Friends,
It has been a long time since I have wrote here but I was little bit busy with my job and I thought I have not enough to write .More over , I need the mood to write sometimes.That is very important for everyone.If there is no mood then what ever one do will be a drag and nothing more.
Well,the crisis are not over and still casualties are coming out in droves in USA economy.
It was Citi bank and now it is Bank Of America.They seems like will keep on coming.
Well, coming back to our market the unabated selling of FII still continues and hence I do not see any recovery chance in near future.FII will keep on selling at every rise and hence do not believe any rise a turnaround.
Untill June 09, according to me there can be no respite.Just stay away from the market.
Hearing big big Indian companies are losing the orders and unable to get the money back for what they had already sold.If that is the case then seems it will take lots of time to be at normal.
First and formost thing that should one look is US should be normal but it is not happening.
If that happens then we can see a turnaround as other things has already fall in places like Crude is down to $50, Commodities are down at 3 yrs low and this both will make Inflation and Int rate down......
Let us hope that FII selling gets over but it seems that they wants to sell everything out in India.They are still invested by over $70bn .Let us see what is there in the store for us....
Wednesday, November 26, 2008
Saturday, November 22, 2008
A hillarious humor and some sense of how a Gujarati is......
Friends,
Those who know Gujarati will enjoy the last 2 lines....
Rajeev
BILL GATES organized an enormous session to recruit a new Chairman for Microsoft Europe. 5000 candidates assembled in a large room. One candidate is Kantibhai Shah. Bill Gates: Thank you for coming. Those who do not know JAVA may leave. 2000 people leave the room. Kantibhai says to himself, 'I do not know JAVA but I have nothing to lose if I stay. I'll give it a try' Bill Gates: Candidates who never had experience of managing more than 100 people may leave. 2000 people leave the room. Kantibhai says to himself ' I never managed anybody by myself but I have nothing to lose if I stay. What can happen to me?' So he stays. Bill Gates: Candidates who do not have management diplomas may leave. 500 people leave the room. Kantibhai says to himself, 'I left school at 15 but what have I got to lose?' So he stays in the room. Lastly, Bill Gates asked the candidates who do not speak Serbo - Croat to leave.. 498 people leave the room. Kantibhai says to himself, ' I do not speak one word of Serbo - Croat but what do I have to lose?' So he stays and finds himself with one other candidate. Everyone else has gone. Bill Gates joined them and said 'Apparently you are the only two candidates who speak Serbo - Croat, so I'd now like to hear you have a conversation together in that language.'
Calmly, Kantibhai turns to the other candidate and says...... 'kem chho?'
The other candidate answers ........ 'ek dam majama....'
Comments:That is how a Gujarati is.He never miss anything and stays till end....whether a Bull Market or a Bear Market....means loss or profit.......
Those who know Gujarati will enjoy the last 2 lines....
Rajeev
BILL GATES organized an enormous session to recruit a new Chairman for Microsoft Europe. 5000 candidates assembled in a large room. One candidate is Kantibhai Shah. Bill Gates: Thank you for coming. Those who do not know JAVA may leave. 2000 people leave the room. Kantibhai says to himself, 'I do not know JAVA but I have nothing to lose if I stay. I'll give it a try' Bill Gates: Candidates who never had experience of managing more than 100 people may leave. 2000 people leave the room. Kantibhai says to himself ' I never managed anybody by myself but I have nothing to lose if I stay. What can happen to me?' So he stays. Bill Gates: Candidates who do not have management diplomas may leave. 500 people leave the room. Kantibhai says to himself, 'I left school at 15 but what have I got to lose?' So he stays in the room. Lastly, Bill Gates asked the candidates who do not speak Serbo - Croat to leave.. 498 people leave the room. Kantibhai says to himself, ' I do not speak one word of Serbo - Croat but what do I have to lose?' So he stays and finds himself with one other candidate. Everyone else has gone. Bill Gates joined them and said 'Apparently you are the only two candidates who speak Serbo - Croat, so I'd now like to hear you have a conversation together in that language.'
Calmly, Kantibhai turns to the other candidate and says...... 'kem chho?'
The other candidate answers ........ 'ek dam majama....'
Comments:That is how a Gujarati is.He never miss anything and stays till end....whether a Bull Market or a Bear Market....means loss or profit.......
Thursday, November 13, 2008
Don't BUY now.............
Freinds,
This is the first time I am writing this post wherein I am suggesting not to buy anything now.
Market is going to give us more time to buy and average stocks where one have bought high.
Just be on the sidelines.Me seeing more pain coming.We may break the previous low of 7600 and even go to as low as 6500.
These are all my assumptions and I may go horribly wrong but things are not looking good as of now.As I have written only after June 09 we can see some good stabilisation.Price correction has happened and still more to go for certain A gr stocks and hence they can still go down and hence we can see sensex at 6500 and maybe below that.
These are scary views but then I must write it here.Time wise our patience will be tested and that will start from June 09.There is not going to be a V shape recovery.
These are pessimist view but the countries like Russia ,Ireland,Zimbabwe, Pakistan and many more are facing rough time for their currencies and the major impact has been because of Oil going down vertically.
Commodities down turn is affecting Brazil.Can anyone imagine Korea and China's stimulous pacakage is of almost same amt?That is what happening and that is making me nervous.
Cash gr stocks are already battered and hence nothing much to lose here but A gr stocks are still to get hammered.FII's are holding big stake in Ril Ind, SBI,L&T, Tisco, LIC Housing and many more like that.So they will still sell those which can take our Sensex to 6500 and even below that.
FII wants to still sell whatever they have and hence we are seeing still unabated selling of around rs 700 billions each day average.They are not over.
Every rise will be dealt with selling who has got trapped at higher prices at whatever good price they get.
This will go for months and hence the recovery is not going to come soon.
But at the end I would again like to iterate that our market will and should make a come back.We should be back at 2003, which I have written in past here.I am talking of Int rate and infaltion....
This is the first time I am writing this post wherein I am suggesting not to buy anything now.
Market is going to give us more time to buy and average stocks where one have bought high.
Just be on the sidelines.Me seeing more pain coming.We may break the previous low of 7600 and even go to as low as 6500.
