The Icon-o-blast

Time to take money off the table

2011-06-01T12:48:00.000+05:30

Asian paints has rallied 30% in the last two months and is currently trading at 30x FY12 earnings. Time to book profits on this one.

RBI changes provisioning norms for banks

2011-04-28T16:41:00.003+05:30

The RBI recently amended norms relating to provisioning for banks. Banks have to make provisions for loans so that in case some of the loans go bad (i.e. the borrower delays payments or cannot pay), the bank can use these provisions as a cushion. These provisions are made out of the earnings of the bank for that year.

The technical term used for bad loans is non-performing loans (NPLs). Of course, there are several more terms like write-offs, loan losses, past due loans still accruing interest income etc. But for purposes of our current analysis, the term NPL would do.

In 2009, the RBI had mandated that all banks should have a minimum provision of 70%. This meant that if a bank had INR 100 crores of NPLs on its books, it should have (from its revenues each year), cumulative provisions of INR 70 crores to cover these NPLs. However, this was changed recently when the RBI declared that for loans made after Sep2010, the requirement would not apply.

What does this imply for an equity investor in the banking space?

From a bank’s performance perspective, it bring no dramatic changes, therefore long-term investors don’t really benefit (or gain) by this relaxation of norms.

For banks which have had historically low provisioning, they will now have to meet the 70% target only for loans made before Sep2010. Since provisioning comes out of earnings, it means that the EPS (earnings per share) of these banks will go up in the short-term – all of course at the cost of lower coverage for the last 2 quarters of FY11.

Among the larger banks, SBI and ICICI Bank have had below 70% provisioning. Axis bank and Bank of India have just about met the 70% coverage ratio. But banks like HDFC Bank, Yes Bank, Bank of Baroda, PnB and Canara Bank meet these coverage requirements more than adequately.

Interpreting RBI action
The relaxed provisioning norms for loans made after Sep 2010 may be part of preventive action taken by RBI to thwart the threat of NPLs given that rates have increased by 100-125 basis points between Sep 2010 and Mar 2011 and are close to/at their peak.

Impact of Egypt crises on Asian Paints is marginal

2011-02-07T13:13:00.002+05:30

Asian Paints operates in Egypt through a company called SCIB Chemicals SAE in which Asian Paints has a 60% shareholding. Due to the recent crises in Egypt, Asian Paints had temporarily closed two of its plants. However, with effect from yesterday, the company has partially restarted its operations in its two plants in Egypt.

From company reports, we note that the middle-east (ME) region accounted for 9.6% of revenues and 7.5% of PBIT for Asian Paints as of 1HE FY11.The Egyptian market has performed well in the ME region and therefore is important to Asian Paint's international operations. Per analyst estimates, ~5% of total revenues are attributable to Egypt. Thus, the impact of the crises due to a few days of plant shut down in Egypt looks marginal for Asian Paints.

The company has been aware that political conditions in Egypt could go awry. In one of the reports dated Nov 2010, the company has identified an operational risk by stating that, " market conditions in Egypt are expected to remain tough due to forthcoming elections." Hence, the company has not been caught unawares and unprepared for the situation.

Asian Paints currently trades at a historical PE of 28x. With street estimates for growth in EPS at 29%, this implies a forward PE of 23x. At current levels of INR 2,500, the stock continues to look attractive.

Is this for real?

2010-08-20T13:55:00.003+05:30

I keep getting a lot of marketing calls on my mobile phone, most of them either to do with caller tunes or Insurance. However, in recent times, I seem to get calls for charity donations. Usually the caller says that she is from an NGO and there is a child who is suffering from so-n-so disease and that the treatment requires INR 10,000 only. Can you please help this child?

I have never followed up on such calls i.e. never cross questioned them to figure out if they are genuine, but I find it odd that NGOs (if this is indeed not a racket) have started calling up people randomly from some phone list that they have acquired. And I have never heard of the name of the NGO (it is not the familiar CRY or Helpage).

Is this a new form of "you have won $1000,000 from our lucky draw/I am from Africa and am inheriting $2bn"?

A woman is an individual too

2010-08-02T12:51:00.004+05:30

Women never seem to have an independent identity it seems; no matter how good they may be in their individual capabilities.

Take for instance today's front page in Business Standard today which carried a picture of Chelsea Clinton. The title of the photograph is " Just married - Mr. and Mrs. Mezvinsky".

Before marriage, Chelsea was known by her father's name and now after marriage by her husband's name.

On a similar note, I wonder when newspapers print such things, do they bother to investigate (in this case for example), whether Chelsea wants to be known as Mrs. Mezvinsky or would rather use her maiden name?

Dork by Sidin Vadukut

2010-03-02T10:12:00.002+05:30

Dork - ' The incredible adventures of Robin Einstein Varghese'
Price Rs. 199
Penguin Publications

A refreshing change after reading poor quality so called literary pieces of fiction that are being written by taking advantage of the alumni 'brand name' - this book does not fall in that bad literature category.

The book is engrossing, witty and humorous and tells the story of Robin Were Geese - who is a dork and his experiences in a consulting firm. For those who enjoy humour, this is a 'must not miss'. Written in a diary format, which has suited the story very well, the book describes the inane work that a lot of us do in the corporate world.

I have seldom come across books which have good humour primarily because writing humour is much tougher than acting it. A great source of entertainment, it is bound to keep the reader glued to the book till the very last page.

DST - Delhi standard time

2010-02-25T20:05:00.002+05:30

It happens every time I go to some party particularly if it is an evening function. In Delhi, the invitation will always say 6PM or 8PM but the function will never start until it is well past two hours after the stated time?

If it is a marriage then you can add a good 4-5 hours after the stated time.

This month I attended a wedding. Before leaving, Hubby and I finished dinner at home (brushed our teeth and gargled too!) and left well after 10PM to reach the venue. The barat had just entered at 1030PM. And it took till 1130PM before the groom came onto the dias and we could give our gift and politely return home. We could not meet the bride.

Why are people in Delhi extra passionate about the lack of timeliness? Why do they lack respect for other people's time?What is so great about stating a particular time on the card but starting the real function much later?

How do you refuse a 'fraanship' request?

2010-02-10T10:21:00.005+05:30

What do you do when you find that someone who you are merely 'acquainted' with and who you hardly know, sends you a 'friendship' request on one of those several social networking sites that you are registered in?

Frankly, increasing the number of friends I have in my list does not appeal to my ego as it does ( if you were to believe the newspaper articles) to some youngsters. Further, I do not like to display my profile publicly - that goes for those sites as well which are supposedly there to 'help you network for business reasons' (no frannship mails here).

Surely there is no harm in 'accepting' the invite of an 'acquaintance'. But if it were a social networking site, I may not want to share photos of say a vacation with everyone who is listed as a friend on the site. (One solution is to use some other site and send a link to only those who you think are relevant). Further, there may be personal information that I may not want to share with merely an 'acquaintance' I met at some party. Besides, what do you do, if you had taken an instant dislike to that 'acquaintance' and would certainly not want to be seen as being 'friends' or whatever with him/her?

Getting yourself de-listed (is that the right word???) from the site is not the correct solution. After all, I know more about my friends and relatives these days through these social networking sites than I do from talking to them or e-mailing them. But what can one possibly do about some people who I think are a pain in the ***?

Of the usefulness of campaigns

2010-02-08T14:39:00.003+05:30

Save the tiger campaign has drawn flak from some quarters because while it makes people talk about it (with comments like 'oh the cub is chooo sweet/cute'), it does not tell people what they can do to help (monetary contribution to the cause or other kinds of contribution). And I would tend to agree with the conclusion that by simply talking about it and joining the 16-odd facebook groups, how am I really contributing to save the tiger? How many people in those awareness groups have done anything concrete to save at least one tiger?

Saying that talking and voicing concerns will help (even if indirectly help the cause by raising awareness) is like asserting that people who play farmville on facebook are contributing to India's agrarian economy. This is not like an AIDs campaign where creating awareness will lead people to take precautionary measures (like using condoms or using disposable needles). Why doesn't the Save the Tiger ad suggest some concrete measures about what urban masses can do to really save the Tiger? And let those suggestions be practical - not something like - stop using tiger products (I do not know any one in urban areas who uses Tiger skin or eats Tiger meat or uses any part of the Tiger for curing any ailment).

The breast cancer awareness campaign 1 month ago was also on similar lines. Apparently, women had to put the colour of the bra they were wearing on that day on their gtalk/yahoo chat/other chat/facebook status board, to 'raise awareness about breast cancer'.

I felth such a measure was the most useless method (indeed of the highest order). Firstly, how can someone's status message on the bra colour raise awareness about breast cancer? Secondly, it was not an awareness campaign so to say - no handouts or accompanying e-mails which would tell you how you can prevent/reduce the incidence of breast cancer.

When the Internet and e-mail was new to India, there used to be these peculiar chain mails sent for 'helping' a certain cause (justice/appeal for someone) - something similar to a signature campaign, 'please send this to 10 people and add your name to the below list which will be sent to President of India'. And people would (irritatingly) forward those lists. Till date, I do not know of any such spam mail eventually solving the cause for which it was forwarded by scores of people.

I really wish people would stop focusing on such useless methods of raising awareness about an issue and come down to implementing some thing that is practical and aligned to the cause instead.

Wedding gift question

2009-12-03T11:24:00.004+05:30

Recently, husband and I were invited to the wedding. As usual, we were haunted by the key question, what gift should we be giving to the couple?

In our own wedding, we received tons of glass vases. Initially, we thought that maybe this is what people liked, so even we gifted other people glasses and glass vases for weddings. But after several months of storing vases in our own house (which after nearly 3 years are still collecting dust), we realized they were of no practical use to us and neither would they be to any one else. So we stopped giving gifts altogether when we went for weddings.

Early this year however, we again had a spate of weddings to attend to in February - some included NRIs. Giving any gift in kind to an NRI is useless since they are anyway unlikely to carry it with them. So we gifted them money. Since we were gifting our NRI friends money, we decided to gift the Indian ones money too. Since there were at least 15 weddings we attended in a row, we did not place any great significance on the amounts we were gifting - which were different for different couples for no reason.

This time during the wedding season however, we were confronted with another question, how much is good enough to gift? Should it be based on your earning capacity, or should it be based on the cost per plate of food that we eat in the wedding? Or should it be based on how close we were to the couple getting married? Is INR 500 too little and INR 1500 just touching the mark then? We had no clear answers. Eventually, we decided, it is neither costs nor how much you earn, nor how close you are that should determine what you give. You should give what you feel like giving from your heart to that couple.

Bullish mode today

2009-10-30T09:46:00.002+05:30

The Dow closed on a significantly positive note due to lower joblessness claims. Taking the early opening cues from US markets, European markets also rallied between 1-2% yesterday. Key Asian markets have opened in the green and we expect a positive opening for our markets too. Crude closed higher at $79.97/bbl while gold also rallied to $1047/oz.

Institutional activity on the cash segment saw significant volumes yesterday with FIIs selling INR 2546 crs while DIIs purchased INR 977 crs. Yesterday was expiry day and Nifty October futures rolled at a higher rollover cost - implying bullish bias. Nifty November put options are congested around the 4600/4800 levels while call options indicate 5000 as the upside hurdle.

