You know who said this?
“ When we were young kids growing up in
America, we were told to eat our vegetables at
dinner and not leave them. Mothers said, think of
the starving children in India and finish the
dinner.”
And now I tell my children: 'Finish your
homework. Think of the children in India who
would make you starve, if you don't?'
THE WORLD IS FLAT
- BY THOMAS FRIEDMAN
Indian Market Maturing?
It is real nice to see that today market didn't mimic DOW.
Our market is coming out of the hoodoo of DOW movement and the achilles hills for our market was it use to mimic down movement and not the upside of the Dow.But I like this movement.It says , one can't take clue from overseas market and dump the stocks.Otherwise what people use to do was , just see how Dow has fared previous night and short sell heavily in Indian market and market will oblige them veery gleefully as if Dow was to go up next day, our market do not use to go up and hence BEARS use to have field day as they have not to worry about Dow going up as Sensex would not go up if Dow goes up.
Now the scenario has changed.
The present new trend says that Indian market will not go down if Dow goes down.Indian market will see if the fall is real.Means there is really big damage in US economy as it has been seen that Dow tanks one day and goes up double next day.Bulls have seen that Bears breaks the market when Dow goes down but market do not come up when Dow goes up.Bears use to sell saying US economy is under recession and India will be affected but market do not com up on Dow rally.So now the rein of the Indian market is in the hand of Bulls who saw the real contrast and see the anamoly that Bears are taking undue liberty to break the market.
More over Bulls got the solace that individual stocks has fallen down so low , by over 50-60% that there was actually no room to further go down and the only way was to go up..... as almost all stocks are available at 5-6-7 P/E.......
So henceforth, our market will not try to mimick Dow movement.But will wait for more bad news for 3-4 days and if Dow still go down for more days may Sensex go down.But if US economy bounceback then just imagine what can happen and according to me chances are great in second half that US economy can bounce back .
It is the dollar value that is depreciating, that Oil/gas is costlier in USA which is $3.3/gallon.....but as soon as Dollar aprreciate Gas prices will come down and so will Inflation in US because it is obvious that as soon as the Gas price will come down, consumer goods price etc will also come down and inflation will be tamed.
No wonder Warren Bufffet is having no anxiety on US economy.I am having a bullish stance for US economy.I again reiterate that 16,000 Dow is possible by Dec 2008!Let us keep the fingures crossed.
As I have written in my last post, 19k we can see in May/June......
Thursday, April 24, 2008
Tuesday, April 22, 2008
Market is making good comeback.....
As I wrote , market is making a good comeback.
There was actually no room for the market to go down.I wrote that here very categorically that market has moved down by over 50% , ofcoure individual stocks and there is no use selling them now.Instead it is a buy time....and gave a list here and I think allmost all are up from 20% to 80%......and all these return has come in just a month......that is outstanding by any parametres...
The first sign was seen when market shrugged off some real bad news and went up...which I also pointed out here.......and again on Monday it ignored CRR hike and went up.It means value buying is happening.....so getin before the whole world gets in....
Ignoring CRR hike which was 50 point basis...was a terrific effort from the bulls and they have been abl to keep the upperhand on Monday.
I think once it touches 5300 nifty then I think it will be very difficult for the market to break 14700.....as if we reaches 5300 means over 17300 then any correction of 2000 points in Sensex will be enough again to bounce back from that level, which come at 15300 level....
Well,as I said early market should recover ......and we may see sensex crossing 17200 and going much higher around 19k level............by May/June.....
But I still feel it is time to buy stocks which are still available at discount from the pevious high and have good fundamentals......
Readers has asked me about Ispat Ind and I have answered it reasonably.But none seems convinced.....but if one is tracking then it has given a positive breakout and should move this week also......as it is now the only stocks which has to move .....as Nagarjun Ferti,Tata Tele,Chambal Ferti ,JP Hydro and likes has already moved....Ispat is yet to move.....and I am sure it will move...
Well, I am giving two low price stocks.One is Super Spinning and other is Manali Petro.
Well, Manali Petro though has given bad results has declared 10% Div and that shows the confidence of management in it.....
On Super Spinning though it is making loss it has a very good management.Super Spinning can become a dark horse anytime.
I think both these stocks can double in a year time.....
as usual I would write , do due diligence before buying anything...I can only show the way...to go through it depends on you.......I can point the fingure, can't held your fingures and pass you through...
There was actually no room for the market to go down.I wrote that here very categorically that market has moved down by over 50% , ofcoure individual stocks and there is no use selling them now.Instead it is a buy time....and gave a list here and I think allmost all are up from 20% to 80%......and all these return has come in just a month......that is outstanding by any parametres...
The first sign was seen when market shrugged off some real bad news and went up...which I also pointed out here.......and again on Monday it ignored CRR hike and went up.It means value buying is happening.....so getin before the whole world gets in....
Ignoring CRR hike which was 50 point basis...was a terrific effort from the bulls and they have been abl to keep the upperhand on Monday.
I think once it touches 5300 nifty then I think it will be very difficult for the market to break 14700.....as if we reaches 5300 means over 17300 then any correction of 2000 points in Sensex will be enough again to bounce back from that level, which come at 15300 level....
Well,as I said early market should recover ......and we may see sensex crossing 17200 and going much higher around 19k level............by May/June.....
But I still feel it is time to buy stocks which are still available at discount from the pevious high and have good fundamentals......
Readers has asked me about Ispat Ind and I have answered it reasonably.But none seems convinced.....but if one is tracking then it has given a positive breakout and should move this week also......as it is now the only stocks which has to move .....as Nagarjun Ferti,Tata Tele,Chambal Ferti ,JP Hydro and likes has already moved....Ispat is yet to move.....and I am sure it will move...
Well, I am giving two low price stocks.One is Super Spinning and other is Manali Petro.
Well, Manali Petro though has given bad results has declared 10% Div and that shows the confidence of management in it.....
On Super Spinning though it is making loss it has a very good management.Super Spinning can become a dark horse anytime.
I think both these stocks can double in a year time.....
as usual I would write , do due diligence before buying anything...I can only show the way...to go through it depends on you.......I can point the fingure, can't held your fingures and pass you through...
Saturday, April 19, 2008
What Warren Buffets thinks ...............
What Warren thinks...
With Wall Street in chaos, Fortune naturally went to Omaha looking for wisdom. Warren Buffett talks about the economy, the credit crisis, Bear Stearns, and more.
By Nicholas Varchaver,
April 14, 2008: 10:23 AM EDT
(Fortune Magazine) -- If Berkshire Hathaway's annual meeting, scheduled for May 3 this year, is known as the Woodstock of Capitalism, then perhaps this is the equivalent of Bob Dylan playing a private show in his own house: Some 15 times a year Berkshire CEO Warren Buffett invites a group of business students for an intensive day of learning. The students tour one or two of the company's businesses and then proceed to Berkshire (BRKA, Fortune 500) headquarters in downtown Omaha, where Buffett opens the floor to two hours of questions and answers. Later everyone repairs to one of his favorite restaurants, where he treats them to lunch and root beer floats. Finally, each student gets the chance to pose for a photo with Buffett.
In early April the megabillionaire hosted 150 students from the University of Pennsylvania's Wharton School (which Buffett attended) and offered Fortune the rare opportunity to sit in as he expounded on everything from the Bear Stearns (BSC, Fortune 500) bailout to the prognosis for the economy to whether he'd rather be CEO of GE (GE, Fortune 500) - or a paperboy. What follows are edited excerpts from his question-and-answer session with the students, his lunchtime chat with the Whartonites over chicken parmigiana at Piccolo Pete's, and an interview with Fortune in his office.
Buffett began by welcoming the students with an array of Coca-Cola products. ("Berkshire owns a little over 8% of Coke, so we get the profit on one out of 12 cans. I don't care whether you drink it, but just open the cans, if you will.") He then plunged into weightier matters:
Before we start in on questions, I would like to tell you about one thing going on recently. It may have some meaning to you if you're still being taught efficient-market theory, which was standard procedure 25 years ago. But we've had a recent illustration of why the theory is misguided. In the past seven or eight or nine weeks, Berkshire has built up a position in auction-rate securities [bonds whose interest rates are periodically reset at auction; for more, see box on page 74] of about $4 billion. And what we have seen there is really quite phenomenal. Every day we get bid lists. The fascinating thing is that on these bid lists, frequently the same credit will appear more than once.
Here's one from yesterday. We bid on this particular issue - this happens to be Citizens Insurance, which is a creature of the state of Florida. It was set up to take care of hurricane insurance, and it's backed by premium taxes, and if they have a big hurricane and the fund becomes inadequate, they raise the premium taxes. There's nothing wrong with the credit. So we bid on three different Citizens securities that day. We got one bid at an 11.33% interest rate. One that we didn't buy went for 9.87%, and one went for 6.0%. It's the same bond, the same time, the same dealer. And a big issue. This is not some little anomaly, as they like to say in academic circles every time they find something that disagrees with their theory.
So wild things happen in the markets. And the markets have not gotten more rational over the years. They've become more followed. But when people panic, when fear takes over, or when greed takes over, people react just as irrationally as they have in the past.
1)Do you think the U.S. financial markets are losing their competitive edge? And what's the right balance between confidence-inspiring standards and ...
... between regulation and the Wild West? Well, I don't think we're losing our edge. I mean, there are costs to Sarbanes-Oxley, some of which are wasted. But they're not huge relative to the $20 trillion in total market value. I think we've got fabulous capital markets in this country, and they get screwed up often enough to make them even more fabulous. I mean, you don't want a capital market that functions perfectly if you're in my business. People continue to do foolish things no matter what the regulation is, and they always will. There are significant limits to what regulation can accomplish. As a dramatic illustration, take two of the biggest accounting disasters in the past ten years: Freddie Mac and Fannie Mae. We're talking billions and billions of dollars of misstatements at both places.
Now, these are two incredibly important institutions. I mean, they accounted for over 40% of the mortgage flow a few years back. Right now I think they're up to 70%. They're quasi-governmental in nature. So the government set up an organization called OFHEO. I'm not sure what all the letters stand for. [Note to Warren: They stand for Office of Federal Housing Enterprise Oversight.] But if you go to OFHEO's website, you'll find that its purpose was to just watch over these two companies. OFHEO had 200 employees. Their job was simply to look at two companies and say, "Are these guys behaving like they're supposed to?" And of course what happened were two of the greatest accounting misstatements in history while these 200 people had their jobs. It's incredible. I mean, two for two!
It's very, very, very hard to regulate people. If I were appointed a new regulator - if you gave me 100 of the smartest people you can imagine to work for me, and every day I got the positions from the biggest institutions, all their derivative positions, all their stock positions and currency positions, I wouldn't be able to tell you how they were doing. It's very, very hard to regulate when you get into very complex instruments where you've got hundreds of counterparties. The counterparty behavior and risk was a big part of why the Treasury and the Fed felt that they had to move in over a weekend at Bear Stearns. And I think they were right to do it, incidentally. Nobody knew what would be unleashed when you had thousands of counterparties with, I read someplace, contracts with a $14 trillion notional value. Those people would have tried to unwind all those contracts if there had been a bankruptcy. What that would have done to the markets, what that would have done to other counterparties in turn - it gets very, very complicated. So regulating is an important part of the system. The efficacy of it is really tough.
At Piccolo Pete's, where he has dined with everyone from Microsoft's Bill Gates to the New York Yankees' Alex Rodriguez, Buffett sat at a table with 12 Whartonites and bantered over many topics.
2)How do you feel about the election?
Way before they both filed, I told Hillary that I would support her if she ran, and I told Barack I would support him if he ran. So I am now a political bigamist. But I feel either would be great. And actually, I feel that if a Republican wins, John McCain would be the one I would prefer. I think we've got three unusually good candidates this time.
3)They're all moderate in their approach.
Well, the one we don't know for sure about is Barack. On the other hand, he has the chance to be the most transformational too.
a)I know you had a paper route. Was that your first job?
Well, I worked for my grandfather, which was really tough, in the [family] grocery store. But if you gave me the choice of being CEO of General Electric or IBM or General Motors, you name it, or delivering papers, I would deliver papers. I would. I enjoyed doing that. I can think about what I want to think. I don't have to do anything I don't want to do. It might be wonderful to be head of GE, and Jeff Immelt is a friend of mine. And he's a great guy. But think of all the things he has to do whether he wants to do them or not.
4)How do you get your ideas?
I just read. I read all day. I mean, we put $500 million in PetroChina. All I did was read the annual report. [Editor's note: Berkshire purchased the shares five years ago and sold them in 2007 for $4 billion.]
(That is what I do exactly.I read a lot....not claiming I am Warren, but that is the only way)
5)What advice will you give to someone who is not a professional investor? Where should they put their money?
Well, if they're not going to be an active investor - and very few should try to do that - then they should just stay with index funds. Any low-cost index fund. And they should buy it over time. They're not going to be able to pick the right price and the right time. What they want to do is avoid the wrong price and wrong stock. You just make sure you own a piece of American business, and you don't buy all at one time.
When Buffett said he was ready to pose for photographs, all 150 students stampeded out of the room within seconds and formed a massive line. For the next half hour, each one took his or her turn with Buffett, often in hammy poses (wrestling for his wallet was a favorite). Then, as he started to leave, a 77-year-old's version of A Hard Day's Night ensued, with a pack of 30 students trailing him to his gold Cadillac. Once free, he drove this Fortune writer back to his office and continued fielding questions.
6)How does the current turmoil stack up against past crises?
Well, that's hard to say. Every one has so many variables in it. But there's no question that this time there's extreme leveraging and in some cases the extreme prices of residential housing or buyouts. You've got $20 trillion of residential real estate and you've got $11 trillion of mortgages, and a lot of that does not have a problem, but a lot of it does. In 2006 you had $330 billion of cash taken out in mortgage refinancings in the United States. That's a hell of a lot - I mean, we talk about having $150 billion of stimulus now, but that was $330 billion of stimulus. And that's just from prime mortgages. That's not from subprime mortgages. So leveraging up was one hell of a stimulus for the economy.
7)If that was one hell of a stimulus, do you think the $150 billion government stimulus plan will make an impact?
Well, it's $150 billion more than we'd have otherwise. But it's not like we haven't had stimulus. And then the simultaneous, more or less, LBO boom, which was called private equity this time. The abuses keep coming back - and the terms got terrible and all that. You've got a banking system that's hung up with lots of that. You've got a mortgage industry that's deleveraging, and it's going to be painful.
8)The scenario you're describing suggests we're a long way from turning a corner.
I think so. I mean, it seems everybody says it'll be short and shallow, but it looks like it's just the opposite. You know, deleveraging by its nature takes a lot of time, a lot of pain. And the consequences kind of roll through in different ways. Now, I don't invest a dime based on macro forecasts, so I don't think people should sell stocks because of that. I also don't think they should buy stocks because of that.
9)Your OFHEO example implies you're not too optimistic about regulation.
Finance has gotten so complex, with so much interdependency. I argued with Alan Greenspan some about this at [Washington Post chairman] Don Graham's dinner. He would say that you've spread risk throughout the world by all these instruments, and now you didn't have it all concentrated in your banks. But what you've done is you've interconnected the solvency of institutions to a degree that probably nobody anticipated. And it's very hard to evaluate. If Bear Stearns had not had a derivatives book, my guess is the Fed wouldn't have had to do what it did.
10)Do you find it striking that banks keep looking into their investments and not knowing what they have?
I read a few prospectuses for residential-mortgage-backed securities - mortgages, thousands of mortgages backing them, and then those all tranched into maybe 30 slices. You create a CDO by taking one of the lower tranches of that one and 50 others like it. Now if you're going to understand that CDO, you've got 50-times-300 pages to read, it's 15,000. If you take one of the lower tranches of the CDO and take 50 of those and create a CDO squared, you're now up to 750,000 pages to read to understand one security. I mean, it can't be done. When you start buying tranches of other instruments, nobody knows what the hell they're doing. It's ridiculous. And of course, you took a lower tranche of a mortgage-backed security and did 100 of those and thought you were diversifying risk. Hell, they're all subject to the same thing. I mean, it may be a little different whether they're in California or Nebraska, but the idea that this is uncorrelated risk and therefore you can take the CDO and call the top 50% of it super-senior - it isn't super-senior or anything. It's a bunch of juniors all put together. And the juniors all correlate.
11)If big financial institutions don't seem to know what's in their portfolios, how will investors ever know when it's safe?
They can't, they can't. They've got to, in effect, try to read the DNA of the people running the companies. But I say that in any large financial organization, the CEO has to be the chief risk officer. I'm the chief risk officer at Berkshire. I think I know my limits in terms of how much I can sort of process. And the worst thing you can have is models and spreadsheets. I mean, at Salomon, they had all these models, and you know, they fell apart.
12)What should we say to investors now?
The answer is you don't want investors to think that what they read today is important in terms of their investment strategy. Their investment strategy should factor in that (a) if you knew what was going to happen in the economy, you still wouldn't necessarily know what was going to happen in the stock market. And (b) they can't pick stocks that are better than average. Stocks are a good thing to own over time. There's only two things you can do wrong: You can buy the wrong ones, and you can buy or sell them at the wrong time. And the truth is you never need to sell them, basically. But they could buy a cross section of American industry, and if a cross section of American industry doesn't work, certainly trying to pick the little beauties here and there isn't going to work either. Then they just have to worry about getting greedy. You know, I always say you should get greedy when others are fearful and fearful when others are greedy. But that's too much to expect. Of course, you shouldn't get greedy when others get greedy and fearful when others get fearful. At a minimum, try to stay away from that.
13)By your rule, now seems like a good time to be greedy. People are pretty fearful.
You're right. They are going in that direction. That's why stocks are cheaper. Stocks are a better buy today than they were a year ago. Or three years ago.
14)But you're still bullish about the U.S. for the long term?
The American economy is going to do fine. But it won't do fine every year and every week and every month. I mean, if you don't believe that, forget about buying stocks anyway. But it stands to reason. I mean, we get more productive every year, you know. It's a positive-sum game, long term. And the only way an investor can get killed is by high fees or by trying to outsmart the market.
My Commnets:
I hope this dialoge between students and Warren Buffets will give ample food for thinking to those who are thinking that US economy is going to dusbin or almost at the verge of collapase.