These are all my assumptions and I may go horribly wrong but things are not looking good as of now.As I have written only after June 09 we can see some good stabilisation.Price correction has happened and still more to go for certain A gr stocks and hence they can still go down and hence we can see sensex at 6500 and maybe below that.
These are scary views but then I must write it here.Time wise our patience will be tested and that will start from June 09.There is not going to be a V shape recovery.
These are pessimist view but the countries like Russia ,Ireland,Zimbabwe, Pakistan and many more are facing rough time for their currencies and the major impact has been because of Oil going down vertically.
Commodities down turn is affecting Brazil.Can anyone imagine Korea and China's stimulous pacakage is of almost same amt?That is what happening and that is making me nervous.
Cash gr stocks are already battered and hence nothing much to lose here but A gr stocks are still to get hammered.FII's are holding big stake in Ril Ind, SBI,L&T, Tisco, LIC Housing and many more like that.So they will still sell those which can take our Sensex to 6500 and even below that.
FII wants to still sell whatever they have and hence we are seeing still unabated selling of around rs 700 billions each day average.They are not over.
Every rise will be dealt with selling who has got trapped at higher prices at whatever good price they get.
This will go for months and hence the recovery is not going to come soon.
But at the end I would again like to iterate that our market will and should make a come back.We should be back at 2003, which I have written in past here.I am talking of Int rate and infaltion....
Tuesday, November 11, 2008
Soros’ Quantum buys 2% in GVK Power.................
Soros’ Quantum buys 2% in GVK Power
QUANTUM Fund, the investment vehicle of billionaire investor George Soros, has picked up close to 2% stake in power and infrastructure company GVK Power & Infrastructure for around Rs 35 crore. The investment has come at a time when many US-based investors have been on a selling spree amid concerns over acute financial crisis in the world’s largest economy.
The GVK group is a diversified business entity with focus on infrastructure projects, specially in urban areas. It has a significant presence in the hospitality, services and manufacturing sectors. On Monday, GVK Power shares were up by 13% to close at Rs 20.66 per share on the Bombay Stock Exchange .
Recently, GVK Power & Infrastructure said it plans to sell 20% of its electricity business to fund expansion plans. The New Delhi-based company is in talks with Standard Chartered Bank, Merrill Lynch and Cityspring Infrastructure Trust, a unit of Singapore’s Temasek Holdings, for the stake sale.
GVK Power and Infrastructure has initiated power projects that will have an operational capacity of over 2000 mw. While Jegurupadu Combined Cycle Power Plant is operational, several other power projects are being developed. GVK’s power projects are based on coal, gas and hydel resources. The projects are spread across several states in the country including Andhra Pradesh, Punjab and Uttarakhand. At present, Indian power producers are expanding capacity to meet the country’s rising demands. India needs to spend $100 billion every year until 2012 for adding capacity to beat peak hour shortage of 15%. The company may consider listing its electricity business, analysts tracking the company said.
A McKinsey report estimates that India’s electricity demand may triple to 3,35,000 mw by 2017 if the current growth rate is maintained. The country needs to add around 40,000 mw annually to meet the predicted demand, which exceeds current estimates by 1,00,000 mw, the report said.
CHARGED UP
Quantum Fund has bought stake in GVK Power for around Rs 35 crore
GVK Power scrip rose 13% on deal news on Monday
The company plans to sell 20% of electricity biz to meet its expansion plans
Quippo Telecom plans to raise Rs 2,800 cr to fund expansion
QUIPPO Telecom Infrastructure (QTIL) is planning to raise around $600 million (Rs 2,800 crore) through a combination of equity and debt. The fund is expected to finance the company’s expansion, which may include acquisition of a slice of equity in Tata Telecom’s tower business. QTIL targets to invest $3 billion in the current fiscal to expand its telecom infrastructure business in India and plans to raise the number of towers to 25,000 by 2010 from the current 5,000.
Sources close to the development said QTIL has roped in London-based investment bank Euromax Capital as one of the advisors for the proposed fund-raising.
When contracted, QTIL managing director Arun Kapur said, “Being a capital intensive business, we do need funds and have already raised around $185 million recently. We are in the process of raising additional funds. However, it is too early to comment on this.” He declined to comment on the current status of the deal with Tata Teleservices for its tower business.
Investment bankers said the potential investors may include leading IT and finance companies. They added that QTIL is also in talks with the Essar Group for a possible stake buyout in the latter’s tower business. However, this could not be confirmed with the Essar group.
Recently, QTIL raised Rs 480 crore by selling 18.74% stake to Oman Investment Fund. In another round of fund raising, the company sold 12.19% each to Quippo Infrastructure, DB Zwirn, IDFC Private Equity and Indivest for a total investment of Rs 300 crore.
QTIL is a division of Quippo Infrastructure Equipment (QIEL), an arm of SREI Infrastructure Finance, a leading nonbanking financial institution. Under the brand name Quippo, SREI operates infrastructure equipment rental company, servicing high-growth construction, mining, oil & gas, telecom and energy verticals.
Monday, November 10, 2008
Long-term players unfazed by sell-off, stay bullish on India .............
Long-term players unfazed by sell-off, stay bullish on India
Pension & University Funds, Charity Foundations And Endowments Among Those Seeking Registration With Sebi
Jigar Pathak MUMBAI
LONG-TERM players like pension funds and endowment funds from foreign shores continued to get registered with the Indian market regulator even as FIIs have pulled out over $10 billion from the Indian markets so far this year. Nearly 238 new FIIs have got registered with the Securities and Exchange Board of India (Sebi) since January this year and 24 of them came in the last month alone when the market witnessed sharp sell off. The overall number of FIIs and their sub accounts registered with Sebi now stands at 1,543 and 4,767, respectively. And a good number of these players are long-term investors like pension funds, foundations, endowments, university funds, charitable societies and teachers retirements funds. According to analysts tracking pension funds, more than 140 pension funds have signed up with Sebi and about 50-odd such funds from various geographies like the US, Australia and New Zealand have come in the last one year. Top retirement funds that have come to Indian shores this year include American Airways, British Airways and American Legacy Foundation, an anti tobacco foundation. Saurabh Mukherjea, head of Indian equities, Nobel, said:“Pension and such funds are considered to be sacred funds and entry of such funds means a long term investment horizon for the Indian markets. Also with the dwindling Q2 earnings many cash strap companies are really finding it difficult to raise funds for their working capital. We might see lots of PIPE deals in the coming month from such funds even at the cost of greater equity dilution for the companies.” Interestingly, funds from Mauritius continued to dominate the new registration. Of the 24 new FIIs registered last month, 11 FIIs have seen taking the Mauritius route owing to the favourable tax regime. Many India and Asia-Pacific focused funds that managed to raise their money before the market meltdown and were sitting on the fence for the market to cool off are also now turning to the Indian markets for investments. “The increasing number of FIIs getting registered with the Sebi is a good sign for the Indian markets. FIIs are always known to enter the markets at the lower levels and current levels are too tempting for them to miss. Given the growth potential that India carries, it would certainly have an edge over other emerging markets and once the liquidity situation improves we might see a full-fledged participation by the FIIs,” Mithun Banerjee, vice-president-quantitative Research, Antique Finance said.
