Saturday, October 29, 2011

One more proof that recovery in USA is on its way........Beware BEARS.....Bulls are making a comeback.....

US Economy Surpasses Pre-Recession Level

It has taken 15 quarters for the economy to recover, which is 3 times longer than avg


The value of goods and services produced in the US surpassed its pre-recession level after 15 quarters, taking three times longer than the average for 10 previous re
coveries since World War II.
Gross domestic product expanded at a 2.5% annual rate in the period from July through September, the Commerce Department reported on Thursday, the fastest pace in a year and up from 1.3% in the prior threemonth period. After adjusting for inflation, GDP climbed to $13.35 trillion last quarter, topping the $13.33 trillion peak reached in the last three months of 2007.
“The American economy finally has accomplished the recovery and has now entered the expansion,” said Neal Soss, chief economist with Credit Suisse in New York, who
was an aide to former Federal Reserve Chairman Paul Volcker. “But the growth is clearly too slow to solve the most significant problems the economy faces: jobs and getting the public budgets under control.” Consumers reduced savings to boost purchases and companies stepped up investment in equipment and software, even as the biggest drop in incomes in two years raises concerns about whether the spending increase will continue. The number of Americans with jobs last month, 131.3 million, was lower than the 138 million workers in December 2007, when the 18-month recession began, according to Labor Department data.
The US economy expanded at an average 0.9% rate in the first half of 2011, the worst performance since the recovery began in June 2009. Growth needs to exceed 2.5% to reduce the jobless rate, according to estimates by Kurt Karl, chief US economist at Swiss RE in New York. Unemployment stuck around 9% or higher for 30 months explains why Federal Reserve policy makers, who meet next week, and the Obama administration are considering additional measures to boost the economy.


My comments:
My suggestion here for my readers are:

Look out for stocks which has given good nos this qr comparing with last yr qr or can give good nos for whole year then last year.The reason I am saying so is, when the global economy has slowed down,Inflation is at it's high, USA bleeding (means less consumption and hence less export orders),India GDP and IIP is down and still those Cos makes better profit then last year or last year qr then those Cos are ought to make better profit when tides will turn .
Here in India Int rate is about to peak out and with government looking for better policy, we are in for good times.That is what it looks like.......Bulls in India can make a comeback before anyone can have a clue of what is happening.......Our market has consolidated for a very long time and has taken excellent support at nifty 4700 which it looks now difficult to be broken.
And if there is short position in excess then the upmove will be equally sharp and huge.

 Flipkart which I discussed sometime back has caught the eyes of some FII's  and I am glad to see it too:

October 25, 2011, 11:09 AM IST

Flipkart earlier raised $31m in funding from Tiger Global Management and Accel Partners, which has a stake in Facebook.

Private equity firms Carlyle and General Atlantic are in talks to jointly invest about $150 million to $200 million in online retailer Flipkart, according to two sources with knowledge of the deal.
Although the Indian online retailing market is small now, few people doubt that e-commerce will one day be big business in India, a country of 1.2 billion people whose rapid economic growth is adding millions to the middle class every year.
The Indian e-commerce market is expected to grow by 47 per cent to more than Rs 460 billion ($9.2 billion) this year, according to the industry group Internet and Mobile Association of India.
US private equity firms Carlyle and General Atlantic will pick up a minority stake in Flipkart after their investment, said two sources with direct knowledge, declining to be named as the talks are not public yet.
A deal is being held up due to differences in valuation between Flipkart and the investors, one of the sources told Reuters.
Sachin Bansal, chief executive and co-founder of Flipkart, declined to comment when reached by Reuters. Carlyle also declined to comment, while General Atlantic did not immediately respond to mail seeking comment.
Flipkart is India’s biggest online bookseller, with over 10 million titles distributed from warehouses in five cities. It also sells mobile phones, appliances, gaming consoles, music and movies.
It generated $11 million in sales last financial year, and expects revenue to cross $100 million this year. It is targeting $1 billion in revenue by 2015.
Bangalore-based Flipkart had earlier raised $31 million in funding from US venture capital firms Tiger Global Management and Accel Partners, which has a stake in Facebook.
The company, set up by two software developers in 2007, got its first round of funding worth $1 million by Accel Partners in 2009, followed by Tiger Global’s $30 million investment in two tranches.
The possible fourth round of funding by Carlyle and General Atlantic would help Flipkart to boost its business network ahead of Amazon’s entry into Asia’s third-largest economy, one of the sources said.
Amazon, the world’s top online retailer, has no formal presence in India yet, though a source said last month it was mulling plans to set up retail operations in the country next year.
Private equity investment in India is accelerating, as rising borrowing costs and dormant public markets push firms to cut deals with buyout firms in return for much-needed cash injections.
Indian companies signed private equity deals worth $3.2 billion in the first nine months of 2011, up from nearly $2 billion in the same period last year, according to data from Thomson Reuters.
The deals include India’s second-biggest private equity investment of the year, with Apollo Global Management injecting around $500 million in Indian steel pipe maker Welspun group in June.
India is flooded with private equity firms looking for investments — from global buyout shops like Blackstone, 3i Group and KKR, to homegrown firms like IDFC and IFCI.