I would also like to see that our biggest Bear of Indian Marke and my beloved one too, as I feel that if there is no Bear there can't be be any Bull...., that Shankar Sharma also reads this and take a clue , though my inner feeling remains that he do not read this anywhere, otherwise who will be BEAR in our market!
With Wall Street in chaos, Fortune naturally went to Omaha looking for wisdom. Warren Buffett talks about the economy, the credit crisis, Bear Stearns, and more.
By Nicholas Varchaver,
April 14, 2008: 10:23 AM EDT
(Fortune Magazine) -- If Berkshire Hathaway's annual meeting, scheduled for May 3 this year, is known as the Woodstock of Capitalism, then perhaps this is the equivalent of Bob Dylan playing a private show in his own house: Some 15 times a year Berkshire CEO Warren Buffett invites a group of business students for an intensive day of learning. The students tour one or two of the company's businesses and then proceed to Berkshire (BRKA, Fortune 500) headquarters in downtown Omaha, where Buffett opens the floor to two hours of questions and answers. Later everyone repairs to one of his favorite restaurants, where he treats them to lunch and root beer floats. Finally, each student gets the chance to pose for a photo with Buffett.
In early April the megabillionaire hosted 150 students from the University of Pennsylvania's Wharton School (which Buffett attended) and offered Fortune the rare opportunity to sit in as he expounded on everything from the Bear Stearns (BSC, Fortune 500) bailout to the prognosis for the economy to whether he'd rather be CEO of GE (GE, Fortune 500) - or a paperboy. What follows are edited excerpts from his question-and-answer session with the students, his lunchtime chat with the Whartonites over chicken parmigiana at Piccolo Pete's, and an interview with Fortune in his office.
Buffett began by welcoming the students with an array of Coca-Cola products. ("Berkshire owns a little over 8% of Coke, so we get the profit on one out of 12 cans. I don't care whether you drink it, but just open the cans, if you will.") He then plunged into weightier matters:
Before we start in on questions, I would like to tell you about one thing going on recently. It may have some meaning to you if you're still being taught efficient-market theory, which was standard procedure 25 years ago. But we've had a recent illustration of why the theory is misguided. In the past seven or eight or nine weeks, Berkshire has built up a position in auction-rate securities [bonds whose interest rates are periodically reset at auction; for more, see box on page 74] of about $4 billion. And what we have seen there is really quite phenomenal. Every day we get bid lists. The fascinating thing is that on these bid lists, frequently the same credit will appear more than once.
Here's one from yesterday. We bid on this particular issue - this happens to be Citizens Insurance, which is a creature of the state of Florida. It was set up to take care of hurricane insurance, and it's backed by premium taxes, and if they have a big hurricane and the fund becomes inadequate, they raise the premium taxes. There's nothing wrong with the credit. So we bid on three different Citizens securities that day. We got one bid at an 11.33% interest rate. One that we didn't buy went for 9.87%, and one went for 6.0%. It's the same bond, the same time, the same dealer. And a big issue. This is not some little anomaly, as they like to say in academic circles every time they find something that disagrees with their theory.
So wild things happen in the markets. And the markets have not gotten more rational over the years. They've become more followed. But when people panic, when fear takes over, or when greed takes over, people react just as irrationally as they have in the past.
1)Do you think the U.S. financial markets are losing their competitive edge? And what's the right balance between confidence-inspiring standards and ...
... between regulation and the Wild West? Well, I don't think we're losing our edge. I mean, there are costs to Sarbanes-Oxley, some of which are wasted. But they're not huge relative to the $20 trillion in total market value. I think we've got fabulous capital markets in this country, and they get screwed up often enough to make them even more fabulous. I mean, you don't want a capital market that functions perfectly if you're in my business. People continue to do foolish things no matter what the regulation is, and they always will. There are significant limits to what regulation can accomplish. As a dramatic illustration, take two of the biggest accounting disasters in the past ten years: Freddie Mac and Fannie Mae. We're talking billions and billions of dollars of misstatements at both places.
Now, these are two incredibly important institutions. I mean, they accounted for over 40% of the mortgage flow a few years back. Right now I think they're up to 70%. They're quasi-governmental in nature. So the government set up an organization called OFHEO. I'm not sure what all the letters stand for. [Note to Warren: They stand for Office of Federal Housing Enterprise Oversight.] But if you go to OFHEO's website, you'll find that its purpose was to just watch over these two companies. OFHEO had 200 employees. Their job was simply to look at two companies and say, "Are these guys behaving like they're supposed to?" And of course what happened were two of the greatest accounting misstatements in history while these 200 people had their jobs. It's incredible. I mean, two for two!
It's very, very, very hard to regulate people. If I were appointed a new regulator - if you gave me 100 of the smartest people you can imagine to work for me, and every day I got the positions from the biggest institutions, all their derivative positions, all their stock positions and currency positions, I wouldn't be able to tell you how they were doing. It's very, very hard to regulate when you get into very complex instruments where you've got hundreds of counterparties. The counterparty behavior and risk was a big part of why the Treasury and the Fed felt that they had to move in over a weekend at Bear Stearns. And I think they were right to do it, incidentally. Nobody knew what would be unleashed when you had thousands of counterparties with, I read someplace, contracts with a $14 trillion notional value. Those people would have tried to unwind all those contracts if there had been a bankruptcy. What that would have done to the markets, what that would have done to other counterparties in turn - it gets very, very complicated. So regulating is an important part of the system. The efficacy of it is really tough.
At Piccolo Pete's, where he has dined with everyone from Microsoft's Bill Gates to the New York Yankees' Alex Rodriguez, Buffett sat at a table with 12 Whartonites and bantered over many topics.
2)How do you feel about the election?
Way before they both filed, I told Hillary that I would support her if she ran, and I told Barack I would support him if he ran. So I am now a political bigamist. But I feel either would be great. And actually, I feel that if a Republican wins, John McCain would be the one I would prefer. I think we've got three unusually good candidates this time.
3)They're all moderate in their approach.
Well, the one we don't know for sure about is Barack. On the other hand, he has the chance to be the most transformational too.
a)I know you had a paper route. Was that your first job?
Well, I worked for my grandfather, which was really tough, in the [family] grocery store. But if you gave me the choice of being CEO of General Electric or IBM or General Motors, you name it, or delivering papers, I would deliver papers. I would. I enjoyed doing that. I can think about what I want to think. I don't have to do anything I don't want to do. It might be wonderful to be head of GE, and Jeff Immelt is a friend of mine. And he's a great guy. But think of all the things he has to do whether he wants to do them or not.
4)How do you get your ideas?
I just read. I read all day. I mean, we put $500 million in PetroChina. All I did was read the annual report. [Editor's note: Berkshire purchased the shares five years ago and sold them in 2007 for $4 billion.]
(That is what I do exactly.I read a lot....not claiming I am Warren, but that is the only way)
5)What advice will you give to someone who is not a professional investor? Where should they put their money?
Well, if they're not going to be an active investor - and very few should try to do that - then they should just stay with index funds. Any low-cost index fund. And they should buy it over time. They're not going to be able to pick the right price and the right time. What they want to do is avoid the wrong price and wrong stock. You just make sure you own a piece of American business, and you don't buy all at one time.
When Buffett said he was ready to pose for photographs, all 150 students stampeded out of the room within seconds and formed a massive line. For the next half hour, each one took his or her turn with Buffett, often in hammy poses (wrestling for his wallet was a favorite). Then, as he started to leave, a 77-year-old's version of A Hard Day's Night ensued, with a pack of 30 students trailing him to his gold Cadillac. Once free, he drove this Fortune writer back to his office and continued fielding questions.
6)How does the current turmoil stack up against past crises?
Well, that's hard to say. Every one has so many variables in it. But there's no question that this time there's extreme leveraging and in some cases the extreme prices of residential housing or buyouts. You've got $20 trillion of residential real estate and you've got $11 trillion of mortgages, and a lot of that does not have a problem, but a lot of it does. In 2006 you had $330 billion of cash taken out in mortgage refinancings in the United States. That's a hell of a lot - I mean, we talk about having $150 billion of stimulus now, but that was $330 billion of stimulus. And that's just from prime mortgages. That's not from subprime mortgages. So leveraging up was one hell of a stimulus for the economy.
7)If that was one hell of a stimulus, do you think the $150 billion government stimulus plan will make an impact?
Well, it's $150 billion more than we'd have otherwise. But it's not like we haven't had stimulus. And then the simultaneous, more or less, LBO boom, which was called private equity this time. The abuses keep coming back - and the terms got terrible and all that. You've got a banking system that's hung up with lots of that. You've got a mortgage industry that's deleveraging, and it's going to be painful.
8)The scenario you're describing suggests we're a long way from turning a corner.
I think so. I mean, it seems everybody says it'll be short and shallow, but it looks like it's just the opposite. You know, deleveraging by its nature takes a lot of time, a lot of pain. And the consequences kind of roll through in different ways. Now, I don't invest a dime based on macro forecasts, so I don't think people should sell stocks because of that. I also don't think they should buy stocks because of that.
9)Your OFHEO example implies you're not too optimistic about regulation.
Finance has gotten so complex, with so much interdependency. I argued with Alan Greenspan some about this at [Washington Post chairman] Don Graham's dinner. He would say that you've spread risk throughout the world by all these instruments, and now you didn't have it all concentrated in your banks. But what you've done is you've interconnected the solvency of institutions to a degree that probably nobody anticipated. And it's very hard to evaluate. If Bear Stearns had not had a derivatives book, my guess is the Fed wouldn't have had to do what it did.
10)Do you find it striking that banks keep looking into their investments and not knowing what they have?
I read a few prospectuses for residential-mortgage-backed securities - mortgages, thousands of mortgages backing them, and then those all tranched into maybe 30 slices. You create a CDO by taking one of the lower tranches of that one and 50 others like it. Now if you're going to understand that CDO, you've got 50-times-300 pages to read, it's 15,000. If you take one of the lower tranches of the CDO and take 50 of those and create a CDO squared, you're now up to 750,000 pages to read to understand one security. I mean, it can't be done. When you start buying tranches of other instruments, nobody knows what the hell they're doing. It's ridiculous. And of course, you took a lower tranche of a mortgage-backed security and did 100 of those and thought you were diversifying risk. Hell, they're all subject to the same thing. I mean, it may be a little different whether they're in California or Nebraska, but the idea that this is uncorrelated risk and therefore you can take the CDO and call the top 50% of it super-senior - it isn't super-senior or anything. It's a bunch of juniors all put together. And the juniors all correlate.
11)If big financial institutions don't seem to know what's in their portfolios, how will investors ever know when it's safe?
They can't, they can't. They've got to, in effect, try to read the DNA of the people running the companies. But I say that in any large financial organization, the CEO has to be the chief risk officer. I'm the chief risk officer at Berkshire. I think I know my limits in terms of how much I can sort of process. And the worst thing you can have is models and spreadsheets. I mean, at Salomon, they had all these models, and you know, they fell apart.
12)What should we say to investors now?
The answer is you don't want investors to think that what they read today is important in terms of their investment strategy. Their investment strategy should factor in that (a) if you knew what was going to happen in the economy, you still wouldn't necessarily know what was going to happen in the stock market. And (b) they can't pick stocks that are better than average. Stocks are a good thing to own over time. There's only two things you can do wrong: You can buy the wrong ones, and you can buy or sell them at the wrong time. And the truth is you never need to sell them, basically. But they could buy a cross section of American industry, and if a cross section of American industry doesn't work, certainly trying to pick the little beauties here and there isn't going to work either. Then they just have to worry about getting greedy. You know, I always say you should get greedy when others are fearful and fearful when others are greedy. But that's too much to expect. Of course, you shouldn't get greedy when others get greedy and fearful when others get fearful. At a minimum, try to stay away from that.
13)By your rule, now seems like a good time to be greedy. People are pretty fearful.
You're right. They are going in that direction. That's why stocks are cheaper. Stocks are a better buy today than they were a year ago. Or three years ago.
14)But you're still bullish about the U.S. for the long term?
The American economy is going to do fine. But it won't do fine every year and every week and every month. I mean, if you don't believe that, forget about buying stocks anyway. But it stands to reason. I mean, we get more productive every year, you know. It's a positive-sum game, long term. And the only way an investor can get killed is by high fees or by trying to outsmart the market.
My Commnets:
I hope this dialoge between students and Warren Buffets will give ample food for thinking to those who are thinking that US economy is going to dusbin or almost at the verge of collapase.
I would also like to see that our biggest Bear of Indian Marke and my beloved one too, as I feel that if there is no Bear there can't be be any Bull...., that Shankar Sharma also reads this and take a clue , though my inner feeling remains that he do not read this anywhere, otherwise who will be BEAR in our market!
Friday, April 18, 2008
Tata Tele..............
Well Friends,
These first post came on front page of ET yesterday and the second post came in todays ET on front page.Read them properly and then read my comments:
1)Tata Tele to buzz PEs for $1 b :
India Inc Reopened Its Deal Diary With Fresh Fervour.While Cement Majors Get Ready To Mix,A Telco Is Ringing Investors For Capital
R Sriram & Rashmi Pratap MUMBAI
TATA Teleservices is planning to raise more than $1 billion by selling a chunk of its equity to private equity and strategic investors in one of the largest deals in the telecom industry in recent times. India’s second-largest CDMA operator is willing to sell 15-30% to financial and strategic investors to raise money for its expansion in both CDMA and the soonto-be-launched GSM services, people close to the transaction said. This will be one of the largest transactions in the telecom industry in recent times. Bharti Infratel, the wireless tower business of Bharti Airtel, raised around $1 billion from investors such as Temasek in December last year. The Tata Tele deal, which is being run by Lazard, could be bigger than that. Tata Tele wants to bring in a strategic investor and some PE funds. The amount of stake involved could be as high as 25-30%, a person involved in the transaction said. “Tata Teleservices continues to seek appropriate and value-enhancing opportunities that meet its overall business objectives but as a policy, Tata Teleservices doesn’t comment on market speculation,” a Tata Tele spokesperson said. Israeli telecom firm Bezeq is also learnt to be among those interested in buying a stake in TTSL. Bezeq had entered India in the mid-90s by way of a joint venture with HFCL. In 1999, it sold its stake in Fascel (the cellular operator in Gujarat) to Hutchison and left Indian shores. It is now planning a comeback to the world’s fastestgrowing telecom market. Singapore-based Temasek and C Sivasankaran currently hold 9.9% and around 8%, respectively in TTSL. Tata Tele needs funds for GSM rollout in 20 circles
CHENNAI-BASED tycoon Sivasankaran bought over 8% stake in TTSL for Rs 1,200 crore from Tata Sons in March 2006 while Temasek had bought the stake for around Rs 1,500 crore. Siva, as Sivasankaran is widely known, is looking to sell his stake, according to sources familiar with the matter, but has not done a deal as yet. He is believed to be asking for Rs 50 per share, a price that has put off most prospective investors. TTSL, which has a subscriber base of nearly 25 million, offers CDMA-based services in 20 out of 23 telecom circles in India. Early this month, it also received spectrum to roll out operations in the remaining three circles of Assam, North East and Jammu and Kashmir, making it the third pan-India operator after Bharti Airtel and Vodafone Essar. In Maharashtra, including Mumbai and Goa, TTSL’s listed subsidiary TTSL (Maharashtra) provides telecom services. TTSL needs funds to expand its telecom services. Besides starting operations in the three new circles, the telco has applied for GSM spectrum in 20 circles of India, for which it has already received licences. It will, therefore, need more funds to start GSM services as and when spectrum allocation is done. On Tuesday, it received spectrum in Tamil Nadu and Chennai and plans to roll out services before the year-end. TTSL is the fastest-growing service provider, according to a report by the Telecom Regulatory Authority of India (Trai). Its current market share is nearly 10%. “With increasing market share and future investment plans for network expansion, TTSL has an opportunity to dilute equity stake at a premium,” said Ovum India head (IT & Telecom) Alok Shende. TTSL is, however, still making losses and needs funds for growth. “Tatas have to dilute stake to pump in more money into their telecom venture,” said another analyst on condition of anonymity. Last month, TTSL entered into a brand franchising agreement with Virgin Mobile to offer services of the British company over its infrastructure. “While TTSL has spent a lot in brand building and innovative schemes in the past 2-3 years, it needs to do more to improve market share,” the analyst added.
2)ISRAELI CO EYES 10% IN TATA TELE
Israeli investment firm Koor Industries is interested in buying a 10% stake in Tata Teleservices for up to $720 million, report Kausik Datta & Rashmi Pratap in Mumbai. Koor, controlled by Israeli banking and telecommunications magnate Nochi Dankner, has submitted an ‘initial letter of intent’ for a possible investment of $577-$720m.
My Comments:
I gave a call of Tata Tele at mmb at Rs 27/-.and after that it made a high of Rs 65 and retraced back to23.50 and now again up to Rs 33.80...
Raima and some other friends were asking what to do with Tata Tele.I told them to hold it.
Well, now the news are out.
Now the analysis of the above two post.....
In the second post Israeli investment firm Koor Industries is ready to pay $720 mn for 10% pie....
1)that gives the value of $7200 mn for the company.....as 10 % is worth $720 mn then 100% means $7200 mn...means RS 28,800 cr valuations in Rs.....
2) Now it means that for every shares it is worth Rs 152.39...according to the valuations.... Israeli investment firm Koor Industries ready to pay for...
I am not going to write how I came to this figure....calculate by your self........
Hence I do not see much problem for Sivasankaran for selling his stake at Rs 50/- which he wants....
Tata Tele is also having Tele Towers and they wants to divest some stake in that as well.
I am not writing more as One can read all these things in the above two articles....
I hope those who are holding Tata Tele will have nice sleep now onwards...
As I repeteadly write,hold for 1-2 yrs...... any stocks...
Ahmed and many others were sceptic on Artson Eng,but Ahmed use to write it many times, as it was not getting listed and when get listed it went down horribly.The point here to be noted is that, when Artson Eng is moving in Constant UPPER circuits and it is over 100% from recent low of Rs 22/-,Ahmed is not talking about it...that Rajeev, you were so true on Artson Eng....we were not having the neccesary patience........to hold it.....
Anyway, that is what people are...never remember the successfull call but will point to falied calls immidiately, though they are not actually failed calls.........