Market closed at 4750 yesterday and we expect a positive opening close to 4800 levels. As I mentioned yesterday, it was a good day to start putting money back into the market.

In the short-term, oscillators and stochastic indicate oversold positions. On upside if market breaks 4870, then we are likely to test 4900 again. On the downside, 4770/4665 continue to be strong supports.

Time to start putting money from investing perspective

2009-10-29T10:30:00.003+05:30

The Dow closed negative note on account of concerns about slower global recovery. European markets also closed deep in the red.Today key Asian markets have opened on a negative note and we expect a negative opening for our markets too. Crude closed lower at $77.15/bbl and gold also saw a fall and closed lower at $1032/oz.

Institutional activity on the cash segment mixed with FIIs selling INR 723 crs whileDIIs purchased INR 896 crs. Today is the expiry day so expect a choppy session. Aggregate rollovers so far have been over 61% indicating willingness to participate despiterecent nervousness. Key supports for the day are 4770/4670 while on the upside 5065 remains a crucial resistance level.

4700-4800 is a good time for long-term investors to start putting money in the market. Market has been making higher tops and higher bottoms on the charts. In the last pull back from 4800, we saw a bottom at 4450-4500. From the current high top of 5200, the 50% retracement level of 4665 looks unlikely to be breached at the moment.

Market in a consolidation phase

2009-10-21T09:53:00.000+05:30

US markets closed in the red yesterday based on poor housing starts report despite strong earnings report by heavy equipment maker caterpillar. European markets also closed in the red yesterday. Key Asian markets have opened marginally in the red and we expect a subdued opening for our markets too.

Commodities were little changed with oil ending at $78.50 and Gold at $1,056.

The results season is on the full swing and yesterday majors like Sesa Goa and TechM declared results. Sesa Goa results were lower than expectations (performance is usually lower in 2QE due to monsoon). TechM results were per expectations if one were to exclude the forex gains made by the company. Yes bank also came out with a good set of numbers and the bank is expected to raise further capital to strengthen its Tier I and II capital base.

Among results to watch out for today are Hero Honda and JP Associates.

Further, from tomorrow onwards, the Nifty composition is going to include JP Associates and IDFC to replace Nalco and Tata Comm.

Market is currently in a consolidation phase and it is tough to conclusively say which direction the market is going to head towards. Based on technicals if the market trades below 5100 it will test support of 5077 and 5049 while in case the market breaches the level of 5135 then it will test recent high of 5180 and test even 5300.

Rediscovering board games

2009-10-20T11:04:00.003+05:30

In recent weeks, husband and I have taken fancy to Scrabble. Apart from being a good distraction from TV (where we can never agree on channels) which seldom has good programs except on weekends probably, we found this a better way to spend time and exercise our rusted minds. At the moment the novelty factor has not rubbed off so every day our TV time is spent on Scrabble. We plan to add Carrom and other board games to our activity list soon.

During my childhood days, I seldom associated late evenings with TV. There was no TV till early mid-80s. And then also there was a black-n-white box. As long as I can remember there was boring Krishi Darshan that used to come at 7PM. All the interesting programs would come only after 9PM by which time, I would be fast asleep. Once it got dark and we stopped playing outside, it would be time to play indoor games like Carrom, Scrabble, Chess, Slots. Monopoly was reserved for Sundays since it was a long game.

As adults, our perspective of fun and entertainment has changed radically. TV, cinemas and eating out occupy most of our weekend time-pass. The best form of entertainment we can get during Diwali is only teen-patti. And yet we find 'entertainment' in the monotony of these activities. We've forgotten the joy of painting, drawing, knitting, philately, numismatics or doing any fun activity that we used to as kids. Hubby and I hope to change this for ourselves and rediscover the joys of board games.

Searching for a good english music channel on TV

2009-10-14T19:34:00.002+05:30

Why is it that our Indian TV network does not have any channel which plays only English music all day? Channel V and MTV - traditionally the 'English' music channels hardly play (English) music during regular hours.

Is there no market for English music anymore? Is Bollywood music the preferred music of the times in India? After a long search of surfing through various channels, I finally found one channel VH1 which was unfortunately only playing only one type of music - Hiphop.

Is no one interested anymore in listening to good old classics 'Green Green grass of home', 'Lipstick on your collar' or something from ABBA and some less recent ones from the Corrs or Shania Twain?

Is there any way to check this?

2009-10-07T10:46:00.004+05:30

Very often my mobile phone rings from numbers that play pre-recorded messages. These particular numbers begin with +965XXXXXXX. I get these calls at least twice a day with one call definitely coming while I am driving or early Saturday/Sunday morning when sleep is dear.

Have these telemarketers bothered to find out how effective such a strategy is? I often get such pre-recorded ad calls even on the land line which we hardly use.

I wonder which businesses find telecalling a successful way of getting clients. In my business, it is one of the worst methods of salesmanship. I myself have never agreed to purchase a product solicited over the phone.

Further, numerous SMSes urging me to buy a Sauna belt, learn baking and purchase a second hand computer spam my mobile inbox. Is there no way to stop this nonsense? I will never make a purchase decision based on a faceless, character devoid, monologue. And majority of people I know have not done so either.

Who are these people purchasing products because of one SMS or because of a telemarketer? What causes them to make a purchase decision over the phone?

Why insurance agents should be done away with and insurance sold on a non-commission basis

2009-09-19T17:38:00.002+05:30

I recently came across the following from a CLSA report which I thought was quite informative in terms of putting exact numbers to what I always have suspected – that majority of Life Insurance agents work more for their own benefit (sell products with highest commissions) rather than trying to genuinely meet needs of clients. Consider these (Italicised from CLSA report):
1) Equities account for only 10% of total household assets in India

2) Life insurance in India has seen AUM grow 5 times in 5 years (as compared to only 4 times in 5 years in case of Mutual funds). Higher growth in Insurance is attributed to perception of ‘greater safety’.
A perception arising from fact that Insurance agents constantly belittle direct investment in equities or even Mutual funds for that matter. They have helped spread the idea among lesser aware clients that equities is risky but Insurance is not. Never mind that Insurance industry is one of the largest Institutional force that invests in equities – so where is the risk argument coming from?

3) Only 70,000 agents sell mutual funds, versus 2.5 Million (yes – MILLION) life-insurance agents. The main reason is that life-insurance agents earn higher commissions.
4) Unit-linked insurance plans (ULIPs) account for 90% of the new business of private life-insurance companies.
Because ULIPs often have commissions of as little as 30% and in some instances they have been more than 100%!!!!

Kudos to SEBI

2009-09-15T17:24:00.002+05:30

SEBI’s move to remove entry load charges (which go straight into the distributor’s pocket) from Mutual Funds (MFs) is a welcome move for consumers. MF distributors have been notorious (but not half as much as insurance sales persons) in mis-selling MF products to consumers and also churning MF portfolios of individuals in order to earn extra-commission.

For example, Mr. A who is a MF distributor once told me how he had sold an ELSS fund to a client. The client was looking for a tax-planning MF and was very keen on HDFC’s MF. HDFC had two MFs under ELSS - one which had a 2% commission and another which had a 4% commission. Mr. A did not tell the unknowing customer about existence of two funds. Rather than discussing which of the two fund’s portfolio comprised what, Mr. A simply told the client that HDFC’s 4% fund was ‘good’. And therefore invested client money in the 4% fund.
It is a shame that these distributors like to call themselves “investment advisors’. Ask them why a fund is good and most of them will not go into fundamental reasons why a particular MF is suited to that client. Their reasons will typically range from ‘everyone is investing in this, ‘good fund’, ‘popular fund’ etc. Some of the smarter ones will take out their laptops and rattle out numbers like ‘five star rating’, ‘Sharpe ratio’ out of a software that pulls all data from valueresearch. None, will ever go into the portfolio composition, defensive/aggressive portfolio or sectoral allocation of the fund.

During the bull run, a cousin of mine had invested some of his money in 5 different MFs through a distributor. Ever quarter, he would find his portfolio allocation of 5 MFs changing because the distributor would ‘churn’ the portfolio as if it were a portfolio of stocks. With each churn, the distributor would earn the entry load on the new fund that he had switched the money into. So even with a 2% entry load, with a quarterly switch, that is at least 8% commission earned per MF invested. But since it was the bull run and practically all MFs did well, no one minded.

Insurance agents are notorious for promising unrealistic returns verbally. Rather than selling ‘insurance’ for the sake of insurance, they sell insurance as investment products (the insurance cum investment products make maximum commission for them). One only hopes that the proposed measures to curtail commissions in the insurance sector are implemented soon.

Beauty of the LV bag

2009-09-11T15:03:00.003+05:30

I have been wanting to say this for a long time, but this 'popular' (wonder how it is popular – just snob value?) Louis Vuitton bag is the ugliest bag I have ever seen. Why pick such an dull color for one? I don’t’ care what kind of patent leather the bag is made up of, or what expensive materials went into making of that bag, that accounts for its significant price, I fail to understand why some women will pay INR 25,000 to buy this tasteless bag?

Besides, why would I want to advertise LV for free while carrying my bag with me where ever I go?

May the day never come when I have willingness to spend INR 25,000 on a handbag and end up buying such a disaster.

What kind of sissy girls are these?

2009-09-11T10:45:00.000+05:30

Consider the following story that was making TV ‘breaking' headlines yesterday.
http://www.hindu.com/2009/09/11/stories/2009091161301100.htm
Apparently, the stampede was caused when some girls ‘panicked and fled down the stairs’ because some boys were engaged in eve teasing them. The incident occurred in a ‘girls’ school.

What kind of girls are these that a few boys come into their ‘ilaaka’ and these girls instead of ganging up and beating those boys, instead start running away? What kind of parental upbringing do such girls go through that they don’t’ think that unity is strength and give those erring boys who have come into their domain what they deserve – a good thrashing? They should have simply carried those boys and thrown them from the first floor – after all in school; boys are not all that big – physically; to be impossible to pick and throw (having done that myself during my school days).

I remember an incident during my college festival – I studied in a girl’s college. A boy was trying to enter into the premises without a pass – pass was mandatory for men to enter our college. The boy attempted to enter the premises thrice and all three times –a girl called Sevantika beat the hell out of the boy single handedly and threw him out each time. So much so that the boy tried to scale the wall and enter the college and again Sevantika alone was enough. But had Sevantika even whispered for help from other women, there would be hundreds who would have come immediately to the rescue and beaten the wits out of the boy. And that is the kind of spirit that should be inculcated in women of our country rather than being scared nincompoops.

Divide and rule - British tradition continues

2009-08-31T10:36:00.000+05:30

As if politicians have not done enough to divide the country based on caste and religion, we now have an “expert committee” who is going to decide who will be below poverty line (BPL) based on their caste and religion.
http://www.business-standard.com/india/storypage.php?autono=368335
So poor Brahmins who genuinely require this support will not be able to participate in this program. And those who were not SC/ST, but due to political push (e.g. a certain community from Rajasthan recently had Dharnas and engaged in violence to get themselves listed as STs) got themselves converted into SC/ST, will now benefit from this program.

