ANT HILL

GOOGLE MOBILE: STOCK QUOTE SEARCH

2008-11-19T01:10:00.000-08:00

Google has introduced "Google Mobile Search" through SMS from your mobile.

Google says "Get cricket scores, Indian Railways train schedules & ticket status, horoscopes, movie showtimes, restaurant information and more ...all through SMS on your phone."

Note: No premium charge for the search unlike other providers, only standard SMS charge.

Try the following search:
Reliance quote
SMS to 9-77-33-00000
You will get an SMS almost immediately as follows:
Stock:
500325 (Reliance Industries Ltd)
1184.00 (+43.00/3.80%)
Happy searching.

Go to the link for more informations: Google Mobile-SMS

STILL AT PE MULTIPLE OF THREE DIGITS

2008-11-18T00:37:00.000-08:00

Are there still some equities with PE multiple of theree digits even after the mayhem of stock market?

Yes, there are. Some equities are still commanding that much of confidence (?) from investors. When most of the front line companies have corrected themselves to reasonable PE, the somewhat obscure or traders favourite companies are still there at that unreasonably high position.

Followings are few companies

Mineral and Metal Trading Corp.
Essar Oil
Reliance Natural Resources
Ispat Industries

It is hard to find justification for such high valuations.

More reading at Link The Economic Times

BOOK VALUE Vs MARKET VALUE?

2008-11-07T01:12:00.000-08:00

It is hard to beleive that the book value of a blue script is more than its market value. But the present Bear run has made it possible. Few very good scripts has exactly shown this anomaly. Followings are the companies.

Tata Steel,
Cairn,
Hindustan Zinc,
Hindalco,
MTNL,
Videocon Industries,
Central Bank of India and
Allahabad Bank

Also among the relatively smaller companies the followings are notable.

Raymond,
Parsvnath,
Bajaj Hindusthan,
Vardhman Textiles and
Bajaj Auto Finance.

The news item can be accessed from this link. Economictimes.

Should one go all out in aquiring the above stocks? I beleive in market sentiment, there may be reasons for this fundamental anomalies. But anyway this is a good start to study these stocks.

The news also says there are many more stocks of similar fate.

DILEMMA FOR SMALL INVESTORS

2008-10-24T20:27:00.000-07:00

The Rakesh Jhunjhunwala interview was on NDTV Profit, not on CNN IBN, my apology to all. Thanks to Danny for pointing out.

Yesterday was another black friday, along with the world indexes, Sensex was down by 1000+ points even after so called discovery of value at above 10000, it was really one of the saddest day for small investors. Thousands of us lamenting below the expectation datum of even for small returns.

Will the market rebound again? How far our Reserve Bank can effort to lower the CRR level? They have the reponsibility of lookin into the economy of our country in a Wholistic way.

I am feeling particularly bad, as just in the previous day I downgraded myself being bullish to realist (another term of bearish?).

Point to Ponder for small investors: Should we withdraw our money from market with whatever loss we are incurring?

WHERE TO: INDIAN STOCK MARKET?

2008-10-23T02:04:00.000-07:00

We dangerously hovering in some place from where we can see neither upside nor downside?

The statement from our PM, "cloudy sky", not that confident Rakesh Jhunjhunwala in CNN IBN yesternight and global scenerio has made me to reconsider my decision to be bull at least for near term.

Where to Indian Stock Market?

We small investors has more responsibility to protect our capital than to multiply it. Withdrow, your capital but keep your profit part there well parked in good stock.

What comes down will definitely go up. It is only matter of time.

MARKET FALACIES-1

2008-10-16T03:54:00.000-07:00

It seems that it is almost sure that recession has set in world economy. If we consider all the factors India should be well insulated from the global turmoil. Our semi socialistic principles is saving us from the global downturn. We may be a little edgy right now but reasons will prevail very soon.
Will the Indian Stock Market will recover and prove the theory of decoupling of economies is right?
Though I still beleive the theory was a offshoot of a clever market manipulator. This one of the biggest Market falacies.
My earlier blog Posts. Link 1, 2, 3.

WHERE SENSEX IS HEADING TO?

2008-10-10T21:46:00.000-07:00

IS THIS THE END OF THE WORLD?
IS THERE NOTHING LEFT IN INDIAN STOCK MARKET?

LOOKING AT SENSEX AT DANGEROUSLY CLOSE TO 10,000 MARK, IT GIVES ME SHIVERS IN MY SPINE. IT IS VERY NOT PLEASANT TO SEE MY CAPITAL ERODING.

INDIA IS A GROWING STORY. HAVE FAITH IN IT, BUT TREAD VERY VERY CAUTIOUSLY AT THIS VERY DIFFICULT JUNCTURE. NOBODY CAN PREDICT WHAT IS THERE IN FUTURE LURKING BEHIND THE MAZE OF COMPLEX FINANCIAL WEB. BUT STILL I AM A FIRM BELEIVER OF INDIAN STOCK MARKET.

RUMOURS ARE DOING ITS ROUND, BUT RUMOURS ARE RUMOURS.

"RUPEE IS AT A WHEN SENSEX WAS AT 5000, A FEW YEARS BACK. WILL SENSEX GO TO THAT LEVEL?"

BAKWAS!! MANY DOOMSDAY SAYER CRABS ARE THERE TO FINISH SMALL INVESTORS OFF.

IDENTIFY THEM AND REMEMBER WHAT THEY ARE SAYING NOW, JUST LIKE THOSE WHO WERE PROFESSING "THE THEORY OF DECOUPLING OF ECONOMICS". THESE ARE BAITS.

ALAS! YOU CAN SELL SOUR MANGOES ONCE, TWICE OR MAY BE MANY MANY TIMES TO THE REALLY SMALL AND HELPLESS UNSUSPECTING SMALL INVESTORS.