These first post came on front page of ET yesterday and the second post came in todays ET on front page.Read them properly and then read my comments:
1)Tata Tele to buzz PEs for $1 b :
India Inc Reopened Its Deal Diary With Fresh Fervour.While Cement Majors Get Ready To Mix,A Telco Is Ringing Investors For Capital
R Sriram & Rashmi Pratap MUMBAI
TATA Teleservices is planning to raise more than $1 billion by selling a chunk of its equity to private equity and strategic investors in one of the largest deals in the telecom industry in recent times. India’s second-largest CDMA operator is willing to sell 15-30% to financial and strategic investors to raise money for its expansion in both CDMA and the soonto-be-launched GSM services, people close to the transaction said. This will be one of the largest transactions in the telecom industry in recent times. Bharti Infratel, the wireless tower business of Bharti Airtel, raised around $1 billion from investors such as Temasek in December last year. The Tata Tele deal, which is being run by Lazard, could be bigger than that. Tata Tele wants to bring in a strategic investor and some PE funds. The amount of stake involved could be as high as 25-30%, a person involved in the transaction said. “Tata Teleservices continues to seek appropriate and value-enhancing opportunities that meet its overall business objectives but as a policy, Tata Teleservices doesn’t comment on market speculation,” a Tata Tele spokesperson said. Israeli telecom firm Bezeq is also learnt to be among those interested in buying a stake in TTSL. Bezeq had entered India in the mid-90s by way of a joint venture with HFCL. In 1999, it sold its stake in Fascel (the cellular operator in Gujarat) to Hutchison and left Indian shores. It is now planning a comeback to the world’s fastestgrowing telecom market. Singapore-based Temasek and C Sivasankaran currently hold 9.9% and around 8%, respectively in TTSL. Tata Tele needs funds for GSM rollout in 20 circles
CHENNAI-BASED tycoon Sivasankaran bought over 8% stake in TTSL for Rs 1,200 crore from Tata Sons in March 2006 while Temasek had bought the stake for around Rs 1,500 crore. Siva, as Sivasankaran is widely known, is looking to sell his stake, according to sources familiar with the matter, but has not done a deal as yet. He is believed to be asking for Rs 50 per share, a price that has put off most prospective investors. TTSL, which has a subscriber base of nearly 25 million, offers CDMA-based services in 20 out of 23 telecom circles in India. Early this month, it also received spectrum to roll out operations in the remaining three circles of Assam, North East and Jammu and Kashmir, making it the third pan-India operator after Bharti Airtel and Vodafone Essar. In Maharashtra, including Mumbai and Goa, TTSL’s listed subsidiary TTSL (Maharashtra) provides telecom services. TTSL needs funds to expand its telecom services. Besides starting operations in the three new circles, the telco has applied for GSM spectrum in 20 circles of India, for which it has already received licences. It will, therefore, need more funds to start GSM services as and when spectrum allocation is done. On Tuesday, it received spectrum in Tamil Nadu and Chennai and plans to roll out services before the year-end. TTSL is the fastest-growing service provider, according to a report by the Telecom Regulatory Authority of India (Trai). Its current market share is nearly 10%. “With increasing market share and future investment plans for network expansion, TTSL has an opportunity to dilute equity stake at a premium,” said Ovum India head (IT & Telecom) Alok Shende. TTSL is, however, still making losses and needs funds for growth. “Tatas have to dilute stake to pump in more money into their telecom venture,” said another analyst on condition of anonymity. Last month, TTSL entered into a brand franchising agreement with Virgin Mobile to offer services of the British company over its infrastructure. “While TTSL has spent a lot in brand building and innovative schemes in the past 2-3 years, it needs to do more to improve market share,” the analyst added.
2)ISRAELI CO EYES 10% IN TATA TELE
Israeli investment firm Koor Industries is interested in buying a 10% stake in Tata Teleservices for up to $720 million, report Kausik Datta & Rashmi Pratap in Mumbai. Koor, controlled by Israeli banking and telecommunications magnate Nochi Dankner, has submitted an ‘initial letter of intent’ for a possible investment of $577-$720m.
My Comments:
I gave a call of Tata Tele at mmb at Rs 27/-.and after that it made a high of Rs 65 and retraced back to23.50 and now again up to Rs 33.80...
Raima and some other friends were asking what to do with Tata Tele.I told them to hold it.
Well, now the news are out.
Now the analysis of the above two post.....
In the second post Israeli investment firm Koor Industries is ready to pay $720 mn for 10% pie....
1)that gives the value of $7200 mn for the company.....as 10 % is worth $720 mn then 100% means $7200 mn...means RS 28,800 cr valuations in Rs.....
2) Now it means that for every shares it is worth Rs 152.39...according to the valuations.... Israeli investment firm Koor Industries ready to pay for...
I am not going to write how I came to this figure....calculate by your self........
Hence I do not see much problem for Sivasankaran for selling his stake at Rs 50/- which he wants....
Tata Tele is also having Tele Towers and they wants to divest some stake in that as well.
I am not writing more as One can read all these things in the above two articles....
I hope those who are holding Tata Tele will have nice sleep now onwards...
As I repeteadly write,hold for 1-2 yrs...... any stocks...
Ahmed and many others were sceptic on Artson Eng,but Ahmed use to write it many times, as it was not getting listed and when get listed it went down horribly.The point here to be noted is that, when Artson Eng is moving in Constant UPPER circuits and it is over 100% from recent low of Rs 22/-,Ahmed is not talking about it...that Rajeev, you were so true on Artson Eng....we were not having the neccesary patience........to hold it.....
Anyway, that is what people are...never remember the successfull call but will point to falied calls immidiately, though they are not actually failed calls.........
Wednesday, April 16, 2008
A good query...
Monil asked me a good question :
Hello Rajeev,Pleased to read your insights on SREI. Though, you point out at a very important factor for turning SREI into a minting machince, 'IF the interest portion of 100cr. is cutout'. But, going by books, it does not seem that SREI is near to achive that? No immediate unlocking of value / cash flow seems evident? How do you analyse that to happen?Also, for my learning and information, where did you get the information about Quippo being a company promoted by SREI? And the businesses of Quippo? I could not find anything related to the same on BSE's website / announcements.
I thought I put the answer on main page and not on comments so that some readers may get insight to look at things in Stock Market.... and will also suggest readers to see my comments as well.Sometimes there is something we can teach each other....never skip looking at commnets...
Here is my answer:
Hi Monil,It is already written in the text which I have pasted it here.It is not my hand written....that Quippo is promoted by Srei Infra....I have just highlited that sentence.I haven't added on my own.....I don't say the Int. cost will come down immidiately.It is all assuming but that can happen.It is natural that if co is giving 100 cr per qr as int. then any MD will think to lower that cost and increase the earning to get better discounting....and hence can place Srei Infra shares at higher price.Monil, these are the things to be foreseen.....it is called Vision...it can also be called as thinking in right way...If it is written anywhere then everyone can buy it seeing that EPS is going to increase.But one should be able to read between the lines....That's it....These things are not written anywhere...it is to be anticipated....and BTW...I am never ST....
Hello Rajeev,Pleased to read your insights on SREI. Though, you point out at a very important factor for turning SREI into a minting machince, 'IF the interest portion of 100cr. is cutout'. But, going by books, it does not seem that SREI is near to achive that? No immediate unlocking of value / cash flow seems evident? How do you analyse that to happen?Also, for my learning and information, where did you get the information about Quippo being a company promoted by SREI? And the businesses of Quippo? I could not find anything related to the same on BSE's website / announcements.
I thought I put the answer on main page and not on comments so that some readers may get insight to look at things in Stock Market.... and will also suggest readers to see my comments as well.Sometimes there is something we can teach each other....never skip looking at commnets...
Here is my answer:
Hi Monil,It is already written in the text which I have pasted it here.It is not my hand written....that Quippo is promoted by Srei Infra....I have just highlited that sentence.I haven't added on my own.....I don't say the Int. cost will come down immidiately.It is all assuming but that can happen.It is natural that if co is giving 100 cr per qr as int. then any MD will think to lower that cost and increase the earning to get better discounting....and hence can place Srei Infra shares at higher price.Monil, these are the things to be foreseen.....it is called Vision...it can also be called as thinking in right way...If it is written anywhere then everyone can buy it seeing that EPS is going to increase.But one should be able to read between the lines....That's it....These things are not written anywhere...it is to be anticipated....and BTW...I am never ST....
Tuesday, April 15, 2008
SREI Infra.............a company worth looking at........
SREI Infra......is having a very big eq but it has many subsidiaries....and they seems to be faring extremly well...I am tracking Srei since many years...but since last year or so I thought it is a wonderful co.
Let us see some of updates:
Quipo Oil & Gas to acquire 8 rigs for $140 million
Quipo Oil & Gas is in the process of acquiring eight on-land rigs, for which it will spend about $140 million. Quipo Oil and Gas is a subsidiary of infrastructure equipment rental company Quipo Infrastructure Equipment, promoted by SREI Infrastructure Finance. (It means Unlocking of value at any time)
Quipo Oil & Gas owns one rig. It had drilled 11 wells at Cairn India’s oilfield in Rajasthan’s Barmer district in 2005. The company is also deploying five onshore rigs through Russian-Indian Drilling Oil Company, a 50:50 joint venture with Russia’s Oil Technologies Overseas.
An on-land rig typically costs about $17-18 million (about Rs 70 crore).
“Of the eight new rigs, three will be acquired by Quipo, while our Russian joint venture will acquire five. Of the three rigs we will get directly, one will come in September and the other two will arrive by January,” said Quipo Oil & Gas Managing Director S K Mehta.
The joint venture company, which will provide drilling services in Russia and India, will get its five rigs by December-January.
There is a shortage of rigs across the world and its impact is being felt in India as well. Reliance Industries’ and ONGC’s drilling commitments in offshore areas have been delayed due to this shortage.
The waiting period for offshore rigs is almost five years and that for onshore rigs a lot lesser at about 8 months.
Quipo has undertaken on-land drilling with the one rig it has. “Considering that there is so much activity in offshore basins, and if the opportunity arises, we will definitely acquire offshore rigs as well,” Mehta said. The rig, named Quipo1, recently completed drilling at ONGC’s coal bed methane block in Gujarat, and is headed for Australia on a drilling job at a block owned by Oilex.
Quipo has targeted an increase in revenue from the current Rs 10 crore to about Rs 70 crore, mainly by increasing operations through integrated drilling services. Integrated drilling services include rig facilities as well as engineering and manpower support for operation of the rigs.
Quipo also plans to go public soon. “We would definitely like to go public at some point of time. We will wait for the right time to do that,” Mehta said.
Now the latest:
Quippo to invest $3 bn in telecom biz:
Srei Group's Quippo Telecom Infrastructure Ltd (QTIL) today said it plans to invest $3 billion in 2008-09 to ramp up its telecom infrastructure business.The company is planning to invest 3 billion dollars to grow both organically and inorganically, QTIL Managing Director Arun Kapur told PTI.Besides, the company is also in talks with Tata Teleservices to buy its telecom tower business."We are in an advanced stage of negotiation with Tata Teleservices and the deal is expected to be concluded by next month, he added.However, he declined to divulge the financial details of the proposed deal.Tata Telecom service provider is examining hiving off a part stake of its tower business portfolio."Consolidation is the order of the day. This is a capital -intensive industry. In this scenario consolidation is going to be the name of the game," he added.Ruias-led Essar group is also understood to be in talks with Quippo for a possible merger of its telecom tower business arm Essar Telecom Infrastructure Pvt Ltd.However, Kapur declined to comment on the issue.Quippo has about 4,500 towers and plans to increase this to 10,000 by March 2009.The company also plans to venture into active infrastructure sharing."We are in talks with all the new players who are receiving spectrum such as Datacom, Bycell, Shyam for active infrastructure sharing," he added.The government had recently allowed sharing of active infrastructure, which includes sharing of antenna, feeder cable, Node B, Radio Access Network and transmission system by telecom service providers, enabling them to cut costs in network roll-out and pass on the savings to consumers by way of cheaper tariffs.
My commnets:
Looking at the Quippo to invest $3 bn in telecom and Oil Rigs.....seems Srei Infra is going at a song....52 week high/low are 292 and 49.....and CMP is 143.50.......
No wonder Institution holds 49% and promoters hold 25%.......
Just go to the BSE site and see the SHP.........
Well,I hope u all will look at the results as well and will not end up looking only Share Holding Pattern(SHP).....which I told to do......
Looking at the results , Interest payment is as big as 100 cr/qr means imagine what can happen to this co if Interest payout is trimmed?100 cr int payment per quater means whole eq is given out for Int payment....means 10 eps one can add per quater.....
I hope I have not to write more......My readers are more expert then me to understand what all these means....
I am again writing this is not a buy call.....I have just brought this stock in lime light.....take your own decision .......buy at your comfort level..........
Let us see some of updates:
Quipo Oil & Gas to acquire 8 rigs for $140 million
Quipo Oil & Gas is in the process of acquiring eight on-land rigs, for which it will spend about $140 million. Quipo Oil and Gas is a subsidiary of infrastructure equipment rental company Quipo Infrastructure Equipment, promoted by SREI Infrastructure Finance. (It means Unlocking of value at any time)
Quipo Oil & Gas owns one rig. It had drilled 11 wells at Cairn India’s oilfield in Rajasthan’s Barmer district in 2005. The company is also deploying five onshore rigs through Russian-Indian Drilling Oil Company, a 50:50 joint venture with Russia’s Oil Technologies Overseas.
An on-land rig typically costs about $17-18 million (about Rs 70 crore).
“Of the eight new rigs, three will be acquired by Quipo, while our Russian joint venture will acquire five. Of the three rigs we will get directly, one will come in September and the other two will arrive by January,” said Quipo Oil & Gas Managing Director S K Mehta.
The joint venture company, which will provide drilling services in Russia and India, will get its five rigs by December-January.
There is a shortage of rigs across the world and its impact is being felt in India as well. Reliance Industries’ and ONGC’s drilling commitments in offshore areas have been delayed due to this shortage.
The waiting period for offshore rigs is almost five years and that for onshore rigs a lot lesser at about 8 months.
Quipo has undertaken on-land drilling with the one rig it has. “Considering that there is so much activity in offshore basins, and if the opportunity arises, we will definitely acquire offshore rigs as well,” Mehta said. The rig, named Quipo1, recently completed drilling at ONGC’s coal bed methane block in Gujarat, and is headed for Australia on a drilling job at a block owned by Oilex.
Quipo has targeted an increase in revenue from the current Rs 10 crore to about Rs 70 crore, mainly by increasing operations through integrated drilling services. Integrated drilling services include rig facilities as well as engineering and manpower support for operation of the rigs.
Quipo also plans to go public soon. “We would definitely like to go public at some point of time. We will wait for the right time to do that,” Mehta said.
Now the latest:
Quippo to invest $3 bn in telecom biz:
Srei Group's Quippo Telecom Infrastructure Ltd (QTIL) today said it plans to invest $3 billion in 2008-09 to ramp up its telecom infrastructure business.The company is planning to invest 3 billion dollars to grow both organically and inorganically, QTIL Managing Director Arun Kapur told PTI.Besides, the company is also in talks with Tata Teleservices to buy its telecom tower business."We are in an advanced stage of negotiation with Tata Teleservices and the deal is expected to be concluded by next month, he added.However, he declined to divulge the financial details of the proposed deal.Tata Telecom service provider is examining hiving off a part stake of its tower business portfolio."Consolidation is the order of the day. This is a capital -intensive industry. In this scenario consolidation is going to be the name of the game," he added.Ruias-led Essar group is also understood to be in talks with Quippo for a possible merger of its telecom tower business arm Essar Telecom Infrastructure Pvt Ltd.However, Kapur declined to comment on the issue.Quippo has about 4,500 towers and plans to increase this to 10,000 by March 2009.The company also plans to venture into active infrastructure sharing."We are in talks with all the new players who are receiving spectrum such as Datacom, Bycell, Shyam for active infrastructure sharing," he added.The government had recently allowed sharing of active infrastructure, which includes sharing of antenna, feeder cable, Node B, Radio Access Network and transmission system by telecom service providers, enabling them to cut costs in network roll-out and pass on the savings to consumers by way of cheaper tariffs.
My commnets:
Looking at the Quippo to invest $3 bn in telecom and Oil Rigs.....seems Srei Infra is going at a song....52 week high/low are 292 and 49.....and CMP is 143.50.......
No wonder Institution holds 49% and promoters hold 25%.......
Just go to the BSE site and see the SHP.........
Well,I hope u all will look at the results as well and will not end up looking only Share Holding Pattern(SHP).....which I told to do......
Looking at the results , Interest payment is as big as 100 cr/qr means imagine what can happen to this co if Interest payout is trimmed?100 cr int payment per quater means whole eq is given out for Int payment....means 10 eps one can add per quater.....
I hope I have not to write more......My readers are more expert then me to understand what all these means....
I am again writing this is not a buy call.....I have just brought this stock in lime light.....take your own decision .......buy at your comfort level..........
Monday, April 14, 2008
Some Facts
IIP hints slowdown fears exaggerated
The momentum of industrial production is maintained at a handsome level. In February 2008, the industrial index registered a growth of 8.6%; though less than the rate of 11% during the same month of 2007, the performance is laudable.
At close to 9%, even the average rate of growth in the industrial sector during the first eleven months paints a more or less reassuring picture.
Though during the preceding year, the incremental growth was higher for the same month and for the same period, the trend indicates that for 2007-08, fears of a serious slowdown are misplaced and the fiscal may end on a satisfactory note.
As many as 16 of the 17 industry groups at the two-digit classification, 10 have registered a respectable rate of increase and for another six, the growth was in the positive territory.
Further, demand for investment goods is keen, reflecting that industries are busy creating or augmenting assets.
In February 2008, the upswing in capital goods output was to the tune of 10.4% and for the April-February period, the rise was of the order of 17.5%.
According to official data, there was a marginal improvement in the growth rate of mining segment at 5.1% during the first eleven months of last year.
In electricity, the let-up was slight at 6.6%. But the heavyweight- manufacturing - continues to fare well.
Though the tempo of manufacturing has slackened from 12.2% to 9.1%, in a fundamental sense, the showing is good in the case of this sector.
The use-based classification indicates that both the basic goods industry and the capital goods segment are sustaining a healthy level of output.
Some fine tuning of output in the light of demand conditions is natural and one should not read too much in the deceleration noted in both these industries in 2007-08.In respect of intermediate goods, the growth rate of 9.2% is commendable, although it is lower than the preceding year’s 11.7%.