High time India abolished caste, creed, religion and region. Even asking someone his religion and caste should be made a serious crime. If after more than 60 years of freedom, the reservation system has not been able to do anything for the betterment of the so-called reserved castes, it just goes to show the efficacy of reservation – that it does not work.
Tamil Nadu is a class example of how having 99.99% reservation in its schools and colleges did no good for those who genuinely required it. It only benefited the political class. And drove out the Brahmins from the state as far as education was concerned.

Clearly, the government is in no mood to take genuine steps to improve the reach of BPL. It is simply charting out the easy way which will also earn it the vote bank.

On pesticides and other related matters

2009-08-27T10:29:00.001+05:30

I wonder why the fuss is being made over organic food’s nutrition quality
http://www.business-standard.com/india/news/to-eat-or-not-to-eat/365594/
Per this report, some UK study suggests that organic food is not more nutritious than regular food.
No one eats organic food because it is more nutritious. People (like me) like to eat organic food because it is supposed to be pesticide free. Will someone please explain to the advocates of this study the complete futility of their expensive research?

On a different note, I recently discovered (much to my shock) that some people are using coke, pepsi and other aerated drinks as pesticides on food. It appears that these being more cost effective than regular pesticides, aerated drinks are preferred increasingly by households for domestic use. That certainly puts an end to my ever having any more aerated drinks.

Mr. Minister - I disagree with your decision

2009-08-12T10:47:00.002+05:30

I was unhappy when the minister for education announced that class X students wont have to go through the ‘ordeal of Boards’. I always felt that Board exams were one great leveler for all kinds of students irrespective of your caste, region and extent to which you licked your teacher’s feet. Oh! And one more - irrespective of whether you were a teacher’s son/daughter.
In my 12 years of school life, I managed to study in 10 different schools – all in different parts of India. And I found that students who had been studying in the same school without having to undergo the torture of having to change schools, had significant advantage of having spent time in building a relationship with the teachers, of having convinced the teachers of a history of ‘good performance’ in their class.

One such incident happened when I shifted in between terms from one school in J&K to another in M.P. in class IX. My biology teacher decided to give us a surprise test in class. It so happened that a girl, who was sitting next to me, copied an entire diagram (which was the whole test) from my test answer sheet. In other words, she made the same mistakes that I had made in the diagram. But she was not caught. I, who was unaware of someone having copied my answer, was punished for copying. Not to be pushed back by such an incident, I told the teacher that she could re-take the test and check who was the culprit. By then the red-faced teacher realized it was a mistake but was unwilling to admit it. The incident created a rift forever between that teacher and I. I knew I would never get the best grades in Biology as long as that teacher marked my answers.

Another similar incident happened when I was in Class IV. My math teacher never thought much of my academic credentials and even gave me a '0' in the Math oral exam. Then, one day my dad got promoted. The teacher’s husband was working in the same organization as my dad. From the day the news of my dad’s promotion came, the teacher was suddenly very nice, polite and most understanding towards me. And I never got beaten by a cane stick for not being able to answer Math questions in class.

In the school in J&K, there were two teachers kids in my class – Jasmine and Sonika. Except for the first two ranks in class, the rest of the kids could choose any rank they desired. What shocked me when I first was admitted to this school was that Jasmine was considered the “English” topper. Ask her to construct a sentence in English and it would be the worst grammar you had ever heard. I am sure despite Jasmine and Sonika coming first/second in class throughout their school life, I am willing to bet that these girls have not done anything significant in their life with their education.

So Mr. Minister – scrapping board exams may make parents in Delhi happy (who crib the maximum), but it would make scores of students like me unhappy because now, for 11 whole years, the student will continue to be at the mercy of teachers and abide by their whims and fancy.

Political factors to continue to play role in market sentiment

2009-05-23T13:59:00.003+05:30

We saw a very eventful week last week with markets and most stocks touching 52-week high for a change. The results of elections were unexpected, or so we were made to believe during elections by political pundits that there would be a fractured verdict. As a result the market saw for the first time in its history a day of upper circuit! Most retail traders I spoke to, seem to have sold off their entire portfolios on Tuesday at some profit in the belief that the opportunities may come in the future to buy on dips.

As things stand today, I dont believe that the market is going to go down significantly at least not till the budget is over. For one, there is no foreseeable bad news. Most data that was earlier a cause of concern is either a non-event for the market or has come down to manageable levels. FII purchases throughout March and April have been strong and continue to be in May. Rating agencies are waiting on the sidelines to get some clues on economic measures and reforms that the government is likely to implement. Right now a lot of action in the market will be based on political outlook e.g allocation of portfolio to various ministers. Does Mr. Montek become Finance minister (likely very positive for markets), what is the outcome from DMK? On the other hand, RBI's clarification that no more fiscal stimulus is required would also be treated as a positive (a policy action that is however, controlled by the govt. not RBI).

In technical terms, there is likely to be resistance at 4450 levels while one needs to rethink about taking long positions if Nifty breaches the psychological 4000 barrier. RSI does imply that we are in an overbot market. However, political factors are likely to play a significant role than technicals this week. Trading on the Nifty is likely to be tricky this week and I would recommend taking stock specific positions instead. Stocks that are likely to benefit from govt. budget are likely to be movers e.g. power sector, aviation, OMCs, autos. Many of these have already seen some up moves. Dollar-rupee exchange rate moments should be watched out for as further rupee appreciation without RBI intervention would be negative for IT sector. The IT sector has already lost some of the early gains made last week. RBI is likely to defend the rupee at current levels so that it benefits exporters. So remain neutral on IT sector.

Seen the following menu in a 'dhaba cum restaurent' on Delhi-Jaipur Highway

2009-03-24T19:09:00.003+05:30

1) Staff naan
2) Staff paratha (staff meat next??)
3) Maashrum masala
4) Chees toast
5) Oniun pakora
6) veg peti (they meant patty)
7) tamato soup
8) Pees potato (literal translation from aloo matar)

Apart from these, beverage menu includes
1) Mango juicy
2) Orange juicy

Markets on 06Mar09

2009-03-06T10:45:00.002+05:30

Looks like I need to get into the habit of posting the e-mailed version -

Markets are expected to open in the red based on global cues (~1%-2% negative).US markets shed more than 4% with the S&P index being at the lowest since 1996.

Nifty outlook - Likely to be range bound and may move in either direction. On upside, no significant upmove expected. On spot levels break below 2500 is crucial as break below this level may take Nifty further down.

Key levels for the day - 2500/2540 and 2640/2700.

Stock specific - Can go long on Cairn from a delivery perspective as crude is likely to move higher from current levels.

Others - Buy Nifty Mar 2600 PE at 112, target 132 SL 100. Also Sell RIL 1133, SL 1145, target 1116/1100.

Markets on 05Mar09

2009-03-05T12:00:00.002+05:30

Oops... forgot to post this
---------------

Yesterday's market fall was arrested by the V-shaped recovery seen yesterday in the last one hour of trading - a result of RBI cutting rates.Repo rate is at 5% while reverse repo stands at 3.5% after the rate cut. Temporary bullishness is not ruled out because of the positive impact of ratecut. However,as mentioned before, unless the market can successfully cross 2800, bearish trend will continue.FIIs continue to be sellers in the market each day and prov. figures show that they sold ~ INR 494 cr yesterday. 2550-60 is going to be a crucial support. Key support and resistance levels are at 2560/2620 and 2660/2700.

Markets on 04Mar09

2009-03-04T08:40:00.000+05:30

As mentioned in our market update yesterday, the market predictably saw some rebound before resuming its downward journey closing at 2622.Today also, the market is likely to open flat. Yesterday's sharp fall in the last 45 minutes of trading on reasonable volumes indicates that the bearish trend is likely to continue albeit with some marginal technical bounce backs. The downward journey is not likely to be smooth and is likely to be charecterised by sharp movements. From a momentum based perspective, the marketcould also test 2200 levels. 2550-60 is going to be a crucial support for any bounce. High risk traders can use the bounce to shortthe market again.Only a cross over of 2780/2800 in case of a recovery will negate the bearish trend for the market.Key support and resistance levels are at 2560/2590 and 2680/2740.

Market on 03Mar09

2009-03-03T09:51:00.001+05:30

Markets are expected to open flat based on global cues. Yesterday the Dow closed more than 4% in the red. Asian markets are currently trading 1-2% in the red as well.
In technical terms, yesterday the market broke a key support of 2680 on the spot. Hence, we would expect the negative trend to continue. As expected, the market has finally broken out of its range bound zone. Some technical bounce back is not ruled out. Markets will face resistance
at 2700/2730. On the lower side, markets are expected to test supports of 2630/2550.

Indian equity markets on 25Feb09

2009-02-25T09:15:00.002+05:30

Markets are expected to open up ~1-2% based on global cues. Asian markets are trading in the green with both Nikkei and Hang Seng trading over 1%. The dow also closed over +3%.
As mentioned yesterday,the markets saw a bounce back to 2730 levels ona closing basis due to the tax stimulus given by the government(ignoring S&P's negative outlook on India). 2750/60 is a crucial leveland beyond this markets are likely to test 2800.Any cross above 2800 will reverse the current short-term bearish trendand markets may test higher levels. For today, key resistance levels are at 2760/2790 and support levels are 2650/2710. FO expiry tomorrow is crucial and we may see some short-covering therefore keeping the bullish bias - if it sustains today.

Mera Telephone Nahi Lagta

2009-02-24T16:11:00.004+05:30

MTNL may be offering attractive packages with respect to broadband and mobile telephone services. However, my personal experience with the MTNL broadband is quite a sob story.

For no reason, the broadband can disconnect when it so desires. This is particularly true when you are half-way through downloading that huge PDF report or when you need to sent some urgent e-mail. What a co-incidence, MTNL just knows how to time your work to have a 100% hit rate.

Early mornings and late nights are probably the times when you can reasonably trust the broadband. But then, why would I need a broadband during those non-peak hours anyway?

Where a Kirana would score significantly over a big Bazaar

2008-10-22T19:21:00.002+05:30

There have been scores of studies done on how the likes of Big Bazaar would be a threat to local kirana shops.
My experience with one Big Bazaar outlet seems to show that my locality’s Kirana shops are better than this one Big Bazaar outlet. Here is why –
1) In reality, there are no discounts on the quality branded products. E.g. Surf Excel would cost the same in Big Bazaar as it would in the Kirana.
2) Discounts are only on the internal Big Bazaar products (e.g. Big Bazaar ghee is INR 1 cheaper than Amul ghee) – which are anyway not great on quality.
3) Or on products where prices are difficult to determine e.g. if you buy some local brand of facial tissues, you do not know if it is worth INR 30 or INR 20 per packet. If you buy it from the roadside boys selling them at a red-light, you can bargain for the same at INR 10 a packet (while the printed price will continue to say INR 30).
4) Quality of Big Bazaar packaged food products is particularly bad. For that INR 1 or INR 2 per kg of savings, the quality compromise is not worth it. Packaged pulses and rice frequently have loads of insects in them. I get better quality in my local Kirana store at more or less the same price.
4) There are products that a local Kirana will have which a Big Bazaar does not because there is not ‘adequate’ demand in Big Bazaar for them to make the effort to procure such products. E.g You will never find Til oil in this Ambi Mall outlet.
5) Contrary to popular belief, even local Kiranas give discounts. If you shop for INR 1,000 or more, why wouldn’t he?
6) The local Kirana does home delivery on as little as an INR 100 bill.