FEW GOOD STOCKS

2008-09-10T20:37:00.000-07:00

It is difficult to imagine now, a few months back we were cruising at a rate of 9 percent growth, now it is a dismal 7 percent and we are trying hard to get to that figure. Inflation is at high 12 percent, crude price has shown some funny momentum but hopefully now settled at below 110 dollar per barrel. Nobody, including market pundits has anything concrete to forward their opinions on stock market. It requires braveness to pick up stocks at this juncture, especially for small investors. We don’t have much clue on what is going on there. Recently I have come across articles in which few stocks were identified which don’t have direct impact of the present economic scenario. I agreed to some extent, to their suggestions, though I believe no stock is secure from the current world economic scenario. I think it will be better to forward their recommendations for the perusal of small investors.
The stocks are
CRISIL
EDUCOMP SOLUTION
KALINDEE RAIL NIRMAN
PRIME FOCUS
TULIP TELECOM
VAKARANGEE SOFTWARES
The article also listed seven factors to look for in stocks to beat the slowdown. One can go through the article, which will also enable a small investor to pick up few more stocks other than the above listed.
Some articles are still relevant though may be two issues old.
Link: The gems in the corner (Business Today, Sept 7 2008 issue).

FEW STOCK IDEAS

2008-08-30T02:51:00.000-07:00

The escewed market seems to be settled now.
Oil is more or less steady, gold is trying to find its groove. Probably stock market is settled and have it discovered its real worth?

But inflation is still high and rising , high interest rates should slow down loan activity and thereby growth. Monsoon activity is good, though political heat is rising. (What Mamata B is upto? Is she a real politician? Politicians should have more tact and statesmanship.)

Whenever it seems that market is going up there will be something which will pull it down. This is a out and out Bear market, though it should be a Bull market by all arguments. But market does not reacts on arguments, than on sentiments.

Can we hide from the realities for long and simply shy away from it? It will be foolhardy if we donot reap some benefits by way of changing outlook to a long term view. Some stocks I have noted below which may merit long term outlook, lets see if you agree with me.
Yes Bank
Opto Circuit
Sesa Goa
State Bank of India
BHEL
IDFC
Hope to see you in near future.

FAVOURITE STOCKS OF MUTUAL FUNDS

2008-06-16T09:12:00.001-07:00

Should we invest in stock in these depressing days? For many it is a half filled glass situation rather than half empty. Some investors are just being adventurous and buying anything which is right now less than half of their price in their heydays. Prudent investors are judging what others are buying and why they are buying. And also for how long the prudent investors can stay invested. There are so many factors / parameters to consider before making a decision to invest. But anyway it helps a lot to steer our course if we consider what others are buying. Let’s see what the biggest investors in the market, the mutual funds are staying invested or what their preferred stocks are. I have sourced the data from The Economic Times.
Company
No of schemes invested
Sum of no. of shares held
Reliance Ind
230
3.51
Bharti Airtel
177
3.93
Infosys Tech
166
1.92
ICICI Bank
177
5.08
Larsen and Tourbo
166
1.38
BHEL
184
1.85
Reliance Comm
150
4.85
SBI
143
1.81
ITC
131
8.97
Tata Steel
155
3.27
HDFC
126
0.84
ONGC
121
3.06
Satyam Computer
111
2.82
Tata Consultancy
110
1.50
JP Associates
115
9.63
Sterlite Indd
101
1.59
UTI Bank
98
2.16
Crompton Greaves
96
6.72
Maruti Udyog
102
1.56
Tata Chemicals
75
2.65

MARKET WISHLIST

2008-06-05T05:27:00.000-07:00

It has been a long time since I took a hiatus from blogging. It was a really turbulent period, as the market showed weakness beyond expectation. Small investors are trying to put up a brave face though bleeding inside. The maximum loss was to those who have entered into the arena in recent months.

I am trying to frame a wishlist of mine on the market after I saw an advertisement of an investment farm in a magazine. The punch line of the ad was “Riding out the turbulence. Wealth. What’s it to you?” Certainly an experience co-pilot should be of immense help, it will be the top most point of my wishlist. The co-pilots comes at a cost, small investors can ill effort the hefty amount they charge. The Indian Mutual Trust Industry is a good example. Even with all the good intentions, the regulators are at a loss how to address the issue of protecting the interest of small investors. Still it is better to park some part of our monies in some scheme which offers guaranteed return.

The second point of my wishlist will be to learn from my mistakes I have committed in the past. But, alas, I am a small investor and only a small fraction of small investor has shown this trait so far and I should not be an exception.

The third point I wish that the so called market experts on TV should be able to decipher the signal market is giving. In most cases I have seen these free experts fails in much of a similar fashion of a free iron I got with an annual subscription of a magazine. The TV experts have huge fan followings among the small investors.

In one of my earlier blog I promised to book profit whenever the chance presents itself. I wish I could have learned the trick when to book instead of a simple promise. Profit booking is another wish of mine.

Market maxim says buy, when the market is down. I am hardly left with any monies to buy, and I am not sure to take a loan to buy stocks right now. I wish I have some money to invest.

The wish list can be extended to many more points, probably the market is like our life, good things remains elusive.

SUNNY SENSEX DAYS: HOW FAR AWAY

2008-03-09T00:26:00.000-08:00

Sensex is below 16K after half a year, inflation crossed past the crucial 5%, Karat and party drawing attention with pre-election gimmick, UPA is in election mood handing over soaps and above all--- the fears of recession in USA is catching up. It is mesh in American job market, there is an unexpected drop of payroll. It is now in air that the total credits related write off will be in the range of $ 1 trillion. The economy massacre is now a global phenomenon initiated in North America.

But the fall of Indian Stock Market is hardest amongst peers.

The Sensex has lost 21% in 2008, but still the average price earning multiple of Sensex stocks is still at 21.58. China ranks over us theirs at 36.03 after a fall of 13.6% in 2008. In the same time Hang Seng dropped 16.5%, Kospi by 11.6% and Japan Nikkei by 5.8%.

The technical analysts are most worried lot, both the key indices Sensex and Nifty have crossed the crucial 50 week moving averages indicating an onset of bear phase of our market.

Why we are going down faster than other markets, probably due to more inflow of FII money to India compared to other markets last year. So money will head out in tough times. The more money came to our market as it presented a better earning potential.

The robust earning potential can not go wrong as drastically and at such a short time frame as our market is now presenting before us. So probably Indian stock market is more attractive now.

So it is a buy time for small investors! ! ! !

No, with another very strong NO.

Markets are mostly driven by sentiment. Right now the sentiments of investors are abysmally low; it does not appear to me that it will improve so fast at least in India. No sensible investors will go for market till political situation of left vs. others of UPA stabilizes.

