual Change in Global Oil Consumption
Source: The Economist
The Efficiency Story China is one of the cornerstones of the energy bull story. It is widely assumed that it will have an almost endless appetite for oil over the next few decades. An economy very dependent on industrial production combined with rising living standards, or so the argument goes, will demand enormous quantities of the black gold. Many go as far as to suggest that the growth in oil consumption will actually outpace GDP growth for the foreseeable future. I found the chart below on BP’s website. It is probably fair to say that most commentators expect larger and larger parts of the world to be covered in the dark green colour used to illustrate how North Americans (together with a handful of smaller nations) are the largest per capita consumers of oil in the world today. China, in particular, is widely predicted to go ‘dark green’ within a few years.
Chart 3: Per Capita Consumption of Oil, 2006
Source: BP Statistical Review, 2007
In reality, though, Chinese oil consumption has actually decelerated in recent years. Going forward, the EIA now predicts that Chinese oil consumption will grow from 8 to 8.4 mbpd from this year to next – well below the anticipated GDP growth rate.
By comparison, the 27 countries in the European Union gobble up just over 15 mbpd. Back in 1973, the year of the first oil crisis, the same 27 countries consumed 15.5 mbpd. The EU is living proof that you can actually grow GDP at a respectable rate and keep oil consumption
steady at the same time. As a side note, over the same 35 year period, U.S. consumption has
grown from about 17.3 to 20.5 mbpd. The Chinese will unquestionably seek to learn from the Europeans rather than the Americans when they mplement future policies. In a recent research note provided by Goldman Sachs3, it is estimated that if the United States, China, India
and Russia could achieve the same energy efficiency as Japan, global energy consumption would drop by 20%. The Demand Response Story One of the favourite arguments amongst oil bulls is that oil demand is very inelastic. Don’t count on it. As reported in last week’s issue of The
Economist4, Professor Gary Becker at University of Chicago has 3 GS Global Economic Weekly, May 21, 2008. 4 See “Double, double, oil and trouble”, 29th May, 2008. calculated that, whereas both supply and demand are fairly inelastic in the first few years after a major oil price move, in the longer term, consumption drops significantly and production rises steeply when oil
prices double. In this context it is also worth mentioning that, according to Stephen
Jen at Morgan Stanley, half the world’s population currently enjoys fuel subsidies of some kind. As the price of oil continues to rise, the situation becomes increasingly untenable for most of the governments providing these subsidies. One by one, they will throw in the towel and let prices rise to market levels. Anything else is fiscally irresponsible. Egypt raised petrol prices by 40% only a couple of weeks ago. So did Indonesia (+33%) and Sri Lanka (+25%). India, Taiwan and Malaysia are all giving it serious consideration, according to The Daily
Telegraph. As I pointed out in last month’s Absolute Return Letter, Asia is by far biggest importer of oil, and rising oil prices could do serious damage to economic growth in a number of those countries. At the same time, inflation is now out of control in many countries across Asia. This is a deadly cocktail. It is called stagflation. I still remember it from the late 1970s and early 1980s. Not to be recommended!
Chart 4: Largest Oil Consumers
United States 20,687 Low pop growth
China 7,201 No pop growth; subsidised energy prices
Japan 5,159 Negative pop growth
Russia 2,811 Negative pop growth
Germany 2,665 Negative pop growth
India 2,572 Subsidised energy prices
Canada 2,264 Low pop growth
Brazil 2,217
Korea, South 2,174 No pop growth
Saudi Arabia 2,139 Subsidised energy prices
Mexico 1,997 Subsidised energy prices
France 1,961 Low pop growth
United Kingdom 1,830 Low pop growth
Italy 1,732 Negative pop growth
Iran 1,686 Subsidised energy prices
Total, Top 15: 59,095 (71% of World Total)
Top World Oil Consumers (2006)
Thousand Barrels per Day
Source: United Nations, own research.
The Demographic Story The Asian growth miracle, and China in particular, is usually emphasised as the key reason why oil prices can only go up in the long run. Nobody talks about the flip side of that story – the fact that baby boomers all over the world are fast approaching retirement; the fact that many countries around the world will see low or no population growth over the next many years. As illustrated in chart 4 above, amongst the top 15 oil consuming countries, 10 countries will see low, no or negative population growth between now and 2015. At least within the OECD it is fair to assume that, without population growth, GDP growth will be strictly limited and, without GDP growth, oil consumption will probably decline. The Diesel Story Do you drive a diesel car? If so, you will probably have noticed that diesel prices have risen even more dramatically than petrol prices in recent weeks and months. Many commentators have singled out diesel as a sign of things to come. We’d better get used to shortages they tell us. So what are the facts? Well, it looks like the Chinese have cornered the market in the early part of 2008, buying whatever diesel they can get their hands on, pushing prices through the roof. What you don’t learn unless you dig deeper is that the Chinese government, still smarting from the Tibet PR disaster and the earthquake in the Sichuan province, is keen to avoid any embarrassment in connection with the upcoming Olympic Games.
They have hence ordered Chinese oil companies to stock up on diesel in order to avoid fuel shortages which are a widespread phenomenon in China. At the same time, just before and during the games, the central government plans to switch from coal to diesel at some of the Beijing based electricity plants in order to improve the air quality5. All this may work very well in terms of ensuring that the Beijing Games go down in history as a success for the Chinese. However, come August when the games are in full swing, and the Chinese coffers are bursting
with diesel, you shouldn’t necessarily be surprised if diesel prices suddenly fall out of bed.
The Tanker Story This part of the story has been the most difficult to research. What we
have noted, however, is that there has been a growing disparity between physical (spot) oil prices and prices on oil futures, the latter being significantly higher. What that essentially suggests is that, at current prices, there is more demand for paper oil than for physical oil.