The serious setback in February 2008 can be viewed as a blip rather than a sign of any serious bottleneck in this segment.
Even in the case of consumer goods, the more important non-durable segment is in a fine fettle; at 11.0%, the growth rate in February 2008 was higher than what it was a year ago and for the period, April-February period, the performance is good.
The consumer durables is in the doldrums, though the output in the latest month is a shade better than 12 months ago.
The industrial production scenario in the last fiscal year, based on the available trends, indicates that, while a distinct deceleration is on the cards for the broad industrial groups in relation to 2006-07, the rate of increase would be high enough to be described as very satisfactory in that it would be largely in conformity with the Plan targets.
My Comments:
What if IIP do not slow down?Going by one quanter do not makes a Slow down.....and hence let us see 2-3 qrs down the line....but I am afraid what will happen,to SS and party, if IIP figures keeps coming good in next 2-3 months....
Moreover , I am seeing that Dow is again up , which again vindiactes my view that it was only a reaction of bad GE figures....as the figures shows that March Retail Sales are higher and that is a good sign....and hence we may see Dow closing green today....
2)FIIs more bullish than promoters on Indian stocks
MUMBAI: It is the 'heavy selling' by FIIs being blamed squarely for meltdown at Dalal Street, but if their market activity patterns are to be believed, overseas investors seem to be over three times more confident than India Inc itself regarding the mark et's future growth. According to an analysis of the changes in the listed companies' shareholding patterns since the beginning of this year, the number of companies where foreign institutional investors have raised their holding is bigger than that of th ose where FII holdings have gone down.
In contrast, the promoters have cut down their holdings in more number of companies as compared to those where they have raised their stakes during the same period. The data shows that among all the firms having disclosed their latest shareholding patter n as on end of January-March quarter, at least one in three firms have seen an increase in its FII holding.
In comparison, only about one in nine has seen its promoters raising their shareholding in the company. However, indicating a relatively less bullish stand on large-cap companies, the overseas investors have mostly cut down their exposure to the firms wi th high market values while accumulating more shares in those with lesser valuations.
So far, close to 900 companies have released their shareholding patterns as on March 31, 2008. Out of these, the FIIs have raised their shareholding in as many as 320 companies, ( this is important)while promoter holding has increased in just 117 companies from the levels as on the end of 2007.
Those companies where FIIs have cut down their holdings, include HDFC, ICICI Bank, HDFC Bank, IVRCL Infra, Spice Communications, United Phosphorus, Dr Reddy's Labs, DCB, Axis Bank, Tata Motors, HCL Infosystems and J&K Bank. - PTI
My Comments:
I again say that there is nothing to do with what Dows do....we have already decoupled it...as we can see that when Dow moves down our market moves down but when Dow moves up our market do not move up....and that is decoupling.....means the fault is in our market.Our market is not looking at International clues.....if it was there ,then with Asian market moving up our market must have imbibed that movement but that is not happening.....
Now the above article also says that FIIs have raised their shareholding in as many as 320 companies in Mar quater....and that is the confidence FII's are showing if one goes by the FII's increasing stake in the Indian companies....
I hope those who follows FII's figures would get some clue from this....
All said and done I think this will throw some light how Indian Market will behave and what one should do......according to me....It is Cherry picking time..... Buy....everything avaibale on SALE..........One for One Free.....
The momentum of industrial production is maintained at a handsome level. In February 2008, the industrial index registered a growth of 8.6%; though less than the rate of 11% during the same month of 2007, the performance is laudable.
At close to 9%, even the average rate of growth in the industrial sector during the first eleven months paints a more or less reassuring picture.
Though during the preceding year, the incremental growth was higher for the same month and for the same period, the trend indicates that for 2007-08, fears of a serious slowdown are misplaced and the fiscal may end on a satisfactory note.
As many as 16 of the 17 industry groups at the two-digit classification, 10 have registered a respectable rate of increase and for another six, the growth was in the positive territory.
Further, demand for investment goods is keen, reflecting that industries are busy creating or augmenting assets.
In February 2008, the upswing in capital goods output was to the tune of 10.4% and for the April-February period, the rise was of the order of 17.5%.
According to official data, there was a marginal improvement in the growth rate of mining segment at 5.1% during the first eleven months of last year.
In electricity, the let-up was slight at 6.6%. But the heavyweight- manufacturing - continues to fare well.
Though the tempo of manufacturing has slackened from 12.2% to 9.1%, in a fundamental sense, the showing is good in the case of this sector.
The use-based classification indicates that both the basic goods industry and the capital goods segment are sustaining a healthy level of output.
Some fine tuning of output in the light of demand conditions is natural and one should not read too much in the deceleration noted in both these industries in 2007-08.In respect of intermediate goods, the growth rate of 9.2% is commendable, although it is lower than the preceding year’s 11.7%.
The serious setback in February 2008 can be viewed as a blip rather than a sign of any serious bottleneck in this segment.
Even in the case of consumer goods, the more important non-durable segment is in a fine fettle; at 11.0%, the growth rate in February 2008 was higher than what it was a year ago and for the period, April-February period, the performance is good.
The consumer durables is in the doldrums, though the output in the latest month is a shade better than 12 months ago.
The industrial production scenario in the last fiscal year, based on the available trends, indicates that, while a distinct deceleration is on the cards for the broad industrial groups in relation to 2006-07, the rate of increase would be high enough to be described as very satisfactory in that it would be largely in conformity with the Plan targets.
My Comments:
What if IIP do not slow down?Going by one quanter do not makes a Slow down.....and hence let us see 2-3 qrs down the line....but I am afraid what will happen,to SS and party, if IIP figures keeps coming good in next 2-3 months....
Moreover , I am seeing that Dow is again up , which again vindiactes my view that it was only a reaction of bad GE figures....as the figures shows that March Retail Sales are higher and that is a good sign....and hence we may see Dow closing green today....
2)FIIs more bullish than promoters on Indian stocks
MUMBAI: It is the 'heavy selling' by FIIs being blamed squarely for meltdown at Dalal Street, but if their market activity patterns are to be believed, overseas investors seem to be over three times more confident than India Inc itself regarding the mark et's future growth. According to an analysis of the changes in the listed companies' shareholding patterns since the beginning of this year, the number of companies where foreign institutional investors have raised their holding is bigger than that of th ose where FII holdings have gone down.
In contrast, the promoters have cut down their holdings in more number of companies as compared to those where they have raised their stakes during the same period. The data shows that among all the firms having disclosed their latest shareholding patter n as on end of January-March quarter, at least one in three firms have seen an increase in its FII holding.
In comparison, only about one in nine has seen its promoters raising their shareholding in the company. However, indicating a relatively less bullish stand on large-cap companies, the overseas investors have mostly cut down their exposure to the firms wi th high market values while accumulating more shares in those with lesser valuations.
So far, close to 900 companies have released their shareholding patterns as on March 31, 2008. Out of these, the FIIs have raised their shareholding in as many as 320 companies, ( this is important)while promoter holding has increased in just 117 companies from the levels as on the end of 2007.
Those companies where FIIs have cut down their holdings, include HDFC, ICICI Bank, HDFC Bank, IVRCL Infra, Spice Communications, United Phosphorus, Dr Reddy's Labs, DCB, Axis Bank, Tata Motors, HCL Infosystems and J&K Bank. - PTI
My Comments:
I again say that there is nothing to do with what Dows do....we have already decoupled it...as we can see that when Dow moves down our market moves down but when Dow moves up our market do not move up....and that is decoupling.....means the fault is in our market.Our market is not looking at International clues.....if it was there ,then with Asian market moving up our market must have imbibed that movement but that is not happening.....
Now the above article also says that FIIs have raised their shareholding in as many as 320 companies in Mar quater....and that is the confidence FII's are showing if one goes by the FII's increasing stake in the Indian companies....
I hope those who follows FII's figures would get some clue from this....
All said and done I think this will throw some light how Indian Market will behave and what one should do......according to me....It is Cherry picking time..... Buy....everything avaibale on SALE..........One for One Free.....
Sunday, April 13, 2008
What is Bear Market?
I have taken this article from Moneycontrol site.........
Bear markets are not something that people enjoy talking about and infact of most people avoid using this term as far as possible. A correction in the long-term bull market is acceptable but an out and out prognosis of a bear market, there won’t be too many takers for that.
Bear markets are periods when prices keep falling down over a long period of time and the general consensus in the market is that they will continue to their downward movement for the foreseeable future.
Typically bear markets are associated with economic contractions, high unemployment and high inflation
1)How does one differentiate between a bull market correction and a bear market correction?
There is no simple answer to this. Some people are comfortable with a 20% number. A market fall of more than 20% over a sustained period of time is when the bear market lingo starts to creep in. these markets are also characterized by long periods of sideways movement.
Calling a bear market is always difficult but yet everybody wants to do that. Peter Lynch made an interesting comment about at every talk he gave he had people asking him whether markets were good or bad and he said that the only co-relation he had figured is that every time he got promoted the markets went down. The next question to him would have been –
2)Every time I buy a stock, the market goes down?
Lynch had a very interesting statistic to quote,”The price of an average stock fluctuates 50% in a year, so if you buy a Rs 100 then it could go up to Rs 150/- or it could go down to Rs 50 in the next year or so, say this price starts to move up from Rs 100 to about Rs 120 and you buy some of the stock expecting strong upmove but unfortunately the stock decides to move down before it goes up and it goes down to Rs 75 and the investor sells out in panic. Then you become a sucker and more so if the stock then decides to go up to Rs 150- this is a classic argument against timing the market.
They say that the classic contrarian is the one who doesn’t do necessarily do the opposite of what everyone else is doing in the market, he is the one who will wait for things to cool down and then go out and buy stocks that nobody else cares about. That is one way to play out bear markets. Keep your cool and start accumulating value scripts. (according to me this is very important)
Bear markets can see 50% declines from their top. Looking back at history from April 1992-93 or if you look at September 1994, down to 1996, and the more recently of Feb 2000 to September 2001, all these period saw decline of upto 50% or so and these periods lasted between 1-2 years and within those periods there were many rallies showing as much as 30-60% of upswings which did not materialize into bull markets.
Bear markets so P/E contractions as well. In 2000 the forward multiples went from 20 down to 10 and while in 1994-1996 period they went from 17 to around 10. One thing is for sure, “sharper the preceding rise, the bigger the fall”.
Technically US markets are not yet down 20% from their highs of last October of about 14,000 odd levels. Coming back to our markets, we still have a robust GDP growth rate at the moment. We have to watch out for inflation and interest rate to see where we are headed.
3)So what are the classic indicators of a bear market?
“The standard measure as per the developed markets is that if there is an erosion of more than 20% from the highs that have been reached during the bullish phase then it would normally be treated as a kind of bear market scenario but experience with our markets have shown that we are prone to showing declines greater than 30% during normal reactions also. So as a benchmark, we could use something like 30% pullback from the top of being a definition or an indicator of us slipping into a potential bear phase and we do have that as of now.” says CK Narayan – ICICI Secruties
4)Technically then it fits into the definition of bear markets for India at the moment?
You are right on the fringes of it because we have a pull back on the Nifty and Sensex an exact amount of 30% but if you were to make that list broader and look at it more in terms of stocks particularly the leading ones and perhaps the midcap ones, one will find a considerable number which are much more than 30%. So from such a context one would say that the odds are quite heavily leading towards us having slipped out of bull phase and leaning into what me may call as a bear phase
My Comments:
Well, First try to understand who is Peter Lynch...if someone is not knowing him then read his books....1)One up in Wall Street..2)Learn to Earn...A biggeners Guide...3)Beating the Street
These are worth reading.....If one will read One Up on Wall Street and Beating the Street then one will get many insight....as I have read some excerpts......not read the whole book...
But Peter Lynch is one of the most successfull Fund Manager along with Warren Buffet....
and reading him is a treat ......
Ok,now coming back to what Peter Lynch says......one will get insight how market behaves....when one BUY A STOCK.....and that is true for everyone ,be it Peter Lynch,Warren Buffet , Rakesh Jhunjhunwala or Rajeev Desai....that there is no guarentee that stock will not move down after one buy it.....
Peter Lynch feels that whenever he gets promotion , market goes down...whenever he buys stocks goes down......
and that has happened to Warren Buffet as well.....he is buying Kraft Foods since last summer and Kraft Food is stagnant....or is going down....I can give more examples on Stocks where Warren Buffet has bought and the stock went down......
Warren Buffet ,George Soros , Peter Lynch etc are the living Legends and they know very well how the world economy will pan out and still they buy stocks.....
Bear markets are not something that people enjoy talking about and infact of most people avoid using this term as far as possible. A correction in the long-term bull market is acceptable but an out and out prognosis of a bear market, there won’t be too many takers for that.
Bear markets are periods when prices keep falling down over a long period of time and the general consensus in the market is that they will continue to their downward movement for the foreseeable future.
Typically bear markets are associated with economic contractions, high unemployment and high inflation
1)How does one differentiate between a bull market correction and a bear market correction?
There is no simple answer to this. Some people are comfortable with a 20% number. A market fall of more than 20% over a sustained period of time is when the bear market lingo starts to creep in. these markets are also characterized by long periods of sideways movement.
Calling a bear market is always difficult but yet everybody wants to do that. Peter Lynch made an interesting comment about at every talk he gave he had people asking him whether markets were good or bad and he said that the only co-relation he had figured is that every time he got promoted the markets went down. The next question to him would have been –
2)Every time I buy a stock, the market goes down?
Lynch had a very interesting statistic to quote,”The price of an average stock fluctuates 50% in a year, so if you buy a Rs 100 then it could go up to Rs 150/- or it could go down to Rs 50 in the next year or so, say this price starts to move up from Rs 100 to about Rs 120 and you buy some of the stock expecting strong upmove but unfortunately the stock decides to move down before it goes up and it goes down to Rs 75 and the investor sells out in panic. Then you become a sucker and more so if the stock then decides to go up to Rs 150- this is a classic argument against timing the market.
They say that the classic contrarian is the one who doesn’t do necessarily do the opposite of what everyone else is doing in the market, he is the one who will wait for things to cool down and then go out and buy stocks that nobody else cares about. That is one way to play out bear markets. Keep your cool and start accumulating value scripts. (according to me this is very important)
Bear markets can see 50% declines from their top. Looking back at history from April 1992-93 or if you look at September 1994, down to 1996, and the more recently of Feb 2000 to September 2001, all these period saw decline of upto 50% or so and these periods lasted between 1-2 years and within those periods there were many rallies showing as much as 30-60% of upswings which did not materialize into bull markets.
Bear markets so P/E contractions as well. In 2000 the forward multiples went from 20 down to 10 and while in 1994-1996 period they went from 17 to around 10. One thing is for sure, “sharper the preceding rise, the bigger the fall”.
Technically US markets are not yet down 20% from their highs of last October of about 14,000 odd levels. Coming back to our markets, we still have a robust GDP growth rate at the moment. We have to watch out for inflation and interest rate to see where we are headed.
3)So what are the classic indicators of a bear market?
“The standard measure as per the developed markets is that if there is an erosion of more than 20% from the highs that have been reached during the bullish phase then it would normally be treated as a kind of bear market scenario but experience with our markets have shown that we are prone to showing declines greater than 30% during normal reactions also. So as a benchmark, we could use something like 30% pullback from the top of being a definition or an indicator of us slipping into a potential bear phase and we do have that as of now.” says CK Narayan – ICICI Secruties
4)Technically then it fits into the definition of bear markets for India at the moment?
You are right on the fringes of it because we have a pull back on the Nifty and Sensex an exact amount of 30% but if you were to make that list broader and look at it more in terms of stocks particularly the leading ones and perhaps the midcap ones, one will find a considerable number which are much more than 30%. So from such a context one would say that the odds are quite heavily leading towards us having slipped out of bull phase and leaning into what me may call as a bear phase
My Comments:
Well, First try to understand who is Peter Lynch...if someone is not knowing him then read his books....1)One up in Wall Street..2)Learn to Earn...A biggeners Guide...3)Beating the Street
These are worth reading.....If one will read One Up on Wall Street and Beating the Street then one will get many insight....as I have read some excerpts......not read the whole book...
But Peter Lynch is one of the most successfull Fund Manager along with Warren Buffet....
and reading him is a treat ......
Ok,now coming back to what Peter Lynch says......one will get insight how market behaves....when one BUY A STOCK.....and that is true for everyone ,be it Peter Lynch,Warren Buffet , Rakesh Jhunjhunwala or Rajeev Desai....that there is no guarentee that stock will not move down after one buy it.....
Peter Lynch feels that whenever he gets promotion , market goes down...whenever he buys stocks goes down......
and that has happened to Warren Buffet as well.....he is buying Kraft Foods since last summer and Kraft Food is stagnant....or is going down....I can give more examples on Stocks where Warren Buffet has bought and the stock went down......
Warren Buffet ,George Soros , Peter Lynch etc are the living Legends and they know very well how the world economy will pan out and still they buy stocks.....
Friday, April 11, 2008
First sign of Bulls getting strength.....
Well, today was I-day.....and every Friday is I-day..........I means Inflation figures day.
The Inflation figures were up then last week but still market closed higher.
That is the first sign of Bulls getting upper hand.........as it was obvious that everybody were feeling that if Inflation will go up market will tank......and that too very badly.But that didn't happen......that is according to me is the first sign of Bulls getting strength.
It also says that there is no more room for downside.It means that investors are ready to buy stocks at this level ignoring the inflation nos.
And that is the precise reason Small/Midcaps are firing all cylinders.....
Small/Midcaps have been beaten down so horribly that there is only one way and that is up from here.I am seeing lots of value surfacing in horizen at this point and stocks are available at mouthwatering price.I have already given the long list .Artson Eng where many were asking me is firing like anything.I have time and again said that have faith in stocks which you hold .Go to Artson site and read what they do......Do your home work....Conviction comes only if you read yourself.......about the company you wants to invest..........
Well,market has ignored the inflation figures and that is a good sign for Bulls.Market is not taking note of negative news and went up and these is what shows that is going to come up.
Bears has shortsold Ril Ind,SBI,RPL, Ril Energy etc heavily but seems Bulls are trapping them and one fine morning Bears will see that all their profit in selling short has evaporated.....
for e.g take the case od Ril Ind.....it was 3200 and now it is 2500....means market is down still by 25% and Ril Ind is going up.
