Friends,
Market went up on Friday.The Inflations nos were weak.Oil went up and still market didn’t come down….
When rupee was appreciating analyst has problem that it is hindering export growth.When rupee is depreciating then also they have problem.Says oil bill is going up…..now can anyone tell me how one can fight with this breed of analyst.
There is a great story.Whether that is true or not is not important but it worth a read….I read it somewhere and am pasting it here….
THE MCKINSEY SYNDROME
Once upon a time there was a shepherd looking after his sheep on the side of a deserted road.
Suddenly a brand new Porsche screeches to a halt. The driver, a man dressed in a Versace suit, Cerutti shoes, Police sunglasses, Rolex wrist-watch, and a Armani tie, gets out and asks the Shepherd:
"If I can tell you how many sheep you have, will you give me one of them?" The shepherd looks at the young man, and then looks at the large flock of grazing sheep and replies:"Okay."
The young man parks the car, connects his laptop to the mobile-fax, enters a NASA Webster, scans the ground using his GPS, opens a database and 60 Excel tables filled with logarithms and pivot tables, then prints out a 10 page report on his high-tech mini-printer.
He turns to the shepherd and says, "You have exactly 1,586 sheep here."
The shepherd cheers, "That's correct, you can have your sheep." The young man makes his pick and puts it in the back of his Porsche.
The shepherd looks at him and asks: "If I guess your profession, will you return my animal to me?" The young man answers, "Yes, why not".
The shepherd says, "You are a Management Consultant from a top-notch consultancy like McKinsey,etc..".
How did you know?" asks the surprised young man.
"Very simple," answers the shepherd.
"First, you came here without being called.
Second, you charged me a fee to tell me something I already knew, And
Third, you don't understand anything about my business...
Now can I have my sheep back?"
That
That is how this Consultant firms are……They just do nothing and teaches you what you know…..and ask for hefty fees…..If by chance they prove right somewhere then sky is the limit for them…as they will go on speaking world over that they have set things right for others though it is once in a while…..
Well coming back to our market, rupee is depreciating and hence will have positive effect on IT , Phrama and other export related companies…
So watchout for IT sector…..Like Compact Disc, ASM Techno, ABM Knowledge in low price category……
And there are scores of stocks to look at with P/E at 5 to 10 and even less.
Like say, Jayaswal Neco,Wanbury Ltd,Tanfac Ltd,Kirloskar Ferro, Impex Ferro…..I think the list is long and one can pick up stocks at will.
Even Gremach Infra,Sujana Towers has come down very much and becomes a buy anytime…..
I think Jyoti Ltd is also looking extremely good to me.
Well, as it was time to buy at sensex 14700 as we thought it was the bottom, then I think at 13k also time to buy if it was then at 14700….
Well the situation has not gone so bad that we can go to this level.This is an excess hammering by bears and it can get stopped anytime.See as I wrote early with all negatives like Inflation,Crude etc market went up ……
I am not sure where the bottom is….I use to write that 14k shouldn’t be broken but it get broked…and I failed horribly in predicting that.I confess that I was not able to see that Crude can go up even beyond 120-130 and actually I was expecting that it should tank in June itself.But alas! Wishes were horses…….
Well,somehow I still feel that crude rally should get punctured.In past whenever crude has rise so fast it has then come down very drastically …..and that will be the day for reversal in sentiment.I have always emphasized on sentiment.If sentiment is good fundamentals come .No sentiment no fundas works….we are seeing that now….
Kirloskar Ferro being a great co ,great gr is available at just ¼ the high…what is the justification of this? Well, one can say that the runup was not justified...to over 100, agreed , but Rs 25 is also not the fair value.....one can argue that the prices which went up were wrong but one can't argue that the value comes to just 1/4 of the high.......and that goes for each and every stocks.Try to find out those and one will get many....
Well, I have proved wrong this time and no guanretee I do not do that again.
Take your own call and Best Of Luck…..
Here is an article from ET which shows how petro dollars are slowly finding their way into India.
ReplyDeleteImp:Due to surge in oil prices IMF predicts 940 billion dollars would come to this region, Heres tHE ARTICLE:
PETRO dollars are now finding their way into India. Surprising it may sound but High Networth Individuals (HNIs) and financial institutions (read sovereign wealth funds) in the Middle-East are now routing their money to India through private equity firms. According to sources in the private equity space, Middle-East based investment houses such as Global Investment House (Kuwait), Abu Dhabi Investment Authority (ADIA) and Dubai Investment Group (UAE) are in talks with various India-focused private equity firms to invest in their funds. In fact, the investments from the Middle-East in the last six months has seen a whopping surge of more than 300%. Already Anil Dhirubhai Amabani Group (ADAG) holding, Reliance Communication, is in talks with global private equity and Middle East sovereign wealth funds, on sourcing capital for the proposed MTN deal. With the the International Monetary Fund (IMF) expecting oil and gas exports to bring in $940 billion to the region this year, private equity players are expecting a windfall of petro dollars in the country. “The Middle East funds are growing very rapidly, thanks to the petro-dollars. All these investment houses have deep pockets. The free fall of dollar has made these private equity firms in the Middle East diversify their risks and there is a greater propensity to invest outside the US, where traditionally they’ve been investing,” a source told SundayET. Funds from Middle-East countries such as Oman, Abu Dhabi, Qatar and Dubai are currently on a lookout for Indian PE companies which have exposure in realty, infrastructure, healthcare, retail, and education sector. “It is not only the existing funds but personal funds, supported by HNIs in countries such as Brunei, the United Arab Emirates, Kuwait and Oman, which are looking to tap opportunities in India,” the source said.
According to Ranu Vohra, MD and CEO of Avendus Capital, it is the growing clout of sovereign funds from the Middle East which are behind the recent heightened activity in this space. “In fact, in the last few months we too have been approached by a few Middle-East based funds. They are either looking at direct investments in India or exploring partnerships with investment banks and firms which have a solid distribution network and are capable of channellising their money into profitable ventures,” he said. ADIA, which is eyeing an opportunity in India, in fact, is the largest international sovereign wealth fund, as per Morgan Stanley research. According to Mr Vohra, this trend can be attributed to the shift in focus to emerging markets. “Earlier these firms were looking to tap opportunities in the Middle-East North Africa (MENA) region but now they’re also looking at the emerging markets such as India,” he said. Another factor, according to Abhey Yograj, chairman and MD of Tecnova, is the Indian firms’ mindset towards investments from Middle-East funds. “The fact is that Indian firms are more open to private placements from the Middle-East because they’re a good bargain and are cheap, compared to those coming from other countries. Further, the risk of Asian assets has considerably reduced and they offer more opportunities than in the US or Europe,” he explained.
Other PE firms agree that the activity from the Middle-East would only increase. “Though we only have our funding from the US, but with correction in the Indian stockmarkets, the companies are looking attractive at current valuations. And with such large funds at their disposal, Middle East firms are likely to be bullish on the India theme,” said Raj Mishra, managing partner of Indea Capital. According to Morgan Stanley, sovereign funds now hold over $113bn of investments globally. An e-mail to Middle-East PE firms, Swicorp, NBK Capital (subsidiary of National Bank of Kuwait) and Ithmar Capital, elicited no response.
Thanks ravi,
ReplyDeleteI also read that and will be pasting in front....but I think I have given enough to read for readers to read...let them digest this first and then I will paste it on front page.....