Now, when you listen to people with knowledge about these sorts of things (ISI Research, Stratfor, etc.), a rather disturbing picture quickly emerges. If there is such a shortage of oil as claimed by many commentators, why is it that it is virtually impossible to lease a tanker
if you need one? Why is it that the Persian Gulf is currently littered with oil tankers, all filled with unsold oil? Why is it that Rotterdam Harbour is struggling to cope with the amount of oil coming into its harbour? Anyone out there with a good answer to these questions?
The Masters Story All of which brings me to the last point I wish to make. Michael Masters really rocked the boat when he suggested that much of the recent rise in commodity prices has been driven by speculative demand. Many people took serious offence to his claim. One of the centrepieces of their counterargument focused on Masters’ claim that commodity index funds have grown from just $13 billion less than 5 years ago to about $260 billion today. As (correctly) pointed out by Masters’ critics, $247 billion of new commodity investments over 5
years is a drop in the ocean in the fast growing pool of commodity assets.
However, the point completely missed by everyone, including Masters himself, is that index funds and ETFs are only half the story. According to the Bank for International Settlements6, as of 31st December 2007, the total amount of OTC commodity contracts outstanding came to $9
trillion – up from $7.1 trillion the previous year, bringing a total of $1.9 trillion of new investments into commodity derivatives during 2007.
Let’s assume that oil represents about 70% of those contracts, which seems like a fair assumption given that oil is about 70% of the major commodity indices. 70% of $1.9 trillion is about $1.33 trillion. Even if we assume that all those commodity contracts used zero leverage
(which is most likely not true), such an amount of money going into the oil market in a single year is certainly enough t0 move prices.
5 Source: The Economist.
6 “OTC derivatives market activity in the second half of 2007”, BIS, May 2008.
Conclusion We remain bullish long term on oil prices. We believe in the concept of Peak Oil and we believe that the oil left on this planet is located in increasingly inhospitable places. All this favours high oil prices longer term.
Recently the arguments have become increasingly one-sided, though. How can you ignore the fact, for example, that the oceans of this world seem to be full of oil tankers bursting with oil that nobody seems to want?
We see numerous parallels to the dotcom boom of the late 1990s when investors, much to their regret, chose to ignore a number of yellow flags, only to suffer the consequences when the bubble ultimately burst.
Bubble are relatively easy to spot (did you get that one Greenspan?); however, it is notoriously difficult to predict the timing of their demise.
We work closely with an independent economic consultant named Simon Hunt (of Simon Hunt Strategic Services). I have a huge amount of respect for Simon’s work. In a recent memo he predicted oil prices to hit $80-85 by early 2009 and $60-65 a year later, based on the work of
his cycles associate, WaveTrack International. Take it for what it is worth. I always listen carefully when Simon makes his predictions.
Other
Finance
3%
Consumer
Finance
Corporate 4%
High Yield
8%
Distressed
Debt
8%
Loans
4%
ILS (Life)
7%
ILS
(Non-Life)
15%
Commodities
8%
Special
Situations
4%
Volatility
Arbitrage
4%
Project
Finance
13%
Premium
Finance
6%
Corporate Lending
17%
The Millennium Wave Portfolio
as at 30th April, 2008:
I read this somewhere else and am pasting it here for readers to have a look at it....
Perticularly who are bullish on Oil and bearish on stock market....
Authorised and Regulated by the Financial Services Authority.
Registered in England, Partnership Number OC303480.
Pine Copse, Whitmoor Common, Worplesdon, Surrey, GU3 3RP
The Absolute Return Letter
June 2008
The Untold Story
“If you look at the facts, they show that the price of oil is about supply
and demand”
Henry Paulson, U.S. Treasury Secretary
A cat amongst the pigeons In the rather mundane world of investments, rarely has oneindividual caused as many ripples as Michael Masters1 did when, only a couple of weeks ago, he chose to share his thoughts on commodity prices with the distinguished members of the U.S. Senate Committee on Homeland
Security and Governmental Affairs. If ever a cat was put amongst pigeons…
Masters merely suggested that speculative demand is behind much of the recent rise in commodity prices and that U.S. lawmakers must curb speculators’ access to commodities if they want to get commodity price inflation under control. The debate is reasonably straightforward. Are commodity prices driven by economic fundamentals (i.e. a function of supply and demand) or are speculative investors (primarily pension funds, index funds and hedge funds) to “blame” for the stratospheric rise of commodity prices in recent months? I actually touched on this subject in last month’s letter and do not intend to repeat myself. However, it appears to me that a number of hard facts have been swept aside, as the move in oil prices has become rather one-sided in recent months. Even if you believe in the concept of Peak Oil2, it is important to recognise the fact that oil prices, like all commodity prices, are sensitive to economic up- and downturns. In the following I intend to take a hard look at those arguments underpinning
the bull story on oil prices.
The Supply and Demand Story The notion of Peak Oil has led many to believe that global oil
production is actually in decline. When I did my research in preparation for this letter, I was astonished to learn how many socalled ‘experts’ seem to confuse Peak Oil with global production
decline. In reality, global production has risen every year since 2002 and it continues to grow. Peak Oil is a local phenomenon (at least until now), with large oil producing countries such as the United States, Venezuela, the United Kingdom, Norway and Indonesia all in terminal decline.
1 A U.S. based hedge fund manager.
2 Peak Oil is a concept originally conceived by the late Dr Hubbert, an American geophysicist. All the way back in 1949, he predicted that fossil fuels would have a strictly limited life span (and he was widely ridiculed for this prediction). He defined Peak Oil as the point in time when the maximum rate of production is reached, after which the rate of production enters its terminal decline.