It is easy to sell nifty and then sell Ril Ind , SBI,Ril Energy etc as these stocks will fall, naturally nifty will also fell that is precisely Bears have done and everyrise they will sell more unless the SL what they have thought do not come and that can be as far as 5300 or 5500....untill then Bears will not cut their position.But I think by then their all profit will vanished .....
Bulls are trapping them inch by inch....let them short sell ....and then will come back from behind like they did today....
It is a Bull and Bears game...........
I am no judge of anything ...I read and analyse..........and I write......
The Inflation figures were up then last week but still market closed higher.
That is the first sign of Bulls getting upper hand.........as it was obvious that everybody were feeling that if Inflation will go up market will tank......and that too very badly.But that didn't happen......that is according to me is the first sign of Bulls getting strength.
It also says that there is no more room for downside.It means that investors are ready to buy stocks at this level ignoring the inflation nos.
And that is the precise reason Small/Midcaps are firing all cylinders.....
Small/Midcaps have been beaten down so horribly that there is only one way and that is up from here.I am seeing lots of value surfacing in horizen at this point and stocks are available at mouthwatering price.I have already given the long list .Artson Eng where many were asking me is firing like anything.I have time and again said that have faith in stocks which you hold .Go to Artson site and read what they do......Do your home work....Conviction comes only if you read yourself.......about the company you wants to invest..........
Well,market has ignored the inflation figures and that is a good sign for Bulls.Market is not taking note of negative news and went up and these is what shows that is going to come up.
Bears has shortsold Ril Ind,SBI,RPL, Ril Energy etc heavily but seems Bulls are trapping them and one fine morning Bears will see that all their profit in selling short has evaporated.....
for e.g take the case od Ril Ind.....it was 3200 and now it is 2500....means market is down still by 25% and Ril Ind is going up.
It is easy to sell nifty and then sell Ril Ind , SBI,Ril Energy etc as these stocks will fall, naturally nifty will also fell that is precisely Bears have done and everyrise they will sell more unless the SL what they have thought do not come and that can be as far as 5300 or 5500....untill then Bears will not cut their position.But I think by then their all profit will vanished .....
Bulls are trapping them inch by inch....let them short sell ....and then will come back from behind like they did today....
It is a Bull and Bears game...........
I am no judge of anything ...I read and analyse..........and I write......
My recent Multibagger.....even in Down market.....
Friends,I remember I gave a call on Gujarat Foils at just Rs 11/- at ISG and someone is also tracking it.His name is I think Suresh or something...and he use to live in Gulf country due to his Job....But he wrote me then at ISG that he has started tracking Guj Fiols.Well,Guj Foils is amazingly making newer highs when the Whole market is down.....It is now Rs 120!Wow!....
It is almost over a year I gave a call at ISG , maybe it is over 18 months.....but the result can be seen.....
From Rs 11/- to 120/- is a great run and a great return by any standard......and that too in bad time........
Let us hope our other calls also give same type of return.
Let me write here , that whenever I zeroed on a stock I always feel that it is going to be a multibagger ....means I always think of a multibagger return.Never thought of a 30-40% retrun...Never..!
As I have very little money to deploy and hence has to find stocks which can give multiple returns........Uptill now I have been successful and hope I will be successfull in future as well.
Well, the real acumen is when one is able to trim down the loss and buy something which can make up that loss.Mistakes are bound to happen but one should be able to rectify it....that is the bottomline.......One should be able to sell stocks even at LOSS if one is not confident about and swtich over to some better prospects.....As once Rakesh Jhunjhunwala said,maybe he quoted someone else,but I liked what he said....
"Mistakes are bound to happen in stock market.Even I have made mistakes....but the mistake must not be such that in only ONE mistake one is thrown out of the market...as to succeed and earn big returns one should be able to remain in the market"
So the Chram is to be there !In the market..........
I have always written here and at mmb and at ISG that never put big weightage in any scrip ....so big that it can ruin you if something goes wrong....Anything can happen....it can be a wrong decision to buy that stock at say wrong price or say the company do not fare well and market is giving a drubbing or say everything is good , viz: Earningvisibilty, EPS,P/E's,Sales,Growth,NPM,BV, etc everything is good but the Sentiument becomes BAD...like we are seeing in Indian Market.......these are all factor and many others which decides the fate of a stock...whether it will move or not....hence it is necessary to have a very balances portfolio.....
I have written in one of my points to find a multibagger that BUY even 100 shares if you feel it is a multibagger as if it is a multibagger then even 100 shares will give you great money......
I can give many examples where one would have bot only worth shares of Rs 10k and have made 1 lac within a year.....maybe someone has bought 1000 Guj Fiols at rs 11/- for rs 11,000/- and he would have made Rs1,20,000/- within 2 yrs!
Like I wrote about Gremach Infra or Vishnu Chem...or even Sujana Tower,these are such stocks that even 100 shares are enough to have with one self.... which can wipe out the entire loss and bring you back in black (I have done that)....but the main thing is you should OWN them.....if you do not have them and then we say I was thinking of buying but I didn't buy and that was a mistake as I had no money at that time but ....who says to buy 1k or 5k shares....BUY 100 SHARES WHICH ONE FEELS LIKE BUYING......you should be there in that counter......
Let us see how things folds out ........
I would again like to write here that the real courage is holding the stocks when the cheaps are down............BIG Returns are made who has hold stocks for longer period.....
Best Of Luck........
It is almost over a year I gave a call at ISG , maybe it is over 18 months.....but the result can be seen.....
From Rs 11/- to 120/- is a great run and a great return by any standard......and that too in bad time........
Let us hope our other calls also give same type of return.
Let me write here , that whenever I zeroed on a stock I always feel that it is going to be a multibagger ....means I always think of a multibagger return.Never thought of a 30-40% retrun...Never..!
As I have very little money to deploy and hence has to find stocks which can give multiple returns........Uptill now I have been successful and hope I will be successfull in future as well.
Well, the real acumen is when one is able to trim down the loss and buy something which can make up that loss.Mistakes are bound to happen but one should be able to rectify it....that is the bottomline.......One should be able to sell stocks even at LOSS if one is not confident about and swtich over to some better prospects.....As once Rakesh Jhunjhunwala said,maybe he quoted someone else,but I liked what he said....
"Mistakes are bound to happen in stock market.Even I have made mistakes....but the mistake must not be such that in only ONE mistake one is thrown out of the market...as to succeed and earn big returns one should be able to remain in the market"
So the Chram is to be there !In the market..........
I have always written here and at mmb and at ISG that never put big weightage in any scrip ....so big that it can ruin you if something goes wrong....Anything can happen....it can be a wrong decision to buy that stock at say wrong price or say the company do not fare well and market is giving a drubbing or say everything is good , viz: Earningvisibilty, EPS,P/E's,Sales,Growth,NPM,BV, etc everything is good but the Sentiument becomes BAD...like we are seeing in Indian Market.......these are all factor and many others which decides the fate of a stock...whether it will move or not....hence it is necessary to have a very balances portfolio.....
I have written in one of my points to find a multibagger that BUY even 100 shares if you feel it is a multibagger as if it is a multibagger then even 100 shares will give you great money......
I can give many examples where one would have bot only worth shares of Rs 10k and have made 1 lac within a year.....maybe someone has bought 1000 Guj Fiols at rs 11/- for rs 11,000/- and he would have made Rs1,20,000/- within 2 yrs!
Like I wrote about Gremach Infra or Vishnu Chem...or even Sujana Tower,these are such stocks that even 100 shares are enough to have with one self.... which can wipe out the entire loss and bring you back in black (I have done that)....but the main thing is you should OWN them.....if you do not have them and then we say I was thinking of buying but I didn't buy and that was a mistake as I had no money at that time but ....who says to buy 1k or 5k shares....BUY 100 SHARES WHICH ONE FEELS LIKE BUYING......you should be there in that counter......
Let us see how things folds out ........
I would again like to write here that the real courage is holding the stocks when the cheaps are down............BIG Returns are made who has hold stocks for longer period.....
Best Of Luck........
Thursday, April 10, 2008
Friends.........
It is an anamoly that when I was not here everyone wrote everything but when I am here no is coming out to write ......
Well,as I have written....market is forming a base of 14700 and now at 15300 ......and the BULLS are consolidaing the gains inch by inch............
Almost all shares that I have listed have moved up.I still feel that each and every shares are worth a look even after 50% up from my recomended price.This type of chance will rarely come.
I would like to specially mention Vishnu Chemical(52 week high 186 and low 50),Gremach Infra(52 week high 504 &low 72).Well, for Gremach infra 72 low was not now it was previous low.
Vishnu Chemical is a Chemical co with background for Pharma bulks .
I would like readers to dingin both the above companies and come out what they have found.
I again write , stocks like JCT Ltd and other which were down heavily are still worth a look.Artson which went down is again going up.
The real thing is one should be able to HOLD.....Hold for 1-2 yrs and the benifit will be there.
Gremach has ordered for 4 Oil Rigs and have 11 coals mines in Mozambiq with 75% stake in each of them.Rio Tinto is about to increase the prices of coal anytime by not less then 80% and hence Gremach is going to be benifittef hugely.More over the rent for Oil Rig varies from $4 lacs to $6 lacs /day and that is as good as Rs 1.6 cr to 2.4 cr rent per day.
With 4 rigs ordered and should be ready to deployed in near future I am seeing Gremach as a big multibagger of future....
Anyone who wants to read more on Gremach should open the bse site and read all the annoucement one by one previous and recent.
Well,as I have written....market is forming a base of 14700 and now at 15300 ......and the BULLS are consolidaing the gains inch by inch............
Almost all shares that I have listed have moved up.I still feel that each and every shares are worth a look even after 50% up from my recomended price.This type of chance will rarely come.
I would like to specially mention Vishnu Chemical(52 week high 186 and low 50),Gremach Infra(52 week high 504 &low 72).Well, for Gremach infra 72 low was not now it was previous low.
Vishnu Chemical is a Chemical co with background for Pharma bulks .
I would like readers to dingin both the above companies and come out what they have found.
I again write , stocks like JCT Ltd and other which were down heavily are still worth a look.Artson which went down is again going up.
The real thing is one should be able to HOLD.....Hold for 1-2 yrs and the benifit will be there.
Gremach has ordered for 4 Oil Rigs and have 11 coals mines in Mozambiq with 75% stake in each of them.Rio Tinto is about to increase the prices of coal anytime by not less then 80% and hence Gremach is going to be benifittef hugely.More over the rent for Oil Rig varies from $4 lacs to $6 lacs /day and that is as good as Rs 1.6 cr to 2.4 cr rent per day.
With 4 rigs ordered and should be ready to deployed in near future I am seeing Gremach as a big multibagger of future....
Anyone who wants to read more on Gremach should open the bse site and read all the annoucement one by one previous and recent.
Monday, April 7, 2008
Hello Friends,
Well,
I have not been able to open the internet for last 8 days and hence I was not able to read commnets and not able to reply as well.
Well, I read about the first comment of annonymous about my target of 3800 of nifty and 37k of sensex.
I think I wrote that targets perticularly of nifty 3800 at some other forum and if I can recall ,I wrote that target I read somewhere that the biggest bear known for his bearish view in market and once even RJ has a big fight with him on NDTV Profit channel couple of yrs back.... and hence 3800 nifty target were never mine ...... Moreover SS is a wellknown personality and comes on business channels to shares his expertise and while I am nowhere near to him in any context....be it money,assets,buisness...or anything like that...and hence can't be compared with SS........
I got to know that they were sellers in market and had put a target of 3800 nifty and 12000 for sensex....I remember I categorically wrote there ,that let use see what happens as I also got the news that the yesteryear Bull and the new bull and one prominent player, who use to change gears as is the case, means becomes a BULL if the scenario is excellent and becomes BEARS if the gloom is seen on the market...had become bullish and they have taken a bullish position for nifty Apr futures.....and are putting a target of 5300 for nifty in April itself....
Well, the anonymous seems to be the same person who must be the member of that forum and as he can't write there like this as it is out rules to attack personally there due to the rules prevailing there he wrote it here.......Lol.......but am amazed who he can be!
I wrote last time here that market is making a base around 14000-14500 and it should not go below that level and that it is time for buying and it would be useless if one is selling stocks at 50-60% low from the high.
I still feel that it is time to buy stocks now and perticularly those stocks which are oversold and has been down by over 50%..
The list I gave here is still worth a look as I have confidence about my picks..
Well, some 2-3 readers has asked me about my pick of Ispat Ind.They feel that there is no fundamentals hence how I can recomend it.
Well,I will write some points here for that reasoning:
1)Ispat Ind will be the sole supplier of sheet material for the body of Tata Nano Car and at $2500 , Tata Nano is going to be the biggest hit in India as well as in US & other countries.So seems a good win win position for Ispat Ind.I have read this news in a paper and I hope readers will check it themself.
2)Ispat Ind has bought huge coals mines in Mozambiq or at some african country ,I forget the name...but someone told me that there was a news in ET last Monday or Tuesday that Ispat is buying coal mines.....that should help Ispat in cost ....and improve the profitability...while according to my knowledge they have bot the coal mines wayback some 3 yrs back...
3)Ispat Ind is having a vast land bank at prime area in Mumbai and the price is really big....
All these reaosning makes Ispat Ind an ideal LT multibagger candidate....
Well,it is all about sentiment and as soon as the market will go up people will buy in market.The real thing is we should buy before the others starts buying....I think any stock I listed here can easily give 40-50% return within 6 months time and some may even give double return...
Even though the US market is showing great resileance after so much tormoil of finance sector and Dow not going below 12k....our market is still not able to catch up with the other Asian Markets.But as it is not going down and today it was up by over 400 points it seems that next base which seems to be forming is 15300.....Bulls are slowly making head and trying to consolidate the gains bit by bit and inch by inch........No sooner the buying will start by FII's which is bound to happen any time ,we will see a big rally unfolding.....at 8899 also there were talk of 7k and 6k and none ever imagined of crossing the previous high while sensex theven crossed the previous high but went up much much more then that....
Well,I am no God and have never claimed anything .....I am trying to write what I feel and what I use to analyse what I read in ET,BS or while surfing the net.....
I have written ealier and write again , I can go wrong anytime....and hence I suggest all readers that please don't rely on me....we are here to share knowledge and we are human beings and anyone can go wrong......Market has proved that time and again that no one is greater then market........
I again write that I have no vested interest in any of my call I use to give here....maybe I may have position in some of them but they use to be very small as I am a very small player.....
As someone has written, yes my portfolio is down by over 50%.......but it is stable since last week ...I can only say here that I am not here to misguide anyone that was never my motto ....
Well,I have not seen the selling of promoters in SKS Logistic....but I think it is still a hold and a buy as well.....I also bot SKS Logistic high and am still holding as the story is still to unfold....
So is the case of SBTL.......it will move......when time will come.....
I also hold SBTL as well...that to high....but still it is a buy....the next big thing will be in BioFuel sector...as world will have to find the alternative for oil as Oil is becoming costlier day by day....
I have not been able to open the internet for last 8 days and hence I was not able to read commnets and not able to reply as well.
Well, I read about the first comment of annonymous about my target of 3800 of nifty and 37k of sensex.
I think I wrote that targets perticularly of nifty 3800 at some other forum and if I can recall ,I wrote that target I read somewhere that the biggest bear known for his bearish view in market and once even RJ has a big fight with him on NDTV Profit channel couple of yrs back.... and hence 3800 nifty target were never mine ...... Moreover SS is a wellknown personality and comes on business channels to shares his expertise and while I am nowhere near to him in any context....be it money,assets,buisness...or anything like that...and hence can't be compared with SS........
I got to know that they were sellers in market and had put a target of 3800 nifty and 12000 for sensex....I remember I categorically wrote there ,that let use see what happens as I also got the news that the yesteryear Bull and the new bull and one prominent player, who use to change gears as is the case, means becomes a BULL if the scenario is excellent and becomes BEARS if the gloom is seen on the market...had become bullish and they have taken a bullish position for nifty Apr futures.....and are putting a target of 5300 for nifty in April itself....
Well, the anonymous seems to be the same person who must be the member of that forum and as he can't write there like this as it is out rules to attack personally there due to the rules prevailing there he wrote it here.......Lol.......but am amazed who he can be!
I wrote last time here that market is making a base around 14000-14500 and it should not go below that level and that it is time for buying and it would be useless if one is selling stocks at 50-60% low from the high.
I still feel that it is time to buy stocks now and perticularly those stocks which are oversold and has been down by over 50%..
The list I gave here is still worth a look as I have confidence about my picks..
Well, some 2-3 readers has asked me about my pick of Ispat Ind.They feel that there is no fundamentals hence how I can recomend it.
Well,I will write some points here for that reasoning:
1)Ispat Ind will be the sole supplier of sheet material for the body of Tata Nano Car and at $2500 , Tata Nano is going to be the biggest hit in India as well as in US & other countries.So seems a good win win position for Ispat Ind.I have read this news in a paper and I hope readers will check it themself.
2)Ispat Ind has bought huge coals mines in Mozambiq or at some african country ,I forget the name...but someone told me that there was a news in ET last Monday or Tuesday that Ispat is buying coal mines.....that should help Ispat in cost ....and improve the profitability...while according to my knowledge they have bot the coal mines wayback some 3 yrs back...
3)Ispat Ind is having a vast land bank at prime area in Mumbai and the price is really big....
All these reaosning makes Ispat Ind an ideal LT multibagger candidate....
Well,it is all about sentiment and as soon as the market will go up people will buy in market.The real thing is we should buy before the others starts buying....I think any stock I listed here can easily give 40-50% return within 6 months time and some may even give double return...
Even though the US market is showing great resileance after so much tormoil of finance sector and Dow not going below 12k....our market is still not able to catch up with the other Asian Markets.But as it is not going down and today it was up by over 400 points it seems that next base which seems to be forming is 15300.....Bulls are slowly making head and trying to consolidate the gains bit by bit and inch by inch........No sooner the buying will start by FII's which is bound to happen any time ,we will see a big rally unfolding.....at 8899 also there were talk of 7k and 6k and none ever imagined of crossing the previous high while sensex theven crossed the previous high but went up much much more then that....
Well,I am no God and have never claimed anything .....I am trying to write what I feel and what I use to analyse what I read in ET,BS or while surfing the net.....
