Yups, Its 10/10 …
Here I am not giving 10/10 marks to Indian performance in the series…I am not giving 10/10 to their historical victory …..I am not giving 10/10 to double ton of Gambhir or Lax, Highest test score of Sachin or 300 wckt feat of Bhajji ….
Its record of last 13 years of India Vs Australia in test matches which is 10/10.
Lets go back to history. It was in 1995 when Aussies defeated West Indies and they emerged as a dominant power in international cricket. After winning world cups in 1999, 2003, 2007 Australians were Kings in cricket field. Be it Test cricket or One day internationals they were unbeatable everywhere and all conditions. It was twice in this period that Australia won 16 test matches in a row and irony is both the times they lost 17th test match to India , once in 2001 in Eden Garden and Once in 2008 in Perth. India was the only team which was difficult for Australia even at the time when they were at their peak.
Be it Sachin vs Warne or Ponting vs Bhajji ….Indians were ahead. It was proved in historical test match of Eden Garden in 2001 when after follow on India defeated Australia ( it happened only thrice in test history ) and won the series after that.
In last 13 years England was second toughest team for Australia , and they lost 7 matches to England . West Indies being third toughest and they lost 6 matches to West Indies .
For India ..It was a perfect 10/10. India won 10 and Aussies also won 10, till Nagpur test today. This is the record of the period when Australians were most dominant side of international cricket ever.
It reminds me about competition of Nadal and Federer in tennis. Yups …what a cricket …what a competition.
Forget Indian Vs Pakistan. Its India Vs Australia now and its perfect 10/10.
Cheers for Team India !!! Cheers for Captain Dhoni for winning all his test matches under captaincy ( Total 3 )
Best wishes to Ganguly for future ahead. Yups we will be lucky to see him playing soon. IPL is still there. C u Dada!!!
Monday, November 10, 2008
Sunday, October 26, 2008
Happy Deewali 2008 or 2009 ???
First of all let me wish all readers and all my friends a very Happy Deewali !!!
Deewali is a festival of light, happiness joy and celebrations for Indians. Yes, a heavy shopping is always on cards and we saw all companies from Electronics to Automobile with various offers and discounts for customers.
But is this Deewali really happy. Recession already started in USA and its showing its affects around the globe. US, Europe, Japan, China and India all are badly affected by it and Stock markets of various countries are trading at 5 year's low on average.
Is this time calls for celebrations ???
Two BIG-Bs of Indian business already lost around 100 Billion $ of money in 9 months. Mukesh Ambani from 58 to 14 billion $ and Anil Ambani from 48 to 8 billion $. Indian companies already down by 1.5 trillion $ in market cap. Sensex trading at 8700 levels, lowest since Nov'08. Pink slips can be there any time, after drama by Jet-Airways employees of various companies are fearful. Situation is no doubt bad, atleast no better then previous few Deewalis.
But, should we morn, obviously not. Deewali is festival of victory of good over evil. Bad time will come and go and good days will be back, may be not soon but it will. As per Mr. Warren Buffet also, its a economic cycle and it will pass with time.
Hope we will have reasons to celebrate Deewali in 2009. As of now, lets the Dalaal street be Halaal street, lets celebrate our losses, our defeat and our pains. Because "Haarkar jeetne wale ko baazigar kahte hain"
Happy Deewali, 2009.
Deewali is a festival of light, happiness joy and celebrations for Indians. Yes, a heavy shopping is always on cards and we saw all companies from Electronics to Automobile with various offers and discounts for customers.
But is this Deewali really happy. Recession already started in USA and its showing its affects around the globe. US, Europe, Japan, China and India all are badly affected by it and Stock markets of various countries are trading at 5 year's low on average.
Is this time calls for celebrations ???
Two BIG-Bs of Indian business already lost around 100 Billion $ of money in 9 months. Mukesh Ambani from 58 to 14 billion $ and Anil Ambani from 48 to 8 billion $. Indian companies already down by 1.5 trillion $ in market cap. Sensex trading at 8700 levels, lowest since Nov'08. Pink slips can be there any time, after drama by Jet-Airways employees of various companies are fearful. Situation is no doubt bad, atleast no better then previous few Deewalis.
But, should we morn, obviously not. Deewali is festival of victory of good over evil. Bad time will come and go and good days will be back, may be not soon but it will. As per Mr. Warren Buffet also, its a economic cycle and it will pass with time.
Hope we will have reasons to celebrate Deewali in 2009. As of now, lets the Dalaal street be Halaal street, lets celebrate our losses, our defeat and our pains. Because "Haarkar jeetne wale ko baazigar kahte hain"
Happy Deewali, 2009.
Sunday, October 19, 2008
BUY AMERICAN :: I AM - Warren Buffet
THE financial world is a mess, both in the United States and abroad. Its problems, moreover, have been leaking into the general economy, and the leaks are now turning into a gusher. In the near term, unemployment will rise, business activity will falter and headlines will continue to be scary.