Wait till appropriate time (Do not rush), have some money in pocket then go for a short term kill.

POWER STOCK: RELIANCE POWER AND AFTER

2008-02-19T06:27:00.000-08:00

Many investors walked through the Dalal Street and many an event happened in the background after the mega IPO of Reliance Power. It was an epoch making issue, investors of all hues ignoring all boundaries made it a point to invest in this offer. The power sector is the most happening sector right now and in the days to come, it held out much promise. In one of my earlier blogs (link) I discussed the issue as I was sure the issue will be a block buster and only a few will repeat its performance in future. I am still bullish in power sector in Indian context. (Earlier Popular Blogs link1, link2)

It is still a mystery what followed just prior to and after listing of the issue. We saw the melt down of Indian stock market, pundits tried to find out reasons, and as usual it is always easier to find the exact reason after any mishap. Post mortem report-"weak global cues". But interestingly some HNI and Institutional investors off loaded their holding of the issue just like a hot potato from their hand.

All of a sudden, few pundits suddenly discovered power stocks in India are over valued; so far we along with the same set of pundits were over optimistic in this sector. Now, many small investors panicked and sold off their holdings.

It seemed to me as a well orchested event that followed one after another in a systematic way. Whatever it may be, but it was successful, many small investors who invested in the issue with their hard earned money and some even with borrowed fund sold off their holdings and incurred heavy loss.

Should we pass on the blame to the promoter of the issue? Probably not, ADAG tried their best to allot shares to all small investors, (fifteen, sixteen shares) we are not complaining.

But the recent positive news of bonus shares, to make up the loss of investors, is laudable. The news also boosted the stock link. With this particular small gesture ADAG showed how they care for their investors. It also shows that they are bold enough to admit that may be their pricing of the stock was high.

Will it be very high expectation for the small investors to have such gestures from the houses of repute in future? May be ADAG set a high standard to emulate for all business houses.

IS INDIAN STOCK MARKET BEING MANIPULATED?

2008-02-13T06:10:00.000-08:00

“The present slide of Indian stock market is due to global cues”, the market pundits are saying. By the very word “global cues” they are hinting to the “recession” of North American economy. All the major markets, including the robust emerging markets are showing weakness, and many are even hinting that the bears are taking over from the bulls.

To give a loose definition of recession: it is a contraction of economic activities spreading more than just a few months and becomes evident within a few months from the onset of it. The complex web of financial world which connects the world’s market makes it difficult to predict how the US recession will affect a particular market. So, generally many theories fly around. It is easier to press the panic button by one and for all. We have seen that rumors gain more ground than in normal condition.

Now we will come to know the “theory of decoupling of economies” will prove its mantle, as is being professed by many economists. But it seems the pillars of market are developing cracks, and may be it will be too late to welcome the onset of so called “decoupling of economies”.

Not going to financial theories and jargons, we should remember that the small investors are bleeding and the loss is far greater for small investors as they are not equipped to deal with falling market.

I always had some hunch of suspecting about the manipulation of our market by some unscrupulous operators. This particular view is probably shared by most of the small investors. We all will welcome the Regulator SEBI to play their positive role in this kind of manipulation if there is any.

Recently I have come across an interesting blog, which I think those who have the lingering doubts on market manipulation should go through it. LINK.

Can we do anything more than keeping our finger crossed anticipating the rebound of our market after the Budget session of Parliament?

BUDGET 2008-09: POWER STOCKS

2008-02-07T06:20:00.000-08:00

If you have noticed that before every budget the fertilizer stocks goes up anticipating some kind of package from Government. Generally all agriculture-based industries expect some kind of tax soap from the central budget. In most cases the budget addressed the expectations in the form of subsidies and tax cuts. And these measures helped our agriculture to arrive at where it is today.

As we are ushering our country to “Developed Economy”, it is the time to set our priority in some more areas too. The infrastructure sector needs financing to speed up the developmental activities. The success of Government is measured by good governance. Good governance includes the facilities provided to the citizens. The recent Gujarat election showcased the importance of good governance or development, to the political parties. With the developing economy, the common people expect basic infrastructure/facilities, and probably will shun the divisive politics the parties are now practicing.

Ours is power starved country, even with all out effort it will take some time to fill the gap of demand and supply. The power sector is targeting an increase of 78,500 mw in generating capacity during the 11th Plan (2207-2012) and the overall funding requirement will be Rs. 10,60,000 crore. It will be Herculean task to raise that much amount even with the proposed Tax-free Power Bonds, Power Vikash Patra and disinvestment of public sector power companies. The participation of private sector is of paramount importance to achieve the objective, the VC s and PE funds should be encouraged with additional tax benefits.

With the above in view the most likely gainers will be the power sector stocks. There should be secular growth in the sector and the growth should encompass the capital good companies manufacturing power equipment. The story has relevance and is already established by the eager participation in the recent Reliance Power IPO.

I am as always very bullish in this sector (link, link, link) and believe that this is the sector which will provide some silver linings in the dark cloud of overall gloomy picture of Indian stock market.

It is now the duty of small investor to do some research and pick the power stocks which will provide excellent growth opportunity.

NORTH AMERICAN SLUMP AND TWO STOCKS OF MY FANCY

2008-02-06T06:22:00.000-08:00

The news of economic slump or the recession in North American market is probably the most dreaded word in world economic order. No body can ignore the huge impact of North American Market though few may try to wish it away. The slide of today’s market is the knee-jerk reaction by the world stock market on the latest assessment of situation over there. The situation will remain grim for some more time and probably there will not be any positive trigger for some more time if we believe the pundits and fund houses.

The situation may not be as bad, the overseas fund especially the North American funds should come out as a result of the recession and it should come to Emerging Markets and a major share will come to Indian stock market.

Indian domestic market is also large enough to sustain of its own. Imagine the crores of consumers; they can drive the economy forward. Luckily we did not become an export dependent/oriented economy though we strived to become one.

Anyway let’s discuss one stock “YES BANK” which caught my fancy recently, though I was very much aware of it and kept in my radar for a long time. But somehow it did not follow it up.

The stock has high return on equity, high growth and zero NPLs. The unique business model of the Bank presents promises for future growth. Detailed report is available in this link.