Among other things that have changed, making shopping at Big Bazaar, Ambi Mall not worthwhile –
7) When this Big Bazaar outlet was still in the ‘newly opened’ stage, each time you shopped for INR 1,000, INR 2,000 and so on, there was a free gift for each amount of shopping. E.g. for INR 1,000 worth of shopping one would get 1kg sugar and 1kg of powdered wheat free. With INR 2,000 of shopping, one would get a mixer and so on. This practice has been stopped once the mall gained some popularity.
8) Moreover, since the rest of the mall was under construction, parking was easy. One could park right next to Big Bazaar and there were no security queues or billing queues.
9) And finally, any savings that one makes on purchases from Big Bazaar get more than offset with fuel bill (INR 200), the Delhi-gurgaon toll (INR 17) and the high parking charges (INR 30).

What is our education worth?

2008-10-21T11:57:00.004+05:30

For those of us who do an MBA; believe in self-interest, the end game of MBA is to get a better job. 'Better' is merely a euphemism for 'more money/pot loads of money'. Lets face it, why does (or did) a job in Morgan Stanley command a position of day '0' rather than a marketing job with P&G?

I am not trying to argue how as MBA students we rate companies internally so that they are accordingly assigned their day-status. But since money is the motivation for MBA and choice of job, why don't the same type of people become clerks in Customs or Municipalities? I have heard of multiple stories of MCD employees earning anything between 1-2 lacs a week. And if one can crack the CAT to get into an IIM, one can easily take the MCD/customs exam and become a employee of the Indian govt. and earn significantly higher than a better educated MBA. And the work hours would be more comfortable. Not to mention that one would not pay any tax on the additional income.

Wish a Career Launcher or IMS would start programs oriented towards 'getting into MCD/customs' and then have course-work for 'how to make more money than your predecessors in your MCD/customs job'.

Of course, a lot of people would not justify this on 'moral' or 'ethical' grounds'. We are more comfortable when we do similar jobs in a corporate that has justified the same thing e.g. if a Lehman sells junk to a clients, it s justified. After all the client is willing to pay a price for the shit Lehman sells. (I think enough has been said on Lehman so lets skip a Lehman example). Take HLL instead that sells Sunsilk. Now if HLL were to claim that the shampoo makes your hair silky/kills dandruff in 15 days/doubles the hair density on your head.............., never mind the claims are never justified. Never mind that the shampoo may work only on certain hair types and under certain controlled conditions, but no one will sue HLL for making false claims. Their sales/marketing guys will continue to believe in peddling these false-claims products to innocent consumers but will not once feel the the moral dilemma that could come (initially) in an MCD/customs job.

Is ICICI bank the next ML or Lehman?

2008-10-10T18:57:00.000+05:30

As the Indian markets crashed (for yet another day, yawn) there was not a sector untouched. Despite CRR reduction by RBI during wee hours of morning, banking stocks were hard hit – ICICI being among the worst hit down 20% nearly EOD.

Why I write about ICICI bank is because a friend showed me a copy of a report he had received today. The 1 page report was written by one of the analysts of a large European Bank. If this report was meant to ‘assuage’ investors, it ended up doing quite the opposite given what was published.

It wrote thus, “ One of the authors of this report who visited a very large branch of ICICI Bank close to our office and interacted with the staff came back reassured. We do recognize that this is not an elaborate conclusive survey. But the fact that it is a large branch in a commercial area and the visit was done today when the market was rife with concerns, things appear to be normal on the ground.”

The report is quite interesting and goes on to comment that the ATM machines appeared to have a regular clientele (i.e. the authors did not see a ‘run’ on the bank happening ‘yet’!). The exact comments were, “ The ATMs were working and cash was being dispensed (sounds pedestrian, but there were media reports of some ATMs malfunctioning or debit cards not working, which the
management clarified was due to a switching problem).”

What I found shocking about the report was the following:
1) The analysts have declared the bank ‘functioning normal’ based on 1 visit to 1 branch!
2) The analysis for declaring normalcy appeared quite a charade. Surely, an expert analyst is expected to look for more than just mere branch visits to determine if the bank is running soundly (am sure talking to the treasury guys in various banks who deal with ICICI and talking to the bank’s significant counter parties would have given hint enough about the liquidity condition of the bank).

On a different note, today’s Mint carried a front-page article on how one Indian bank has borrowed at an unbelievable rate of 20% some INR 1,000 cr. This rate is apparently the highest rate charged to a bank for a 45-day loan. The report hints that this was in order to tide over ALM mismatch due to its overseas operations. That left me guessing, which Indian bank would need to tide over its overseas operations? Is this what prompted the above mentioned equity analyst to hurriedly rush to a nearby branch and prepare a soothing report?

Be the CEO of your life

2008-10-10T16:48:00.002+05:30

by Vivek Gupta & Sandeep Amar

Price - NA, Publisher- reviewers online version

The book provides a refreshing change in scene after the multiple fiction authors that IIMs seem to be churning.
A highly relevant book in today’s world, the authors looks at a common problem faced by all in this competitive world – that of keeping up with the Joneses and peer pressures.
Recently, I came across a blog that spumed venom about how the guy was very happy to see that all his high paying I-banker friends were jobless while he, an average salaried guy who did not have the luck to get through an I-bank, was feeling secure in his current job. The book has aptly captured these very emotions as the authors write, “ It is strange but you must know someone, who was doing very well, and in your hearts you envied him/her. And when the same person goes down in life, you are happy and tell the stories of his debacle with great passion, finally passing on the moral of the story, “The people who grow fast, fall faster”.”
What is interesting about the book is that it does not ponder over the problem across several pages but is rather succinct in its presentation of the typical issues facing the young bread winners. Instead, the book focuses on how one can get over these common problems that we create in our own minds – by developing greater control over one-self. The book aptly suggests that one should be first look at one’s long-term aspirations before deciding on short-term goals that would eventually lead to that final destination. In reality, usually most of us look at short-term material benefits first and then try to force-fit that into our supposed macro picture.
Be it pressure to perform at a young age or pressure to catch up with –thy neighbour, the authors correctly suggest (most relevant for the call-center generation) - (1) Make your monthly budget based on your expected permanent income throughout your life (2) Try to spend 70% of that income on the things you enjoy doing. Go for that world tour or buy the rarest of music CD’s (3) Save close to 30% of your monthly income. This would suffice your future needs and the entire eventuality (4) Don’t spend under peer pressure; Spend your money intelligently on things which give you real utility rather than just one-upmanship in the society.
Written in a simplistic language, the book is a must read especially for aspiring MBAs who just want to do an MBA because either it’s the ‘in-thing’ to do or because newspapers play up the salaries of MBA and hence make it a ‘must-do’.

Condom condom condom condom………condom

2008-10-10T13:41:00.004+05:30

Have you seen the ad(s) by NACO (the national AIDS control organization) where a puny man is playing kabaddi and repeats ‘condom’ instead of chanting ‘kabaddi’ when he goes to the opponents court to outdo them? If you missed this older ad then the more recent one that plays on TV is where the same puny man has a condom ring tone on his new mobile phone, which his rather embarrassed uncle happens to be holding when the phone rings.

These ads are expected to promote the usage of condom among Indians. A very noble cause indeed given that (a) condoms help prevent AIDS (b) control our burgeoning population.
But I really wonder if the creators of the ad/people in NACO/ govt. representatives who pass resolutions for using precious taxpayers money (my money!) to fund NACO, among others have used any of these Indian condoms. (After all, why preach what you do not practice).

Take any well-known Indian condom brand for instance. A Nirodh or a Kohinoor for example. Forget prevention AIDS/population control. The plastic cylindrical creation will not allow you to have sex in the first place because whoever produces these condoms, clearly believes that ‘more is better’ in terms of the thickness of the condoms. I think somewhere in the specs someone mistook a ‘mm’ to be ‘cm’ and manufactured them accordingly.

One may ask, so there are those ultra-thin, pleasure-enhancing condoms. Try using an ultra-thin Nirodh/Kohinoor and I bet both purposes (a) and (b) outlined above will get defeated in no time since these condoms ‘tear’ easily.

It is high time the government awakens to the fact that producing a good quality product comes first, product promotion later. A good step in this direction would be to make the ministers/government officials try these very condoms and take down their observations before the product is passed on to ‘aam junta’ (common man).

Markets on 01Oct08

2008-10-01T09:06:00.002+05:30

Markets are expected to open positive today in view of global cues. Key resistance levels would be seen at 4030 and 4100 levels. Best strategy would be to stick to intraday trades and avoid bottom fishing in case the market falls.

Market on 26Sep08

2008-09-26T09:07:00.000+05:30

Global cues indicate a negative opening of 1%. Day’s range is expected to be 4070-4200. Key supports and resistances on nifty are seen at 4025/4060 and 4160/4220. Inflation data came marginally better than expected at 12.14% and hence may be a non-event.

Can someone please explain this?

2008-09-10T20:25:00.002+05:30

1) Why would any one buy a 2nd hand and jaded-looking Perry Mason for INR 85 from the Redi-side in Basant Lok complex when one can get a Brand New copy (different publisher though) for INR 75 from Om Book shop inside the same complex!
2) Why does Khan Market parking lot of tons of sign boards announcing "Free Parking. Do not tip the assistants." Yet the assitants run upto your car and nearly stop you if you do not already have some token money out to dole out in charity.

Markets for 09sep08

2008-09-09T06:23:00.004+05:30

Indian markets rallied yesterday in view of NSG (India) and F&F takeovers (US).
Key resistance and support on Nifty for today are 4430/4460 and 4520/4560. Key levels to look out for are 4500. One could expect profit booking in the market to take place at these levels.
Sterlite board is mulling a restructuring proposal today and hence it may continue to rise further.

International education at national prices

2008-09-09T06:08:00.005+05:30

Worried your kids may not get admission in Ivy League colleges abroad?Or you may not be able to afford education in the US? To solve all your child education problems, FINALLY A SOLUTION IS HERE.

Announcing, Stanford College, Gurgaon, India

Dream car

2008-09-09T06:04:00.004+05:30

Somebody's idea of a dream car.

Market analysis

2008-08-30T23:10:00.004+05:30

One fundamental investor was getting exasperated by a young (and green) technical analyst's argument that technical analysis is best and fundamentals do not mean a thing.
The fundamental investor finally had the last word when he summarised his view on technical analysis with the following - technical analysis is like Janus-faced person who calls a woman 'sister' in the morning and 'wife' in the evening.
(Note: The original dialogue in Hindi sounded much better)

Markets on 28-Aug-08

2008-08-27T20:11:00.000+05:30

Markets expected to be even more unpredictable with expiry coupled with weekly inflation numbers.

Key support/resistances for the Nifty are 4230/4260 and 4340/4400.

Our target for Sterlite was met at 620 and 630. We reiterate buy on Sterlite with same targets. Exit out of Maruti call. Continue to hold RPL with a medium-term perspective keeping stop-loss at 154.