I have written ealier and write again , I can go wrong anytime....and hence I suggest all readers that please don't rely on me....we are here to share knowledge and we are human beings and anyone can go wrong......Market has proved that time and again that no one is greater then market........
I again write that I have no vested interest in any of my call I use to give here....maybe I may have position in some of them but they use to be very small as I am a very small player.....
As someone has written, yes my portfolio is down by over 50%.......but it is stable since last week ...I can only say here that I am not here to misguide anyone that was never my motto ....
Well,I have not seen the selling of promoters in SKS Logistic....but I think it is still a hold and a buy as well.....I also bot SKS Logistic high and am still holding as the story is still to unfold....
So is the case of SBTL.......it will move......when time will come.....
I also hold SBTL as well...that to high....but still it is a buy....the next big thing will be in BioFuel sector...as world will have to find the alternative for oil as Oil is becoming costlier day by day....
Sunday, March 30, 2008
Time for bottom fishing..........
Friends,
Seems the market is trying to make a base at 14,000 to 14600 level...that is what I wrote here last...
Like I wrote in last crash in May 2006....at then 8888 that it is time for bottomfishing....
I am seeing many boaders at MMB still giving bearish calls but I think the bottom has been made...
Well, it is true that when chartist and analyst were gungho at 21000 , predicting a target of 25000 and more....means in Bull market everyone didn't know where is the top then at 14700 also after retracing for 7000 points from the high , how one can be so sure of a target of 12k or 9999 (i.e....below 5 figure....la Shankar Sharma).....or even 8000...
I hope if wishes were horses......if one think and that happens.....is that so easy.....
All the projections of lower targets seems to me rediculous.....maybe individual stocks can go down which are still highly discounted.....but overall market should remain good...if this is how SS....or anyone think market can go down.....then in next 2 months ....it can be 7000 and another 2 months Sensex will be ZERO...........
Just in last sep Shankar Sharma was very very bullish and was giving call that sensex will touch 25000 in next 6 months and he will be surprised if that doesn't happen......I was then surprised how a Bear can turn a BULL .......and now he is coming out of his true colors.....
What changed the entire outlook.....India story gone in dustbin?
Even if we expect that if we slow down even then GDP will grow at 8% ....and that is still ok at higher base.....remember our economy is growing at over 9% sonce last 3-4 yrs and has made a higher base....and constantly doing that is difficult...
Well,I heard that some good futures contract of Nifty of Apr future for LONGS were bought by some big heads....and also heard that some good short position were also created for Apr Nifty futures by the Bears.....
Now we have to see who wins in April...It is BULL or BEAR........
But my take is market should remain good ..maybe inbetwen Profitbooking coming but overall market should consolidate as written by me earlier....
I have written let March pass here in past.....
But as stocks has gone over 60% below the 52 week high.....I would again like to write some stocks which are worth a look though almost all stocks are looking extremly good among which we discussed....but still I am writing them and maybe some new included...
1)Ispat Ind
2)Jayaswal Neco( great chance to buy those who missed)
3)SBTL
4)Vishnu Chemical
5)SKS Logistic
6)Innocorp Ltd
7)JCT Ltd
8)Asian CERC
9)Sujana Towers
10)Spice Jet
11)India Glycols
12)XL Tele
13)Gremach Infra
14)Guj State Petro
15)Ril Infra
16)Assam Co
17)Alfa Transformer
18)Minda Ind
19)Flex Ind
I think I have written many of them here and at mmb.....
Take your own call....again I repeat I can go horribly wrong..........as I got in Allied Comp.....
But this is a great chance to accumalate stocks of great story unfolding in future.....take your call and invest........
Seems the market is trying to make a base at 14,000 to 14600 level...that is what I wrote here last...
Like I wrote in last crash in May 2006....at then 8888 that it is time for bottomfishing....
I am seeing many boaders at MMB still giving bearish calls but I think the bottom has been made...
Well, it is true that when chartist and analyst were gungho at 21000 , predicting a target of 25000 and more....means in Bull market everyone didn't know where is the top then at 14700 also after retracing for 7000 points from the high , how one can be so sure of a target of 12k or 9999 (i.e....below 5 figure....la Shankar Sharma).....or even 8000...
I hope if wishes were horses......if one think and that happens.....is that so easy.....
All the projections of lower targets seems to me rediculous.....maybe individual stocks can go down which are still highly discounted.....but overall market should remain good...if this is how SS....or anyone think market can go down.....then in next 2 months ....it can be 7000 and another 2 months Sensex will be ZERO...........
Just in last sep Shankar Sharma was very very bullish and was giving call that sensex will touch 25000 in next 6 months and he will be surprised if that doesn't happen......I was then surprised how a Bear can turn a BULL .......and now he is coming out of his true colors.....
What changed the entire outlook.....India story gone in dustbin?
Even if we expect that if we slow down even then GDP will grow at 8% ....and that is still ok at higher base.....remember our economy is growing at over 9% sonce last 3-4 yrs and has made a higher base....and constantly doing that is difficult...
Well,I heard that some good futures contract of Nifty of Apr future for LONGS were bought by some big heads....and also heard that some good short position were also created for Apr Nifty futures by the Bears.....
Now we have to see who wins in April...It is BULL or BEAR........
But my take is market should remain good ..maybe inbetwen Profitbooking coming but overall market should consolidate as written by me earlier....
I have written let March pass here in past.....
But as stocks has gone over 60% below the 52 week high.....I would again like to write some stocks which are worth a look though almost all stocks are looking extremly good among which we discussed....but still I am writing them and maybe some new included...
1)Ispat Ind
2)Jayaswal Neco( great chance to buy those who missed)
3)SBTL
4)Vishnu Chemical
5)SKS Logistic
6)Innocorp Ltd
7)JCT Ltd
8)Asian CERC
9)Sujana Towers
10)Spice Jet
11)India Glycols
12)XL Tele
13)Gremach Infra
14)Guj State Petro
15)Ril Infra
16)Assam Co
17)Alfa Transformer
18)Minda Ind
19)Flex Ind
I think I have written many of them here and at mmb.....
Take your own call....again I repeat I can go horribly wrong..........as I got in Allied Comp.....
But this is a great chance to accumalate stocks of great story unfolding in future.....take your call and invest........
Wednesday, March 26, 2008
Two good quotes
1) Many of life's failures are people who did not realize how close they were to success when they gave up.
2) There are two ways of meeting difficulties:
You alter the difficulties, or
You alter yourself to meet them
2) There are two ways of meeting difficulties:
You alter the difficulties, or
You alter yourself to meet them
Does it means that we are almost at BOTTOM?............
I am pasting a post I read somewhere....which makes a good sense..:
A comparison between the savage corrections of May-June ’06 and the current one highlights some startling similarities. After closing at the then all-time high of 3754 on May 10, ’06, the Nifty plunged, losing just under 30%, before finally bottoming out at 2633 on June 14, ’06. This loss of 1,121 points was a 78% retracement of the rally that had started after the correction of June ’05, from a level of 2316 on the Nifty. In technical analysis, the 78.6% retracement is seen as a significant support level and the fact that it was not violated augured well for the Nifty. The result? The Nifty rallied sharply and reached a new all-time high within the same calendar year. This time round, after hitting a new alltime high of 6357 on January 8, ’08, the Nifty witnessed a savage correction, losing a similar 30% at close on March 17, ’08. But the point to be noted is that this loss of 1,854 points is close to a 78.6% retracement of the rally that had started from the lows of August 17, ’07, from a level of 4002 on the Nifty. So, if last Monday’s closing value of 4503 is not violated on a closing basis, we have a strong case for the resumption of a rally.
WHAT MORE?
At close last week, the Nifty March put-call ratio was quoting at 0.79, oversold by any stretch of imagination. And almost unbelievably, the 5100 put continues to see a build-up of close to 19 lakh shares, the highest among all put options. Although the Nifty has swung wildly between 5000 and 4500 in the past 6-7 sessions, the 5100 put has hardly seen unwinding. Neither have these putwriters bailed out at higher levels, nor have they panicked at sub-4500 levels. This suggests that a level of 5000+ is still possible on the Nifty, though it will require a monumental effort by bulls. Traders willing to bet on this should buy call options, as that will limit the downside. And the best one looks to be the 4700 call, which is available at an absolute bargain, at an implied volatility (IV) of 37% and a downside of less than Rs 40. However, brave-hearts betting on this would do well to keep it small and have a strict stoploss at a close below 4503, because all we are trying to do is catch a falling knife. At the same time, the 21% of Nifty futures positions that have been rolled over into the next series also reflect that bears are trying to bail out and are not very confident of rolling over into the next series, whereas the bulls are slowly, but surely, trying to put at least their first foot forward. On Tuesday, while March futures shed close to 44 lakh shares in open interest, April futures added more than 20 lakh shares and in the process, shot up from a discount of about 50 points to a slight premium. This suggests that a majority of the futures rolled over on Tuesday were long positions. Interestingly, the very next day, while March futures shed more than 28 lakh shares in open interest, the April futures added only about 16 lakh shares and in the process, pushed itself from a premium to a discount of over 20 points. Although most of the rolled-over positions on Wednesday were shorts, the fact that they were probably lower than the number of long positions rolled over the previous day indicates that bulls are slowly trying to muscle their way in.
Does it means that we are almost at BOTTOM?............
A comparison between the savage corrections of May-June ’06 and the current one highlights some startling similarities. After closing at the then all-time high of 3754 on May 10, ’06, the Nifty plunged, losing just under 30%, before finally bottoming out at 2633 on June 14, ’06. This loss of 1,121 points was a 78% retracement of the rally that had started after the correction of June ’05, from a level of 2316 on the Nifty. In technical analysis, the 78.6% retracement is seen as a significant support level and the fact that it was not violated augured well for the Nifty. The result? The Nifty rallied sharply and reached a new all-time high within the same calendar year. This time round, after hitting a new alltime high of 6357 on January 8, ’08, the Nifty witnessed a savage correction, losing a similar 30% at close on March 17, ’08. But the point to be noted is that this loss of 1,854 points is close to a 78.6% retracement of the rally that had started from the lows of August 17, ’07, from a level of 4002 on the Nifty. So, if last Monday’s closing value of 4503 is not violated on a closing basis, we have a strong case for the resumption of a rally.
WHAT MORE?
At close last week, the Nifty March put-call ratio was quoting at 0.79, oversold by any stretch of imagination. And almost unbelievably, the 5100 put continues to see a build-up of close to 19 lakh shares, the highest among all put options. Although the Nifty has swung wildly between 5000 and 4500 in the past 6-7 sessions, the 5100 put has hardly seen unwinding. Neither have these putwriters bailed out at higher levels, nor have they panicked at sub-4500 levels. This suggests that a level of 5000+ is still possible on the Nifty, though it will require a monumental effort by bulls. Traders willing to bet on this should buy call options, as that will limit the downside. And the best one looks to be the 4700 call, which is available at an absolute bargain, at an implied volatility (IV) of 37% and a downside of less than Rs 40. However, brave-hearts betting on this would do well to keep it small and have a strict stoploss at a close below 4503, because all we are trying to do is catch a falling knife. At the same time, the 21% of Nifty futures positions that have been rolled over into the next series also reflect that bears are trying to bail out and are not very confident of rolling over into the next series, whereas the bulls are slowly, but surely, trying to put at least their first foot forward. On Tuesday, while March futures shed close to 44 lakh shares in open interest, April futures added more than 20 lakh shares and in the process, shot up from a discount of about 50 points to a slight premium. This suggests that a majority of the futures rolled over on Tuesday were long positions. Interestingly, the very next day, while March futures shed more than 28 lakh shares in open interest, the April futures added only about 16 lakh shares and in the process, pushed itself from a premium to a discount of over 20 points. Although most of the rolled-over positions on Wednesday were shorts, the fact that they were probably lower than the number of long positions rolled over the previous day indicates that bulls are slowly trying to muscle their way in.
Does it means that we are almost at BOTTOM?............
Asset Bubble : Raw Explanation
I got a Mail in my box which made an interesting reading.....I am pastinng it here for everyone:
Here's a very interesting anecdote that describes how an "asset bubble"builds up and what are its consequences.Read it even if it confuses you a bit...things will be clear as you reach the end.... ANCEDOTE -Once there was a little island country. The land of this country was thetiny island itself. The total money in circulation was 2 dollar as therewere only two pieces of 1 dollar coins circulating around.
1) There were 3 citizens living on this island country. A owned the land. Band C each owned 1 dollar.
2) B decided to purchase the land from A for 1 dollar. So, A and C now eachown 1 dollar while B owned a piece of land that is worth 1 dollar. The net asset of the country = 3 dollar.
3) C thought that since there is only one piece of land in the country andland is non produceable asset, its value must definitely go up. So, heborrowed 1 dollar from A and together with his own 1 dollar, he bought theland from B for 2 dollar. A has a loan to C of 1 dollar, so his net asset is 1 dollar. B sold his land and got 2 dollar, so his net asset is 2 dollar. C owned the piece of land worth 2 dollar but with his 1 dollar debt to A,his net asset is 1 dollar. The net asset of the country = 4 dollar.
4) A saw that the land he once owned has risen in value. He regrettedselling it. Luckily, he has a 1 dollar loan to C. He then borrowed 2 dollarfrom B and and acquired the land back from C for 3 dollar. The payment is by2 dollar cash (which he borrowed) and cancellation of the 1 dollar loan toC. As a result, A now owned a piece of land that is worth 3 dollar. But sincehe owed B 2 dollar, his net asset is 1 dollar. B loaned 2 dollar to A. So his net asset is 2 dollar. C now has the 2 coins. His net asset is also 2 dollar. The net asset of the country = 5 dollar. A bubble is building up.
(5) B saw that the value of land kept rising. He also wanted to own theland. So he bought the land from A for 4 dollar. The payment is by borrowing2 dollar from C and cancellation of his 2 dollar loan to A. As a result, A has got his debt cleared and he got the 2 coins. His netasset is 2 dollar. B owned a piece of land that is worth 4 dollar but since he has a debt of 2dollar with C, his net Asset is 2 dollar. C loaned 2 dollar to B, so his net asset is 2 dollar. The net asset of the country = 6 dollar. Even though, the country has onlyone piece of land and 2 Dollar in circulation.
(6) Everybody has made money and everybody felt happy and prosperous.
(7) One day an evil wind blowed. An evil thought came to C's mind. "Hey,what if the land price stop going up, how could B repay my loan. There isonly 2 dollar in circulation, I think after all the land that B owns isworth at most 1 dollar only." A also thought the same.
(8) Nobody wanted to buy land anymore. In the end, A owns the 2 dollarcoins, his net asset is 2 dollar. B owed C 2 dollar and the land he ownedwhich he thought worth 4 dollar is now 1 dollar. His net asset become -1dollar. C has a loan of 2 dollar to B. But it is a bad debt. Although his net assetis still 2 dollar, his Heart is palpitating. The net asset of the country = 3 dollar again. Who has stolen the 3 dollar from the country ? Of course, before the bubble burst B thought his land worth 4 dollar.Actually, right before the collapse, the net asset of the country was 6dollar in paper. his net asset is still 2 dollar, his heart is palpitating. The net asset of the country = 3 dollar again.
(9) B had no choice but to declare bankruptcy. C as to relinquish his 2dollar bad debt to B but in return he acquired the land which is worth 1dollar now. A owns the 2 coins, his net asset is 2 dollar. B is bankrupt, his net assetis 0 dollar. ( B lost everything ) C got no choice but end up with a landworth only 1 dollar (C lost one dollar) The net asset of the country = 3dollar. ************ ****End of the story******* ********* ********* ** There is however a redistribution of wealth. A is the winner, B is the loser, C is lucky that he is spared. A few points worth noting -
(1) When a bubble is building up, the debt of individual in a country to oneanother is also building up.
(2) This story of the island is a close system whereby there is no othercountry and hence no foreign debt. The worth of the asset can only becalculated using the island's own currency. Hence, there is no net loss.
(3) An overdamped system is assumed when the bubble burst, meaning theland's value did not go down to below 1 dollar.
(4) When the bubble burst, the fellow with cash is the winner. The fellowshaving the land or extending loan to others are the loser. The asset couldshrink or in worst case, they go bankrupt.
(5) If there is another citizen D either holding a dollar or another pieceof land but refrain to take part in the game. At the end of the day, he willneither win nor lose. But he will see the value of his money or land go upand down like a see saw.
(6) When the bubble was in the growing phase, everybody made money.
(7) If you are smart and know that you are living in a growing bubble, it isworthwhile to borrow money (like A ) and take part in the game. But you mustknow when you should change everything back to cash.
(8) Instead of land, the above applies to stocks as well.
(9) The actual worth of land or stocks depend largely on psychology.
Here's a very interesting anecdote that describes how an "asset bubble"builds up and what are its consequences.Read it even if it confuses you a bit...things will be clear as you reach the end.... ANCEDOTE -Once there was a little island country. The land of this country was thetiny island itself. The total money in circulation was 2 dollar as therewere only two pieces of 1 dollar coins circulating around.
1) There were 3 citizens living on this island country. A owned the land. Band C each owned 1 dollar.
2) B decided to purchase the land from A for 1 dollar. So, A and C now eachown 1 dollar while B owned a piece of land that is worth 1 dollar. The net asset of the country = 3 dollar.
3) C thought that since there is only one piece of land in the country andland is non produceable asset, its value must definitely go up. So, heborrowed 1 dollar from A and together with his own 1 dollar, he bought theland from B for 2 dollar. A has a loan to C of 1 dollar, so his net asset is 1 dollar. B sold his land and got 2 dollar, so his net asset is 2 dollar. C owned the piece of land worth 2 dollar but with his 1 dollar debt to A,his net asset is 1 dollar. The net asset of the country = 4 dollar.
4) A saw that the land he once owned has risen in value. He regrettedselling it. Luckily, he has a 1 dollar loan to C. He then borrowed 2 dollarfrom B and and acquired the land back from C for 3 dollar. The payment is by2 dollar cash (which he borrowed) and cancellation of the 1 dollar loan toC. As a result, A now owned a piece of land that is worth 3 dollar. But sincehe owed B 2 dollar, his net asset is 1 dollar. B loaned 2 dollar to A. So his net asset is 2 dollar. C now has the 2 coins. His net asset is also 2 dollar. The net asset of the country = 5 dollar. A bubble is building up.
