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Saturday, November 30, 2013

Sachin Tendulkar Was A Long Term Investment

So farewell to a glorious career.Farewell to Sachin Tendulkar.Dignified man who let his deeds on the cricket field do all the talking.His place in history is secure.


Sachin Tendulkar had a 25 year career.When he started playing the price levels were:-

Rupee versus US $ was 19
The BSE Sensex was at 800
Petrol prices were Rs 9.85 Ltr
Diesel prices were Rs 4.10 Ltr
Gold was Rs 3100 per 10gms

If you had bought some of these financial assets the returns would be:-

Rupee versus the US $ today is 62
The BSE Sensex today is 20790
Petrol today is Rs 74
Diesel today is Rs 57.50
Gold price today is Rs 30440 per 10gms

Do the maths?Tear your hair out.Whatever.

If your investing career had been as long as Sachin's,it might have been as glorious for you as it has been for Tendulkar!!

The good part is that its never too late(or never too early)to start.Go to your nearest financial advisor or  you might see a similar message when Virat Kohli retires a few decades hence...!

India and China.

Let me give you an example.The Congo river drains an area of 3.7 milliom kilometres known variously as the Congo basin which consists of Tropical Rain Forests spread over 178 million hectares.It is so large that it creates its own climate.The evaporation from trees is so vast that it forms clouds that drop their load over the wide area at an annual average of 650cm per year!

A billion consumers in Indian and a little more in China can create a vast business cycle of maufacturing to consumption of goods and services that is self sustaining.

There is no need for esoteric,complex investments.Just look around you and you will find companies that make profits from you,products that you use in everyday life.

Tuesday, November 19, 2013

Season of Laggards...

The Nifty has made a new near high.The Sensex already did that.So how many of those who invested came away winners?
 
Very Few.Most stocks are still languishing at 2011 levels and that is especially true of mid caps.Those who invested in 2009-10 and did not average are stuck with stocks which are as yet 15-40% below their buy level.
 
Retail participation is at all time lows in Indian equities and few have the taste for fresh investments.Fewer yet have the courage!
 
Analysts have been talking on how important infrastructure is if India as a Nation has to develop economically and challenge the USAs,Chinas etc.In a decade the vaulations have tumbled for stocks and even mighty companies a la Larsen&Toubro,Bhel and a few others have had prices come down from stratospheric heights.

This Five Year chart of L&T is a good example:


The present managers of India have been caught in too many stings,corruption scandals and sheer weariness to do much.If the BJP comes to power then infrastructure looks set for a fillip as their economic policy is very traditional,their support base being mainly from Infra,textile and the general merchant class.
 
Additionally what this correction has done is to very brutally factor in the over leveraged Balance Sheets,longer duration of realization,increased project cost -  till most of the firms prices fell to 30-50% below Book Value(BV)
 
For the long term investor it still isn't the best  price to buy and forget.Offcourse these days its difficult to reccomend such buy-and-forget ideas as the Global and internal situation is so fluid and just a surfeit of news and occurrences.I mean,President Obama might 'find' WMDs in Iran to take focus of his internal issues with the Congress,Prime Minister Nawaz Sharrif might send in Peshmergas into Kashmir to prove to the Pak Army-ISI combine on how tough he is.India's food inflation with daily rumours of some shortage or the other.
 
Tough call.But buy the following stocks  as they look set for 10-20% rally in a market where the large cap leaders have already moved up leaving few gaps for a profitable trade:-
 
JPinfrasture   cmp 19
HCC              cmp 14
JPAssociate   cmp 49
IFCI               cmp 25
 
Other stocks that one can look at NBCC, JSW En,NCC.Afterall its a trader's market!

 

Monday, November 4, 2013

Agenda for 2014...??

The Sensex hit a new all time high last week.The investors I talk too across the country are still holding 75% stocks at inflated valautions that are still far from breakeven.After factoring in inflation the Sensex is still down 12%.And I am not even talking about the midcaps,smallcap etc
 
 
The RBI Governor has injected a sense of focus on the economic barometers that he wishes to tackle and has had a positive affect.The Quarterly numbers have been better than expected.PSU Banks that got beaten down ralled 2-3% and so did the Nifty.
 
This rally in Indian equities have again brought out the "experts" from the woodwork and I heard someone predict that the BJP led coalition victory in 2014 elections was factored in...!!
 
Wow...!!
 
Does anyone know what the agenda of the BJP for 2014 is or will be?
 
Will they want to build a 'Ram'Mandir at Ayodya?
Will they give a stipend to all the priest,mahants,holy men in the country?
Will they go around building giant sized statues of their ideological ancestors?
 
I mean,in a country with the highest infact mortality rate,starving people,people below poverty line,people without homes and not counting those victims of myriad Cyclones,storms,floods,droughts.
 
And the 'would be' Prime Minister wants to build the world's highest statue of one of India's founding fathers...!!Is that the agenda?
 
Its shocking that the industrial policy has not been defined other that to say that the 'Gujarat Model' will be followed which means land given to industry at cheap rates to create jobs without counting environmental cost or the loss in agricultural acreage.
 
It was the same party's government that handed over terrorists after the Air India hijack at Kabul.Can they be tough on border issues with China or Pakistan?
 
Do they have the statesman or the leaders with experience to deal with a country of diverse cultures frustrated by corruption,apathy,ineptitude.Bad roads,poor electricity,high food prices.Its a real tower of Babel.
 
Right now it is tough to figure out the way the dice will roll.I for one am pessimistic that even after the elections the situation may not change and if it does it will have more to the Global factors than any inherent measures by measly politicians.
 
Will we be able to change the leaders who quibble over flood relief measures,throw chairs in Parliament,browbeat citizens,grab government grants for individual favours.
 
The danger from terrorists,Pak army,floods,cyclones is much less than these greedy 'self appointed'guardians of Indian morality...!!
 
Will they change after the 2014 Elections?
 
Me thinks NOT.