So ... I’ve been buying American stocks. This is my personal account I’m talking about, in which I previously owned nothing but United States government bonds. (This description leaves aside my Berkshire Hathaway holdings, which are all committed to philanthropy.) If prices keep looking attractive, my non-Berkshire net worth will soon be 100 percent in United States equities.
Why?
A simple rule dictates my buying: Be fearful when others are greedy, and be greedy when others are fearful. And most certainly, fear is now widespread, gripping even seasoned investors. To be sure, investors are right to be wary of highly leveraged entities or businesses in weak competitive positions. But fears regarding the long-term prosperity of the nation’s many sound companies make no sense. These businesses will indeed suffer earnings hiccups, as they always have. But most major companies will be setting new profit records 5, 10 and 20 years from now.
Let me be clear on one point: I can’t predict the short-term movements of the stock market. I haven’t the faintest idea as to whether stocks will be higher or lower a month — or a year — from now. What is likely, however, is that the market will move higher, perhaps substantially so, well before either sentiment or the economy turns up. So if you wait for the robins, spring will be over.
A little history here: During the Depression, the Dow hit its low, 41, on July 8, 1932. Economic conditions, though, kept deteriorating until Franklin D. Roosevelt took office in March 1933. By that time, the market had already advanced 30 percent. Or think back to the early days of World War II, when things were going badly for the United States in Europe and the Pacific. The market hit bottom in April 1942, well before Allied fortunes turned. Again, in the early 1980s, the time to buy stocks was when inflation raged and the economy was in the tank. In short, bad news is an investor’s best friend. It lets you buy a slice of America’s future at a marked-down price.
Over the long term, the stock market news will be good. In the 20th century, the United States endured two world wars and other traumatic and expensive military conflicts; the Depression; a dozen or so recessions and financial panics; oil shocks; a flu epidemic; and the resignation of a disgraced president. Yet the Dow rose from 66 to 11,497.
You might think it would have been impossible for an investor to lose money during a century marked by such an extraordinary gain. But some investors did. The hapless ones bought stocks only when they felt comfort in doing so and then proceeded to sell when the headlines made them queasy.
Today people who hold cash equivalents feel comfortable. They shouldn’t. They have opted for a terrible long-term asset, one that pays virtually nothing and is certain to depreciate in value. Indeed, the policies that government will follow in its efforts to alleviate the current crisis will probably prove inflationary and therefore accelerate declines in the real value of cash accounts.
Equities will almost certainly outperform cash over the next decade, probably by a substantial degree. Those investors who cling now to cash are betting they can efficiently time their move away from it later. In waiting for the comfort of good news, they are ignoring Wayne Gretzky’s advice: “I skate to where the puck is going to be, not to where it has been.”
I don’t like to opine on the stock market, and again I emphasize that I have no idea what the market will do in the short term. Nevertheless, I’ll follow the lead of a restaurant that opened in an empty bank building and then advertised: “Put your mouth where your money was.” Today my money and my mouth both say equities.
Warren E. Buffett is the chief executive of Berkshire Hathaway, a diversified holding company.
SOURCE :: NEWYORK TIMES
So ... I’ve been buying American stocks. This is my personal account I’m talking about, in which I previously owned nothing but United States government bonds. (This description leaves aside my Berkshire Hathaway holdings, which are all committed to philanthropy.) If prices keep looking attractive, my non-Berkshire net worth will soon be 100 percent in United States equities.
Why?
A simple rule dictates my buying: Be fearful when others are greedy, and be greedy when others are fearful. And most certainly, fear is now widespread, gripping even seasoned investors. To be sure, investors are right to be wary of highly leveraged entities or businesses in weak competitive positions. But fears regarding the long-term prosperity of the nation’s many sound companies make no sense. These businesses will indeed suffer earnings hiccups, as they always have. But most major companies will be setting new profit records 5, 10 and 20 years from now.
Let me be clear on one point: I can’t predict the short-term movements of the stock market. I haven’t the faintest idea as to whether stocks will be higher or lower a month — or a year — from now. What is likely, however, is that the market will move higher, perhaps substantially so, well before either sentiment or the economy turns up. So if you wait for the robins, spring will be over.
A little history here: During the Depression, the Dow hit its low, 41, on July 8, 1932. Economic conditions, though, kept deteriorating until Franklin D. Roosevelt took office in March 1933. By that time, the market had already advanced 30 percent. Or think back to the early days of World War II, when things were going badly for the United States in Europe and the Pacific. The market hit bottom in April 1942, well before Allied fortunes turned. Again, in the early 1980s, the time to buy stocks was when inflation raged and the economy was in the tank. In short, bad news is an investor’s best friend. It lets you buy a slice of America’s future at a marked-down price.
Over the long term, the stock market news will be good. In the 20th century, the United States endured two world wars and other traumatic and expensive military conflicts; the Depression; a dozen or so recessions and financial panics; oil shocks; a flu epidemic; and the resignation of a disgraced president. Yet the Dow rose from 66 to 11,497.
You might think it would have been impossible for an investor to lose money during a century marked by such an extraordinary gain. But some investors did. The hapless ones bought stocks only when they felt comfort in doing so and then proceeded to sell when the headlines made them queasy.