(5) B saw that the value of land kept rising. He also wanted to own theland. So he bought the land from A for 4 dollar. The payment is by borrowing2 dollar from C and cancellation of his 2 dollar loan to A. As a result, A has got his debt cleared and he got the 2 coins. His netasset is 2 dollar. B owned a piece of land that is worth 4 dollar but since he has a debt of 2dollar with C, his net Asset is 2 dollar. C loaned 2 dollar to B, so his net asset is 2 dollar. The net asset of the country = 6 dollar. Even though, the country has onlyone piece of land and 2 Dollar in circulation.
(6) Everybody has made money and everybody felt happy and prosperous.
(7) One day an evil wind blowed. An evil thought came to C's mind. "Hey,what if the land price stop going up, how could B repay my loan. There isonly 2 dollar in circulation, I think after all the land that B owns isworth at most 1 dollar only." A also thought the same.
(8) Nobody wanted to buy land anymore. In the end, A owns the 2 dollarcoins, his net asset is 2 dollar. B owed C 2 dollar and the land he ownedwhich he thought worth 4 dollar is now 1 dollar. His net asset become -1dollar. C has a loan of 2 dollar to B. But it is a bad debt. Although his net assetis still 2 dollar, his Heart is palpitating. The net asset of the country = 3 dollar again. Who has stolen the 3 dollar from the country ? Of course, before the bubble burst B thought his land worth 4 dollar.Actually, right before the collapse, the net asset of the country was 6dollar in paper. his net asset is still 2 dollar, his heart is palpitating. The net asset of the country = 3 dollar again.
(9) B had no choice but to declare bankruptcy. C as to relinquish his 2dollar bad debt to B but in return he acquired the land which is worth 1dollar now. A owns the 2 coins, his net asset is 2 dollar. B is bankrupt, his net assetis 0 dollar. ( B lost everything ) C got no choice but end up with a landworth only 1 dollar (C lost one dollar) The net asset of the country = 3dollar. ************ ****End of the story******* ********* ********* ** There is however a redistribution of wealth. A is the winner, B is the loser, C is lucky that he is spared. A few points worth noting -
(1) When a bubble is building up, the debt of individual in a country to oneanother is also building up.
(2) This story of the island is a close system whereby there is no othercountry and hence no foreign debt. The worth of the asset can only becalculated using the island's own currency. Hence, there is no net loss.
(3) An overdamped system is assumed when the bubble burst, meaning theland's value did not go down to below 1 dollar.
(4) When the bubble burst, the fellow with cash is the winner. The fellowshaving the land or extending loan to others are the loser. The asset couldshrink or in worst case, they go bankrupt.
(5) If there is another citizen D either holding a dollar or another pieceof land but refrain to take part in the game. At the end of the day, he willneither win nor lose. But he will see the value of his money or land go upand down like a see saw.
(6) When the bubble was in the growing phase, everybody made money.
(7) If you are smart and know that you are living in a growing bubble, it isworthwhile to borrow money (like A ) and take part in the game. But you mustknow when you should change everything back to cash.
(8) Instead of land, the above applies to stocks as well.
(9) The actual worth of land or stocks depend largely on psychology.
Tuesday, March 25, 2008
My view Vindicated...........
Friends,
I am happy to note that again my view gets vindicated on two things:
1)I categorically wrote in my last post that there is no need to sell now at 50-60% down price, actually it is time to buy....
2)With market moving up by 900 points, it agained proved that technical are useless tools......
I am more happy for the second one.... Though I do not claim of anything.....as this is simple logic that I am applying......nothing more....maybe my experaince is coming handy....
Vasanth, see this is what happens with technicals.....now all the supports and breakout between 15288 and 16216 , like say , 15550-15700-15985-16100 are major resistance levels and they were broken in a single day......but the anamoly will be this chartist will still say, that it is just a day....wait for 2-3 more days for clear signal......and then buy.....that is horrible....
I still say, this charts is for Day trading or for a week trading and that too also not even 10% perfect.....No one can win in ST....all the great fortune made in stock market, be it Warren Buffet, Peter Lynch or anyone...they were LT.....HOLD the stocks which are great in fundamentals....that is the bottom line....
I again reiterate, if you have money to invest for only 1 year to invest, don't come to market.....there is no guanrentee that within a year you will get good return as market moves on sentiment and no one knows when the sentiment gets bad and the worse like we saw recently in Jan/Feb/Mar......If one is ready for an investment for 2-3 yrs atleast then only come to stock market and invest....if the stock goes up within a year then it is OK, but should be ready to hold for longer period...
Will anyone tell me which analyst forecasted looking at the chart that there will be a big upmove of over 900 points today?Did chart forecasted that?
I suggest and advice my readers that please refrain looking at charts and playing hencewise....as charts may prove right for once twice ,but most probably will take you in deep loss.....I have not seen anyone making big profit from technicals.....
I remember , I saw Anil Maghnani of Modern Sharebroker , a day back saying that on chart he is seeing there is no investors confidence and he sees more down side from hereon.....and actually from thereon the market take a U turn.....
I am happy to note that again my view gets vindicated on two things:
1)I categorically wrote in my last post that there is no need to sell now at 50-60% down price, actually it is time to buy....
2)With market moving up by 900 points, it agained proved that technical are useless tools......
I am more happy for the second one.... Though I do not claim of anything.....as this is simple logic that I am applying......nothing more....maybe my experaince is coming handy....
Vasanth, see this is what happens with technicals.....now all the supports and breakout between 15288 and 16216 , like say , 15550-15700-15985-16100 are major resistance levels and they were broken in a single day......but the anamoly will be this chartist will still say, that it is just a day....wait for 2-3 more days for clear signal......and then buy.....that is horrible....
I still say, this charts is for Day trading or for a week trading and that too also not even 10% perfect.....No one can win in ST....all the great fortune made in stock market, be it Warren Buffet, Peter Lynch or anyone...they were LT.....HOLD the stocks which are great in fundamentals....that is the bottom line....
I again reiterate, if you have money to invest for only 1 year to invest, don't come to market.....there is no guanrentee that within a year you will get good return as market moves on sentiment and no one knows when the sentiment gets bad and the worse like we saw recently in Jan/Feb/Mar......If one is ready for an investment for 2-3 yrs atleast then only come to stock market and invest....if the stock goes up within a year then it is OK, but should be ready to hold for longer period...
Will anyone tell me which analyst forecasted looking at the chart that there will be a big upmove of over 900 points today?Did chart forecasted that?
I suggest and advice my readers that please refrain looking at charts and playing hencewise....as charts may prove right for once twice ,but most probably will take you in deep loss.....I have not seen anyone making big profit from technicals.....
I remember , I saw Anil Maghnani of Modern Sharebroker , a day back saying that on chart he is seeing there is no investors confidence and he sees more down side from hereon.....and actually from thereon the market take a U turn.....
Monday, March 24, 2008
Is US recession drifting towards 1929's......period?
Well Friends,
I read an article somewhere and I am pasting some excerpts here.
Great Depression questions resurface amid current economic conditions, just as they have during other downturns
Fears resurface amid latest turmoil, as they have during previous downturns, but parallels are few and regulation has changed
Dysfunctional capital markets, frantic central banks, stressed-out consumers, fear and uncertainty—all are alarming echoes of the global economic cataclysm of the 1930s.Which raises the inevitable question: Could another Great Depression be lurking over the horizon?TV news programs show grainy footage of Depression-era bankers as reporters tick off grim economic statistics. The Federal Reserve invokes powers it hasn't used since the 1930s. Critics of President Bush's economic policies are emboldened to use the H-word: Hoover.
On the surface, there are disquieting parallels between economic conditions in the early 1930s and those of today. There is the popping of enormous asset bubbles: stocks then, housing now. And, as in the Great Depression, the financial system is in disarray. It was symbolized back then by the failure of thousands of banks, mostly small, local outfits—2,300 in 1931 alone.The parallel today is the crippling of onetime giants such as Bear Stearns Cos., Countrywide Financial Corp. and Ameriquest Mortgage Co.Many economists believe the U.S. will find it almost impossible to avert a recession, if one has not started already. Housing remains mired in a deep slump. The Commerce Department reported last week that new residential building permits nationwide plummeted 36.5 percent in February from a year earlier.Then, like now, stock prices were highly volatile. The Standard & Poor's 500 index, which fell more than 56 percent from 1928 through 1940,nevertheless recorded four up years in that span, including a 46.5 percent gain in 1933.The shadow of the '30s looms over every economic downturn or crisis, no matter how modest. Pundits were quick to invoke the Depression as a cautionary model during the stock market crash of 1987, the bailout of the giant hedge fund Long-Term Capital Management in 1998 and the dot-com meltdown of 2000 and 2001.But there are vast differences between the 1930s and today. U.S. unemployment reached 25 percent during the Depression; last month, it was reported at 4.8 percent. The international industrial economy was a shambles in the '30s. Today, it is coming off a global boom."I've been asked many times whether we will have another Great Depression," said David M. Kennedy, a Stanford University history professor and the author of "Freedom From Fear," a Pulitzer Prize-winning history of the Depression and World War II. "My standard answer is that we won't have that one again. I'd be surprised to have one of that seriousness and duration. But that doesn't mean we wouldn't have a catastrophe we haven't seen before."Nothing demonstrates that as vividly as the Fed's orchestration of the takeover of Bear Stearns by JPMorgan Chase & Co. The deal staved off a possible bankruptcy, which the central bank feared might traumatize financial systems worldwide.The resolution drew a stark contrast with the Fed's role in the 1930 collapse of the Bank of the United States, a New York institution largely serving Jewish immigrants. The failure was then the largest in U.S. history, and the Fed's inability to arrange a rescue by Wall Street banks, including J.P. Morgan & Co., the predecessor to the "white knight" in the Bear Stearns case, caused a cataclysmic loss of confidence in the entire national banking system. That fueled a panic that historians regard as a key cause of the Depression.The Fed's relative powerlessness in 1930 led directly to New Deal reforms that vastly expanded its authority. Some of the agency's new powers, such as its ability to lend directly to brokers and investment banks, were seldom or never used until the current crisis.
Fed Chairman Ben Bernanke, an expert in the central bank's Depression-era history, is also knowledgeable about the instruments at its disposal in a crisis.In a 2002 speech, when he was a member of the central bank's board of governors under Alan Greenspan, he outlined a number of drastic steps the Fed could take in extreme conditions and still remain within its legal authority.Among them were buying up foreign government debt to influence dollar exchange rates, and even lending, if indirectly, against private assets.
The subject of Bernanke's speech was how to combat deflation, a broad decline in consumer prices that is not currently a problem on the Fed's agenda. Still, the powers he described could apply in a wide range of dire scenarios.
There are also limits to what monetary policy, the Fed's responsibility, can achieve on its own to forestall a drastic economic downturn. The Franklin D. Roosevelt administration not only reformed the Fed but also experimented with stimulative fiscal policy, such as unemployment relief.
New Deal programs aimed at staving off a wave of home foreclosures might be especially relevant today. Among the most important was the Home Owners Loan Corp., or HOLC, which is one of several models for homeowner relief being considered by Congress.HOLC took over 1 million mortgages in default starting in 1933, worked to keep the owners in their homes and made new loans to strapped mortgage holders. When the agency was finally liquidated in 1951, it even returned a small profit to the U.S. Treasury.
My View:
If 1 million houses default were there in 1930's, while comparing the population, then in 1930's and now in 2008 in USA......then we can assume that 10 lacs housing loan defaults can be considered very very big.....While we compare this with the recent housing default crisis, it seems to me very very less then what happened in 1930's.
Hence I feel what Shankar Shrama spoke about the 1929 type scenario again visiting looks pity difficult to arrive....
I think Ben Branake is the BEST person at the helm of affairs and I am confident he will be able to aver the recession situation and bringing the US economy to a Slow down or on the brink of a longterm slow down.....I think US market should rally from the second half....means from June onwards.......
I read an article somewhere and I am pasting some excerpts here.
Great Depression questions resurface amid current economic conditions, just as they have during other downturns
Fears resurface amid latest turmoil, as they have during previous downturns, but parallels are few and regulation has changed
Dysfunctional capital markets, frantic central banks, stressed-out consumers, fear and uncertainty—all are alarming echoes of the global economic cataclysm of the 1930s.Which raises the inevitable question: Could another Great Depression be lurking over the horizon?TV news programs show grainy footage of Depression-era bankers as reporters tick off grim economic statistics. The Federal Reserve invokes powers it hasn't used since the 1930s. Critics of President Bush's economic policies are emboldened to use the H-word: Hoover.
On the surface, there are disquieting parallels between economic conditions in the early 1930s and those of today. There is the popping of enormous asset bubbles: stocks then, housing now. And, as in the Great Depression, the financial system is in disarray. It was symbolized back then by the failure of thousands of banks, mostly small, local outfits—2,300 in 1931 alone.The parallel today is the crippling of onetime giants such as Bear Stearns Cos., Countrywide Financial Corp. and Ameriquest Mortgage Co.Many economists believe the U.S. will find it almost impossible to avert a recession, if one has not started already. Housing remains mired in a deep slump. The Commerce Department reported last week that new residential building permits nationwide plummeted 36.5 percent in February from a year earlier.Then, like now, stock prices were highly volatile. The Standard & Poor's 500 index, which fell more than 56 percent from 1928 through 1940,nevertheless recorded four up years in that span, including a 46.5 percent gain in 1933.The shadow of the '30s looms over every economic downturn or crisis, no matter how modest. Pundits were quick to invoke the Depression as a cautionary model during the stock market crash of 1987, the bailout of the giant hedge fund Long-Term Capital Management in 1998 and the dot-com meltdown of 2000 and 2001.But there are vast differences between the 1930s and today. U.S. unemployment reached 25 percent during the Depression; last month, it was reported at 4.8 percent. The international industrial economy was a shambles in the '30s. Today, it is coming off a global boom."I've been asked many times whether we will have another Great Depression," said David M. Kennedy, a Stanford University history professor and the author of "Freedom From Fear," a Pulitzer Prize-winning history of the Depression and World War II. "My standard answer is that we won't have that one again. I'd be surprised to have one of that seriousness and duration. But that doesn't mean we wouldn't have a catastrophe we haven't seen before."Nothing demonstrates that as vividly as the Fed's orchestration of the takeover of Bear Stearns by JPMorgan Chase & Co. The deal staved off a possible bankruptcy, which the central bank feared might traumatize financial systems worldwide.The resolution drew a stark contrast with the Fed's role in the 1930 collapse of the Bank of the United States, a New York institution largely serving Jewish immigrants. The failure was then the largest in U.S. history, and the Fed's inability to arrange a rescue by Wall Street banks, including J.P. Morgan & Co., the predecessor to the "white knight" in the Bear Stearns case, caused a cataclysmic loss of confidence in the entire national banking system. That fueled a panic that historians regard as a key cause of the Depression.The Fed's relative powerlessness in 1930 led directly to New Deal reforms that vastly expanded its authority. Some of the agency's new powers, such as its ability to lend directly to brokers and investment banks, were seldom or never used until the current crisis.
Fed Chairman Ben Bernanke, an expert in the central bank's Depression-era history, is also knowledgeable about the instruments at its disposal in a crisis.In a 2002 speech, when he was a member of the central bank's board of governors under Alan Greenspan, he outlined a number of drastic steps the Fed could take in extreme conditions and still remain within its legal authority.Among them were buying up foreign government debt to influence dollar exchange rates, and even lending, if indirectly, against private assets.
The subject of Bernanke's speech was how to combat deflation, a broad decline in consumer prices that is not currently a problem on the Fed's agenda. Still, the powers he described could apply in a wide range of dire scenarios.
There are also limits to what monetary policy, the Fed's responsibility, can achieve on its own to forestall a drastic economic downturn. The Franklin D. Roosevelt administration not only reformed the Fed but also experimented with stimulative fiscal policy, such as unemployment relief.
New Deal programs aimed at staving off a wave of home foreclosures might be especially relevant today. Among the most important was the Home Owners Loan Corp., or HOLC, which is one of several models for homeowner relief being considered by Congress.HOLC took over 1 million mortgages in default starting in 1933, worked to keep the owners in their homes and made new loans to strapped mortgage holders. When the agency was finally liquidated in 1951, it even returned a small profit to the U.S. Treasury.
My View:
If 1 million houses default were there in 1930's, while comparing the population, then in 1930's and now in 2008 in USA......then we can assume that 10 lacs housing loan defaults can be considered very very big.....While we compare this with the recent housing default crisis, it seems to me very very less then what happened in 1930's.
Hence I feel what Shankar Shrama spoke about the 1929 type scenario again visiting looks pity difficult to arrive....
I think Ben Branake is the BEST person at the helm of affairs and I am confident he will be able to aver the recession situation and bringing the US economy to a Slow down or on the brink of a longterm slow down.....I think US market should rally from the second half....means from June onwards.......
Friends,
This is not the time to SELL.....Maybe a little bit down from here, but atleast not the time to sell.
There is no use to sell at 50-60-70% down prices.
Uptill now, if one has not sold anything , then it is no use in selling now at 60% down prices.
Actually , I think it is time to buy stocks in staggered manner.
Buy 10-15% of what you wanted to buy, if the stocks are looking fundamentally great one can even buy more in percentage terms.
India Glycols, SKS Logistic,SBTL,XL Tele, Gremach Infra,Time Techno,JMC Project,Ispat Ind,Ril Infra , Ril Petro and many A gr stocks are looking great.
A gr stocks will be the forerunner in next rally as they have been also battered in this carnage along with Cash gr stocks.....hence when a blue chip is available at 50% discount why one will go for a underdeveloped stocks like SKS Logistic,SBTL etc......
I am not saying that Cash gr stocks which we have discussed here are bad, but they will take time to go up and that maybe a year or more from here........
Hence I would suggest to start buying from hereon in a staggered manner.....instead of selling...
This is not the time to SELL.....Maybe a little bit down from here, but atleast not the time to sell.
There is no use to sell at 50-60-70% down prices.
Uptill now, if one has not sold anything , then it is no use in selling now at 60% down prices.
Actually , I think it is time to buy stocks in staggered manner.
Buy 10-15% of what you wanted to buy, if the stocks are looking fundamentally great one can even buy more in percentage terms.
India Glycols, SKS Logistic,SBTL,XL Tele, Gremach Infra,Time Techno,JMC Project,Ispat Ind,Ril Infra , Ril Petro and many A gr stocks are looking great.