Markets on 27Aug08

2008-08-27T06:18:00.001+05:30

With just two days to expiry, the market trend is expected to be volatile albeit with a positive bias.
Key resistance/supports for the Nifty are 4350/4400 and 4250/4300. Stocks that look bullish include MUL (targets of 645/660), RPL (targets of 161.5/163/165). Sterlite is another stock that looks bullish (over a slightly longer holding horizon) with tentative targets of 620/630/640.

Entrepreneurial ruminations

2008-08-24T06:22:00.001+05:30

Very oft, I have been asked about my entrepreneurial experience. Somehow, I always end up answering “very good”. The truth however, is somewhere in between.
I must admit, that whether it was my first unsuccessful attempt at quitting my job to start up or whether it was when I actually quit to start-up, everybody was very encouraging.

As a friend summarized for me, it is like jumping off a cliff with a Made in Timbucktoo (MIT) parachute. Everyone lauds you for your bravery for jumping off the high cliff. But you really do not know whether MIT will open up at the right time.

I have taken the plunge now and the fall down the cliff is both exciting and scary. Exciting because when I think of the upside and how my company will grow magnamously, I am delighted to dream about it. I am thrilled when I get the first cheque from my clients. And it is “hard earned” money (because its very hard to earn whatever little money you get).

But now that I am on the other side of the fence, I can understand why my colleagues from B-school or work would most likely not take the radical step that I have taken.
Firstly, there is nothing such as a monthly paycheck to keep you going. (How I miss the days when on the 25th of each month I would see my bank account being credited and would be overjoyed as if I had got some new toy.)
Secondly, as an entrepreneur, there is nothing such as well-defined role or work hours. I am my own boss. But that also means that I cannot have friends and relatives take my time for granted. So I have kept an office with fixed hours to maintain the discipline.
Thirdly, as a salaried class, I was so used to things being taken care of e.g. taxes (now I have to get my own CA and pay him for consultation).

One of the more important aspects also was an assurance that there is a dependable clean loo. You have loosies on any day – no problem. Clean loos, enough water, toilet paper and soap. (Right now I have to carry my own for lack of basic toilet infrastructure and a thick hanky to close my nose once inside the toilet).
Of course this is just the beginning. Like any other entrepreneur, I expect things to improve and grow out of my current insignificant existence. Till then, I will continue to carry my own.

Markets on 08Aug08

2008-08-07T21:22:00.002+05:30

Markets ended on an almost flatish note today. Markets seem to be testing 4600 levels on the nifty and appear to be unable to sustain it. Inflation will be a non-event in determining market direction for tomorrow given that it was close to expectations. However, given the sharp rise in markets over the past few days, I expect the market to see profit booking. One could see markets testing 4450 levels. Suggest taking small short positions/booking profits on long positions.
However, if markets overcome 4600 levels successfully on a closing basis then we could see markets test 4800. Suggested stock specific shorts (from today's closing levels) for – DLF, LT, JP Associates, GMR Infra with stop losses at 580, 2840, 195 and 105. MUL could be another candidate for shorting, keep stop loss at 685.

Are we still slaves of the white skin?

2008-07-30T08:41:00.000+05:30

The following was brought to my notice by a friend who was looking out for a job. Among other descriptions, the following was mentioned in the education part -
*Education preferred: * IIT + IIM / ISB / US Univ ONLY
So any damn degree from a US university - say University of Chikengunia (U.S.A.) would do because its “Aamriican” but if you are from India, you should have been on top of the rat race.

Markets on 23Jul08

2008-07-23T06:50:00.004+05:30

With the govt. winning the trust motion yesterday with a clear margin, markets are all set to rally. Crude fell to a 6-week low at close to USD129/bbl which should further help the rally gain momentum.

An equity analyst friend working at a large foriegn brokerage mentioned that the turn of events (political stability + falling oil) now may make India a Buy for now among FIIs and a rally towards 16k is not ruled out.

Nifty should open with a gap up and a rally towards 4300, 4400 is not ruled out.

LT had been looking technically strong on the charts and I am bullish on this stock with a target close to 2700 levels. Power stocks like NTPC should also see a signficant rally (due to the nuclear deal getting a boost with govt. winning trust vote). Expect rally to 190+ levels.

Market strategy for 23Jul08

2008-07-22T17:22:00.004+05:30

A good market closing strategy would have been to take a out of the money Nifty call in order to benefit from the political situation. For example a 4400 call would have cost INR 60 while a 4300 call would have cost INR 90. The upside is doubling of call value if the government wins the motion today evening (because then the market would open with a gap up of 2-4%). Downsides are limited to the extent of the value of the investment amount.
Another strategy would have been to buy both deep out of the money call and put options. This would however be expensive. One can limit downsides by keeping the in-the money option and squaring off the out of the money option during opening.
A third strategy would be to keep out of open positions till the outcome is known. (Not a bad idea given how our markets behave)
I am not suggesting a naked put as a good closing strategy because if one were to look at Nifty trades, it appears that a signficant short covering has occured over the last couple of days.

Jane Tu Ya jaane na - certainly the director does not know

2008-07-09T22:59:00.005+05:30

By far the worst movie that I have ever seen in 2008. Save your ticket costs (INR 250-500), popcorn combo (INR120) and parking charges (INR10-60) and your TIME. I dont even want to waste my time in writing about this awful movie or make you waste yours in reading about it. Have the reviewers been paid to give good ratings for this movie? After Tashan, this movie wins hands down followed by Krazzy4

Follow up for 03-Jul-08

2008-07-03T19:46:00.000+05:30

Follow up for 03-Jul-08 – Market reversed yesterday’s gains and was 5% down during the day before some amount of short covering took place (hence a marginal recovery from day’s lows closing at -4.09%). Both LT and RIL were down 3-5%. Banks were significantly impacted during the day and ICICI and HDFC Bank were among the top losers (-7.9% and –4.2%) in the banking sector before short-covering saved them from further carnage. We had shorted LT at 2264 levels today and booked profits at 2194. Other recommended stocks did no offer opportunity to short as they opened significantly negative in the opening trades itself.

Market on 3-Jul-08

2008-07-03T09:46:00.000+05:30

Some short-covering may be left and that is the only reason why the markets can move up today. However, given crude at USD 144/barrel bearishness is very much on cards. Any positive opening in the market today should be an opportunity to go short on the market.
Good shorts would be especially banking stocks like ICICI and HDFC bank that rose significantly yesterday. Other major stocks like LT and RIL also bearish. With DLF doing a buy back on the 10th of this month, we may see some bullishness for that reason in realty stocks.

Markets on 1Jul08

2008-07-01T08:23:00.000+05:30

Each passing day bring with it new gloom and doom for the bulls. Although the market has reached an oversold region and hence expect a brief rally, further downsides are not ruled out. FII selling rules the roost and therefore no fundamentals can save the bulls. Nifty closed at 4040 and key support and resistances are placed at 3930/3990 and 4130/4200. Crude prices at USD 140+ a barrel have been an added dampener to the Indian stock market.
For short-term intraday trades (do not recommend delivery in these markets), Cairn is a good buy with CMP 274.7 for targets of 282. Keep stop loss at 269.5. RPL also looks bullish for targets of 176, CMP 170.55. Keep stop loss at 167.

Markets on 24-Jun-08

2008-06-24T09:37:00.004+05:30

Nifty may see some short-lived rally today. Key support and resistances seen at 4150/4200 and at 4300/4400.
Expect volatility to continue (hence keep short targets and strict stop losses) till expiry. Hence, for intraday trades, recommend taking options positions instead of Futures. A 4300 call at 45-48 levels looks good with targets of 70/80. Keep stop loss at 35.
News based call - Orchid Chemicals may see some action with targets of 255 (238 current levels).

Follow up -2

2008-06-20T12:21:00.001+05:30

Book full profits in nifty short at 5789 (spot) lvls.

Follow up

2008-06-20T12:00:00.004+05:30

Book partial profits in Bank Nifty (spot at 5810). Inflation at 11.05% Way off - worse than expected.
Do not initiate any long positions. Fresh short-positions may be taken but with limited profits as market already fallen 1.85% (nifty). Fresh shorts may in initiated in Banks, real estate and auto sectors for intraday trading.

Markets on 20 June 2008

2008-06-20T10:36:00.001+05:30

I dislike it when the market goes up sharply in a short span of time because what happened day before yesterday was a consequence of that. The nifty goes up sharply, and then major counters see profit booking as soon as the first level of resistance or thereabouts are seen. On the nifty, 4700 was key resistance and even before we could touch those levels, profit booking happened and the market fell significantly.

Today is the all-important day as far as inflation is concerned with expectations of close to double-digit inflation data coming out. Market has probably factored in 9.5%-10% inflation. Anything higher, and expect sharp fall. No positive surprises expected today.
One needs to be extremely stock specific in such a market and avoid big-ticket nifty based trades. Short position on Bank Nifty though may be a good idea at 5902 (spot) with targets of 5800 (spot levels).

Follow up -2

2008-06-17T22:17:00.003+05:30

MUL achieved our recommended target of 765 on spot levels and we advised our clients to book profits in the MUL call.
On Infosys, stop loss was triggered.

Follow up

2008-06-17T12:07:00.001+05:30

Book profits in Nifty call option at 149. High risk traders may paritally book profits and hold for higher targets of 155.

Markets on 17 June 2008

2008-06-17T10:36:00.001+05:30

Market has opened today on a flat note. Key supports and resistances are placed at 4500/4530 and 4600/4650 with expectations of a bullish bias. Hence recommend, a long position in Nifty June 4500 call option at Rs123 with SL 105 for target of 148.

Stocks to go long for short-term trades are 1) Infosys (CMP 1918) with targets of 1940/1970. Keep stop loss at 1909 2) GMR Infra CMP 113 with target of 115/117 and stop loss at 111.

Maruti is rumored to be producing a competitor to Tata’s Nano. The company has been taking several measures to increase sales e.g. introduction of CNG and LPG variants for the smaller cars. And now a Maruti Nano! The stock faces stiff resistance at 732 (spot levels). Go long if it moves above 732 for targets of 765.

Markets on 13 June 2008

2008-06-13T09:25:00.000+05:30

Today’s support resistance for Nifty seen at 4330/4440 and 4600/4650. Market continues to look bearish although a short-term rally on the nifty is not ruled out.
Among stocks that look bullish are RPL with targets of 185/190 in the short-term, IFCI with short-term targets of 63/65.
GMR Infra looks in the oversold region and may see some recovery.