According to the U.S. Energy Information Administration (EIA), global output this quarter should reach 86.2 million barrels per day (mbpd). And it doesn’t stop there. Following a couple of years with limited production growth, total output is likely to accelerate again soon as new oil fields come into production. It is now estimated that well over 3 mbpd will be added between now and late 2009 (see chart 1 below).
Chart 1: Estimated Growth in Oil Output
Source: EIA, Short-Term Energy Outlook, May 2008
The EIA estimates that, by the second half of next year, daily production will be approaching 89 million barrels. Meanwhile global demand continues to be robust if you believe the stories which run in the mainstream media almost daily. In fact, as you can see from chart 2 below, demand growth has been slowing steadily since 2004, and some estimates now suggest total consumption to grow by no more than about 0.3 mbpd in 2008. It is also worth noticing that the new production will be kicking in at a point in time where global economic growth is likely to be slowing down.
Chart 2: Annual Change in Global Oil Consumption
Source: The Economist
The Efficiency Story China is one of the cornerstones of the energy bull story. It is widely assumed that it will have an almost endless appetite for oil over the next few decades. An economy very dependent on industrial production combined with rising living standards, or so the argument goes, will demand enormous quantities of the black gold. Many go as far as to suggest that the growth in oil consumption will actually outpace GDP growth for the foreseeable future. I found the chart below on BP’s website. It is probably fair to say that most commentators expect larger and larger parts of the world to be covered in the dark green colour used to illustrate how North Americans (together with a handful of smaller nations) are the largest per capita consumers of oil in the world today. China, in particular, is widely predicted to go ‘dark green’ within a few years.
Chart 3: Per Capita Consumption of Oil, 2006
Source: BP Statistical Review, 2007
In reality, though, Chinese oil consumption has actually decelerated in recent years. Going forward, the EIA now predicts that Chinese oil consumption will grow from 8 to 8.4 mbpd from this year to next – well below the anticipated GDP growth rate.
By comparison, the 27 countries in the European Union gobble up just over 15 mbpd. Back in 1973, the year of the first oil crisis, the same 27 countries consumed 15.5 mbpd. The EU is living proof that you can actually grow GDP at a respectable rate and keep oil consumption
steady at the same time. As a side note, over the same 35 year period, U.S. consumption has
grown from about 17.3 to 20.5 mbpd. The Chinese will unquestionably seek to learn from the Europeans rather than the Americans when they mplement future policies. In a recent research note provided by Goldman Sachs3, it is estimated that if the United States, China, India
and Russia could achieve the same energy efficiency as Japan, global energy consumption would drop by 20%. The Demand Response Story One of the favourite arguments amongst oil bulls is that oil demand is very inelastic. Don’t count on it. As reported in last week’s issue of The
Economist4, Professor Gary Becker at University of Chicago has 3 GS Global Economic Weekly, May 21, 2008. 4 See “Double, double, oil and trouble”, 29th May, 2008. calculated that, whereas both supply and demand are fairly inelastic in the first few years after a major oil price move, in the longer term, consumption drops significantly and production rises steeply when oil
prices double. In this context it is also worth mentioning that, according to Stephen
Jen at Morgan Stanley, half the world’s population currently enjoys fuel subsidies of some kind. As the price of oil continues to rise, the situation becomes increasingly untenable for most of the governments providing these subsidies. One by one, they will throw in the towel and let prices rise to market levels. Anything else is fiscally irresponsible. Egypt raised petrol prices by 40% only a couple of weeks ago. So did Indonesia (+33%) and Sri Lanka (+25%). India, Taiwan and Malaysia are all giving it serious consideration, according to The Daily
Telegraph. As I pointed out in last month’s Absolute Return Letter, Asia is by far biggest importer of oil, and rising oil prices could do serious damage to economic growth in a number of those countries. At the same time, inflation is now out of control in many countries across Asia. This is a deadly cocktail. It is called stagflation. I still remember it from the late 1970s and early 1980s. Not to be recommended!
Chart 4: Largest Oil Consumers
United States 20,687 Low pop growth
China 7,201 No pop growth; subsidised energy prices
Japan 5,159 Negative pop growth
Russia 2,811 Negative pop growth
Germany 2,665 Negative pop growth
India 2,572 Subsidised energy prices
Canada 2,264 Low pop growth
Brazil 2,217
Korea, South 2,174 No pop growth
Saudi Arabia 2,139 Subsidised energy prices
Mexico 1,997 Subsidised energy prices
France 1,961 Low pop growth
United Kingdom 1,830 Low pop growth
Italy 1,732 Negative pop growth
Iran 1,686 Subsidised energy prices
Total, Top 15: 59,095 (71% of World Total)
Top World Oil Consumers (2006)
Thousand Barrels per Day
Source: United Nations, own research.
The Demographic Story The Asian growth miracle, and China in particular, is usually emphasised as the key reason why oil prices can only go up in the long run. Nobody talks about the flip side of that story – the fact that baby boomers all over the world are fast approaching retirement; the fact that many countries around the world will see low or no population growth over the next many years. As illustrated in chart 4 above, amongst the top 15 oil consuming countries, 10 countries will see low, no or negative population growth between now and 2015. At least within the OECD it is fair to assume that, without population growth, GDP growth will be strictly limited and, without GDP growth, oil consumption will probably decline. The Diesel Story Do you drive a diesel car? If so, you will probably have noticed that diesel prices have risen even more dramatically than petrol prices in recent weeks and months. Many commentators have singled out diesel as a sign of things to come. We’d better get used to shortages they tell us. So what are the facts? Well, it looks like the Chinese have cornered the market in the early part of 2008, buying whatever diesel they can get their hands on, pushing prices through the roof. What you don’t learn unless you dig deeper is that the Chinese government, still smarting from the Tibet PR disaster and the earthquake in the Sichuan province, is keen to avoid any embarrassment in connection with the upcoming Olympic Games.