  1. Dear Rajeev, I am back with my questions. I feel sorry for repeatedly distrurbing you but your blog is the only place where I can get my doubts cleared.
    I want to invest in Petronet LNG with a long term perspective of 5-10 years. Once invested I will stick to it and will not sell. But before making such a long term commitment I want to be double sure that I am investing in the right stock. I researched a lot and I have few Pros and Cons about this stock and am not able to decide what to do.

    1. As such the business model is very good, but the core business is to import LNG to meet domestic demand. Currently this seems to be profitable but once RIL-BP deal works out and the KG-6 productions starts, then RIL will provide the same gas at $4.2-$5.6 per mmbtu whereas LNG is almost twice the cost of this. RIL-BP wants to market the gas as well, it means they will be the biggest rival of Petronet LNG. Everyone knows that by hook or crook RIL will supress its rivals. What will happen if this comes out true.

    2. Some say that despite of RIL ramping up production but the domestic demand is so huge that india will need to import gas, but then will petronet lng be able to utilize the full capacity which it has built after RIL taking away 80 mmscd demand. How much will be left for petronet to fulfill.

    3. Should I take a medium term call (upto the time till RIL is falling short of output) or is it worth taking it for 10 years.

  2. Hi Sukanya,
    I am here for my readers and if I have answer, I always reply unless it is not a repeated question.
    Well, Petronet LNG is an excellent Co and the infrastructure Petronet possess even Ril will be faroff nearing it.Ofcourse that is my view.
    So you don't need to worry on that front.
    Ofcourse keeping tab what is happening in that sector is very important.
    Sukanya, buy stock like Seimens, L&T, Bharat Forge, ABB etc where one never goes wrong and one can hold for 10 yrs and more.These are evergreen Cos.I donno but I have a great liking for Seimens Ltd.I love this Co.

  3. Thanks a lot Rajeev for the reply and also for the suggestions.

  4. Dear rajeevji

    Ur list is too long and im new to shares so can u please give a list of 5-7 stocks which at present i can buy. and buying will be my decision and i may not tell anything to u even it goes wrong.

    Waiting for ur reply


  5. Hai Rajeev

    How are you?

    I need your opinion regarding ennore coke which was one of your long term picks. It touches Rs 136/- and falls to Rs.31/- in one year. Do you believe its time to buy at this rate or waite for further downside.


    Vishnu R Nair

    Happy Investing

  6. Hi Harman,
    I feel that Tips Ind, Pitti Lamination, India Glycols, Pondy Oxide, Cochin Mineral, Indag Rubber are looking good at this juncture.

  7. Vishnu,
    As Ennore Coke has not performed , you don't need to buy or average it out.
    Buy Pondy Oxide, Pitti Lamination,Sree Rayal sema Hi Strength Hypo, Tips Ind etc.....

  8. Hi Sukanya,
    Have a look at some stocks which I recently gave to someone else.As I use to write, read all my replies.One can always find something there.
    I would also suggest you and all to buy IFCI which I use to recomend here time and again.
    Even Central Bank is looking good.

  9. Dear rajeevji

    Now days 1 stock everyone is talking about is AVANTI FEEDS can u give ur views regarding the same as every other person is recommending / promoting the same. is it just a trap??



  10. Thanks Rajeev for remembering my question and giving suggestion. Will look for them. Thanks again.

  11. Harman,
    Anvati Feeds has come out with excellent results and I also read that all and sundry has started recomending it.
    I am actually not tracking this sector but what I will say is Avanti seeds is a good Co....