Another stock is GMR Infra, market lowered premium on this stock after its announcement of overseas acquisition. I am bullish on this stock and I think it is a good buy below hundred and seventy buck with a horizon of one year minimum. The analysis of the stock is available from the same link above.

The last correction and the topsy-turvy-yo-yo have reconfirmed my belief in profit booking.

MAKING MONEY IN INDIAN STOCK MARKET

2008-02-03T06:26:00.000-08:00

"The market may test the last bottom again", a stern warning from different quarters.
"Stay away from market till it stabilizes. The market is under bearish fever." warning from another source.
"One should not buy in a falling market" - all the above warnings are from respected houses and pundits, when the market goes down.

"Ours is growth story", "difficult to copy our business model", "market is insulated from the rest of the world" and so on all the positive thinking from the same set of houses and pundits when our market was going up.

Why the contradiction of finding darkness in a lighted room? Very high level of spiritual intelligence?

To me the above is due to the heavy stakes the market pundits and fund houses have in the market. So they flounder and panick at the drop of a hat, and we have seen the grim faces of them in the TV screen recently. The same grim, smileless, serious faces in the TV which makes a mountain out of a mole hill everytime the market goes down.

Their heavy accent and drooping eyes make the small investors more nourvous, but they donot sell our stakes as fast as they advice and themselves do. We, small investors have our sweet time gap of selling and buying. And it is for various obvious reasons. We have experienced in most cases sweet time gap of selling and buying benefits us. Panick selling and buying are not for small investors.

We still make money and we take the correction as an opportunity to buy where-ever we zero in and whatever small fund we may have.

Can anybody lose money in a long time bull market.

PREPARE FOR PICKING STOCKS

2008-01-24T06:19:00.001-08:00

It is always difficult to be sure in stock market. The days before, when I did put down my opinion as “it is probably not the right time to pick up stock for small investors”( LINK), many of my friends were at serious difference with me.
I had my own reasons to come up with a statement like that.
As always the small investors tend to pick up stocks at higher price. How many of us could pick up our stocks at bottom, yesterday we came to know about the turn around of the market a tad later, by the time, it wheezed past many a miles, certainly we lost some good ground.
But again, the yesterday’s rally was the turn around of the market?
Probably not, the market again went down today for some reason that we could not think of. It seems the market will behave in weird way for some more time.
Or to me, till the liquidity re-injected from the refunds of Reliance Power IPO. That means after a week time. We can wait for some more time till a clear picture.

There are many a stocks which are at very attractive price right now. But the stocks which were at their best before the slide may not go back to the original position at the same rapid stride. History has many instances. Zoom your attention to the stocks with good fundamentals and which has prospects to grow, stock market always pays premium to growth story.
I have identified few stocks for picking up when the market stabilizes, but again I am suffering from liquidity crunch like most small investors.
Powergrid
GMR infra
PetronetLNG
ONGC
IFCI
RNRL
Nagarjuna Fertilizer
RPL
May be it is the right time to buy as per the market pundits, but listen to your inner self too. Most of the time, in such situation the gut-feelings presents the answer.
The loss or gain is yours, so nobody is going to shoulder responsibility but everybody will claim credits.

DO NOT BUY: WAIT FOR SOME MORE TIME

2008-01-22T06:17:00.000-08:00
The present fall of Indian stock market is so violent and vicious it forced me out of my slumber of so called bloggers block. The sudden and completely unanticipated tanking of the market is the result of many factors and the factors were cumulative. That is the reason of this violent fall trailing with some bloody aftermath after every fall.

I was shivering in front of my computer when I saw the freefall of the market as if there is no bottom, interestingly similar feelings was there when the market was going up at a frenetic pace (my earlier blog). Such wild movement of the market is definitely not good for the small investors.

But market reign supreme. The market is very vindictive in the hands of market operators. Probably it calls for proactive Regulators which do not yield to the stage managed hulla-bol of unscrupulous element.

Probably, after a long time, the market is reinventing value, and discarding momentum. In that case what will be our next logical step to rise like Phoenix from the ashes of our portfolios?
Should we cherry-pick some good mid cap stocks, large cap stocks, dividend paying stock and what not at some attractive price as some experts are dishing out their advice.
(Sometime I can not stand some experts who pose as Mr. Know-all and have some preconceived ideas which in most cases turn out to be wrong, but never accepted it. aka. ONGC, RNRL, L&T haters )

For me sit tight and watch is the best policy for the time being and buy my stock only after the market turns around from the bottom of this abyss.

I am very much sure we have a bull market ahead of us and may be these developments are for the best interest of us.

STOCKS FOR 2008: CALLS FOR REALIGNING STRATEGY

2008-01-04T05:47:00.000-08:00
It was interesting to note the following ten top performing stocks in 2007. Link- Time-Blog.

Inner Mongolia Yitai Coal Co. Ltd., China, 1017%
Jai Corp. Ltd., India, 877%
Reliance Natural Resources Ltd., India, 823%
Ispat Industries Ltd., India, 742%J
indal Steel & Power Ltd., India, 664%
Essar Oil Ltd., India, 570%
Shougang Concord Int'l Enterprises Co. Ltd., Hong Kong, 534%
China National Building Material Co. Ltd., China, 496%
Lanco Infratech Ltd., India, 487%
Adani Enterprises Ltd., India, 467%

Surprised? Let me quote from the same source that out of hundred top performing stocks in 2007, fortyone are from India.

We are extremely bullish in India story and the above is just another support to our bullish outlook. We are an emerging market, and we have many hidden gems whose earning potential is not yet fully exposed. Above all , we have our unique stock/financial market which has a judicious mixture of domestic and foreign earning potentials.

But still, it may not be possible to repeat this kind of extraordinary feat year after year. To sustain similar kind of growth to our portfolios, it certainly calls for realigning of strategy and to have a peek into the minds of market pundits. Some good prescriptions of stocks for the year 2008 are already doing rounds in the world of investors. These prescriptions if you look at them have their own merits. These suggestions at times go terribly wrong leaving the investors high and dry. So, small investors are to apply their own discretion.

I personally liked few suggestions and these may be used as guideline for framing strategy for next year.

Business-standard: Some picks which does not need much expertise, still should reaffirm our faith in known stocks.