Today people who hold cash equivalents feel comfortable. They shouldn’t. They have opted for a terrible long-term asset, one that pays virtually nothing and is certain to depreciate in value. Indeed, the policies that government will follow in its efforts to alleviate the current crisis will probably prove inflationary and therefore accelerate declines in the real value of cash accounts.
Equities will almost certainly outperform cash over the next decade, probably by a substantial degree. Those investors who cling now to cash are betting they can efficiently time their move away from it later. In waiting for the comfort of good news, they are ignoring Wayne Gretzky’s advice: “I skate to where the puck is going to be, not to where it has been.”
I don’t like to opine on the stock market, and again I emphasize that I have no idea what the market will do in the short term. Nevertheless, I’ll follow the lead of a restaurant that opened in an empty bank building and then advertised: “Put your mouth where your money was.” Today my money and my mouth both say equities.
Warren E. Buffett is the chief executive of Berkshire Hathaway, a diversified holding company.
SOURCE :: NEWYORK TIMES
Monday, September 29, 2008
How the Banks "FOOL", sorry "RULE"
Have your ever given a 10 Rupees note to a bagger ?, for most of us the answer is no. Most of the times we give nothing, somtimes 1 or 2 Rupees. But we are giving thousands of Rupees to banks yearly, irony is we are totally unaware about it. Lets see how ........
First of all a basic rule about interests given by banks on saving bank accounts to customers.
"Interest will be paid on amount which is deposited on or before 1oth day of the month and not withdrawn till end of the month"
Interesting, and now how it works for banks.
Suppose you have deposited 10,000 Rs in bank on 5th July and you withdrew 5000 Rs on 31 July, although you have withdrawn amount on last day but you will get interest only on 5000 Rs. If you have deposited some amount on 11th July and not withdrawn till the end of month in that case you will not get interest on that amount for month July. Hope you are getting my point now. Many people are aware about this and banks save crores of rupees in such transactions.
Crazy, now how we can save our hard earned money.
We all have lot of bills to pay these days like credit card bills, mobile bills, broadband bills, electricity bills etc. There is always 20 days time period to pay that bill approximately. Let your billing period is 15th July to 5th August and total bill amount is Rs 5,000. If you will pay your bill inbetween 15th July to 31st July then you will loose interest on Rs 5000 and you will not get any benefit of early bill payments and if you will pay your bills on 1st August then you will get intrest on Rs. 5000 and your bills will also be paid on time without fine.
In USA most people pay thier bills in last days only to get this benefit, in India also many people pay thier bills on last day but reason is different.
Some calculation now, in above case you will save Rs. 50 monthly approximately. Amount sounds very small. Some more calculations, if you will save this small amount which only needs your little planning you will have around Rs. 20,000 extra in 20 years. This amount is minimum possible and it can be as high as Rs 50,000 as our expenditure is much more then I stated.
Here i have taken only small amount but when we invest large amount like when we buy mobiles, cars, electronic gudgets, or paying our home EMI, just by little care and planning, we can save few thousand bucks yearly.
Few steps to get this unknown money -
1. Plan your bill payments well in advance and always pay in last days of billing period.
2. Try to avoid month end shopping or expenditure.
3. Do not transefer money from your one account to another inbetween 11th to end month, if you really do not need it badly.
4. Use automatic bill pay, given by various credit card companies wherever possible to plan payments better.
5. Use your credit cards intelligently to get one month extra interest.
6. Try to avoid any type of bill payments in last days of a month, where you will not be fined.
Enjoy your Money. Value your Money.
Lets Rule the banks !
Happy Saving.
Note: Your comments and feedback is most welcome.
First of all a basic rule about interests given by banks on saving bank accounts to customers.
"Interest will be paid on amount which is deposited on or before 1oth day of the month and not withdrawn till end of the month"
Interesting, and now how it works for banks.
Suppose you have deposited 10,000 Rs in bank on 5th July and you withdrew 5000 Rs on 31 July, although you have withdrawn amount on last day but you will get interest only on 5000 Rs. If you have deposited some amount on 11th July and not withdrawn till the end of month in that case you will not get interest on that amount for month July. Hope you are getting my point now. Many people are aware about this and banks save crores of rupees in such transactions.
Crazy, now how we can save our hard earned money.
We all have lot of bills to pay these days like credit card bills, mobile bills, broadband bills, electricity bills etc. There is always 20 days time period to pay that bill approximately. Let your billing period is 15th July to 5th August and total bill amount is Rs 5,000. If you will pay your bill inbetween 15th July to 31st July then you will loose interest on Rs 5000 and you will not get any benefit of early bill payments and if you will pay your bills on 1st August then you will get intrest on Rs. 5000 and your bills will also be paid on time without fine.
In USA most people pay thier bills in last days only to get this benefit, in India also many people pay thier bills on last day but reason is different.
Some calculation now, in above case you will save Rs. 50 monthly approximately. Amount sounds very small. Some more calculations, if you will save this small amount which only needs your little planning you will have around Rs. 20,000 extra in 20 years. This amount is minimum possible and it can be as high as Rs 50,000 as our expenditure is much more then I stated.