They have hence ordered Chinese oil companies to stock up on diesel in order to avoid fuel shortages which are a widespread phenomenon in China. At the same time, just before and during the games, the central government plans to switch from coal to diesel at some of the Beijing based electricity plants in order to improve the air quality5. All this may work very well in terms of ensuring that the Beijing Games go down in history as a success for the Chinese. However, come August when the games are in full swing, and the Chinese coffers are bursting
with diesel, you shouldn’t necessarily be surprised if diesel prices suddenly fall out of bed.
The Tanker Story This part of the story has been the most difficult to research. What we
have noted, however, is that there has been a growing disparity between physical (spot) oil prices and prices on oil futures, the latter being significantly higher. What that essentially suggests is that, at current prices, there is more demand for paper oil than for physical oil.
Now, when you listen to people with knowledge about these sorts of things (ISI Research, Stratfor, etc.), a rather disturbing picture quickly emerges. If there is such a shortage of oil as claimed by many commentators, why is it that it is virtually impossible to lease a tanker
if you need one? Why is it that the Persian Gulf is currently littered with oil tankers, all filled with unsold oil? Why is it that Rotterdam Harbour is struggling to cope with the amount of oil coming into its harbour? Anyone out there with a good answer to these questions?
The Masters Story All of which brings me to the last point I wish to make. Michael Masters really rocked the boat when he suggested that much of the recent rise in commodity prices has been driven by speculative demand. Many people took serious offence to his claim. One of the centrepieces of their counterargument focused on Masters’ claim that commodity index funds have grown from just $13 billion less than 5 years ago to about $260 billion today. As (correctly) pointed out by Masters’ critics, $247 billion of new commodity investments over 5
years is a drop in the ocean in the fast growing pool of commodity assets.
However, the point completely missed by everyone, including Masters himself, is that index funds and ETFs are only half the story. According to the Bank for International Settlements6, as of 31st December 2007, the total amount of OTC commodity contracts outstanding came to $9
trillion – up from $7.1 trillion the previous year, bringing a total of $1.9 trillion of new investments into commodity derivatives during 2007.
Let’s assume that oil represents about 70% of those contracts, which seems like a fair assumption given that oil is about 70% of the major commodity indices. 70% of $1.9 trillion is about $1.33 trillion. Even if we assume that all those commodity contracts used zero leverage
(which is most likely not true), such an amount of money going into the oil market in a single year is certainly enough t0 move prices.
5 Source: The Economist.
6 “OTC derivatives market activity in the second half of 2007”, BIS, May 2008.
Conclusion We remain bullish long term on oil prices. We believe in the concept of Peak Oil and we believe that the oil left on this planet is located in increasingly inhospitable places. All this favours high oil prices longer term.
Recently the arguments have become increasingly one-sided, though. How can you ignore the fact, for example, that the oceans of this world seem to be full of oil tankers bursting with oil that nobody seems to want?
We see numerous parallels to the dotcom boom of the late 1990s when investors, much to their regret, chose to ignore a number of yellow flags, only to suffer the consequences when the bubble ultimately burst.
Bubble are relatively easy to spot (did you get that one Greenspan?); however, it is notoriously difficult to predict the timing of their demise.
We work closely with an independent economic consultant named Simon Hunt (of Simon Hunt Strategic Services). I have a huge amount of respect for Simon’s work. In a recent memo he predicted oil prices to hit $80-85 by early 2009 and $60-65 a year later, based on the work of
his cycles associate, WaveTrack International. Take it for what it is worth. I always listen carefully when Simon makes his predictions.
Other
Finance
3%
Consumer
Finance
Corporate 4%
High Yield
8%
Distressed
Debt
8%
Loans
4%
ILS (Life)
7%
ILS
(Non-Life)
15%
Commodities
8%
Special
Situations
4%
Volatility
Arbitrage
4%
Project
Finance
13%
Premium
Finance
6%
Corporate Lending
17%
The Millennium Wave Portfolio
as at 30th April, 2008:
Friday, June 13, 2008
Total Copy............
Friends,
One of my friend has send me a mail asking whether the content written in a site is mine.
Here is the link.
http://www.marketbuzz.in/out/surprised-to-see-that-no-one-is-bearish-on-crude
Well,this is my another testimony that my article is pasted and been read world over.
It is circulated in other stock market paid site and circulated in forums.People who are not aware of my blog are also able to read it though in different manner…..
My articles on stocks and Indian market are taken note and pasted for their readers to read.
Here the marketbuzz site has written my name that it is written by me but it is written as such that I write for them….
I was told by some friends that my content and writing is circulated somewhere else….and today I got the proof as well…
Rajeev
One of my friend has send me a mail asking whether the content written in a site is mine.
Here is the link.
http://www.marketbuzz.in/out/surprised-to-see-that-no-one-is-bearish-on-crude
Well,this is my another testimony that my article is pasted and been read world over.
It is circulated in other stock market paid site and circulated in forums.People who are not aware of my blog are also able to read it though in different manner…..
My articles on stocks and Indian market are taken note and pasted for their readers to read.
Here the marketbuzz site has written my name that it is written by me but it is written as such that I write for them….
I was told by some friends that my content and writing is circulated somewhere else….and today I got the proof as well…
Rajeev
Thursday, June 12, 2008
Market ends in Green....
Well Friends,
Market ends in green against market expectation…..
Dow was down by 200 points and still market ends up……
Crude inches up and still market ends in green.
Unemployement figures in US coming weak and still market ends in Green.
What can be understood from these?Has market made a triple bottom today?Again market took a support around 14700 level.It means now that market will need some very very concrete and very very bad news to break this support.
As it now becomes obvious that at 14700 ,lots of buying is coming and hence it can be assumed that value is seen at this level. Market has taken support thrice at this level and one should remember that.