Pension & University Funds, Charity Foundations And Endowments Among Those Seeking Registration With Sebi
Jigar Pathak MUMBAI
LONG-TERM players like pension funds and endowment funds from foreign shores continued to get registered with the Indian market regulator even as FIIs have pulled out over $10 billion from the Indian markets so far this year. Nearly 238 new FIIs have got registered with the Securities and Exchange Board of India (Sebi) since January this year and 24 of them came in the last month alone when the market witnessed sharp sell off. The overall number of FIIs and their sub accounts registered with Sebi now stands at 1,543 and 4,767, respectively. And a good number of these players are long-term investors like pension funds, foundations, endowments, university funds, charitable societies and teachers retirements funds. According to analysts tracking pension funds, more than 140 pension funds have signed up with Sebi and about 50-odd such funds from various geographies like the US, Australia and New Zealand have come in the last one year. Top retirement funds that have come to Indian shores this year include American Airways, British Airways and American Legacy Foundation, an anti tobacco foundation. Saurabh Mukherjea, head of Indian equities, Nobel, said:“Pension and such funds are considered to be sacred funds and entry of such funds means a long term investment horizon for the Indian markets. Also with the dwindling Q2 earnings many cash strap companies are really finding it difficult to raise funds for their working capital. We might see lots of PIPE deals in the coming month from such funds even at the cost of greater equity dilution for the companies.” Interestingly, funds from Mauritius continued to dominate the new registration. Of the 24 new FIIs registered last month, 11 FIIs have seen taking the Mauritius route owing to the favourable tax regime. Many India and Asia-Pacific focused funds that managed to raise their money before the market meltdown and were sitting on the fence for the market to cool off are also now turning to the Indian markets for investments. “The increasing number of FIIs getting registered with the Sebi is a good sign for the Indian markets. FIIs are always known to enter the markets at the lower levels and current levels are too tempting for them to miss. Given the growth potential that India carries, it would certainly have an edge over other emerging markets and once the liquidity situation improves we might see a full-fledged participation by the FIIs,” Mithun Banerjee, vice-president-quantitative Research, Antique Finance said.
Sunday, November 9, 2008
2008- Berkshire Hathaway Shareholders meeting ..............
Friends,
I am extremly sorry to write that this is the post I read at some other forum and I have pasted here for my blog readers.
It is not me who has attended the shareholder meeting.I am too small a person to be there.
I apologize for not writing this before but I was in hurry and hence just pasted it here....
Rajeev
I had the good fortune to attend the 2008- Berkshire Hathaway Shareholders meeting at Omaha, Nebraska a few wee It was a wonderful experience listening to and learning from the Master Investor- Warren Buffett himself and all I can say is that he stands alone as the reigning deity of financial world's Mt Olympus!
The degree of humility and composure he exhibited, although he is the richest and most well respected human is stunning!
I tried to take some notes and would like to share with you some of the best questions and answers which came across during the conversation between we mortals and God.
Having read about him, observed him and worshipped him for a few years now, I think it is reasonable to believe that this guy is exactly what he seems: a plain-speaking, tee totaling man of uncrackable integrity who works really, really hard and sticks to his investing and management principles through boom and bust which makes him a freak of nature since he is above normal human tendencies. He is like a comet streaking through the heavens every 75 years or so.
The questions the shareholders threw at him for 7 continuous hours ranged from finances, life, religion, career, politics, sports and several other streams. And he answered everything with a Zen like calm and confidence.
Even if you are least bothered about investments and finances, I insist, Pl read on. ================
Q1.What does it take to become a successful investor? Brilliance or Smartness?
Neither, Success in investing doesn't correlate with I.Q. Once you have ordinary intelligence, what you need is the temperament to control the urges that gets other people into trouble in investing.
Q2.When do you deicide to invest in a firm?
The best thing that happens to us is when a great company gets into temporary trouble. We want to buy them when they're on the operating table. (Mr. Buffett bought Coke when it had its biggest fiasco after launching New Coke; he bought American Express when it went through a loss making phase in the early 60's)
Q3.What do you look for in people when they come to sell their firms to you?
I don't look for the usual credentials such as an MBA, a pedigree (Harvard, Wharton), or cash reserves or market cap of their firm. What I look for is just a passion in their eyes; I think that's the key. A person who is hungry will always do well. I prefer it when people even after selling stay on and work for the firm; they are people who can't wait to get off their bed to get to work. Passion is everything; there is no replacement for innate interest.
Q4.Mr. Buffett, you told us that Berkshire Hathaway has $ 45 Billion in cash. Why aren't you investing?
Up until a few years back I had more ideas than money. Now I have more money than ideas.
Q5.When do you plan to retire?
I love my job; I love it so much that I tap dance to work. Mrs. B, the founder of Nebraska Furniture Mark worked until she was 104, she died within 6 months of her retirement, that's a lesson to all my managers, don't retire! I personally am going to work 6-7 years after I die, probably that's what they mean when they say- "Thinking out of the Box"!!
Q6.Why do stock market crashes happen?
Because of human nature for greed and insecurity. The 1970s were unbelievable. The world wasn't going to end, but businesses were being given away. Human nature has not changed. People will always behave in a manic-depressive way over time. They will offer great values to you."
Q7.What are the things that are taught wrong in Business school and the corporate world?