Here i have taken only small amount but when we invest large amount like when we buy mobiles, cars, electronic gudgets, or paying our home EMI, just by little care and planning, we can save few thousand bucks yearly.
Few steps to get this unknown money -
1. Plan your bill payments well in advance and always pay in last days of billing period.
2. Try to avoid month end shopping or expenditure.
3. Do not transefer money from your one account to another inbetween 11th to end month, if you really do not need it badly.
4. Use automatic bill pay, given by various credit card companies wherever possible to plan payments better.
5. Use your credit cards intelligently to get one month extra interest.
6. Try to avoid any type of bill payments in last days of a month, where you will not be fined.
Enjoy your Money. Value your Money.
Lets Rule the banks !
Happy Saving.
Note: Your comments and feedback is most welcome.
Tuesday, September 23, 2008
Deeper, Longer and Harder - Welcome Recession !!!
Year 2008, it started on very positive note, for India atleast. In 2007 Market touched new highs and collection through IPOs was also all time high. It was cool morning of 14'Jan'08 when biggest, most waited and most overvalued IPO of India was announced. The Euphoria was that form Bangalore to Delhi, from Ahemadabad to Calcutta everyone was saying
"Power On to India On :: R-Power !!!
R-Power IPO created new records not in the capital markets of India but in World capital makrets. It collected 7.56 Lakhs Cores Rs. and set new benchmarks for world capital Markets. Sensex was around 21,000 at that moment and analysts were expecting that it will close around 28,000 by the end of 2008, irony is, Sensex trading around 13,500 on 15 Sept'08, its less then half the expectations.
Market started toppling down with closing of R-Power IPO and since then it lost around 30%. Increasing inflation, high fuel prices, global volatility, recession in USA and internal security in chaos. All things went wrong for Indian Stock Makrets and it followed its global peers. Year 2008 has already seen top 5 biggest one day crashes in history.
Monday 15'Sept'08 added one of the worst day in global finance world. One of oldest and biggest financial organisation Lehman Brothers, filed for bankruptcy and another biggy Merrill Lynch is sold. Such things happens once in a Century. Yes, i said "Once in a Century".
Fears of global slowdown are almost confirmed now. There have been big recessions in USA and around the globe in 1930, 1970, 1980, 2000. But unlike in 30s and 70s, recessions of 2000 were shortlived and followed by boom. But this time, as more and more finance companies are going for Bankruptcy and Sold out, there are signs of long, deep and hard recessions.
As we know that world economies are linked like never before and impacr of USA will be seen all over the globe, infact we are seeing it, so it can be said easily that we will also feel the heat in this time. Although though recently local Insaurance investment firms surpassed FIIs in terms of investment in Indian markets but the effect will be there. FIIs are already on selling route and marekts trading more then a years low, we can see new lows in very near future.
Yes, new lows and long recession will impact global economies.
Lets the dust settle. Lets the picture clear.
Till then its better for retail investors to stay away instead of burning thier Fingers !!!
Keep your eyes and ears open. Keep your Demat accounts and Bank accounts closed !!!
"Power On to India On :: R-Power !!!
R-Power IPO created new records not in the capital markets of India but in World capital makrets. It collected 7.56 Lakhs Cores Rs. and set new benchmarks for world capital Markets. Sensex was around 21,000 at that moment and analysts were expecting that it will close around 28,000 by the end of 2008, irony is, Sensex trading around 13,500 on 15 Sept'08, its less then half the expectations.
Market started toppling down with closing of R-Power IPO and since then it lost around 30%. Increasing inflation, high fuel prices, global volatility, recession in USA and internal security in chaos. All things went wrong for Indian Stock Makrets and it followed its global peers. Year 2008 has already seen top 5 biggest one day crashes in history.
Monday 15'Sept'08 added one of the worst day in global finance world. One of oldest and biggest financial organisation Lehman Brothers, filed for bankruptcy and another biggy Merrill Lynch is sold. Such things happens once in a Century. Yes, i said "Once in a Century".
Fears of global slowdown are almost confirmed now. There have been big recessions in USA and around the globe in 1930, 1970, 1980, 2000. But unlike in 30s and 70s, recessions of 2000 were shortlived and followed by boom. But this time, as more and more finance companies are going for Bankruptcy and Sold out, there are signs of long, deep and hard recessions.
As we know that world economies are linked like never before and impacr of USA will be seen all over the globe, infact we are seeing it, so it can be said easily that we will also feel the heat in this time. Although though recently local Insaurance investment firms surpassed FIIs in terms of investment in Indian markets but the effect will be there. FIIs are already on selling route and marekts trading more then a years low, we can see new lows in very near future.
Yes, new lows and long recession will impact global economies.
Lets the dust settle. Lets the picture clear.
Till then its better for retail investors to stay away instead of burning thier Fingers !!!
Keep your eyes and ears open. Keep your Demat accounts and Bank accounts closed !!!
Tuesday, January 22, 2008
You cant beat:::History will repeat
Future lies in past itself.