Why starting your own business in Delhi is so tough

2008-06-06T18:53:00.000+05:30

Ravi (name changed), owns a piece of (semi) residential property (the kinds where there is a grey line as to commercial or residential use) in a reasonably posh locality in New Delhi. He always wanted to do something on his own so he decided to put his experience as a Hotelier into use and in turn, use turn this extra piece of property to commercial use and opened a guest house (like several others had been doing in Delhi). Little did he realize that what he had started as an exciting new venture would turn into a nightmare for him.
After spending a lot of his precious saved money on renovation and reconstruction of the property, he opened his guesthouse. He had some corporate contacts and therefore leveraged them to get some business. The moment he had guests pouring into his guest-house, first came a police inspector.
“ Show me the records, this man and woman in room 201,…… I want to inspect”, said the inspector.
“Sir, but they are our customers. How can we disturb them?,” said the manager.
“Look, I am an authority of the law and I want to inspect to see if they are not doing any other bizness (business) here.”
“But sir……”, protested the manager.
Soon Ravi was called. Ravi spoke to a friend of his who advised him that this was the way the police harassed and asked for money. So Ravi told the manager to give the policeman some ‘hafta’ (money given as if its an SIP with returns in the form of zero harassment).
After a month, the same inspector came in and asked the manager, “ haan bhai, kya haal hai, (hey man what is up?), bizness thik chal raha hai (is your business going on OK without any trouble)?
‘Yes sir. Aap ki krupa hai (all your blessings Sir).”
“To doosara business bhi chal raha hai accha (is the other business also going on well – meaning if prostitutes were using some of the rooms regularly to conduct their business)?”
“Nahi (no) Sir, we do not encourage such business.”
“Kya? Kyon nahi encourage kaar rahe ho? Aakhir hum hain na? (what? why aren’t you encouraging such business, after all I am there!)
Ravi was smart enough to realize that if he encouraged the other kind of business, he would be a permanent slave of the inspector who would find it a good way to blackmail him.
The demands for money however, did not stop here. Ravi soon found multiple people from the police force coming in. He finally had to get a contact through a friend of a friend – a small time politician who helped in getting only one point of contact – a single guy from the police force who would be paid and they would share the booty.
This did not however stop other departments of the government from coming and harassing Ravi. One day, someone from MCD (municipal corporation of Delhi) came and objected to the plants outside his guest-house being watered as the water was ‘stagnating’ and would cause malaria. Soon Ravi found he had to pay MCD, the electricity department, and any one else who could possibly be providing any public utility.
At the end of three years, Ravi found that his guest house was unable to break even. And one of the biggest reasons was that his cash outflow as payments/forced bribes to everyone was so high, that he could barely make any money. The final blow came when the property was declared illegal and was sealed. By then he had no money left to bribe the MCD to get the property up and running the way bigger business men have done.Today, Ravi is jobless and tries to do some part time hotel management consultancy in order to earn a living. He does not know if he will ever try to get into a business again. For him the experience has been a path to hell.

Gloom and doom and lots of bearishness on outlook

2008-06-06T08:34:00.002+05:30

Nifty continues to look bearish for today with key support and resistances placed at 4500/4550/4600 and 4730/4800. However, global cues indicate a positive opening for the market.

With crude moving from USD 124 levels to USD 127.5 levels, Cairn should see some bullish movement to meet targets of 270/280.
As mentioned yesterday, both GMR Infra and JP associates were in the oversold region and hence rose by 3% and 4% respectively from their bottoms.

RIL was still in the red despite market closing positive. RIL appears to have been oversold and if it moves up, it could see upsides of INR100 from current levels.
It is interesting to note how many market analysts are now debating if bottom fishing is indeed worth it or will we be seeing new bottoms in recent months to come. Markets were close to the Jan bottom levels yesterday before the market led a relief rally and closed 2% positive. In fact there appears to be a lot of pessimism on India and recently, one foreign brokerage (whose analysts write reasonable reports) even downgraded India from overweight to neutral.

Inflation data should be a non-event today and it is less likely that the numbers throw any surprises. Oil price hike should be reflected only in the coming weeks and inflationary expectations have already adjusted to a 9% level in the near future.

Keep away from bottom fishing in Banking stocks at the moment (unless you plan to short banknifty). Governor Reddy seems to have hinted at that they would take measures to curb inflationary pressures (potential CRR hike? other measures may be?).

All in all, too much bearishness around.

follow up

2008-06-05T13:07:00.000+05:30

book profits in nifty short call at 4537

Market on 5 Jun 08

2008-06-05T10:55:00.000+05:30

Today’s support and resistances are placed at 4450/4500 and 4600/4650. Since market has opened with a gap up, 4600 are good levels to short (primarily because market has been struggling to move up significantly beyond 4600) the nifty keeping stop loss at 4640 levels.
Most stocks don’t look bullish in the short-term from a technical point of view. For a long-term investor, ‘bargain’ buys should continue (though they run a risk of ‘bargain’ value becoming better!). For the short-term investor looking to go long in the cash segment, a better policy would be to wait for a definite trend to emerge once the bottom of this downtrend has been confirmed and then start buying.GMR Infra is in the oversold region (and yet never seems to have ever hit the bottom eh?). JP associates also is in the oversold region. Definitely worth buying at these levels. Maruti took a beating yesterday (expected) due to the fuel price hike. For those who are looking to enter/re-enter this stock, I would recommend waiting till it breaches its previous lows of 722.

An ode to the markets

2008-06-02T17:49:00.002+05:30

Markets on 02Jun08

2008-06-02T09:53:00.000+05:30

Friday was an interesting day with GDP and inflation data being released. GDP data was better than expected and therefore despite higher inflation data, markets closed on a positive note.
For Monday, GMR Infra looks bullish on charts, immediate targets of 141. JP associates looks bearish because it broke support of 214 on Friday. However, both GMR Infra and JP Associates appear to be in the oversold region. For medium/long term investors, both stocks offer good buying opportunity at current levels.
Another stock that looks extremely attractive at current levels is RPL. However, with RPL is a favorite of operators/punters so one needs to be cautious while investing.
RIL has been quite a surprise with it falling in the past two trading sessions and continues to look weak. Good levels to accumulate this stock for the long term.
Key support and resistance for today seen at 4800/4950.

Follow up on trades for 28 May08

2008-05-28T10:21:00.001+05:30

Bharti 880 target achieved. High risk traders book partial profits and hold for targets of 890 for short-term.

Markets on 28-May-08

2008-05-27T18:44:00.002+05:30

With just two days to go before expiry, it is highly likely that the market will remain volatile. I would recommend only high risk traders to trade in such a market. Long -term investors should see this as an opportunity to buy stocks that have been beaten in the past few trading sessions. 4830 is a crucial level for nifty and only if we close below this, one should think of taking fresh short positions.
Technicals do not bode too well for the bulls and there seems to be no positive data that is coming from any quarters. Friday will be a big day since it will be the first day after expiry and also because there will be several data that would be released on this day.
India expects Fertilizer subsidy to more than double in FY09. The result was that fertilizer stocks were up specifically Chambal and Nagarjuna. These may continue to see some positive action.
Bharti reacted positively to the fall out of the MTN deal. Technically, it looks strong and is likely to reach targets of 880 in the short-term.
JP associates looks weak on charts and is likely to touch 214 (BUY the stock then).
GMR Infra’s performance has been good for bears in recent times. All around too much of pessimism surrounding this stock at the moment with target expectations of 129-130 in the short-term. However, one must note that the stock has entered the oversold territory so the trend could reverse.

More updates on stock markets to follow.

Markets on 21 May 2008

2008-05-21T08:58:00.002+05:30

Seems like before we even touch any where close to 5300/5400, profit booking starts as people are scared of being the last ones to get out on the end of any short-term rally. We may continue to see the same trend today as well. Today’s support/resistance seen at 4980/5050 and 5150/5200.
I recommended my clients to exit Sterlite yesterday at 945 levels. That would be ~ INR 85 to INR 90 per share of profits or 10% profits in less than a week!
MUL seems to be struggling with the 830 mark and tested the same again yesterday but came down closing at 814 levels. Continue to reiterate targets of 830/840 for this stock for the short-term with stop loss at 805.
RIL’s performance dragged the market and was disappointing.
RCOM seems to be an interesting play these days and is likely to touch 620/640 levels in the short-term.
Today, technology stocks may prove the only succor for the bulls. For Halal punter : GMR Infra results were expected yesterday.

Markets on 20 May 2008

2008-05-20T08:28:00.000+05:30

Nifty to test 5200 levels. Some profit booking expected.
On 16th May, MUL tested 830 levels and came down on profit booking. High risk traders who held on to their positions can see it re-test 830 levels to move to 840.
RIL also broke its first resistance levels and likely to move towards its target of 2700.
I had recommended Sterlite to my clients last week. The stock has done well and closed at 896 on Friday – well above the 890 target suggested. Expect bullishness on this stock to continue and test 915 levels. Book partial profits above 910 and hold remaining for medium term target of 1000.
JP associates will continue to be bullish and test higher levels on Tuesday. GMR infra has no reason to be left behind and should test 158 levels as well.Punting stock – Last week I had recommended IFCI as a high risk-return stock. The stock has been showing a zig-zag performance in recent sessions. For a high risk trader, short-term target for the stock is seen at 65.

Markets for 16 May 2008

2008-05-16T10:13:00.000+05:30

Watch out for inflation data. Do not expect significant change in inflation rate. Expected rate at 7.55%.
Nifty is expected to test upsides of 5150 and 5190 subject to inflation. Profit booking is expected to take place if market tests 5190 levels.
Maruti again broke its resistance levels and is expected to move up further to reach targets of 830/840 (CMP 821). I had recommended MUL for intraday trading with targets of 810/820. Closing at 821 is taken as a strong bullish signal on this stock.
Strong performance of RIL today shows that RIL may test close to 2700 levels again. Any break out from here should be taken as a strong bullish signal.
JP associates looks bullish and is expected to continue to do well.
GMR Infra which has been under performing in recent times as compared to rest of the market, still looks weak in the short-term.I had also recommended Sterlite to my clients on Wednesday. This looks bullish on the charts and may test 890 levels.

post facto - MUL

2008-05-14T10:53:00.002+05:30

I hope a lot of you guys benefitted signficantly from intraday trading in MUL. For those who bot it in the morning at 770-772 levels can book profits at 788 (CMP). That is a neat INR 18 on INR 0 invested!!!
High risk traders may continue to hold the long position for target of 790. If 790 is broken likely that MUL will move much higher.
ENJOY!!!!

Market view for 14 May

2008-05-14T09:36:00.000+05:30

Nifty view – Support/resistance levels seen at 4890/4950 and 5000/5030
Due to depreciating rupee, we should see technology stocks do well.
Traders may assume short positions for short-term gains. But remember, significant gains from shorting are ruled out at the moment given that the markets have come down rapidly and on a continuous basis in the past 7 trading sessions.
For long-term investors, this may present yet another good buying opportunity in select counters like GMR, JP associates, RPL, DLF, LT, BHEL.On MUL (CMP 770), my favorite pick as always, short-term strategy should be to buy on declines for targets of 780-790. For long-term, I continue to recommend this as a buy.

Post facto for recos given on 07-May-08

2008-05-08T15:37:00.002+05:30

On 07-May-08, while the overall market closed negative, Cairn India rose by more than 8%, RIL also showed strong moves (up by more than 1.3%). In a falling market MUL demonstrated strength (up 1% nearly) despite other rate sensitive stocks being in the red.

Today's view

2008-05-07T08:47:00.002+05:30

Expect positive opening. Can continue to see some amount of profit booking.
Stocks I am bullish on MUL, RIL.
Stocks to watch out for Cairn, Chennai Petro, tech sector (for bullish moves).
Bearish on JP Associates (short-term only, my long-term view on JP associates continues to be a BUY).
Key support/resistance seen at 5100/5250 for today.

Post facto....

2008-05-03T16:31:00.001+05:30

For those who picked Maruti Udyog based on my recommendation a few days ago will now be sitting on 9.1% profit on their capital invested (CMP 787.9).

BHEL picked momentum on Friday and touched a day high of 1934.