I like such open ended questions, I think Business schools should refrain from teaching their wards about profit making and profit making alone, it gives a sense of 1 dimensional outlook to the young students that loss is a curse. In reality, in the corporate world, failure and loss making are inevitable. The capital market without loss is like Christianity without hell. I think they should teach the student on how to buy a business, how to value a business? Not just on how to determine the price of a business. Because price is what you pay, value is what you get.
Q8.Do you still hate Technology stocks?
With Coke I can come up with a very rational figure for the cash it will generate in the future. But with the top 10 Internet companies, how much cash will they produce over the next 25 years? If you say you don't know, then you don't know what it is worth and you are speculating, not investing. All I know is that I don't know, and if I don't know, I don't invest."
Q9.How to think about Investing?
The first investment primer was written by Aesop in 600 B.C. He said, 'A bird in the hand is worth two in the bush.' Aesop forgot to say when you get the two in the bush and what interest rates are; investing is simply figuring out your cash outlay (the bird in the hand) and comparing it to how many birds are in the bush and when you get them."
Q10. How do you feel after donating $ 40 Billion to the Bill and Melinda Gates foundation? You are a hero to us!
I feel nothing. I haven't sacrificed anything in life. Ihave had a good life. I donated after I turned 75. I think I admire those people who sacrifice their time, share their food and home, as the people to be emulated not me. Besides, what is money before a man's life?
Q11.What do you think are the pitfalls in donation?
I have never donated a dime to churches or other such organizations; I need to believe in something before I end up doing that. I have been observing the Bill & Melinda Gates foundation for years now and I am confident they will do a fantastic job of making use of the money. I am a big believer in Outsourcing, others believed in me as an Investor and gave their hard earned money to invest. I believe in Bill Gates, he is a better donor than me.
Q12.Why do you work from Omaha and not Wall Street, New York?
Wall Street is the only place where people alight from Rolls Royce to get advised by people who use the Public transportation system.
Q13.You seem to be so well read, tell us how it all started.
My father was a stock broker, so we had all these financial books in our library. He introduced me to those classics and I got into them. I am lucky that my father was not a fan of Playboy! Reading is the best habit you can get. Well, you can learn from teachers too, and have mentors but there are so many constraints attached- they will talk fast, talk slow, they might talk like a pro or they might be terrible communicators. Books are a different animal altogether, I love reading! The beauty about reading and learning is that the more you learn the more you want to learn.
Q14.People who join Berkshire Hathaway seldom leave. How do you get along well with all your executives?
I try to get quality people. I always say - Hire someone in your organization who is better than you are. If you do that, you build a company of giants. If you get people worse than yourself, you build a company of dwarfs. And do not try to do everything yourself. Delegate the jobs and look out of the window. The results will come. That's how you build institutions. It happens only when you empower others, believe in others. Iam an investor, Iam very secured at that, I have no clue how to make Coca-Cola or how to dole out credit cards (MrBuffett owns 8% of Coca-Cola and 13 % of American Express). I understand the wisdom of the aphorism that you cannot please all the people all the time. Of Course, you will always find qualities that you don't like in people around you, but if you observe carefully the love of the work unites you both. There is no point in being obsessive about a bad quality in a person, whom you otherwise respect.
Q15.I am a small time businessman from Dallas, Texas, what do I need to do to hit big time?
Be patient, Achieving your financial goals and dreams will not happen overnight. As much as we would all really love to accomplish our goals in a few years, this is an ongoing process. Defining your financial goals is not a one-time task; you need to keep adding new plans at different stages in your life. We all admire the skills of Olympic ice skaters, pro golfers, and concert pianists. But do we remember that they didn't acquire their skills overnight? They had to practice hours on end for years to achieve their dreams. The key to success is to continue learning throughout your life with a voracious appetite.
Q16. I think it is marvelous that you have had a golden run with investing, how did you do that?
My rule is to be fearful when others are greedy, and be greedy when others are fearful. Besides, I call investing the greatest job in the world because you never have to swing. You stand at the plate; the pitcher throws you General Motors at 47! U.S. Steel at 39! And nobody calls a strike on you. There's no penalty except opportunity lost. All day you wait for the pitch you like; then when the fielders are asleep, you step up and hit it. Stay dispassionate and be patient. You're dealing with a lot of silly people in the marketplace; it's like a great big casino and everyone else is boozing. If you can stick with drinking Coke, you should be OK. First the crowd is boozy on optimism and buying every new issue in sight. The next moment it is boozy on pessimism, buying gold bars and predicting another Great Depression, most people get interested in stocks when everyone else is. The time to get interested is when no one else is. You can't buy what is popular and do well.
Q17.Mr. Buffett you have seen so many crashes and recessions, your take on facing recessions and stock market crashes?
If past history was all there was to the game, the richest people would be librarians. Every scenario is different. But always remember, Tough times do not last. Tough people do.
Q18.What is the 1 biggest advice you would impart to a young investor like me?
Think for a moment that you are given a car and told this is the only car you would get for the rest of your life. Then you would make sure that you car is taken care of well, it is oiled and detailed every now and then. You would make sure that it never gets rusted, and you would garage it. Think of yourself as that car. You just get 1 body, 1 mind and 1 soul. Take care of it well. Invest in yourself that would be my advice.
Q19.You personally know many of the Financial executives who are engineers of the current turmoil in the financial world, surprisingly even after record losses, those executives receive astronomical salaries and bonuses and arrogantly declare that they deserve it, why dint you advice them from making such decisions and what's your view on their justification for their pay?
I like sharing my ideas but don't like imposing my ideas on anybody. It doesn't make sense and is a waste of time. If somebody has decided that they know everything that is there to know, nobody can help them. The best way to learn and succeed is to know that we know nothing. There is an entire universe out there and still some of us think we can know everything. In the world of investing a few people after making some money tend to imagine they are invincible and great. This is the worst thing that could happen to any investor, because it surely means that the investor will end up taking unnecessary risks and end up losing everything ¡V arrogance, ego and overconfidence are very lethal. Personally I don't feel too comfortable with too much extravagance, because I always think like an investor. My thought process doesn't see a lot of value in a fancy car or a designer suit. Thinking like an investor always is very important to bring in a sense of discipline and focus. Before reading balance sheets and investing you need to make sure your outlook and mindset is that of an investor. Never let ego, arrogance and over-confidence control you - not just as an investor but also as a human being. You will never have internal peace if you are unable to look at everybody around you with love, compassion and understanding. Irrespective of who the person is, he or she can teach you something you don't know. I have learnt so much from people all around me and I wouldn't have been able to learn all these wonderful things if I had not spoken to them with a smile. To quote Sir Isaac Newton- If I have seen farther than others, it is because I have stood on the shoulders of giants.