A gr stocks will be the forerunner in next rally as they have been also battered in this carnage along with Cash gr stocks.....hence when a blue chip is available at 50% discount why one will go for a underdeveloped stocks like SKS Logistic,SBTL etc......
I am not saying that Cash gr stocks which we have discussed here are bad, but they will take time to go up and that maybe a year or more from here........
Hence I would suggest to start buying from hereon in a staggered manner.....instead of selling...
Saturday, March 22, 2008
Friends,
It seems you all have read what you not have to read, and have not read properply what you all have to read....in my last post here:
I have clearly written then under para with a special highlighting with BLUE colors...I am again pasting it here:
One thing is clear in my mind and that is if , When Market ignores bad news constantly and goes up, means it is over heating and hence a downfall is imminent,but it is also true that if market ignores Good news and still goes down, it means the fall is unnatural/or castigated and hence the end is also near for Bear phase....
I hope you all will try to read what these means..........
I will be back on market in due course of time.........with all reasons and jutifications......
But remember, what I have learned in my stay in Indian Market for last 23 yrs is that no one can time the market..............and if chartist are so sure about what is there in store then no one can loose in this market as , one has to just pay the fees to the chartist and you are always away of any trouble in Stock Market!Tell me is it so simple?I would like to ask all those who says they know charts..........Well, one or two successful example do not make Chart reading success...
It seems you all have read what you not have to read, and have not read properply what you all have to read....in my last post here:
I have clearly written then under para with a special highlighting with BLUE colors...I am again pasting it here:
One thing is clear in my mind and that is if , When Market ignores bad news constantly and goes up, means it is over heating and hence a downfall is imminent,but it is also true that if market ignores Good news and still goes down, it means the fall is unnatural/or castigated and hence the end is also near for Bear phase....
I hope you all will try to read what these means..........
I will be back on market in due course of time.........with all reasons and jutifications......
But remember, what I have learned in my stay in Indian Market for last 23 yrs is that no one can time the market..............and if chartist are so sure about what is there in store then no one can loose in this market as , one has to just pay the fees to the chartist and you are always away of any trouble in Stock Market!Tell me is it so simple?I would like to ask all those who says they know charts..........Well, one or two successful example do not make Chart reading success...
Friday, March 21, 2008
U.S has gone from 14000 to 12500.! we've slipped from 21000 to 15000...wonders which country is in recession!.
Friends,
Well, writing after a long time.
Readers asked me again for a fresh BUY list....but I refrained from doing it at that time as I was seeing more downside and that has happened ultimately.
Well,looking at the Indian Market,it seems that Indian economy is on a slow down or recession edge rather then US economy......Lol....The reason is , while Dow went up for twice for 400 points each in almost a week ,Sensex still went down and down......
--------------U.S has gone from 14000 to 12500.! we've slipped from 21000 to
15000..!! .........wonders' which country is IN RECESSION...!!?
Well, it was obvious that Dow went up because some steps were taken for the Financial Sector there and Ben gave more money to help mortgage crisis...and tried to let the Banks come out from mortgage crisis.....and on the back of that Dow moved up twice over 400 points......but Sensex didn't exhibit the positive of Dow......
It means that either
1)The pessimism is so large that no one is still ready to take a call on Indian market and are waiting for more positives...or
2)The bears are trying to break the market without looking at the prices.....with the help of some FII's and with some insiders news of selling to come in face of , e.g.Bear Stern going Bankrupt.....as we all saw that Bear Stren sold Rs 1000 cr to make up the loss in US..
but the anamoly is, that didn't affect Dow to rise when measures were taken for Bear Stren debacle and Dow went up, while our market drifted lower and lower.Since last two days Dow is moving up......today also it is Dow is up by 233 points at 2.50 pm , just 10 min to go for closing bell,means Dow will end in Green....
One thing is clear in my mind and that is if , Market ignores bad news constantly and goes up, means it is over heating and hence a downfall is imminent,but it is also true that if market ignores Good news and still goes down, it means the fall is unnatural/or castigated and hence the end is also near for Bear phase....
Hence it can be derived from the above scenario that either Pessimism has surounded the Indian Market or Bear are over doing and in both circumstances , whenever the market will take above turn, it will be vicious......and Bear again will be slaughtered in a big way......
The breakdown of prices in Indian Market is taking place at a very low vol...hence whenever the buying will come ...it will react like a spring......
US economy is growing at 2-2.5% rate and is on edge of a slowdown or recession..while Indian Economy is moving at 9% growth and may slow down a bit to 8% or 7.5% ..but still it will remain No2 fastest growing economy in the world....
As I have written in the heading, is it the Indian Economy going in for recession or slow down or recession or US is still unanswerable.....
Well, One of my reader, Mr.Ahmed has claimed that he wrote about the down trend well in advance and he also pasted what he wrote in past...
I have written the word, "he claimed", because he has reiterated that what he wrote came out true and that too 3-4 times he ahs written this ......It means that from now onwards, Mr.Ahmed will write when will the market go up and how much will it go up and that too in how much time.....as he has also written that for 3 months we will be in a Bear Phase......
I salute the mastery of Mr.Ahmed ..........
I am glad to know that atleast one of my reader is a Master in predicting the course of market and I would request Mr.Ahmed to please guide us on the fututre course of the market, when one have to sell and when one has to buy.......so that none loose money in stock market.......I hope he will enlightened us here......as he is doing now writign about his prediction..........
Hence I would like to suggest my readers that please sell everything now, if they wants to follow Mr.Ahmed as 12300 is yet to come and hence still many water has to be flown before that....At sensex 12300 , I think still the prices will be atleast 30% down from now....and hence selling now and buying at 12300 will be a profitable trade.......
And , Last I would request Mr.Ahmed to write what he thinks about the market when it reaches 12300....I hope he will come out with some future projections , like how will be market from thereon and whether we will see the new high or not or are we going for more down side like , 9000 or will consolidate , whether Indai will be slowing down, or whether we will go in for a recession or what...for how many months will this take for the market to come up....and many how months market will consolidate etc etc........
I hope as Mr.Ahmed has written 3-4 times about his predictions coming true, he will also write what will happen next..............
Well, writing after a long time.
Readers asked me again for a fresh BUY list....but I refrained from doing it at that time as I was seeing more downside and that has happened ultimately.
Well,looking at the Indian Market,it seems that Indian economy is on a slow down or recession edge rather then US economy......Lol....The reason is , while Dow went up for twice for 400 points each in almost a week ,Sensex still went down and down......
--------------U.S has gone from 14000 to 12500.! we've slipped from 21000 to
15000..!! .........wonders' which country is IN RECESSION...!!?
Well, it was obvious that Dow went up because some steps were taken for the Financial Sector there and Ben gave more money to help mortgage crisis...and tried to let the Banks come out from mortgage crisis.....and on the back of that Dow moved up twice over 400 points......but Sensex didn't exhibit the positive of Dow......
It means that either
1)The pessimism is so large that no one is still ready to take a call on Indian market and are waiting for more positives...or
2)The bears are trying to break the market without looking at the prices.....with the help of some FII's and with some insiders news of selling to come in face of , e.g.Bear Stern going Bankrupt.....as we all saw that Bear Stren sold Rs 1000 cr to make up the loss in US..
but the anamoly is, that didn't affect Dow to rise when measures were taken for Bear Stren debacle and Dow went up, while our market drifted lower and lower.Since last two days Dow is moving up......today also it is Dow is up by 233 points at 2.50 pm , just 10 min to go for closing bell,means Dow will end in Green....
One thing is clear in my mind and that is if , Market ignores bad news constantly and goes up, means it is over heating and hence a downfall is imminent,but it is also true that if market ignores Good news and still goes down, it means the fall is unnatural/or castigated and hence the end is also near for Bear phase....
Hence it can be derived from the above scenario that either Pessimism has surounded the Indian Market or Bear are over doing and in both circumstances , whenever the market will take above turn, it will be vicious......and Bear again will be slaughtered in a big way......
The breakdown of prices in Indian Market is taking place at a very low vol...hence whenever the buying will come ...it will react like a spring......
US economy is growing at 2-2.5% rate and is on edge of a slowdown or recession..while Indian Economy is moving at 9% growth and may slow down a bit to 8% or 7.5% ..but still it will remain No2 fastest growing economy in the world....
As I have written in the heading, is it the Indian Economy going in for recession or slow down or recession or US is still unanswerable.....
Well, One of my reader, Mr.Ahmed has claimed that he wrote about the down trend well in advance and he also pasted what he wrote in past...
I have written the word, "he claimed", because he has reiterated that what he wrote came out true and that too 3-4 times he ahs written this ......It means that from now onwards, Mr.Ahmed will write when will the market go up and how much will it go up and that too in how much time.....as he has also written that for 3 months we will be in a Bear Phase......
I salute the mastery of Mr.Ahmed ..........
I am glad to know that atleast one of my reader is a Master in predicting the course of market and I would request Mr.Ahmed to please guide us on the fututre course of the market, when one have to sell and when one has to buy.......so that none loose money in stock market.......I hope he will enlightened us here......as he is doing now writign about his prediction..........
Hence I would like to suggest my readers that please sell everything now, if they wants to follow Mr.Ahmed as 12300 is yet to come and hence still many water has to be flown before that....At sensex 12300 , I think still the prices will be atleast 30% down from now....and hence selling now and buying at 12300 will be a profitable trade.......
And , Last I would request Mr.Ahmed to write what he thinks about the market when it reaches 12300....I hope he will come out with some future projections , like how will be market from thereon and whether we will see the new high or not or are we going for more down side like , 9000 or will consolidate , whether Indai will be slowing down, or whether we will go in for a recession or what...for how many months will this take for the market to come up....and many how months market will consolidate etc etc........
I hope as Mr.Ahmed has written 3-4 times about his predictions coming true, he will also write what will happen next..............
Saturday, March 8, 2008
Again.......
Friends,
I again caution to all of you that please refrain from buying anything in market untill March end...Just become passive.......and see what market is doing and where it is going.....
No need to panic as well.This is part and parcel of stock market.....Sunny days are here to come.....but wait for that.....
I again caution to all of you that please refrain from buying anything in market untill March end...Just become passive.......and see what market is doing and where it is going.....
No need to panic as well.This is part and parcel of stock market.....Sunny days are here to come.....but wait for that.....
Wednesday, March 5, 2008
A point to be discussed.......
BUFFETT: I would tell people if they worry what the market does on any given day, they shouldn't be buying stocks.
Dear Rajeevbhai,
Please throw light on one development, which i am not able to justify. Till Jan 15th, the all stock mkts, Crude, Gold, Non ferrous Metal, steel (Each comodities) were almost rising togather.The US slow down, sub-prime issue were here since last August but our stock morket was enjoying bull ride with all the comodities till mid Jan. They all were ignoring above issues.But from Feb onwards, surprisingly, all comodities are near to their all time high prices (Gold, Crude, Copper, ALuminum & few Agro products) but our stock mkt is on reverse trend. Globally, the volume of stockmarket is very less compared to the volume of Comodity Mkt. Why did stock mkt started to move in oposite direction to major comodities and all news media, brokers, etc are making hype of Slow down?Please make me understand.Regards,
Well Friends,
I have been asked the following questions and I thought it to write the answer on the main page as I thought many readers may not see my answers at Comment section....but I suggest all my readers to see all comments and my replies religiously.There will always be some thing to read.I am sure about it.
Ok now coming back to the answer which Mr.Dinesh asked.....
Why till Jan 15 Stock Market an Commodities Market ran up and up hand in hand and now Stock Markets are tanking and not Commodities?
Well,one thing one has to understand the difference between Commodities Market and Stock Market. Stock Market is driven by sentiments while Commodities is driven by REAL DEMAND.....Demand coming from the consumer.Viz:Industries using Iron Ore,Copper, Coal, Silver, Uranium, Manganese Ores etc etc.....and daily consuming commodities with the people ,needs in general, like Wheat,Sugar,Oil & Gas,different types of grains etc etc....and these demands are constantly increasing world over and hence commodities will still go up.....but maybe not Stock Market....as we can say.. for eating Wheat and grains are a must and one has to buy them ,while if one do not buy Shares in stock market for years togather ,it will do....because the first priority is livelyhood.If we are not living then what the hell to do with the shares!
That is the reason lately since last Aug , Warren Buffet is buying an ailing company shares , Kraft Foods Inc, a food co....as he knows that people will have to buy food to LIVE!as he is sure about the turnaround of it.....
Well,the reason for the price rise for commodities are actually ,world is not able to produce commodities in enough amount to feed the world increasing populations and there are many reasons for that....that I will discuss another time...But I will simply put in this way that, It is a Vicious Circle....that has no end....
Hence the decoupling we are seeing between Stock market and Commodities Market....we will still see Commodities going up and up and Stock Market will be down in dumps and they may remian for more time......
Well, coming to the second point Dinesh has showed...that the subprime issue and USA Slow down were there from Aug then why stock market went up to Jan?
Well, the reason behind this is ....in Aug players were not sure how much the damage was...they thought it can be few billions dollars ....and US economy is resilent to any major drawbacks of Subprime issue...but as the things started unfolding and major loss making and writing off news started to pour in the Fund Manager started panic unwinding in Emerging Markets , where they have made money,to make up the loss in US subprime.....and the selling came in heavy which our market were not able to take and hence the strong reactions we saw in Jan and even now.....
The risk aversion view grew up and people started taking the money off from the MF's to invest in more secured Investment like bonds etc.
The Master , Warren Buffet just said that , he feels that US is already in recession and there is no need for the technical indicator to visulize whether the recession is there or not.....
So, Stock market is all about Sentiment and hence as soon as the sentiment get bad people tends to sell either to capitalize whatever profit he is having or trying to trim down the loss how mcuh he can.....When people wants to sells , it is everyone who wants to sell......adn hence we see sellers curcuits and when one wants to buy everone wants to buy and hence we see buyers circuits.....that is called Herd mentality......and market is always driven by this and those to thinks different from that makes a Fortune.............
I hope I have given enough reasons to reply the question.I may have missed one to two more .Let me see and if I can recall I will add it here.....
Dear Rajeevbhai,
Please throw light on one development, which i am not able to justify. Till Jan 15th, the all stock mkts, Crude, Gold, Non ferrous Metal, steel (Each comodities) were almost rising togather.The US slow down, sub-prime issue were here since last August but our stock morket was enjoying bull ride with all the comodities till mid Jan. They all were ignoring above issues.But from Feb onwards, surprisingly, all comodities are near to their all time high prices (Gold, Crude, Copper, ALuminum & few Agro products) but our stock mkt is on reverse trend. Globally, the volume of stockmarket is very less compared to the volume of Comodity Mkt. Why did stock mkt started to move in oposite direction to major comodities and all news media, brokers, etc are making hype of Slow down?Please make me understand.Regards,
Well Friends,
I have been asked the following questions and I thought it to write the answer on the main page as I thought many readers may not see my answers at Comment section....but I suggest all my readers to see all comments and my replies religiously.There will always be some thing to read.I am sure about it.
Ok now coming back to the answer which Mr.Dinesh asked.....
Why till Jan 15 Stock Market an Commodities Market ran up and up hand in hand and now Stock Markets are tanking and not Commodities?
Well,one thing one has to understand the difference between Commodities Market and Stock Market. Stock Market is driven by sentiments while Commodities is driven by REAL DEMAND.....Demand coming from the consumer.Viz:Industries using Iron Ore,Copper, Coal, Silver, Uranium, Manganese Ores etc etc.....and daily consuming commodities with the people ,needs in general, like Wheat,Sugar,Oil & Gas,different types of grains etc etc....and these demands are constantly increasing world over and hence commodities will still go up.....but maybe not Stock Market....as we can say.. for eating Wheat and grains are a must and one has to buy them ,while if one do not buy Shares in stock market for years togather ,it will do....because the first priority is livelyhood.If we are not living then what the hell to do with the shares!
That is the reason lately since last Aug , Warren Buffet is buying an ailing company shares , Kraft Foods Inc, a food co....as he knows that people will have to buy food to LIVE!as he is sure about the turnaround of it.....
Well,the reason for the price rise for commodities are actually ,world is not able to produce commodities in enough amount to feed the world increasing populations and there are many reasons for that....that I will discuss another time...But I will simply put in this way that, It is a Vicious Circle....that has no end....
Hence the decoupling we are seeing between Stock market and Commodities Market....we will still see Commodities going up and up and Stock Market will be down in dumps and they may remian for more time......
Well, coming to the second point Dinesh has showed...that the subprime issue and USA Slow down were there from Aug then why stock market went up to Jan?
Well, the reason behind this is ....in Aug players were not sure how much the damage was...they thought it can be few billions dollars ....and US economy is resilent to any major drawbacks of Subprime issue...but as the things started unfolding and major loss making and writing off news started to pour in the Fund Manager started panic unwinding in Emerging Markets , where they have made money,to make up the loss in US subprime.....and the selling came in heavy which our market were not able to take and hence the strong reactions we saw in Jan and even now.....
The risk aversion view grew up and people started taking the money off from the MF's to invest in more secured Investment like bonds etc.
The Master , Warren Buffet just said that , he feels that US is already in recession and there is no need for the technical indicator to visulize whether the recession is there or not.....
So, Stock market is all about Sentiment and hence as soon as the sentiment get bad people tends to sell either to capitalize whatever profit he is having or trying to trim down the loss how mcuh he can.....When people wants to sells , it is everyone who wants to sell......adn hence we see sellers curcuits and when one wants to buy everone wants to buy and hence we see buyers circuits.....that is called Herd mentality......and market is always driven by this and those to thinks different from that makes a Fortune.............
I hope I have given enough reasons to reply the question.I may have missed one to two more .Let me see and if I can recall I will add it here.....
Monday, March 3, 2008
Don't buy anything now................
Friends,
I suggest everyone not to buy anything now.Market is looking weak atleast for the month of March.Let March pass by....
WE can see lower levels ..........and may test even 14000-14500...
Hence refrain from buying anything......
Best Luck.....If anyone having position in F&O please sell it.....
And last...I may prove wrong......take your own call.....
Rajeev
I suggest everyone not to buy anything now.Market is looking weak atleast for the month of March.Let March pass by....
WE can see lower levels ..........and may test even 14000-14500...
Hence refrain from buying anything......
Best Luck.....If anyone having position in F&O please sell it.....
And last...I may prove wrong......take your own call.....
Rajeev
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