As mentioned earlier, JP associates continued its upward momentum breaking new resistance levels touching 292 during intra-day to close at 288.75. Given that I have been recommending this stock since 240 levels, one would be sitting on a neat profit of 17.8% by now.

Keep watching this space to get more exciting action on your stock portfolio.

Quick updates- II

2008-04-30T09:13:00.002+05:30

RBI’s actions buoyed the markets and nifty closed nearly 2% up from yesterday.
JP associates (recommended yesterday) has reached its short-term target. The stock has broken resistance levels and therefore is expected to go higher.
RPL (recommended yesterday) also broke the 200 psychological mark and should move towards its short-term target.
Maruti also reacted positively to RBI news and is expected to inch up only.

Indiabulls securities has declared a dividend of Rs 7.5 per share. If approved by the board, given CMP 137.75, this is a tax-free return of 5.4% on capital invested at CMP. The stock has run up almost 10% each day in the past 4 trading sessions. This stock while a high risk, continues to be a good intra-day pick.
Another short-term pick is RNRL. At CMP of 126.85, one can hold the stock for target of 130-135.
BHEL is another under performer. The stock has been languishing for quite sometime. Expect BHEL to touch 2000 in a few trading sessions. This would also be a good long-term hold.

Quick updates

2008-04-29T09:40:00.001+05:30

Long-term pick - Maruti Udyog is very close to its 52-week low of 700. Closing at 722.35 yesterday, MUL is a good long-term buy. Immediate support/resistance is seen at 700/760. Stock has been beaten down in recent times due to accelerated depreciation policy. Recommend as the best bullish play right now in the auto sector with at least 30% upsides in the long-term.
The stock is fundamentally strong with the largest market share (50%) in the petrol segment and innovative product line (new product launch ~ every 6 months). Key risk seen from competition to its small-car segment from Tata’s Nano, rising input costs.

Short-term punt – RPL has been showing strong upward trend in recent weeks. For high-risk traders, above 200, RPL is expected to rise to 210-215 levels in the short-term.

Short-term punt – JP associates closed at 251.5. Stock has run up in the last few weeks quite aggressively from 220 levels. Short-term target of 265.

In view of RBI policy today, and Fed meet tomorrow, we expect markets to be volatile. RBI policy will be key determinant of how markets behave today. Support/Resistance seen at 5000/5050 and 5140/5200.

Ever wondered

2008-04-04T13:33:00.002+05:30

1) Why in Christian marriages brides wear White colored clothes but in Hindu marriages it is considered inauspicious to wear White.
2) Why as teenagers, elders warn us against having sex and thereby producing kids. But once you get married, they want you to have sex all the time and produce multiple kids.
3) Why Hindi News channels speak in the national language (Hindi) but wear not so nationalist clothes (business suits). How come no one wants to wear Dhoti/Veshti/Kurta and dress like a true nationalist?
4) Why some people think its OK to eat a friend’s half eaten sandwich (called “jhootha” in Hindi). But when you tell the same people that the friend has AIDS or TB, they don’t want to even touch the person let alone the sandwich.
5) Why Defence Colony is called 'DefCol'; Punjabi Bagh as 'PBags', Kamala Nagar as 'Knags' but South extension is not called 'SEX'? (source :Vishesh)
6) …………………………..and you can keep adding to the list.

How to invest in the markets right now

2008-03-18T09:33:00.001+05:30

I have been receiving a lot of queries on whether this is a good time to put money in the markets and how to go about investing in the market right now.

If you are new to the market
This is a god sent opportunity to put your money in the equity markets right now. Fundamentally we are a strong Indian economy (see no reasons for drastic change in fundamentals). I would recommend the following strategy (something which quite a few ‘experts’ too have been touting), each time the market falls 5%, put in 20% of your total allocation towards equities. I would strongly recommend picking some Nifty stocks and select mid caps. Any of the blue chip stocks (e.g. RIL), stocks in the infrastructure and related construction space, Cairn are excellent picks at the moment. One can also diversify by picking select banking and auto stocks like ICICI Bank, SBI, Maruti, Tata Motors. NTPC is a great pick when compared to valuation of Reliance Power. However, NTPC is usually a slow moving stock and hence can test investor patience in a bull market.

If you are already invested

Stay invested. Unfortunately there is nothing much you can do about it right now but sit patiently and wait. I suggest – take a long cheap vacation (or take a cheap vacation so that it seems long), go to temples/churches/mosques often and pray real hard. Per experts, markets could test august 2007 lows (close to 4000). But nobody can predict accurately how low the market will go from here (CMP nifty at 4545 while writing this article). Moreover, nobody can actually catch the market at the very bottom. (It will not take time for views to reverse if the trend reverses. Then we will have experts on TV telling us about new highs our markets will be testing). Remember, that given reasonable PE of 20-22 times in FY12 and earning CAGR of at least 20%, we should see Sensex at 45k levels in 2012 (CMP Sensex 15,059). And Warren Buffet is a great example for teaching us that long-term investments do pay in the end.

Real life horrors

2008-03-11T15:08:00.002+05:30

Recently I have been meeting some clients who are really worried. No, it is not about the stock markets but it is about school admissions for their child/children. From the stories I heard, it seems that the business of imparting primary education through schools is a great business. Parents will go to any extent to pay bribes (mind you, no one wants to officially quote any school or person lest their child’s chances in getting school admission get jeopardized.)
Here are some real stories about school admissions in New Delhi
1) As soon as the short-list of this not-so-great school was put up on the school board (this was for admissions for kinder garden age 3+), a stampede of parents ensued. One man made his wife climb on top of his shoulders so that she could see the list from a height of 10 feet and read the short-list.
2) During the same stampede, there was a lot of push and shove by parents. One parent told another, you A** H**e, don’t you dare push me. I can push you back and really hard. (Hang on, I thought these were parents! How did they start behaving like school kids)
3) This one is a typical experience of most parents – they go for an interview for their kid of 4 or 5 years of age. The kid gets quizzed on identification of pictures and numbers and rattling off A-Z while parents get grilled on their education background and more importantly personal details like salaries.
4) There are other schools who claim to have fancier processes. For example, some schools have points system. So you get 10/10 if you are an NRI who has returned to India, 10/10 points if parents of the child have had an inter-religion marriage. In addition, there are points for the GD (group discussion) conducted for parents. This is not one of those IIM GDs but a mass interview where a panel of school directors line up parents and one by one each parent is asked “why would you like your child to join this school?” Ultimately when results come out, no reasons are sited as to why your child did not make it through the process. Sometimes I wonder if parents are over reacting to the importance of where you get a school education from. Did Kishore Biyani, Sunil Mittal, Arcelor Mittal, Narayanmurthy, Arundhati Roy, Aamir Khan attend the best of all schools. And anyway, when articles are written about successful people, everybody mentions the college they went to, rarely the school. Or is it that college gets determined by what school you went to?

Even a monkey can do a good job of stock picking

2008-03-07T14:54:00.002+05:30

Last year when markets would go up an unbelievable 3-4% each day, there were a flood of recommendations from experts. It became hard to keep a track of each one of them let alone read all the brokerage house reports on companies. Udayan Mukherjee would say “We’ve touched yet another high.” Words like ‘happy’, ‘ecstasic’, ‘euphoria’ would be heard on business channels.

Since Jan 2008, there have been very few days when I heard anything good being said about the markets. First the experts advised that speculative money would have been killed in the January massacre. But February brought with it another freedom struggle as the nifty battled to maintain a positive stance. March has already started to prove the worst nightmares of bullish investors.

I am frequently asked, when this is going to end. (People are more interested in short-term views. I suppose when one is used to the good old days of watching stocks double in each quarter, people are looking for some ray of hope in the next few months.) Patience is wearing thin.

Frankly my answer to short-term view is - no one can answer that one for you right now. Fundamentalists are confused with contrary signals, technical analysts see no signs that can tell them for sure where we are headed 1 or 4 or 8 weeks down the line.

While majority of the nifty stocks look like a good buy at the moment, you do run the risk of a downside from current levels. But a better strategy once you buy is the ‘fill it, shut it, forget it’ for 365 days. Until a few days ago, the market was quite close to testing its 200-day average (called the 200-DMA) – a sign of bullishness or bearishness for technical analysts. There was a talk about best buys. But markets tanked below the 200DMA. Recently I heard a friend (working for a large MNC brokerage) remark that suddenly, from asking ‘what are the good picks’ (when markets were close to 200DMA), all long-term investors are in no hurry to invest now. From a talk about a 10-15% downside, now a new set of experts has emerged who are talking about alleged bearishness for 1 year and hence setting expectations of 2-3 year investment horizons.

Hence I feel that the time has come, when even a monkey can do a good job of stock picking for an investor right now.

Kiss… Kiss…. Kiss Kiss ko Buy Karoon, Kaise Fund Karoon… yeah bhi hai.. woh bhi hai…..

2008-03-07T09:22:00.001+05:30

Indian markets have been going through quite a roller coaster ride. In 2008, the downhill has been rather steep and painful for a lot of investors. But the good news for new investors, and investors who have got new money (thanks to awesome bonuses), there couldn’t be a better opportunity that this to bet your money on select stocks.

Why have Indian markets been under performing in recent times?
Unfortunately, Indian markets have still not reached a matured phase and ours is largely a flows driven market. Retail investors are not movers in the Indian markets. Mutual funds though significant, are not very large as compared to FIIs that accounted for more than 35%-40% of turnover (monthly average for CY07 upto Sep07). As a result, when FIIs decided to book profits (to partly offset losses in US and European markets), Indian markets crashed. What added fuel to the fire was the leveraged positions in RelPower IPO by domestic investors.

Short-term (mildly bearish/neutral) – Markets are expected to be volatile for the next one month or more. But we have reached quite close to the bottom of the market.

Long-term view (bullish) – Fundamentally Indian companies are doing well and with a GDP growth rate of 8%, I believe that Indian markets offer great investment opportunities in that context.

Some long-term picks I would recommend are:
1) ICICI bank – CMP 960. Buy in range of 900-950.
2) JP Associates – CMP 226.5.
3) LT – CMP 3201
4) Reliance Industries – CMP 2292.
5) GMR Infra – CMP 156.25

More detailed analysis available to select readers on request.

(Market view for today i.e. 7-Mar-08 – Market likely to open negative. S1/S2 for today are 4800/4700 while R1/R2 are 4950/5050.)

If God were the Editor

2008-03-04T16:37:00.000+05:30

If God Was a Banker

By Ravi Subramanian
Pushlished by Rupa & Co.
Price Rs. 195

When Chetan Bhagat wrote 5-point someone, he brought a refreshing change in the Indian writing scenario. Not only was his book non-intellectual and therefore could be read by everybody but it was also a short-n-sweet so that you it made a great bedtime or airport waiting time read. If you were an IITan you went nostalgic reading the book as you related to a lot of campus life aspects. If you were not an IITian, it offered a window of experience through which you see what you had missed. While he did create a revolution in the minds of readers as a first time author, his book seem to have been a harbinger of books with similar themes.
Harshdeep Jolly, one year my junior from IIMB published his book “Everything you desire” last year on similar lines. There is already a book out on JNU campus and now there is ‘If God Was a Banker’.