Q20.How do you make the Government eat out of your hands? How do you make them agree to everything you do?
If the strategy of a private enterprise matches the policy of the government, the government will be compelled to support you even if they don't like you.
============
It was a 7 hour conversation and I could just capture some of the best questions and answers. As 37,000+ dazed, amazed and grateful shareholders trooped out of the stadium after the meeting, I found myself recalling one of my favorite quotes-
"A man has to learn that he cannot command things, but that he can command himself; that he cannot coerce the wills of others, but that he can mold and master his own will: and things serve him who serves truth; people seek guidance of him who is master of himself".
I am extremly sorry to write that this is the post I read at some other forum and I have pasted here for my blog readers.
It is not me who has attended the shareholder meeting.I am too small a person to be there.
I apologize for not writing this before but I was in hurry and hence just pasted it here....
Rajeev
I had the good fortune to attend the 2008- Berkshire Hathaway Shareholders meeting at Omaha, Nebraska a few wee It was a wonderful experience listening to and learning from the Master Investor- Warren Buffett himself and all I can say is that he stands alone as the reigning deity of financial world's Mt Olympus!
The degree of humility and composure he exhibited, although he is the richest and most well respected human is stunning!
I tried to take some notes and would like to share with you some of the best questions and answers which came across during the conversation between we mortals and God.
Having read about him, observed him and worshipped him for a few years now, I think it is reasonable to believe that this guy is exactly what he seems: a plain-speaking, tee totaling man of uncrackable integrity who works really, really hard and sticks to his investing and management principles through boom and bust which makes him a freak of nature since he is above normal human tendencies. He is like a comet streaking through the heavens every 75 years or so.
The questions the shareholders threw at him for 7 continuous hours ranged from finances, life, religion, career, politics, sports and several other streams. And he answered everything with a Zen like calm and confidence.
Even if you are least bothered about investments and finances, I insist, Pl read on. ================
Q1.What does it take to become a successful investor? Brilliance or Smartness?
Neither, Success in investing doesn't correlate with I.Q. Once you have ordinary intelligence, what you need is the temperament to control the urges that gets other people into trouble in investing.
Q2.When do you deicide to invest in a firm?
The best thing that happens to us is when a great company gets into temporary trouble. We want to buy them when they're on the operating table. (Mr. Buffett bought Coke when it had its biggest fiasco after launching New Coke; he bought American Express when it went through a loss making phase in the early 60's)
Q3.What do you look for in people when they come to sell their firms to you?
I don't look for the usual credentials such as an MBA, a pedigree (Harvard, Wharton), or cash reserves or market cap of their firm. What I look for is just a passion in their eyes; I think that's the key. A person who is hungry will always do well. I prefer it when people even after selling stay on and work for the firm; they are people who can't wait to get off their bed to get to work. Passion is everything; there is no replacement for innate interest.
Q4.Mr. Buffett, you told us that Berkshire Hathaway has $ 45 Billion in cash. Why aren't you investing?
Up until a few years back I had more ideas than money. Now I have more money than ideas.
Q5.When do you plan to retire?
I love my job; I love it so much that I tap dance to work. Mrs. B, the founder of Nebraska Furniture Mark worked until she was 104, she died within 6 months of her retirement, that's a lesson to all my managers, don't retire! I personally am going to work 6-7 years after I die, probably that's what they mean when they say- "Thinking out of the Box"!!
Q6.Why do stock market crashes happen?
Because of human nature for greed and insecurity. The 1970s were unbelievable. The world wasn't going to end, but businesses were being given away. Human nature has not changed. People will always behave in a manic-depressive way over time. They will offer great values to you."
Q7.What are the things that are taught wrong in Business school and the corporate world?
I like such open ended questions, I think Business schools should refrain from teaching their wards about profit making and profit making alone, it gives a sense of 1 dimensional outlook to the young students that loss is a curse. In reality, in the corporate world, failure and loss making are inevitable. The capital market without loss is like Christianity without hell. I think they should teach the student on how to buy a business, how to value a business? Not just on how to determine the price of a business. Because price is what you pay, value is what you get.
Q8.Do you still hate Technology stocks?
With Coke I can come up with a very rational figure for the cash it will generate in the future. But with the top 10 Internet companies, how much cash will they produce over the next 25 years? If you say you don't know, then you don't know what it is worth and you are speculating, not investing. All I know is that I don't know, and if I don't know, I don't invest."
Q9.How to think about Investing?
The first investment primer was written by Aesop in 600 B.C. He said, 'A bird in the hand is worth two in the bush.' Aesop forgot to say when you get the two in the bush and what interest rates are; investing is simply figuring out your cash outlay (the bird in the hand) and comparing it to how many birds are in the bush and when you get them."
Q10. How do you feel after donating $ 40 Billion to the Bill and Melinda Gates foundation? You are a hero to us!
I feel nothing. I haven't sacrificed anything in life. Ihave had a good life. I donated after I turned 75. I think I admire those people who sacrifice their time, share their food and home, as the people to be emulated not me. Besides, what is money before a man's life?
Q11.What do you think are the pitfalls in donation?
I have never donated a dime to churches or other such organizations; I need to believe in something before I end up doing that. I have been observing the Bill & Melinda Gates foundation for years now and I am confident they will do a fantastic job of making use of the money. I am a big believer in Outsourcing, others believed in me as an Investor and gave their hard earned money to invest. I believe in Bill Gates, he is a better donor than me.
Q12.Why do you work from Omaha and not Wall Street, New York?
Wall Street is the only place where people alight from Rolls Royce to get advised by people who use the Public transportation system.
Q13.You seem to be so well read, tell us how it all started.