I wrote 3 concerns at the top to show that even though they were there market ended in green and at the top of it Inflation is at high with others concerns like US Slow down,China CRR rate hike etc still there.
As I have written in my last 2-3 post that we will make a bottom this month and we will turn around this month itself…
This is going to be a turnaround month and market will gradually be making new tops and eventually will cross the previous high……
I again reiterate, we will make a new high this year itself. I have written this call previously and am again giving the same call ….As soon as Crude tanks bears will come to cover in our stock market.
My calls given are still a buy which I am writing here some of them…
Sujana Towers, Asian CERC,Jayaswal Neco, Flex Food, Artson Eng,Gremach Infra,TTML,Manali Petrol,Vishnu Chem,India Glycols,Lakshmi Electricals (new call),XL Tele,JMC Project, Mcnally Bharat, High Enetrgy Battery are some stocks and others which I have discussed are still a buy….
Best of Luck to all , buy at your comfort level and after doing due diligence…..
Market ends in green against market expectation…..
Dow was down by 200 points and still market ends up……
Crude inches up and still market ends in green.
Unemployement figures in US coming weak and still market ends in Green.
What can be understood from these?Has market made a triple bottom today?Again market took a support around 14700 level.It means now that market will need some very very concrete and very very bad news to break this support.
As it now becomes obvious that at 14700 ,lots of buying is coming and hence it can be assumed that value is seen at this level. Market has taken support thrice at this level and one should remember that.
I wrote 3 concerns at the top to show that even though they were there market ended in green and at the top of it Inflation is at high with others concerns like US Slow down,China CRR rate hike etc still there.
As I have written in my last 2-3 post that we will make a bottom this month and we will turn around this month itself…
This is going to be a turnaround month and market will gradually be making new tops and eventually will cross the previous high……
I again reiterate, we will make a new high this year itself. I have written this call previously and am again giving the same call ….As soon as Crude tanks bears will come to cover in our stock market.
My calls given are still a buy which I am writing here some of them…
Sujana Towers, Asian CERC,Jayaswal Neco, Flex Food, Artson Eng,Gremach Infra,TTML,Manali Petrol,Vishnu Chem,India Glycols,Lakshmi Electricals (new call),XL Tele,JMC Project, Mcnally Bharat, High Enetrgy Battery are some stocks and others which I have discussed are still a buy….
Best of Luck to all , buy at your comfort level and after doing due diligence…..
Wednesday, June 11, 2008
Surprised to see that no one is bearish on Crude...?
Friends.....
I am surprised to see that no one is bearish on Crude…..why? Because no one play in crude? People become bearish only when one is there in that market?
Why can’t there be reaction in speculation of Crude and other commodities? Because we wants stocks cheaper?
Crude has given 40% return in just 5 months and that can be the fastest return in crude history…I don’t know it has happened in past.
We use to discuss that stocks are running up ahead of fundamentals and hence it is speculation that they are going up….so they will come down..
Now I don’t think that oil demands has gone so much up in last 5 months that crude can go from $100 to $140!Just think what I mean to say.The oil demand has risen by 40% in last 5 months and hence the runup of 40% in crude….Is that possible?When USA is bleeding which is the biggest consumer of world oil, which is 30% of the total oil produced(maybe more), how can demand rise so much.Indian economy has slowed down according to figures ,China is raising the int rate to cooloff their economy then how can the demand rise so much so fast ?
Is anyone here to buy this theory that demand has rose that much and hence crude is rising?If the answer is no then why we are still not bearish on crude?Does the answer lies somewhere else?Like we wants to bring Sensex to back 8000 level so that we can buy stocks at the cheapest valuation and again FII’s start buying at that level at P/E 10 or below? Aren’t we playing in the hands of Bears like Shankar Sharma while not thinking of crude crash…..I have absolutely no doubt that crude is only going up due to speculation which I wrote here much earlier maybe then anyone else has written.
Do we again wants to let FII’s buy our stocks at the cheapest rate and let them sell in profit and again annihilate our market next tine?
It is obvious that this bearish phase in our stock market is more a reaction of crude running up and US subprime issue.Edven though some so called economics GURUS(likes…Mark Faber, Jim Rogers etc) are spelling Dooms day for US economy ,the wisest person in world stocks market is buying stocks?Warren Buffet has increased his stake in Kraft Foods and also took stake in Wringly Products and even funded to buy stake to someone else……So if USA economy is going in doldrums and further downside is there then why this Master is buying stocks? Can’t he buy them cheaper at later stage ? Why ? Can anyone answer me this puzzle that this legend is not waiting for further down side?
I think the answer lies here only……
I am surprised to see that no one is bearish on Crude…..why? Because no one play in crude? People become bearish only when one is there in that market?
Why can’t there be reaction in speculation of Crude and other commodities? Because we wants stocks cheaper?
Crude has given 40% return in just 5 months and that can be the fastest return in crude history…I don’t know it has happened in past.
We use to discuss that stocks are running up ahead of fundamentals and hence it is speculation that they are going up….so they will come down..
Now I don’t think that oil demands has gone so much up in last 5 months that crude can go from $100 to $140!Just think what I mean to say.The oil demand has risen by 40% in last 5 months and hence the runup of 40% in crude….Is that possible?When USA is bleeding which is the biggest consumer of world oil, which is 30% of the total oil produced(maybe more), how can demand rise so much.Indian economy has slowed down according to figures ,China is raising the int rate to cooloff their economy then how can the demand rise so much so fast ?
Is anyone here to buy this theory that demand has rose that much and hence crude is rising?If the answer is no then why we are still not bearish on crude?Does the answer lies somewhere else?Like we wants to bring Sensex to back 8000 level so that we can buy stocks at the cheapest valuation and again FII’s start buying at that level at P/E 10 or below? Aren’t we playing in the hands of Bears like Shankar Sharma while not thinking of crude crash…..I have absolutely no doubt that crude is only going up due to speculation which I wrote here much earlier maybe then anyone else has written.