The thing about life is that one makes mistakes. Many mistakes were made in the second half of 2007 and those sins have to be washed away by blood, such is the way of financial markets. Some participants will go down under and never be able to get back to the market again but most will survive. The pain will linger for many months, maybe years but lessons have to be learnt. Every such debacle has lessons for us and the sooner we forget them the more we suffer.
The first lesson is not to let stock price performance become the sole reason for buying, a mistake which was made in abundance in the last 3 months. What couldn't be explained by fundamentals was credited to liquidity. The present lost all relevance as people chose to focus on the distant future, perhaps simply because the present could never justify those ticker prices; only a hazy dream of the future could. Traders and investors had no time for fundamental analysts, in many cases they were labelled "cribbing fools". Chartists became the most celebrated tribe on the street as only they could see and predict the one way run to glory for many of the hot stocks even as fundamental watchers cringed at valuations....till the music stopped. Don't get me wrong, charts do work in trending markets but once stock prices veer away completely from fundamental value, people need to get careful. But they never are.
Now that the blinkers are off, people should ask themselves why stocks like RNRL, Ispat, RPL, Essar oil and Nagarjuna fertilisers have lost 50-70% of their value. It is simply because their stock prices had snapped all connection with underlying business fundamentals, earnings and value. Their stock prices became the only reasons for buying them which works for a while but not forever. The other big lesson, one which should have been driven in earlier in May 2006, is the danger of overextending oneself in the futures market.
The lure of stock futures is easy to understand. Put in some margin, take a big exposure on a fast moving stock, make a killing when prices shoot up. Repeat exercise. Just that people forgot that prices may also come down and at a pace which noone can even imagine, maybe their friendly stockbrokers forgot to tell them that part of the story. The result : unbridled speculation that ran into lakhs of crores, excesses that we are paying for today. Even this fall will not cure investors of their love for futures speculation but if at least some amount of caution is injected it would have been a worthwhile learning.
Futures are not toys for amateurs, they are time bombs in the hands of inexpert and inexperienced traders, it's only a matter of when the fuse runs out. The other learning which I hope will play out in the future, as it has in the past, is that it pays to be brave in times of panic such as these. If I was allowed to invest myself , which I am not, I would have no hesitation in deploying serious money into the market today, knowing fully well that prices may fall more tomorrow. And I would be standing there tomorrow to buy more of the same, till my money ran out. India is going to be a terrific stock market story for many years to come, even an intermediate bearish patch cannot shake that conviction of mine. At best, one will have to wait a bit for the returns to follow. That's alright.
You are happy to put money in a bank FD and then wait for one full year to collect that measly 8%, aren't you? Then why does the stock market need to give you 20% every month? In the last one year, I haven't seen so many good stocks trade at such mouth watering levels. Forget trading, avoid the duds which were fuelled up by operators, just go out and buy those bluechips. They will deliver, even if there is a global market meltdown for a while, and if you are a bit patient you will be rewarded. But do remember January 2008, as history will repeat itself again in the future. Just that our memories tend to be too short and our greed too much.
Happy Price Menu @ Dalaal Street
The thing about life is that one makes mistakes. Many mistakes were made in the second half of 2007 and those sins have to be washed away by blood, such is the way of financial markets. Some participants will go down under and never be able to get back to the market again but most will survive. The pain will linger for many months, maybe years but lessons have to be learnt. Every such debacle has lessons for us and the sooner we forget them the more we suffer.
The first lesson is not to let stock price performance become the sole reason for buying, a mistake which was made in abundance in the last 3 months. What couldn't be explained by fundamentals was credited to liquidity. The present lost all relevance as people chose to focus on the distant future, perhaps simply because the present could never justify those ticker prices; only a hazy dream of the future could. Traders and investors had no time for fundamental analysts, in many cases they were labelled "cribbing fools". Chartists became the most celebrated tribe on the street as only they could see and predict the one way run to glory for many of the hot stocks even as fundamental watchers cringed at valuations....till the music stopped. Don't get me wrong, charts do work in trending markets but once stock prices veer away completely from fundamental value, people need to get careful. But they never are.
Now that the blinkers are off, people should ask themselves why stocks like RNRL, Ispat, RPL, Essar oil and Nagarjuna fertilisers have lost 50-70% of their value. It is simply because their stock prices had snapped all connection with underlying business fundamentals, earnings and value. Their stock prices became the only reasons for buying them which works for a while but not forever. The other big lesson, one which should have been driven in earlier in May 2006, is the danger of overextending oneself in the futures market.
The lure of stock futures is easy to understand. Put in some margin, take a big exposure on a fast moving stock, make a killing when prices shoot up. Repeat exercise. Just that people forgot that prices may also come down and at a pace which noone can even imagine, maybe their friendly stockbrokers forgot to tell them that part of the story. The result : unbridled speculation that ran into lakhs of crores, excesses that we are paying for today. Even this fall will not cure investors of their love for futures speculation but if at least some amount of caution is injected it would have been a worthwhile learning.