Moneycontrol.com: Mainly observations from Pundits. Interesting reading, for the contradictions.

DeadPresident: The most interesting, stock selection by mortals, must read page.

Business Today (Print edition) has also published their list of companies for the year 2008.

Happy New Year.

RELIANCE POWER IPO: STOCK FOR SMALL INVESTORS

2007-12-16T05:50:00.000-08:00

The plan to list Reliance Power Limited was a welcome step from R-ADA group and is eagerly anticipated by small investors. The red herring prospectus for the issue was submitted to SEBI on October 3. The company is supposed to sell 11.5% of post paid up capital of the company, which media reports have said may raise $2.8 billion. Probably it will be India’s biggest IPO. Reliance Power also has in interests in infrastructure, telecoms and financial sector. ADAG holds the company through various group companies including Reliance Energy which holds around 50% of the stake.

According to media report around 30% of the shares will be for retail clients, 10% will be for HNIs and rest 60% will be for Institutional Investors. There are reports that the face value of the stock may be of RS 10/- instead of Rs 2/- as initially proposed. link. The issue will definitely require the support from FIIs and DIIs. Some sources informs that the issue may be delayed by some more time. Link.

No doubt it will be a bonanza for retail investors as power sector is the dominant sector for immediate future.

There is some good news for the investors before the issue. Reliance Power has bagged the Krishnapatnam Ultra Mega Power Project. It has already bagged the Sasan and Mundra mega power projects. All the development is likely to make the issue more attractive.

www.bsensedaily.com has furnished a list of projects currently handled by Reliance Power Limited as follows:

• Rosa Phase I, a 600 MW coal-fired project in Uttar Pradesh scheduled to be commissioned in March 2010.
• Rosa Phase II, a 600 MW expansion of Rosa Phase I which is scheduled to be commissioned in September 2010.
• Butibori, a 300 MW coal-fired project scheduled to be commissioned in June 2010.
• Sasan 3,960MW UMPPs promoted and awarded by the Government of India is expected to be the largest pithead coal-fired power project at a single location in India,scheduled to be commissioned by April 2016.
• Shahapur, a 4,000 MW coal-fired(1,200 MW) and combined cycle gas-fired (2,800 MW) project in Shahapur, scheduled to be commissioned in March 2011.
• Urthing Sobla (400 MW), a run-of-the-river hydroelectric project, located on the Daulinganga River in Uttarakhand scheduled to be commissioned in March 2014.
Five other projects—the gas-fired Dadri project (7,480 MW), the coal-fired MP Power project (3,960 MW) and three run-of-the-river hydroelectric projects, Siyom (1,000 MW), Tato II (700 MW) and Kalai II (1,200 MW).

There are some controversies too. ADAG has alleged some market forces working against the mega issue and trying to thwart it. Link. REL investors are unhappy to find that no approval was sought from them for listing the issue as it has direct bearing on the income of REL. and so on. There is already premium on this issue in the grey market and some of the market operators are making losses, as the issue is delayed for various reasons but the grey market premium on the issue is increasing steadily. Link: Reliance Power IPO clouds grey market.

There is already a blog on this mega issue. But the buzz in the overall Indian finance Blogosphere about the mega issue of Reliance Power IPO is mixed and evoking different emotions. Most of the Indian Stock Market Blogs are maintaining a very neutral stand and just passing on the information on the issue only.

Yours truly is very bullish in the growing story of Power stocks and believes that this issue is genuinely going to lift our stock market to a few notches higher.

CAPITAL GOODS STOCKS: FULL OF PROMISES

2007-12-09T06:28:00.000-08:00
One should have presence in stock market in a sector which is relevant and have the potential to grow aggressively in short and medium term. And icing on the cake will be if one can pick up stocks in that sector at an attractive value. The above is the most ideal situation for any investor.

The renewed emphasis on Indian infrastructure sector is noticeable in recent past, and the capital goods stocks are reaping maximum benefits. They have ever increasing order books as the result of overall well being of Indian economy. The strong quarterly numbers in this sector confirms that the general concern of this sector like execution risk, momentum of order book and funding will not be problem in foreseeable distance. We should not forget, we are targeting 9% GDP growth in the 11th Five Year Plan.

I have identified some stocks which in all probability will be the future leaders in capital good sector. The large caps like L&T, BHEL, Suzlon Energy are already been in the radar of most of the small investors.

The strong momentum of some visible mid caps is noticeable; Thermax, Punj Llyod, Cummins, Siemens, Alfa Laval etc are holding good promises.

Now for small investors let’s go back to first para of this blog: to pick up the selected capital good stocks at attractive value. Stock market is full of surprises, nobody is sure when the stocks will be presented to us on a platter to our likings. But can we pick them at that opportunate moment? I am not sure, downward price of any stock makes us doubting Thomas, and we miss the opportunities.

Let’s be prepared and not miss any opportunity. These stocks will make our portfolio richer.

POWER STOCKS: IDENTIFY THE WINNERS-II

2007-12-05T05:16:00.000-08:00
There is a lot of hullabaloo about the valuation of power stocks in the Indian stock market. Being bullish (earlier post: here and here) in this sector made me to have a rethink. The power stocks passed a long period of sluggishness due to some archaic laws . There is a severe shortage of power in our country and with very conservative estimate the supply shortage to demand will remain until for at least another decade. Now government is putting emphasis on infrastructure and power. Logically power stocks are best bet to invest with a long term horizon.

The valuation of REL, NTPC, Power Grid, Tata Power are in the forties of their annualized sustainable earnings. Neyveli Lignite Corporation, Gujarat Industries Power Company, Lanco Infratech and GVK Power have higher valuations than a year ago. Power equipment manufacturers like BHEL, Cummins, Crompton Greaves are also have high valuation.

It seems that the power sector is in a different platform right now, which reminds me of the IT stocks a year back. The IT stocks justified their high PE with sustained earnings for a long period. Can the power stocks repeat the feat of IT stocks? Debatable! May be power stocks may correct to some extend in the days to come and to me that will be an opportunity to pick up some value stocks for some long term investment.

Some really attractive IPOs are coming in this sector. Reliance Power, NHPC and REC will present small investors a chance to pick them up at good valuations.