Do we again wants to let FII’s buy our stocks at the cheapest rate and let them sell in profit and again annihilate our market next tine?
It is obvious that this bearish phase in our stock market is more a reaction of crude running up and US subprime issue.Edven though some so called economics GURUS(likes…Mark Faber, Jim Rogers etc) are spelling Dooms day for US economy ,the wisest person in world stocks market is buying stocks?Warren Buffet has increased his stake in Kraft Foods and also took stake in Wringly Products and even funded to buy stake to someone else……So if USA economy is going in doldrums and further downside is there then why this Master is buying stocks? Can’t he buy them cheaper at later stage ? Why ? Can anyone answer me this puzzle that this legend is not waiting for further down side?
I think the answer lies here only……
Monday, June 9, 2008
Why the oil boom will eventually bust.........
Fortune
Why the oil boom will eventually bust
Friday June 6, 10:21 am ET By Shawn Tully, editor at large
High-flying tech stocks crashed. The roaring housing market crumbled. And oil, rest assured, will follow the same path down.
Not everyone agrees. In an echo of our most recent market frenzies, some experts pronounce that the "world has changed," and that the demand spikes, supply disruptions, and government bungling we face now will saddle us with a future of $4, $5 or even $10 a gallon gasoline.
But if you stick to basic economics, it's clear that the only question is when - not if - prices will succumb.
The oil bulls are correct in their explanations of why prices have jumped. It's indisputable that worldwide demand has surged, chiefly driven by strong growth in China, India and the Middle East. It's also true that most of the world's reserves are controlled by governments in places like Russia and Venezuela that mismanage production, thus curtailing supply growth.
But rather than forming a permanent new plateau for prices - as the bulls contend - those forces are causing a classically unstable market that's destined for a steep fall.
In a normal oil market, the cost of producing the last, most expensive barrel of oil needed to satisfy worldwide demand sets the price for every barrel the world over. Other auction commodity markets work much the same way.
So even if Saudi Arabia produces at $4 a barrel, if the final, multi-millionth barrel required to heat houses and run cars costs $50, and is produced, for argument's sake, at a flagging field in
West Texas, the world price is $50. That's what economists call the equilibrium price: It's where the price that customers are willing to pay meets the production cost, including a cushion, naturally, for profit or "the cost of capital."
But today, the sudden surge in demand and the production bottlenecks have thrown the market radically out of balance.
Almost exactly the same thing happened in the housing market. And both housing and oil supply react to a surge in demand with a long lag. In housing, the lag is caused by restrictive zoning and development laws, especially in coastal markets like California and Florida.
So when the economy roared back in 2002 and 2003, builders couldn't turn out homes fast enough for buyers armed with those cheap mortgages. As a result, prices spiked. They no longer bore any relation to the actual cost of buying and improving land, or constructing and marketing a new house (at some reasonable profit margin). Instead, frenzied buyers were setting the price.
Because builders were reaping huge windfall profits, they rushed to buy and develop land. And sure enough, those new houses were ready just as buyers were retreating to the sidelines because they could no longer afford to buy a home. That vast overhang of unsold homes is what's driving down prices today.
The story is much the same with oil, with a twist. A big swath of the market isn't really paying that $125 a barrel number you hear about seemingly every hour. In China, India and the Middle East, governments are heavily subsidizing oil for their consumers and corporations, leading to rampant over-consumption - and driving up prices even more.
But sooner or later the world won't keep paying those prices: Eventually, the price must fall back to the cost of that last barrel to clear the market.
So what does that barrel cost today? According to Stephen Brown, an economist at the Dallas Federal Reserve, that final barrel costs just $50 to produce. And when the price is $125, the incentive to pour out more oil, like homebuilders' incentive to build more two years ago, is irresistible.
It takes a while to develop new supplies of oil, but the signs of a surge are already in place. Shale oil costing around $70 a barrel is now being produced in the Dakotas. Tar sands are attracting investment in Canada, also at around $70. New technology could soon minimize the pollution caused by producing oil from our super-plentiful supplies of coal.
"History suggests that when there's this much money to be made, new supplies do get developed," says Brown.
That's just the supply side of the equation. Demand should start to decline as well, albeit gradually.
"Historically, the oil market has under-anticipated the amount of conservation brought on by high prices," says Brown. Sales of big cars are collapsing; Americans are cutting down on driving.
The airlines are scaling back flights.
We've learned another important lesson from the housing market: The longer prices stay stratospheric, the worse the eventual crash - simply because the higher the prices and bigger the profit margins, the bigger the incentive to over-produce.
It's even possible that, a few years hence, we could see a sustained period of plentiful oil supplies and low prices, meaning $50 or below.
A similar scenario occurred following the price explosion in the 1970s and early 1980s. The price spike caused the world to cut back sharply on oil consumption. By the mid-80s, oil prices had fallen from almost $40 to around $15. They remained extremely low for two decades.
It's impossible to predict how the adjustment this time will take shape, just as it was in housing. There the surge in supply came in places the experts swore there was "no supply," and wouldn't be any. Builders found a way to extend vast tracts of homes into California's Inland Empire and Central Valley, and even build "in-fill" projects near the densely-populated coasts.
An earlier bubble is also instructive. In the early 1980s silver prices jumped from $10 to $50 on the theory that the world was facing a permanent shortage of silver. Suddenly ads appeared asking homeowners to bring their tea sets and jewelry to Holiday Inns for a big price. Silver supplies poured from seemingly nowhere, out of America's cupboards, of all places.