Futures are not toys for amateurs, they are time bombs in the hands of inexpert and inexperienced traders, it's only a matter of when the fuse runs out. The other learning which I hope will play out in the future, as it has in the past, is that it pays to be brave in times of panic such as these. If I was allowed to invest myself , which I am not, I would have no hesitation in deploying serious money into the market today, knowing fully well that prices may fall more tomorrow. And I would be standing there tomorrow to buy more of the same, till my money ran out. India is going to be a terrific stock market story for many years to come, even an intermediate bearish patch cannot shake that conviction of mine. At best, one will have to wait a bit for the returns to follow. That's alright.
You are happy to put money in a bank FD and then wait for one full year to collect that measly 8%, aren't you? Then why does the stock market need to give you 20% every month? In the last one year, I haven't seen so many good stocks trade at such mouth watering levels. Forget trading, avoid the duds which were fuelled up by operators, just go out and buy those bluechips. They will deliver, even if there is a global market meltdown for a while, and if you are a bit patient you will be rewarded. But do remember January 2008, as history will repeat itself again in the future. Just that our memories tend to be too short and our greed too much.
Happy Price Menu @ Dalaal Street
Sunday, January 20, 2008
VALUE INVESTING :: BUFFET'S WAY
Price is what you pay. Value is what you get.
The dumbest reason in the world to buy a stock is because it’s going up,” says investment guru Warren Buffet.Trashing conventional principles of investing, Indian investors are on a shopping spree, buying all that is going up, without considering the price or the value of stocks. Price to earnings (PE) ratio, as a concept, appears to have lost its relevance for the time being as investors are busy trying to guess the next level that benchmark indices are likely to touch in the near term.
The 30-share Sensex soared to a new high of 21,000 as investors are counting on stronger foreign fund flows in the coming days, given India’s better resistance to a likely recession in the US compared with other emerging markets.A study on the trading volumes of topline stocks on BSE reveals that investors are accumulating ‘high PE’ stocks — trading in the range of 30-160 times — in large numbers.
PE ratio gives investors an idea as to what the market is willing to pay for the company’s earnings.The higher the PE, the more the market is willing to pay for the company’s earnings. PE, as a stock market indicator, helps the investor in deciding whether he should invest in a particular stock or not.A scrip trading at a PE of 15-18 times is generally regarded as a ‘fairly valued’ stock across markets, provided the company has decent earning potential. In the Indian context, with the Sensex trading at a PE of 22 times, stocks trading in the range of 18-20 times are not seen as overvalued.“PE can be a bit more higher in the case of high-growth sectors like realty and telecom,” said a fund manager.
Conversely, a low PE may indicate low investor confidence in the stock. It could also mean that the scrip is a ’sleeping multi-bagger’ that the market has overlooked. Known as value stocks, many investors made their fortunes spotting such stocks before the rest of the market.So, considering the current trend, how relevant is PE?Generally, in a uptrend, investors with a higher risk profile (those investors who are not investing for the long term) invest blindly without considering much about the fundamentals or value proposition of stocks. This is a dangerous trend, as stocks appreciating on ’sector-goodies” plummet once sentiments change, says experts.“PE, as an easy analytical ratio, is still relevant for investing in stocks.
But in a surging market, people generally don’t buy stocks by considering the PE ratio,” says Indiabulls Securities CEO Divyesh Shah.There is no simple method to spot the right PE for a stock. If an investor is willing to pay more for a particular company’s stock, he believes the company has good long-term prospects over and above its current position. “Though PEs don’t tell you the underlying story, it will give you an idea as to how the stock is valued.High-demand stocks, with low free-float, will also have high PEs. Therefore, along with the PE, investors should also consider the long-term growth prospects of the company they are investing in,”
The dumbest reason in the world to buy a stock is because it’s going up,” says investment guru Warren Buffet.Trashing conventional principles of investing, Indian investors are on a shopping spree, buying all that is going up, without considering the price or the value of stocks. Price to earnings (PE) ratio, as a concept, appears to have lost its relevance for the time being as investors are busy trying to guess the next level that benchmark indices are likely to touch in the near term.
The 30-share Sensex soared to a new high of 21,000 as investors are counting on stronger foreign fund flows in the coming days, given India’s better resistance to a likely recession in the US compared with other emerging markets.A study on the trading volumes of topline stocks on BSE reveals that investors are accumulating ‘high PE’ stocks — trading in the range of 30-160 times — in large numbers.
PE ratio gives investors an idea as to what the market is willing to pay for the company’s earnings.The higher the PE, the more the market is willing to pay for the company’s earnings. PE, as a stock market indicator, helps the investor in deciding whether he should invest in a particular stock or not.A scrip trading at a PE of 15-18 times is generally regarded as a ‘fairly valued’ stock across markets, provided the company has decent earning potential. In the Indian context, with the Sensex trading at a PE of 22 times, stocks trading in the range of 18-20 times are not seen as overvalued.“PE can be a bit more higher in the case of high-growth sectors like realty and telecom,” said a fund manager.