What about the recent listing Surjyachakra Power and IndoWind Energy? Surjyachakra Power has a tie up with a Chinese company to for a coal-fired project in Orissa. They are also good pick for small investors as they still have to find their groove in Market.

One should not worry for the power stocks in their portfolios as they are long term winner and outperformers in Indian Stock Market.

DILEMMA FOR SMALL INVESTORS:

2007-11-22T17:42:00.000-08:00

It seems that we lack confidence to see our market above 20,000 mark of Sensex. If we go anywhere near the mark, we simply falter and whimper back to the so called comfort level of some 18,000. Are we still lacking in the conviction of a strong matured Indian Stock Market, which is not dictated by Hangseng, FTSE or Dow as fast as it is doing right now. I agree that no market can be insulated against the development in overall world scenario, if we consider the superimposition of economies.
But if any market is to climb higher, the Indian stock market is the most obvious choice. (Link to earlier post: here, here) Probably even the congenial Bears will tell; right now we are in a very good phase of Bull Run as almost all factors are favouring it. (Link: here)

The present lowering of market has presented us with a good chance to pick up some stocks which were in our radar for some time, at attractive price. The momentum boys RNRL, RPL, Nagarjuna Fertiliser, Bongaigaon Refinery and a host of other stocks have came down to a comfortable level to pick up. Some bigger boys L&T, Reliance, REL, Punj Lloyd, RCOM, State Bank etc. are now in pick-able price.
No wonder market pundits welcome correction. Should we wait for this correction to be over or just pick them up like that? It is a million dollar question. If we cannot effort to spend time in front of a computer to pick up stocks at theoretically correct time: it is simply not possible. For somebody of my type, who has engaged in other important jobs and cannot effort to spend time in front of a computer, I think picking up stock at a price at my comfortable level is the best bet.

I am sure; anyway we are going to have our market at a higher level in near future.

Now a small stock-poem

My stock: I do not sell it

If my stock remains at level, I do not sell it,
I wait for my stock to react.

If my stock goes down, I do not sell it,
I should not book loss, I can wait for some more time.

If my stock goes up, I do not sell it,
My stock will go up still higher.

I have my disciplines, I keep that in my mind
But never to practice.

POWER STOCKS: IDENTIFY THE WINNERS

2007-11-19T20:40:00.000-08:00
The buzz word in the Indian stock market at present is “Power”. Being bullish in Indian stock market, more so in the power sector (earlier post: Power shows: Market this week) made me to have a look in this particular direction.
The recently introduced BSE Power Index is just an indication of aspiration the market have in this particular sector. This sector was neglected so far due to some prevailing draconian rules. With the development of economy and overall living standards of our country, Government can’t effort to ignore this sector. Let’s have a look at those power stocks which had entered into Indian stock market this year

Power Finance Corporation
Power Grid Corporation
Surjyachakra Power
Indowind Energy

All have done well so far in the market for their unique business models. To me these four stocks are yet to have a proper valuation and so they still have some upside left to be realized. If we consider the demand supply mismatch of power in our country the power stocks are most likely to appreciate and be outperformers to index. We have already seen some actions in this sector.

Some real big players are poised to enter our stock market in near future. Entry of these companies will further strengthen this sector. The noticeable will be the followings:

Reliance Power
Rural Electrification Corp.
NHPC
BGR Energy

We already are in the midst of a very good Bull Run of our market. The market may correct itself in a stock specific way, every time after a very good run. The concern for small investors for a proper area to park their profit may well be answered by stocks in this particular sector.

A good selection of mid cap power stocks at this juncture may yield some multibaggers. Fundamentally good power stocks are for some really long time hold, at least for a decade or till the demand supply mismatch will be shorted out (till 2017 as per investment bank Artherstone).

THE GREAT INDIAN BULL RUN

2007-11-14T17:34:00.000-08:00
It seems that I am destined to miss the excitements of stock market during any of my hiatus from the blog to attend other engagements. The Sensex remained there at tantalizingly near 20,000 when I shined off, then it slided by around 2000 points for lack of cues. It made a resounding recovery of 924 points in a biggest single day rally to be there at its very correct place near 20,000. It reconfirmed my standing (my earlier popular blog: Should we buy stock now?) that there is still some time left for Bears to set in. For now it is the “Great Indian Bull Run”.

Market pundits always maintain, “bull markets don’t just die of old age, historically only one factor has terminated bull runs: rapidly rising interest rates. Bear markets occur when earnings collapse due to an economic recession, which in turn is brought about when real intereat rates cross the threshold of pain”. (Ruchir Sharma: The Sky Isn’t Falling –Yet, November 5, 2007, Newsweek)

To go by the above referred article there are still some way to go before the Indian Stock Market enters into the “bubble” territory. History shows the bubbles peaks when average stock price reach the level of 50-60 times projected earnings for the coming year. Some examples of bigger bubbles are NASDAQ in 1989 and Hong Kong market back in 1973, when the P/E ratio peaked at 55. The bubbles were busted by respective central banks by tightening measures.

Any tightening measure will result in slowing of overall economics of our country which the government will very reluctantly opt for, in all possibilities.

There are some theories floating around like “look beyond the index stocks”. This is a dangerous proposition to small investors as most of the small investors only look at the stock price movement, not beyond that. Some penny stocks are good bait for those unsuspecting small investors by those big great white sharks lurking in the deep blues of uncertainties. They should always value the fundamentals rather than unwanted tips from those uncertain sources.

A few issues back Outlook Money (15th October, 07) came up with nine good mid cap infrastructure stocks which seem to fit the bill for small investors. For small investors these stocks may be kept in their radar for picking up when the stock price and market allows picking (refer my earlier very popular blog: Waiting forever to be discovered by world). For our benefit let me note them down below:

Bharat Bijlee: Good order book and earning visibility.
Bharati Shipyard: Cost competitiveness results in better standings.
Era Infra Engg: Good project execution.
Hercules Hoists: Diverse Product Range in a modern manufacturing facility.
India Cement: Biggest cement manufacturer in South India.
Indo Tech Transformer: Impressive growth potential.
International combustion: Niche product range.
Paramount communication: May be the growth story to come next.
Voltamp Transformers: Should ride the infrastructure growth story.