And so it will be with oil. We don't know where the new abundance will come from, from shale, or tar sands or coal or an OPEC desperate to regain market share. We just know that it will appear. With prices like these, it always does.
Comments:
Just read this article and hence I pasted it here....which agains argue that Oil boom can come to an end any time as written by me in previous post.....
Why the oil boom will eventually bust
Friday June 6, 10:21 am ET By Shawn Tully, editor at large
High-flying tech stocks crashed. The roaring housing market crumbled. And oil, rest assured, will follow the same path down.
Not everyone agrees. In an echo of our most recent market frenzies, some experts pronounce that the "world has changed," and that the demand spikes, supply disruptions, and government bungling we face now will saddle us with a future of $4, $5 or even $10 a gallon gasoline.
But if you stick to basic economics, it's clear that the only question is when - not if - prices will succumb.
The oil bulls are correct in their explanations of why prices have jumped. It's indisputable that worldwide demand has surged, chiefly driven by strong growth in China, India and the Middle East. It's also true that most of the world's reserves are controlled by governments in places like Russia and Venezuela that mismanage production, thus curtailing supply growth.
But rather than forming a permanent new plateau for prices - as the bulls contend - those forces are causing a classically unstable market that's destined for a steep fall.
In a normal oil market, the cost of producing the last, most expensive barrel of oil needed to satisfy worldwide demand sets the price for every barrel the world over. Other auction commodity markets work much the same way.
So even if Saudi Arabia produces at $4 a barrel, if the final, multi-millionth barrel required to heat houses and run cars costs $50, and is produced, for argument's sake, at a flagging field in
West Texas, the world price is $50. That's what economists call the equilibrium price: It's where the price that customers are willing to pay meets the production cost, including a cushion, naturally, for profit or "the cost of capital."
But today, the sudden surge in demand and the production bottlenecks have thrown the market radically out of balance.
Almost exactly the same thing happened in the housing market. And both housing and oil supply react to a surge in demand with a long lag. In housing, the lag is caused by restrictive zoning and development laws, especially in coastal markets like California and Florida.
So when the economy roared back in 2002 and 2003, builders couldn't turn out homes fast enough for buyers armed with those cheap mortgages. As a result, prices spiked. They no longer bore any relation to the actual cost of buying and improving land, or constructing and marketing a new house (at some reasonable profit margin). Instead, frenzied buyers were setting the price.
Because builders were reaping huge windfall profits, they rushed to buy and develop land. And sure enough, those new houses were ready just as buyers were retreating to the sidelines because they could no longer afford to buy a home. That vast overhang of unsold homes is what's driving down prices today.
The story is much the same with oil, with a twist. A big swath of the market isn't really paying that $125 a barrel number you hear about seemingly every hour. In China, India and the Middle East, governments are heavily subsidizing oil for their consumers and corporations, leading to rampant over-consumption - and driving up prices even more.
But sooner or later the world won't keep paying those prices: Eventually, the price must fall back to the cost of that last barrel to clear the market.
So what does that barrel cost today? According to Stephen Brown, an economist at the Dallas Federal Reserve, that final barrel costs just $50 to produce. And when the price is $125, the incentive to pour out more oil, like homebuilders' incentive to build more two years ago, is irresistible.
It takes a while to develop new supplies of oil, but the signs of a surge are already in place. Shale oil costing around $70 a barrel is now being produced in the Dakotas. Tar sands are attracting investment in Canada, also at around $70. New technology could soon minimize the pollution caused by producing oil from our super-plentiful supplies of coal.
"History suggests that when there's this much money to be made, new supplies do get developed," says Brown.
That's just the supply side of the equation. Demand should start to decline as well, albeit gradually.
"Historically, the oil market has under-anticipated the amount of conservation brought on by high prices," says Brown. Sales of big cars are collapsing; Americans are cutting down on driving.
The airlines are scaling back flights.
We've learned another important lesson from the housing market: The longer prices stay stratospheric, the worse the eventual crash - simply because the higher the prices and bigger the profit margins, the bigger the incentive to over-produce.
It's even possible that, a few years hence, we could see a sustained period of plentiful oil supplies and low prices, meaning $50 or below.
A similar scenario occurred following the price explosion in the 1970s and early 1980s. The price spike caused the world to cut back sharply on oil consumption. By the mid-80s, oil prices had fallen from almost $40 to around $15. They remained extremely low for two decades.
It's impossible to predict how the adjustment this time will take shape, just as it was in housing. There the surge in supply came in places the experts swore there was "no supply," and wouldn't be any. Builders found a way to extend vast tracts of homes into California's Inland Empire and Central Valley, and even build "in-fill" projects near the densely-populated coasts.
An earlier bubble is also instructive. In the early 1980s silver prices jumped from $10 to $50 on the theory that the world was facing a permanent shortage of silver. Suddenly ads appeared asking homeowners to bring their tea sets and jewelry to Holiday Inns for a big price. Silver supplies poured from seemingly nowhere, out of America's cupboards, of all places.
And so it will be with oil. We don't know where the new abundance will come from, from shale, or tar sands or coal or an OPEC desperate to regain market share. We just know that it will appear. With prices like these, it always does.
Comments:
Just read this article and hence I pasted it here....which agains argue that Oil boom can come to an end any time as written by me in previous post.....
High Energy Battery..............cmp...Rs 170...!
Friends,
I have seen the results of High Energy Battery(code:504176) and looks extremly good.
The expenditure has come down from 9.2 cr to 7 cr on sales of 11cr and 10 cr respectively on year to year basis.
So the NP has jumped many folds.......this quater!Why the expenditure was less?....though lithium/copper and such commodities are going up?
The stock has a 52 week high of Rs 622 and low of Rs 145 and now at Rs 170 almost at 52 week low.....seems a good buy .....EPS for this qr (Mar) is 18!