My father was a stock broker, so we had all these financial books in our library. He introduced me to those classics and I got into them. I am lucky that my father was not a fan of Playboy! Reading is the best habit you can get. Well, you can learn from teachers too, and have mentors but there are so many constraints attached- they will talk fast, talk slow, they might talk like a pro or they might be terrible communicators. Books are a different animal altogether, I love reading! The beauty about reading and learning is that the more you learn the more you want to learn.
Q14.People who join Berkshire Hathaway seldom leave. How do you get along well with all your executives?
I try to get quality people. I always say - Hire someone in your organization who is better than you are. If you do that, you build a company of giants. If you get people worse than yourself, you build a company of dwarfs. And do not try to do everything yourself. Delegate the jobs and look out of the window. The results will come. That's how you build institutions. It happens only when you empower others, believe in others. Iam an investor, Iam very secured at that, I have no clue how to make Coca-Cola or how to dole out credit cards (MrBuffett owns 8% of Coca-Cola and 13 % of American Express). I understand the wisdom of the aphorism that you cannot please all the people all the time. Of Course, you will always find qualities that you don't like in people around you, but if you observe carefully the love of the work unites you both. There is no point in being obsessive about a bad quality in a person, whom you otherwise respect.
Q15.I am a small time businessman from Dallas, Texas, what do I need to do to hit big time?
Be patient, Achieving your financial goals and dreams will not happen overnight. As much as we would all really love to accomplish our goals in a few years, this is an ongoing process. Defining your financial goals is not a one-time task; you need to keep adding new plans at different stages in your life. We all admire the skills of Olympic ice skaters, pro golfers, and concert pianists. But do we remember that they didn't acquire their skills overnight? They had to practice hours on end for years to achieve their dreams. The key to success is to continue learning throughout your life with a voracious appetite.
Q16. I think it is marvelous that you have had a golden run with investing, how did you do that?
My rule is to be fearful when others are greedy, and be greedy when others are fearful. Besides, I call investing the greatest job in the world because you never have to swing. You stand at the plate; the pitcher throws you General Motors at 47! U.S. Steel at 39! And nobody calls a strike on you. There's no penalty except opportunity lost. All day you wait for the pitch you like; then when the fielders are asleep, you step up and hit it. Stay dispassionate and be patient. You're dealing with a lot of silly people in the marketplace; it's like a great big casino and everyone else is boozing. If you can stick with drinking Coke, you should be OK. First the crowd is boozy on optimism and buying every new issue in sight. The next moment it is boozy on pessimism, buying gold bars and predicting another Great Depression, most people get interested in stocks when everyone else is. The time to get interested is when no one else is. You can't buy what is popular and do well.
Q17.Mr. Buffett you have seen so many crashes and recessions, your take on facing recessions and stock market crashes?
If past history was all there was to the game, the richest people would be librarians. Every scenario is different. But always remember, Tough times do not last. Tough people do.
Q18.What is the 1 biggest advice you would impart to a young investor like me?
Think for a moment that you are given a car and told this is the only car you would get for the rest of your life. Then you would make sure that you car is taken care of well, it is oiled and detailed every now and then. You would make sure that it never gets rusted, and you would garage it. Think of yourself as that car. You just get 1 body, 1 mind and 1 soul. Take care of it well. Invest in yourself that would be my advice.
Q19.You personally know many of the Financial executives who are engineers of the current turmoil in the financial world, surprisingly even after record losses, those executives receive astronomical salaries and bonuses and arrogantly declare that they deserve it, why dint you advice them from making such decisions and what's your view on their justification for their pay?
I like sharing my ideas but don't like imposing my ideas on anybody. It doesn't make sense and is a waste of time. If somebody has decided that they know everything that is there to know, nobody can help them. The best way to learn and succeed is to know that we know nothing. There is an entire universe out there and still some of us think we can know everything. In the world of investing a few people after making some money tend to imagine they are invincible and great. This is the worst thing that could happen to any investor, because it surely means that the investor will end up taking unnecessary risks and end up losing everything ¡V arrogance, ego and overconfidence are very lethal. Personally I don't feel too comfortable with too much extravagance, because I always think like an investor. My thought process doesn't see a lot of value in a fancy car or a designer suit. Thinking like an investor always is very important to bring in a sense of discipline and focus. Before reading balance sheets and investing you need to make sure your outlook and mindset is that of an investor. Never let ego, arrogance and over-confidence control you - not just as an investor but also as a human being. You will never have internal peace if you are unable to look at everybody around you with love, compassion and understanding. Irrespective of who the person is, he or she can teach you something you don't know. I have learnt so much from people all around me and I wouldn't have been able to learn all these wonderful things if I had not spoken to them with a smile. To quote Sir Isaac Newton- If I have seen farther than others, it is because I have stood on the shoulders of giants.
Q20.How do you make the Government eat out of your hands? How do you make them agree to everything you do?
If the strategy of a private enterprise matches the policy of the government, the government will be compelled to support you even if they don't like you.
============
It was a 7 hour conversation and I could just capture some of the best questions and answers. As 37,000+ dazed, amazed and grateful shareholders trooped out of the stadium after the meeting, I found myself recalling one of my favorite quotes-
"A man has to learn that he cannot command things, but that he can command himself; that he cannot coerce the wills of others, but that he can mold and master his own will: and things serve him who serves truth; people seek guidance of him who is master of himself".
Tuesday, November 4, 2008
Market is up by 3000 points from lows.....
Friends,
We have seen a "V" shape bounce back in our market.I have written bounce back because we may be not out of woods still.But seems 7600 bottom should act as a good resistance.
Let us think how is India's scenario.
According to me our growth is intact.I can't believe that our growth is hampered and will not come in years to come according to what some use to have a view.
There is no reason how the infra sector,Agri sector will not grow.There is still lots to be done.Our roads,Railways,Agriculture needs lots of capital investment and lots of investment is still to be done.Maybe due to higher int rate and CRR hike in past money is not coming cheap but that scenario is reversing and we should be back at 5-6% Int rate and less inflation around 5-6% within a year.