In the mean time let us bask in the glory of Sensex Sun and as old adage says: make hey while the sun shines.

HOSTILE TAKEOVER: SMALL INVESTORS CONCERN

2007-10-31T18:57:00.001-07:00

The upward movement of the Indian Stock Market is unabated; sometime it is scary as a small investor to be there, in front of the computer. Capitals of all forms and from all types of sources are entering in the market. It seems the flow will continue for some more times. The recent entry of some Pension indicates the robustness of Indian Stock Market. Some of these funds are well managed and proactive. They generally do not allow Corporate Houses to fiddle and they demand results. We are entering into a more matured stock market scenario in near future.

Hostile takeover in our market is virtually non existent, though it is a norm in developed markets. In many cases the hostile takeovers are welcomed by small investors, as they result in matured pricing of a stock. Recently, there was a rumour of potential take over of Hindalco by a multinational corporation. It is scary not only for the small investors at this dizzy height but also to the corporate houses. The phenomena of hostile takeover will be reality in the coming years.

The leading corporate houses are taking pre-emptive steps by increasing stakes in their companies. Though it is seen as to leverage the India growing story and exercise greater control in the companies; it will act as effective shield against hostile takeover too. I will furnish some figures in the table below which will tell stories if analyzed.

Corporate house

Company

Promoters holding % (June-07)

% increase in last one year

ADAG

Reliance Communication

66.75

24.52

ADAG

Reliance Capital

52.40

16.95

ADAG

Reliance Natural Resource

49.95

4.89

ADAG

Reliance Energy

35.90

30.90

Mukesh Ambani

Reliance Industries

50.98

1.15

Tatas

Tata Steel

33.77

6.89

Tatas

VSNL

76.24

4.72

Tatas

Indian Hotel

29.17

0.77

Tatas

Tata Tea

35.40

6.45

Tatas

TCS

79.12

-4.57

Bajaj

Bajaj Hindustan

40.90

3.19

Bajaj

Bajaj Auto

30.11

0.33

UB

United Spirit

38.10

1.78

OP Jindal

Jindal Stainless

42.56

1.98

OP Jindal

JSW Steel

46.43

1.28

Infosys

Infosys

16.54

-2.87

Satyam

Satyam

8.79

-0.39

Wipro

Wipro

79.58

-1.51

HCL

HCL Technologies

67.55

-1.75

The new equation of ownership may effect small investors, because in India the management and the promoters are same unlike other developed markets.

The increase in stake may dissuade potential take over premium of the stocks where the promoters are holding majority interest of the company. But at the same time the promoters will be at bay as they will always under pressure from those FIIs in addition to small investors best freind SEBI.

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SHOULD WE BUY STOCK NOW?

2007-10-28T18:40:00.000-07:00
Right now Indian stock market is presently second most costly than only to Chinese stock market. The unprecedented capital flow in all possible form is worrying our market regulators. Even the P-note scare could result in a small flicker in the up and up going Sensex graph. Probably the market is over heated as some experts are saying. But any case it is certain we are in a long term Indian Bull Market.

It is difficult to make a buy call when the stock market is at all time high, and when the input news is of mixed kind. We have two choices in front of us if we have some cash waiting in our pocket to invest in stock market. The first choice is to wait for a market correction which is being predicted by many pundits or the second choice is to just take the plunge (or buy at the present rate).

To me both the above cases are extremes on opposite sides. If one waits for a market correction which may even come after a good rally of another few thousand points, may prove to be costly to the investor as he will miss the run of the market. Even the correction at that point may not be deep enough that will see the market lower than the present level. In any stock market 10-15% correction is a good correction.

And as in the second case, after buying at present level the market may tank (again 10-15% correction) and it will take some real long time to come back to present level. The buyer will have some agonizing time if he invests all his monies right now.

It is a matter of conviction, if we believe that we are in a strong Bull Run than the situation will be as follows:

In any bull market it is always a buy proposition for any buyer. We are going to find our market at higher level after the gap of a certain time. Especially those stocks with strong fundamentals, strong order book or in the right sectors. If one decides to enter market he can invest at any point of time, say one invests 50% of his capital in his stocks of choice, and may take the opportunity of any correction (10-15% correction of the index) to invest rest 50%. If the correction is elusive then invest another sum of 25% of his capital in the same stocks after every price rise of 25% of his stock. This way the buyer will always have his stocks at lower value than the market price at the same time will not miss the present Bull Run.

It will be a pity if one misses the present Bull Run by sitting in the side line. This run may not be repeated in future as all factors favours Indian Stock market right now.

Footnote: Stock market is again all about conviction of the investor. My conviction, yes we are in a strong Bull Run of Indian Stock Market and it is due to followings:
There are many theories after the North American sub-prime crisis that all the emerging markets are poised to fall as the cash starved American shoppers will feel the pinch in due course. But probably not the Indian stock market, as the 1.1 billion consumer of domestic market will provide an effective shield against any financial instability world wide. The calculated reforms in the Indian financial sectors have resulted in a very stable economy which is yielding results at present. Indian domestic market is getting bigger as the per capita income will cross $1,000 within this year. Our domestic savings is highest if we compare with developed countries. We can look forward to sustainable growth rate above 10 percent by 2011 if we further liberaralise our labour market, as concluded by a study by “Organization for Economic Co-operation and Development”.

I suggest reading the following article: In the Comfort Zone: by George Wehrfritz and Jason Overdorf. Newsweek, October 22, 2007

HIGH P-NOTE EXPOSURE STOCKS

2007-10-22T03:06:00.001-07:00
The recent clamp-down on P-note by Market Regulator has mixed reactions from different quarters. The stock market is going topsy-turvey on this issue for last few sessions. We all are confused along with the Indian Stock Market how to deal with this particular issue at hand. But anyway kudos to Regulators.

Probably we will be well off if we know the stocks where P-note exposure is high, I have come across such a list from a well known Blog (Investment Guru), I could not resist to note the stocks which he has shown as having high exposure to P-note.