What happens when two boys from IIMs join a Foreign bank that has set up its retail operations in India? Sundeep is the typical city slick street-smart guy who is the jack of all trades and yet master of none. A natural glib talker, Sundeep from IIM-B impresses upon the India retail head using ideas from his intelligent but not street smart Tam-Bram Swami from IIM-A. Sundeep knows nothing about that area but Swami had given a discourse on that issue the afternoon before during their lunch break. And so, Sundeep impresses the hell out of his boss's boss. As Sundeep starts getting ahead with his career, he flouts compliance norms blatantly and receives favours (mostly in the form of sex) for helping in his junior’s career moves. While this helps him get ahead, it also creates trouble which he has to cover up, and in turn ends up getting ‘deeper into shit’.

On the other hand, Swami is a typical Tam-Bram, intelligent but honest; a doer but not a sucker. He is one of those who would very well fit the description of good guys come second when compared to the more successful Sandeep. For him, his family is the most important thing.

Sundeep has nothing against Swami to start with until enter Kalpana – his ‘hot’ classmate from IIM-B who decides to get married to boring Swami who probably never even held a girl’s hand before. Angry at loosing Kalpana to Swami, not because he loves Kalpana but because he always got what he wanted and Kalpana never even allowed him to bed her –even once, Sundeep’s passion and desire to get ahead becomes maniac-like. He vows to get ahead of Swami at any cost. And true enough, he does this through questionable means.

While the book started out on a good humorous note, less than a quarter past the book the author somehow gets too engrossed in the story-line rather than the story-telling aspect. The result is a Saas-Bahu serial outcome in the end with sleezy sex introduced in between.

I will caution the amorous reader that a lot of books have either an emphasis on the plot of book or on building up romance and sex scenes or a mix of both. Sydney Sheldon for instance has good sex and his plots are also quite thrilling. Mills and Boons (MBs) never bother about plots. But sex is steamy and as a reader you look forward to it. AJ Cronin never bothered about either but his writing has been a class apart. Edith Wharton has romance and sex in her books but written in such subtle ways and erupting in surprising places that you have to read it twice before you can believe it has happened. Of course her writing, as was Cronin’s belongs to an entirely different genre. This book disappoints on both counts.

Sex in the book is merely about when and where action happened. There is no building up of suspense, romance or tension in the description of whatever happened leaving the reader with a feeling that he has had salad without any dressing.

The story is simple but the ending comes across as a moral science story being told to a schoolboy leaving the reader disappointed.

My rating of the book 4/10

How a house-broker proposed to me and other incidents

2008-03-01T21:30:00.001+05:30

The following incident happened more than a year ago when I had moved to Mumbai and was desperately looking for a house. Coming from Delhi, rentals were expectantly shocking but what really hit me the most was the quality of houses being shown by various brokers. I was also sick and tired of meeting owners who, in addition to the rental agreement demanded either or a combination of the following criteria –
a) Tenant could only be a Brahmin or Christian or a Gujarati or a Marathi – depending on the origins of the owner.
b) There were vegetarian colonies where the first question the broker asked was not whether you liked the house but whether you were a strict vegetarian.
c) Single women wanting to live alone were a ‘no-no’ for most owners. Where owners agreed to give it to single women, no men were to be allowed inside the house. One owner went to the extent of telling me that he would give me the house only if my mother would stay with me for the first one month so that I could prove that I was no characterless woman and that I was from a ‘decent’ family.
After more than a month of searching for the ‘right house’ in South Mumbai, I came across an advertisement in the Times of India classifieds that promised a fully furnished studio apartment in Colaba. I called the broker without too many expectations and what he said seemed rather encouraging - the house was a large 1BHK with kitchen and attached bathroom with a negotiable rental of Rs. 25,000. The landlady was willing to give it to any decent tenant without the usual fuss of asking my origins or what I ate. The broker said the rest of the terms and conditions were negotiable and could be discussed if I liked the house.
So off I went to meet the broker at Churchgate station. The broker, lets call him Mr. XXX (because he was like a villain straight out of a porn movie. A different matter that I no longer remember his name) was late since he had been showing houses all day. He said he needed coffee so off we went to a restaurant next to the station where he had coffee and he started asking me the usual barrage of questions that all brokers ask.
“ Are you single or married?”, asked Mr. XXX.
“ I am single”, said I.
“ Do you have a boyfriend?”, asked Mr. XXX.
“None.” I lied.
After having learnt the hard way in the past month that boyfriend is misinterpreted as boyfriends – in plural; by the owners and also tends to give an impression that you are a part time slut, I had decided that it was a better strategy to deny any kind of a relationship – no matter how platonic, with the opposite sex. Of course, no one thinks that a woman can be a lesbian (or a man can be gay) or at least they don’t seem to care if you are a lesbian.
“ How old are you?”, asked Mr. XXX.
“ 30” A lie again but for reasons that I did not want people to take me for a ride just because I look young. “But when are we going and seeing the house?”, I asked getting impatient since the guy seemed to be spending more time in the restaurant than required for a mere cup of coffee. Now he had even ordered battata-vada to eat.
He abruptly got up, paid the waiter and we took a cab to Colaba to see the ‘sea-facing studio’. I was taken to the first floor of the house and here was the much-touted studio- it was a 1BHK dump where space for a cupboard had been converted into a ‘kitchen’ (read space for placing gas stove). The bathroom had the main sink where the dishes were to be washed. This was Mumbai. I could not expect much with just Rs. 25,000 a month in Colaba! But this was exactly 5 minutes from my office.
“So do you like the place?”, asked Mr. XXX eager to get the deal going through.
“ I need to think about it. I do not like the house but it’s a stone’s throw from my office.”
“Really, where are you working?”
“Standard Chartered Bank”, I replied.
The name seem to have got him excited. “Oh! Given you are 30, you must be at some managerial level there then. So are you a branch manager? Anyway, do you plan to stay here alone? You know how tough life is for single women here. People are constantly interfering in their lives.”
“See, you are also single,” he continued, “and I am also single. I am sure you need some companionship. And I am from a very decent family. I own so-and-so building in so-and-so area. If you have not had a man in your life, you do need some support not just emotional kinds but otherwise. This house would be ideal for you. Anytime you need me, I will be there for you. This landlady is a very understanding Parsi lady. I am the lone son of my parents and I have a sister working in a senior management position in a PSU bank. ”
I was shell-shocked and speechless as he continued his tirade and started telling me about his sexual encounters in the past. “I want to tell you all about myself before we proceed. You do not have to tell me about your sexual exploits if you are uncomfortable. I will understand.”
Here I was in the middle of a supposedly cosmopolitan city which was considered a SAFE place for women. It was Delhi that is called the city of Rapists. Rapists lurk all over Delhi and the moment you get out of the aircraft; they pounce on you- that’s the reputation Delhi has had.
I muttered something about getting late and got into the nearest cab. Imagine the cheek the broker had to get into the same taxi from the other side of the cab saying that he too had to go to Churchgate. When we reached the station, I let him pay for the cab and ran into the nearest departing train.

On Media, Marriages, Mangalsutras and other random clichés

2008-02-16T12:40:00.001+05:30

A few disparate thoughts that I have been having about the trite and trivial things that are given undeserving importance via the medium of media (like the stuff mentioned in the title of this blog):
1) Karva Chauth – The most touted festival (celebrated only in certain regions and by select communities in India) is given highest importance in Hindi movies (probably because most of the concentration of writers and directors who hail from these select regions). I would want to give this festival the title of “Footage Festival” given the Media attention that was given since Ash-Abhishek wedding. (For those of you who do not know what this festival is about, I suggest you do a google/yahoo search and figure that out yourself) Why on earth would anyone be interested in whether Aishwarya is celebrating the festival (not too sure the community she belongs to, or for that matter to which her Mother-in-law belongs to, has ever celebrated this festival)
2) Vermilon (Sindoor), Thaalis (Mangal Sutras/Bride’s wedding knot around the neck) – The much touted Vermilon in Hindi movies and the Thaali in Tamil movies seem to be personal effects that a chaste married woman cannot be seen without. (I recall watching a Tamil movie where the heroine obstinately refuses to hand over the Thaali to robbers because that inanimate object around her neck was the mark of her marriage – Gosh! Spare me these dialogues.) Frankly, if a woman chooses to, these should be omitted from marriage ceremonies as well. They really serve no purpose and if I may dare – in my personal opinion -add to ‘ugly-fication’ of the bride.
3) Maiden names – I somehow seem to come back to ‘Ash’ thanks to media reports. Ash has made a name for herself. And on the contrary, ‘Ash’ added more value (in monetary terms as well) to junior Bachan. She did not need the Bachan flag to hoist herself any higher than where she already is. But still the media will write about her as ‘Aishwarya Bachan’. Has anyone even bothered to ask ‘Ash’ if she prefers her maiden name? Why cannot we call Ash’s less talented husband – “Abhishek Rai”? After all, he would not have got an iota of media attention had it not been for his father or Ash.

The Regionalist

2008-02-13T17:07:00.000+05:30

Very often, people ask me the following question, “Are you a SouTH Indian?” (with a great emphasis on the TH of ‘south’; (of course the crass version of the same question; ‘ are you a madraasi’); is also often put forth before me. There are several issues with this.
Firstly, why should it matter?
Secondly, when I reply in the affirmative, I am often told that I don’t look like a SouTH Indian at all. My next question is usually, “How do South Indians look like?” The question is out of curiosity because I could never figure out how South Indians looked any different from East, West, North or Central Indians.
The smarter guys who realize they are being cornered into saying something sexist (castist/regionalist etc) usually reply after several minutes of ‘uhms’ and ‘ahs’ that they don’t know.
“Because South Indians are Kaala (black) ” pat comes the reply from the Victims. (Note: ‘people’ become victims once I pounce on them on such replies – read on to know how).
“ But Victimji, Mayawati is dark, so is SRK (sorry SP and SRK fans; I had to drag them in). But look at Hema Malini, Sridevi, Rekha, they are all so Gora (white). Amitabh Bacchan, who hails from UP definitely cant be a poster boy for Emami’s ‘fair and handsome’ cream. And Superstar Rajanikant, is himself from Central India – yet so dark.”
50% of victims know that they now have been caught foot in mouth. But the remaining 50% can’t ever admit defeat, can they. So the conversation continues.
Victim says, “ But these people you suggested are all exceptions to the rule. If you see overall, majority of people from the North are Gora (White) while majority of people from the SouTH are Kaala (black).”
I say, “ Victimji, can you please get me statistical evidence to prove your hypothesis? Have you personally done a survey of people’s complexions? How did you measure the level of ‘Kaala’ and ‘Goora’-ness in a person? How many people did your survey include? How many cities/towns did you cover? Has your study been validated and approved by the government or any authority on this matter?”
By now Victimji is loosing tempo (and temper). “Hema Malini is ‘Gora’ because her mother was a North Indian and Sridevi’s real father was a Kashmiri. I read it one of the Film magazines somewhere. That would explain why they are fair. Rekha was just an exception ”By this point, I am loosing some steam too. I feel like hurling abuses at Victimji and feel like shouting “Get out” but instead, I try to calmly say, “ Aap to bahoot Kaale hain – dil aur dimaag se (you are extremely black – from the heart and head)