I had written many times here and I write it again that the prices we are seeing is because of FII's selling.Agreed that economic growth can slow down to 6-7 GDP but still we are much much higher then any other countries in the world except China.Atleast I can say that if Jan 08 prices were inflated one and they were in excess of 40-50%, then prices which are just 10% of high is also not acceptable.Yes, one may say that what makes the difference if I say unacceptable, they are there.But many prices has gone down even by 95% from high even though the results had come good.Hundreds of stocks are available at half the BV and many are available at 1-2P/E.
As I wrote this is a life time phenomenone that such a credit crises has happened and hence it is a life time opportunity as well to buy stocks as well.
I personally believe that those having even 3-5 lacs will make a FORTUNE IN NEXT 2-3 YEARS.The return can be as big as 1000% , means 10 times from the current prices.The credit crunch is not going to get eased so soon and every rally will be met with selling.But actually I am seeing a different scenario in next 2-3 months , viz after Feb 2009...and it can start even now.
The general feeling uptill now for investors was SELL ON EVERY RALLY but now those who have money should be buying at every fall.These are known as smart money.Those are rich with CASH.New breed of investorss will come and they will take new position. These has happened in every new bull run.
But it is for sure that we are going to bounce back sooner then later.Atleast I believe that it can't be 10 long years of hibernation...Indian market has never remained in Bear Phase that too long..that is too long a period.Many are comparing our bullish run with Japan but that is also not comparable.Japan's Nikkie was around 2000-3000 when the bull run started but went on to make 39000!Even many are comparing with housing bubble of ours with Japan but that also seems to me not possible.There is going to be some price correction in Real Estate and we are seeing them already but I am atleast not seeing the rerun of Japan Asset disaster.We still have a long way to go in comparision to Japan.
According to my experinace we have seen much bigger percentage upmove then we have seen in recent one....In 982 sensex was 370 and from thereon we have made a high of 4565 in Harshad Mehta Bull run in 1992 .i.e. in 10 yrs.That was a 1133% jump.While from 2800 in 2003 we saw a Bull run of 21k that is 650 %, means if we go by the history then we should end at atleast 31k and not less which is atleast 1133% from 2800 which our sensex made a low in 2001 when the Twin Towers of USA were attacked and were annihilated by extremist.That is far far lower then the previous one.Well, all these statistic doesn't matter to me.These are all figures and I personally do not put much weightage on all these , but this is for those who think like that.I am just gicving them the figures.
There is where the Charts comes.The Fibbocini levels.It says that market use to make a bottom at 61% level of the previous high.But it made a low of 7600 which is 63.8%! Now what new taregts technicals gives I would like to know.It has breached the 61% retracement.Now what! That is broken...Someone has send me a list how much stocks were borrowed from FII's to hammer individual stocks.e.g In ICICI, borrowed stocks and get hammered is over 1 cr shares.Now one need to think what can be other figures for other stocks and what can happen if these shorts whenever they will get covered.Maybe market broke the Fibocini levels of 61% and hence they must be trying to say that we will imbibe Japan as it also did the same.Time will only tell that....
As I have written here in past that we can see more good growth not before by June 2009 as I think that much time will be taken for the economy to bounce back for Int rate to come down ,CRR back to normal, Inflation back to 5-6 % etc.But as I have been writing here that market use to discount 6-9 months ahead, I can say that market is discounting next June 09 qr results in a way that world is going in for a recession and that is already discounted....and that is what RJ has spoken at Diwali meet along with SS and SA.
Many can say that it was FII's money that is why we saw a Bull run.Agreed .But they have pulled out some $8-9 bn.Means we need $20 bn to surpass the previous high and that is no big deal for India.When $1500 bn is lying dorment in Swiss Bank and the saving rate is highest in world , just 1.5% of Swiss money can propel our market to newer highs and hence I think for $20 bn investment in our market domestically is not a big deal. We actually don't need FII's.
Well,I have recently bought Gas for $2.13/Gallon in USA for my car .I very clearly remember that the highest price I paid for Gas in South Carolina was $4.59 when I came in SC 3 months back and that too in state where the Gas prices are almost the lowest in entire USA.So the gas in America is down below 50% and that makes sense.Makes sense in the way that if Gas prices are down by 50% , means prices of Milk and grosseries will come down and it has already come down.Milk which was at one time was $5/gl is now at $3.39/gl.That is how America's politicians works and how FED decides.This is going to help the US economy in great way.The consumption will remain in tact now they will have to deal with Hosuing sector debacle.But with $700 bn bill passed the credit crises should ease a lot once the money are poured in the system.People forgets that US has starlwarts like Warren Buffet and likes of Bill Gates who always think for the betterment of America.Their advice will and should come handy whoever wins tommorow.
Warren Buffet has already said that those having Cash will be at loss.This the time to buy Dow stocks. I can will only say that those predicting of US economy falling down can prove wrong.
People are still sceptic of 1929 scenario but no one know what happened in 1929.I have written this many times here.Vallabh Bhansali also said the same in his lastest interview.
I suggest to read Valabh Bhansali interview again and again and also the Diwali interview of RJ, SA and SS .Read them carefully and try to digest what all are saying and try to think whose thinking is rationale.
My thinking goes with VB and RJ.
Rest is your calls.
I am not a Pundit.I am here to share my views.I would only write at the end of my post that just try to reread my old post on CRR hike and Int rate hike, RBI Policy and my post on "Short selling is another name of insider trading" and try to see whether that made any sense.....Just go back and see what I have written in past.
I had proved wrong in predicting the market direction in last 7-8 months.So take your own call....
We have seen a "V" shape bounce back in our market.I have written bounce back because we may be not out of woods still.But seems 7600 bottom should act as a good resistance.
Let us think how is India's scenario.
According to me our growth is intact.I can't believe that our growth is hampered and will not come in years to come according to what some use to have a view.
There is no reason how the infra sector,Agri sector will not grow.There is still lots to be done.Our roads,Railways,Agriculture needs lots of capital investment and lots of investment is still to be done.Maybe due to higher int rate and CRR hike in past money is not coming cheap but that scenario is reversing and we should be back at 5-6% Int rate and less inflation around 5-6% within a year.
I had written many times here and I write it again that the prices we are seeing is because of FII's selling.Agreed that economic growth can slow down to 6-7 GDP but still we are much much higher then any other countries in the world except China.Atleast I can say that if Jan 08 prices were inflated one and they were in excess of 40-50%, then prices which are just 10% of high is also not acceptable.Yes, one may say that what makes the difference if I say unacceptable, they are there.But many prices has gone down even by 95% from high even though the results had come good.Hundreds of stocks are available at half the BV and many are available at 1-2P/E.
