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Saturday, February 25, 2012

Climbing The Wall



Crude is on the boil...Republicans say dig more Oil Wells....Saudis want nukes.....Afghans kill,not because they do not have any food,but due to some Qurans being burnt at an army base!!

The new world is a complex,modern,tech marvel with the social tolerance level of the Dark Ages or the Crusades.Yet Wall Street is almost at a Four year high.What does the American public see that we in the "developing" world do not?

I travelled to one of India's most mineral rich states-Odisha.For many years to call someone an "oriya" was derogatory and meant someone with low level skills.I have a lot of Oriya friends and was amazed to see how well the infrastructure is developing with good roads,modern highways and good management of the iron ore resources so far.Yes Niyamgiri is an exception but on the whole they seem to have taken the 'green earth' policy quite seriously.Being an Oriya will I guess be a matter of pride from now on for all the residents of this marvellous state.

When compared to Bengal,the future definitely seems to be shifting towards the south eastern state and all my investor friends should certainly look at investing in and around Bhubaneswar,the capital of Odisha.The Flip Flop politics of Bengal is not helping.

Whatever is happening to the Dow,Nasdaq-Indian markets are likely to consolidate but my gut feeling is that the beaten down infrastructure space is a good BUY as are the midcaps in business leadership positions in their respective sectors.I am on the long side in ITC,Pantaloons for the next ten days.

The Rupee looks set to trade around 49-50 vis a vis the $ and Gold may outperform silver although in the long run i am more bullish.

A couple of months back I had given a strategy of selling Gold and Buying crude and those who did that are still making a decent return of 25% .Its always nice to talk of things that went right as i have spent One whole year being bullish on India when the nifty gave a return of -24%.Feels good to be vindicated although the rally has been mainly on account of liquidity.Yet the portends for a Bullrun are there and nifty levels of 4900-5000 would be a good place to start accumulating.


Wednesday, February 15, 2012

Pers(ian) Problems...

So the Iranians finally decided to unsheath their 'velvet'gloves at last!

Although Iran has never been counted in the same group of 'Mad Mullahs' comprising Afghanistan etc it seems that the desire for sabre rattling and the creation of the state of Israel cannot be digested.

Its truly a dickensian world where Obama led Americans will give $ 2.4billion to Pakistan for killing the Coalition soldiers,arming the Taliban and Kashmir insurgents and sharing nuclear tech (thru A Q Khan) with Iran.Some ghosts never go away.All field reports have categorically warned of the ISI-Taliban-Al Qaeda nexus yet the mandarins in Washington play their own games.

By covertly supporting the nuclearization of Korea,Pakistan and indirectly Iran,I think China this time has been a little too smart in the long term planning they so like.If the Islamists gain sway in south Asia,the small Chinese problem in Uighur can in a decade become a serious threat.

The western world did not understand that the covert support in Afghanistan and Kashmir would come back to haunt The US within a decade and its destroyed the economic fabric of at least one country.Historically,Islam has been a tribal religion and when they did not find a common enemy then the Shias fought the Sunnis,the Ahmadiyas etc

Threats in the Straits of Hormuz,cutting of oil supply when Europe is on the verge of a recession and an election bound President in the US do not make good reading for the economic world and high commodity prices.

The Israelis i feel have a window within the next six months if they can reach the facilities at Bushehr as its unlikely that President Obama will take the risk.Unlike the past their fighter jets have air-to-air refuelling capacity now and they do not need a friendly power to transit through.

What effect will it have on equity markets?A correction would be healthy and let off the excess exuberance that has built up in india in the new year.A nifty level of 47000-5000 would be a good place to start buying beaten down real estate,infrastructure and power cos with good balance sheets and not too much leverage on their books.

Can look at India hotels(around 70),Lupin(around 470),Indiabulls real Estate(around 77-79).Rcom to be bought on dips around 77-88 mark.I would write a few nifty calls around 5500 level because I havent been short on indian equites since 2010.