Conversely, a low PE may indicate low investor confidence in the stock. It could also mean that the scrip is a ’sleeping multi-bagger’ that the market has overlooked. Known as value stocks, many investors made their fortunes spotting such stocks before the rest of the market.So, considering the current trend, how relevant is PE?Generally, in a uptrend, investors with a higher risk profile (those investors who are not investing for the long term) invest blindly without considering much about the fundamentals or value proposition of stocks. This is a dangerous trend, as stocks appreciating on ’sector-goodies” plummet once sentiments change, says experts.“PE, as an easy analytical ratio, is still relevant for investing in stocks.
But in a surging market, people generally don’t buy stocks by considering the PE ratio,” says Indiabulls Securities CEO Divyesh Shah.There is no simple method to spot the right PE for a stock. If an investor is willing to pay more for a particular company’s stock, he believes the company has good long-term prospects over and above its current position. “Though PEs don’t tell you the underlying story, it will give you an idea as to how the stock is valued.High-demand stocks, with low free-float, will also have high PEs. Therefore, along with the PE, investors should also consider the long-term growth prospects of the company they are investing in,”
Saturday, January 19, 2008
Volatility ahead
It could be a volatile year at the bourses :::
The much-publicised public issue is just behind us and it is interesting to see how the market behaves after the mega event. If the public response to the Reliance IPO is any indication, equity seems to be the flavour of the season. The issue was a talking point at every cafeteria in the corporate sector and many investors ended up opening demat and trading accounts purely to catch the issue.
While a good response to equity issues from retail investors is a welcome sign, the frenzy makes one wonder whether the Indian investor has begun to get unreasonable with his returns expectation. In this backdrop, the recent correction in the market was a welcome relief as some of the over-heated stocks shed their superlative gains. On the other hand, the tech sector continued to be ignored by market men despite delivering results on expected lines. The results failed to boost the market sentiment, with investors chasing higher returns in recent times. While the short-term trend continues to be volatile and uncertain, investors with a long-term view can continue to hold on to their investments.
Sectors such as IT, pharma and technology may be used as defensive sectors. There are still no clear signs of reversals in the fortunes of this segment and instead, a further weakness is being feared in the light of a slow-down in the US. Hence, for short-term investors, technology may not be a safe haven in the coming days. On the other hand, sectors such as banking and financial services, infrastructure and power continue to hold promise with energy being the latest entrant to the list. In the case of infrastructure, fresh buying interest can be foreseen as nearly half-adozen funds have mobilised or in the process of mobilising funds for investing in the sector.
In addition, investors who have penchant for a contrarian view could bet on auto and auto components as action seems to have picked up in this space. The softer interest rate regime could boost the volumes story for the two-wheeler sector. On the other hand, the increasing competition in the fourwheeler segment has once again brightened the prospects of auto component companies. The fact that most of these stock prices have been stagnant in the last couple of quarters reduces the risk-reward ratio for these companies. If there is another sector which is a direct beneficiary of a lower interest regime, it surely is realty. The sector has been one of the most volatile sectors at regular intervals.
The signs of interest rate fall have offset the negative sentiments. Any sharp fall in interest rates will be a big boost for the sector, and hence, its fortunes are directly linked to the credit policy outcome. It may not be a bad idea to use market corrections to accumulate fundamentally good stocks for a long-term portfolio. Irrespective of the choice of sectors, it's time for investors to take a long-term view and the current year well prove to be one of the most volatile years in recent times. While the annualised yield may not be handsome, one can better their portfolio returns by being patient and using deep corrections to pick good stocks.
The much-publicised public issue is just behind us and it is interesting to see how the market behaves after the mega event. If the public response to the Reliance IPO is any indication, equity seems to be the flavour of the season. The issue was a talking point at every cafeteria in the corporate sector and many investors ended up opening demat and trading accounts purely to catch the issue.
While a good response to equity issues from retail investors is a welcome sign, the frenzy makes one wonder whether the Indian investor has begun to get unreasonable with his returns expectation. In this backdrop, the recent correction in the market was a welcome relief as some of the over-heated stocks shed their superlative gains. On the other hand, the tech sector continued to be ignored by market men despite delivering results on expected lines. The results failed to boost the market sentiment, with investors chasing higher returns in recent times. While the short-term trend continues to be volatile and uncertain, investors with a long-term view can continue to hold on to their investments.
Sectors such as IT, pharma and technology may be used as defensive sectors. There are still no clear signs of reversals in the fortunes of this segment and instead, a further weakness is being feared in the light of a slow-down in the US. Hence, for short-term investors, technology may not be a safe haven in the coming days. On the other hand, sectors such as banking and financial services, infrastructure and power continue to hold promise with energy being the latest entrant to the list. In the case of infrastructure, fresh buying interest can be foreseen as nearly half-adozen funds have mobilised or in the process of mobilising funds for investing in the sector.
In addition, investors who have penchant for a contrarian view could bet on auto and auto components as action seems to have picked up in this space. The softer interest rate regime could boost the volumes story for the two-wheeler sector. On the other hand, the increasing competition in the fourwheeler segment has once again brightened the prospects of auto component companies. The fact that most of these stock prices have been stagnant in the last couple of quarters reduces the risk-reward ratio for these companies. If there is another sector which is a direct beneficiary of a lower interest regime, it surely is realty. The sector has been one of the most volatile sectors at regular intervals.