As I wrote this is a life time phenomenone that such a credit crises has happened and hence it is a life time opportunity as well to buy stocks as well.
I personally believe that those having even 3-5 lacs will make a FORTUNE IN NEXT 2-3 YEARS.The return can be as big as 1000% , means 10 times from the current prices.The credit crunch is not going to get eased so soon and every rally will be met with selling.But actually I am seeing a different scenario in next 2-3 months , viz after Feb 2009...and it can start even now.
The general feeling uptill now for investors was SELL ON EVERY RALLY but now those who have money should be buying at every fall.These are known as smart money.Those are rich with CASH.New breed of investorss will come and they will take new position. These has happened in every new bull run.
But it is for sure that we are going to bounce back sooner then later.Atleast I believe that it can't be 10 long years of hibernation...Indian market has never remained in Bear Phase that too long..that is too long a period.Many are comparing our bullish run with Japan but that is also not comparable.Japan's Nikkie was around 2000-3000 when the bull run started but went on to make 39000!Even many are comparing with housing bubble of ours with Japan but that also seems to me not possible.There is going to be some price correction in Real Estate and we are seeing them already but I am atleast not seeing the rerun of Japan Asset disaster.We still have a long way to go in comparision to Japan.
According to my experinace we have seen much bigger percentage upmove then we have seen in recent one....In 982 sensex was 370 and from thereon we have made a high of 4565 in Harshad Mehta Bull run in 1992 .i.e. in 10 yrs.That was a 1133% jump.While from 2800 in 2003 we saw a Bull run of 21k that is 650 %, means if we go by the history then we should end at atleast 31k and not less which is atleast 1133% from 2800 which our sensex made a low in 2001 when the Twin Towers of USA were attacked and were annihilated by extremist.That is far far lower then the previous one.Well, all these statistic doesn't matter to me.These are all figures and I personally do not put much weightage on all these , but this is for those who think like that.I am just gicving them the figures.
There is where the Charts comes.The Fibbocini levels.It says that market use to make a bottom at 61% level of the previous high.But it made a low of 7600 which is 63.8%! Now what new taregts technicals gives I would like to know.It has breached the 61% retracement.Now what! That is broken...Someone has send me a list how much stocks were borrowed from FII's to hammer individual stocks.e.g In ICICI, borrowed stocks and get hammered is over 1 cr shares.Now one need to think what can be other figures for other stocks and what can happen if these shorts whenever they will get covered.Maybe market broke the Fibocini levels of 61% and hence they must be trying to say that we will imbibe Japan as it also did the same.Time will only tell that....
As I have written here in past that we can see more good growth not before by June 2009 as I think that much time will be taken for the economy to bounce back for Int rate to come down ,CRR back to normal, Inflation back to 5-6 % etc.But as I have been writing here that market use to discount 6-9 months ahead, I can say that market is discounting next June 09 qr results in a way that world is going in for a recession and that is already discounted....and that is what RJ has spoken at Diwali meet along with SS and SA.
Many can say that it was FII's money that is why we saw a Bull run.Agreed .But they have pulled out some $8-9 bn.Means we need $20 bn to surpass the previous high and that is no big deal for India.When $1500 bn is lying dorment in Swiss Bank and the saving rate is highest in world , just 1.5% of Swiss money can propel our market to newer highs and hence I think for $20 bn investment in our market domestically is not a big deal. We actually don't need FII's.
Well,I have recently bought Gas for $2.13/Gallon in USA for my car .I very clearly remember that the highest price I paid for Gas in South Carolina was $4.59 when I came in SC 3 months back and that too in state where the Gas prices are almost the lowest in entire USA.So the gas in America is down below 50% and that makes sense.Makes sense in the way that if Gas prices are down by 50% , means prices of Milk and grosseries will come down and it has already come down.Milk which was at one time was $5/gl is now at $3.39/gl.That is how America's politicians works and how FED decides.This is going to help the US economy in great way.The consumption will remain in tact now they will have to deal with Hosuing sector debacle.But with $700 bn bill passed the credit crises should ease a lot once the money are poured in the system.People forgets that US has starlwarts like Warren Buffet and likes of Bill Gates who always think for the betterment of America.Their advice will and should come handy whoever wins tommorow.
Warren Buffet has already said that those having Cash will be at loss.This the time to buy Dow stocks. I can will only say that those predicting of US economy falling down can prove wrong.
People are still sceptic of 1929 scenario but no one know what happened in 1929.I have written this many times here.Vallabh Bhansali also said the same in his lastest interview.
I suggest to read Valabh Bhansali interview again and again and also the Diwali interview of RJ, SA and SS .Read them carefully and try to digest what all are saying and try to think whose thinking is rationale.
My thinking goes with VB and RJ.
Rest is your calls.
I am not a Pundit.I am here to share my views.I would only write at the end of my post that just try to reread my old post on CRR hike and Int rate hike, RBI Policy and my post on "Short selling is another name of insider trading" and try to see whether that made any sense.....Just go back and see what I have written in past.
I had proved wrong in predicting the market direction in last 7-8 months.So take your own call....
Saturday, November 1, 2008
US Stocks..........OXY......Occidental Petroleum Corporation .. cmp...$54...
Friends(Hiren),
I gave a call somewhere else of ....Occidental Petroleum Corporation (OXY) at $44.43 on Oct 28...and it is up by $11 in 3 days.....
The reason for recomending was it has an EPS of 8 and was available at just 5P/E and it actually rallied to $55 in 3 days....one of my frined wrote me there at that time,that it is looking good over $55 as per technicals....
So take your own call.
I still feel that PKD and GEOI are looking great to me......
I gave a call somewhere else of ....Occidental Petroleum Corporation (OXY) at $44.43 on Oct 28...and it is up by $11 in 3 days.....
The reason for recomending was it has an EPS of 8 and was available at just 5P/E and it actually rallied to $55 in 3 days....one of my frined wrote me there at that time,that it is looking good over $55 as per technicals....
So take your own call.
I still feel that PKD and GEOI are looking great to me......
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