Anyone knowing why the expenditure was less can write here......Readers will be enlightened......
Here is the site link: Explore yourself.....see results at bseindia as well.....
http://www.highenergyltd.com/
Rajeev
I have seen the results of High Energy Battery(code:504176) and looks extremly good.
The expenditure has come down from 9.2 cr to 7 cr on sales of 11cr and 10 cr respectively on year to year basis.
So the NP has jumped many folds.......this quater!Why the expenditure was less?....though lithium/copper and such commodities are going up?
The stock has a 52 week high of Rs 622 and low of Rs 145 and now at Rs 170 almost at 52 week low.....seems a good buy .....EPS for this qr (Mar) is 18!
Anyone knowing why the expenditure was less can write here......Readers will be enlightened......
Here is the site link: Explore yourself.....see results at bseindia as well.....
http://www.highenergyltd.com/
Rajeev
Sunday, June 8, 2008
Monday Mayhem in Offing............
Friends,
Get ready for a Monday Mayhem.
I am writing this post just to make you aware that there can be a down circuit today in market.
Sensex can go down by over 1k points. ( Updates: I am seeing Asian stock market are not in huge loss and hence we may recover loss ground in big way as I have suggested here.)
Our market has now gone totally in the hand of FIIs , which takes advice of our Bear operators.
Due to crude going up by $10 last Friday and hence Dow tanking by 400 points , I think there is no way our market can survive the bear onslaught.
I don’t think crude bullishness is due to demand supply gap.If it is so then it couldn’t be
this fast.In a matter of 4 months crude has gone from $100 to $140….that is a huge huge
gain.There are many others oil destination explored.Many alternative will be created but
crude market is not taking it.
Sooner or later FIIs has to take note of India and China as these are the only two countries which are growing at multiples times GDP then USA and Europian countries.
US is simply growing at just 1% .FIIs are taking out money to invest in Commodities
market like Russia(Oil) and Brazil.But they can’t go on investing there forever.
When rupee was appreciating I saw experts saying that it is bad for our export and now when rupee is depreciating they are there to critiszie as well.They says it is bringing the Oil bill high.
The point to ponder here is these economist are such.They speaks both ways.
No one is knowing nothing .
But I will only write here that there is always light at the end of a tunnel.Only after night comes day.Don’t sell in panic.Hold your stocks.As soon as the monsoon sets in the whole scenario will get changed.
The thing which should be noted is , one have to see whether the sensex goes up at the end of the day after making a low of the day.Means it should go up from the days low to close higher though in negative.....
Again I write to my readers please don't sell in panic.Market seems to me bottoming out.This month should be a turnaround month.Very very less chance for market to go below 14k.
Hold stocks for a year......Just hold them.Crude should tank any time.....
Get ready for a Monday Mayhem.
I am writing this post just to make you aware that there can be a down circuit today in market.
Sensex can go down by over 1k points. ( Updates: I am seeing Asian stock market are not in huge loss and hence we may recover loss ground in big way as I have suggested here.)
Our market has now gone totally in the hand of FIIs , which takes advice of our Bear operators.
Due to crude going up by $10 last Friday and hence Dow tanking by 400 points , I think there is no way our market can survive the bear onslaught.
I don’t think crude bullishness is due to demand supply gap.If it is so then it couldn’t be
this fast.In a matter of 4 months crude has gone from $100 to $140….that is a huge huge
gain.There are many others oil destination explored.Many alternative will be created but
crude market is not taking it.
Sooner or later FIIs has to take note of India and China as these are the only two countries which are growing at multiples times GDP then USA and Europian countries.
US is simply growing at just 1% .FIIs are taking out money to invest in Commodities
market like Russia(Oil) and Brazil.But they can’t go on investing there forever.
When rupee was appreciating I saw experts saying that it is bad for our export and now when rupee is depreciating they are there to critiszie as well.They says it is bringing the Oil bill high.
The point to ponder here is these economist are such.They speaks both ways.
No one is knowing nothing .
But I will only write here that there is always light at the end of a tunnel.Only after night comes day.Don’t sell in panic.Hold your stocks.As soon as the monsoon sets in the whole scenario will get changed.
The thing which should be noted is , one have to see whether the sensex goes up at the end of the day after making a low of the day.Means it should go up from the days low to close higher though in negative.....
Again I write to my readers please don't sell in panic.Market seems to me bottoming out.This month should be a turnaround month.Very very less chance for market to go below 14k.
Hold stocks for a year......Just hold them.Crude should tank any time.....
Thursday, June 5, 2008
Can Oil go below $100......!...
Can Oil go below $100......!..
I think Oil is going up on speculation more then a on demand getting more then supply.
I have heard that some $600 bn has been in commodities market including crude as major contributary.The Oil price rise seems to me more speculative then due a reason for lack of supply.
Goldman Scahs being the biggest speculator in Crude it seems that they wants to get out in big profit and hence gave a target of $200 for crude so that they can sell.
Crude and commodities cannot be held physically.....
Well, and hence unlike stock market,crude or commodities cannot be sold physically to break the price nor can market speculator can buy crude physically and corner it and take the price high to some astronomical level.....
So no one in the world is holding commodities physically and as all and sundry has taken long postion especially in Crude which rose almost by over $30 within a couple of months is a big big return in comparision what FII's ,Hedge funds use to get 10% in a whole year....and hence 30% in couple of months by far the biggest and hence it is time for them to unwind their long position.....
It seems that the Oil bubble is going to come to an end anytime and should retrace it gains.....How much it can retrace is anybodies guess and when the prices goes up fast and soon what happens to the price is wellknown by Indian Investors.....
These is one of the reason why I am now becoming bullish on Indian Market.....
and as Oil should comes down....I think if that happens then I think we are all very smart to assume.....what can happen to our market.....
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