The signs of interest rate fall have offset the negative sentiments. Any sharp fall in interest rates will be a big boost for the sector, and hence, its fortunes are directly linked to the credit policy outcome. It may not be a bad idea to use market corrections to accumulate fundamentally good stocks for a long-term portfolio. Irrespective of the choice of sectors, it's time for investors to take a long-term view and the current year well prove to be one of the most volatile years in recent times. While the annualised yield may not be handsome, one can better their portfolio returns by being patient and using deep corrections to pick good stocks.
Market Dynamics
Understanding the dynamics of market and meaning of investment :
It is always said that stcok market is driven by greed and fear.Common people (i mean retail investor) invest in stock for creating wealth which they think that it will fullfill their financial goal.But this natural desire for creating wealth ends in loss when they sell their holding in the fear of loosing their investment. It happens often when price start going down below the purchased price.This is what the dynamics of market is all about.
The word "greed". Greed defines the dynamics of market from Dalal street to wall street.
Money is definately a motivational tool but it can not solve all our problems. At the same time if we don't have passion for money we can loose our hope to achive ambitious GOAL . We need to have balance between "greed for money" and "motivation for money" in order to achieve our GOAL.
It is important to understand that Greed can be motivator but also a barrier. This can distarct our concentartion from focusing on our investment Plan. We can cosume so much of our time in persuit of money that we fail to appreciate the inherent rewards of value investing.
Investment is not just about puting your money in stock.It is about giving yourself a intellectual challange Physically, Emotionaly and Economically.You can develope your investment skill by practicing it in your life. Never focus all of your energy on money and the profit/loss. Instead, you should focus on develoing these skills and enjoying the process of learning irrespective of the fact that you made a profit or loss. because loss incured by you in your early days gives you lots of learning.
In the long term you will always enjoy your investment process and it will always give you a great feeling.
"A stock is not just a ticker symbol or an electronic blip; it is an ownership interest in an actual business, with an underlying value that does not depend on its share price"
..The Intelligent Investor
by: Benjamin Graham
This is what mr. benjamin agrahan said 50 years back.but In today's world in spite of so much of information available around us,People are not ready to understand the meaning of investment.
"The secret to your financial success is inside yourself. If you become a critical thinker who takes no Wall Street “fact” on faith, and you invest with patient confidence, you can take steady advantage of even the worst bear markets. By developing your discipline and courage, you can refuse to let other people’s mood swings govern your financial destiny. In the end, how your investments behave is much less important than how you behave"
..The Intelligent Investor
by: Benjamin Graham
People wants return, which are historically annual, over a span of months or even weeks. This is what make them "greed", the word which defines the dynamics of market.
..Contributed by -
Prem Ranjan Singh
Stock Analayst & Investor
It is always said that stcok market is driven by greed and fear.Common people (i mean retail investor) invest in stock for creating wealth which they think that it will fullfill their financial goal.But this natural desire for creating wealth ends in loss when they sell their holding in the fear of loosing their investment. It happens often when price start going down below the purchased price.This is what the dynamics of market is all about.
The word "greed". Greed defines the dynamics of market from Dalal street to wall street.
Money is definately a motivational tool but it can not solve all our problems. At the same time if we don't have passion for money we can loose our hope to achive ambitious GOAL . We need to have balance between "greed for money" and "motivation for money" in order to achieve our GOAL.
It is important to understand that Greed can be motivator but also a barrier. This can distarct our concentartion from focusing on our investment Plan. We can cosume so much of our time in persuit of money that we fail to appreciate the inherent rewards of value investing.
Investment is not just about puting your money in stock.It is about giving yourself a intellectual challange Physically, Emotionaly and Economically.You can develope your investment skill by practicing it in your life. Never focus all of your energy on money and the profit/loss. Instead, you should focus on develoing these skills and enjoying the process of learning irrespective of the fact that you made a profit or loss. because loss incured by you in your early days gives you lots of learning.
In the long term you will always enjoy your investment process and it will always give you a great feeling.
"A stock is not just a ticker symbol or an electronic blip; it is an ownership interest in an actual business, with an underlying value that does not depend on its share price"
..The Intelligent Investor
by: Benjamin Graham
This is what mr. benjamin agrahan said 50 years back.but In today's world in spite of so much of information available around us,People are not ready to understand the meaning of investment.
"The secret to your financial success is inside yourself. If you become a critical thinker who takes no Wall Street “fact” on faith, and you invest with patient confidence, you can take steady advantage of even the worst bear markets. By developing your discipline and courage, you can refuse to let other people’s mood swings govern your financial destiny. In the end, how your investments behave is much less important than how you behave"
..The Intelligent Investor
by: Benjamin Graham
People wants return, which are historically annual, over a span of months or even weeks. This is what make them "greed", the word which defines the dynamics of market.
..Contributed by -
Prem Ranjan Singh
Stock Analayst & Investor
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