Friday, June 24, 2011

What Is On My Plate?

Once upon a time villages used to abut Cities and now its cities that reach upto the villages,that is how urbanisation is spreading its tentacles and for me its as noxious as pollution,cancer or tobacco!

Rising population and reducing agricultural land to grow staples is the main reason why the inflation in India is not falling despite fiscal measures,policy meets etc

I am bullish on companies that are buying up land to grow crops,eq KGL,which has bought thousands of acres in Kenya,Tanzania,Sudan(although i have my apprehensions about the management).This is the space where scalability will not be a factor and the clamour for food will ensure high prices.

I am bullish on wheat(low prices this year notwithstanding),maize,soya,oilseeds.Those who cannot trade in commodities can alternately invest in those firms that deal in food products.

Another thought that has been in my mind is the propagation of processed foods that will form a  30-40% part of daily life in the next 5 years up from the current 5%.Obesity,high salt content means more healthcare.

If I was a longterm investor i would buy into food&healthcare and ensure I exercised regularly,ate healthly and thought positive!

P.S.Those of us in financial services have not thought positive for the last six months!

Sunday, June 12, 2011

Dont Let the Pessimism Keep you down

So the global situation is bad,Europe is having E.Coli,the USA growth pangs and debt worries.China and India facing inflation,The Middle East-Syria,Yemen at war with itself,Gadaffi is still being bombed and no one knows who is running the oil wells?

Situations like these have given birth to investment "gurus" like Warren Buffett,Soros,Mobius etc,whne the day is at its darkest someone has to take the call on whether we face Armageddon or will will endure.

Indian equities are fairly valued(if you know what fair value is!).I know I would buy real estate,consumer stories as the land required to live and grow food in the emerging markets is at a premium.The real unemployment rate in India is 10% funnily our analysts only see the US figs.Its probably down from around 18-20% in the last decade and the growth in Per Capita income has camoflaged the unemployment effectively.

Infrastructure stories are for those investors who want to invest for minimum 10 years although at the end of the day at least for another quarter take the profits of the table and go for bonds and bank deposits at a risk free return of 8-9%


Wednesday, June 1, 2011

A Little Bit of Everything

The month of May has been bad for the equity markets in India.Those who rushed in to buy have seen a 30% fall in their assets and those who went in to short have seen the indexes rebound.

I have kept away  reading up on investing strategies,alternate assets,a bit of fiction.Finally India seems to be taking Africa seriously.I have written about the resources in earlier blogs but what surprises me is the ARPUs of telecom companies especially Nigeria and Kenya.

If Oil companies raise prices,govt earns more excise duties,inflation rises,oil prices aligned to crude prices,international oil cos sell in india,would not the Indian Oil Cos go running back to Big Daddy for more handouts as their inefficient distribution networks would ensure another LOSS?

So those investors thinking of buying Indian Oil Co stocks should do some groundwork and not let the babble on business TV channels take your breadth away!

Of all the rumours I keep hearing I feel that the lows made in June should hold up as a normal monsoon is expected and the 2nd half of the year might redeem the day for Equity traders although the news has been systematically negative internally and Globally.The record Drought in Europe is adding to the misery and we have to live with high food prices.

I have strongly believe the inverse corelation between high rate of urbanisation and higher food prices.Will write a more detailed article on this...