India Bulls Financial Services
ICICI Bank
HDFC
Bharti Airtel
Reliance Capital
Reliance Energy
Financial Technologies
SAIL
IVRCL Infra
Gateway Distripark
Aptech
BHEL

To quote the statement "this is not an exhaustive list". Link:here

Now what to do in such a scenerio? To me for investors there is absolutely no sense to press the panic button. The P-note have eighteen months time to wind up, but only concern is for the so called market operators, they are already and will be out there in the market to skin unsuspecting small investors. The following three steps will help the small investors in the present scenerio

1. Do not indulge in short term trading. No fresh long term buy.
2. Do not empty up your stock portfolio, specially those family silvers.
3. Bottom fishing is ambiguous term, one can not time the market, we should keep in mind.

We small investors are better off if you compare with those fig fishes. We can hold back our positions till sunny days ahead.

SENSEX : POISED FOR CORRECTION?

2007-10-16T19:23:00.001-07:00
There are two developments which may effect the Indian stock market on 17 th October 2007.

Firstly official from the Ministry of Finance said that the recent inflow of foreign money into our market is due to "Inflows are high as foreign institutional investors find Indian shares attractive" and "It is also because of the interest rate differentials". Link: News.

This is a statement made to control the damage from the statement made by Finance Minister Mr. P. Chidambaram. Link: News, earlier post.

And secondly SEBI is trying to control of Participatory Note participation in our market. The P-note is a derivative product used by overseas operators to protect their identity and the ease of entering and existing any market. Mostly the P-note is used for short term investment in market.
Read SEBI's Paper on the P-note here.

Many pundits beleive that the recent bull run of our market is also fuelled by the P-note phenomena to some extend.

We should be prepared to any kind of market reaction for both the above developments.

CONTROL SENSEX: JUSTIFIED MOVE?

2007-10-15T18:46:00.000-07:00

One week is a long time in stock market, I took a break for one week and it crossed two mile stones (1800 and 1900). Though I still believe Sensex is just another set of numbers, we have some emotional values attached to it. It was pleasant to find the power stocks are powering their way up. It seems there is no end to FII flows which reminds me of a magic trick we all enjoyed during our childhood, the never ending “Water of India”. Sensex is going to cross 20000 in this very run ("19,300" just another number). May be some correction is in its way. News report.

The sheer pace of market movement has some element of doubts; at least our Finance Minister Mr. P. Chidambaram believes so. At the summit of Hindustan Times he showed his reservations and suspicion on how the movement of Sensex sometimes surprised, and sometimes worried him. He talked about the ‘copious inflow of funds from a number of sources’. It is always better to be cautious. But what about too much of it? Agreed that at the helm of affairs he has some responsibilities, especially to those small investors who invest their ‘life’s in the market. But those words in a forum are not exactly what were expected from him, it is no less than manipulating the stock market, trying to stop the natural market movement. Another report in CNBC (Payal Bhattar) says the market regulatory bodies will have two sittings per month as against one earlier. It seems he is really concerned to find a skeleton in the cupboard. Though I have my own doubts on his suspicions I have no objection to the regulatory bodies to be proactive.

Some experts are sure the market movement is due to robustness of our economy and the checks our regulatory bodies have put in place, copious monies can not simply play any major role in market manipulations. It is also believed by major section of small investors that our stock market has started its movement only now and it has unbound potential to go up and up and up. Remember Mr. P. Chidambaram is an economist of his own repute, and there are lot many who shares in his above observations.

The market will go up, the bull run as we all believe is there to stay for some more times, still we are to go slow and not be that greedy to put our life’s into the market.

Check the Sensex graph, may be another correction is in its way.
Disclaimer: I am not a technical analyst.

POWER SHOWS: MARKET THIS WEEK

2007-10-07T20:00:00.000-07:00

Last week is to be marked for two reasons; first the index is just a whisker away from another milestone (Sensex: 18,000) and for the extreme volatility at this high valuation.

Secondly, the phenomenal rise of a dormant sector after a very long time, the POWER sector. Almost all the power stock surged ahead anticipating better market viability after the Power Grid Corporation of India made its debut in stock market (at a premium of 93.5% over issue price). Let us look at the followings and believe the appreciation in the last week only,

Reliance Energy by 20.12%
Tata Power: 10.52%
CESC: 15.76%
Suzlon: 13.79%
GVK Power by 2.3%

ADAG is talking about the mega issue of Reliance Power; so the street is now busy with Power play. Let me note a few figures down here

India’s per capita power consumption is 606 units per annum, a dismal low figure.
90,000 MW new generation capacity will be required in next seven years (we have 135,000 MW now).
Rs 8,00,000 Crores investment opportunity will be there.
Government is emphasizing in this sector.

May be Power merits some investment from the small investors? It is now correct to say “Power shows”. (Word of caution: Power stocks may correct after its too fast run.)

The volatility ensured the market to appreciate only reasonably in last week, Sensex by 2.79% and Nifty by 3.28%, CNX Midcap is laggard by only 0.63%.

Is the extreme volatility a sign of an impending correction?

To put down a hopeful statement “small and meaningful correction” is the best scenario for small investors.
Political issues on Nuclear Deal with United States (another Power story for a power starved nation like India) are proposing to take the shape of a snow ball. Statements are running thick and hard. Caution is prescribed for small investors, book some profit.

If the market corrects itself, small investors can buy some power stocks like Reliance Energy , Tata Power, NTPC, Power Grid Corporation of India etc at lower price. Note: RNRL may have some hidden story in the present Power sector story.

Bankex took some breathers fearing CRR hike last week. CRR hike now is ruled out by experts and downplayed by authorities. Look in that space too; SBI and Centurion Bank of Punjab may have some aces in its sleeve (some block deals last few days).

I should not forget to thank my friend “Greta”; she changed the layout of my blog.

INDIAN STOCK MARKET: DEFYING LAW OF GRAVITY:

2007-09-28T21:19:00.000-07:00
Many pundits are baffled to see the pace at which Indian market is going up. Surpassing 1000 Sensex points at a record time (6 days) and still the market is not showing any let up. The much predicted profit booking session on this Friday was found to be elusive. The market has some discerning buyers. But interestingly not many dead wood were floating around this time, it is a selective surge forward.

To me the Indian stock market is actually behaving as it should behave, going up. I have my reasons and I am giving you only three

1. The Indian stock market is still accounting for a small fraction what the overall Indian economy actually is. Imagine a few public sector companies listed in Stock market; here I am throwing only two among lots BSNL and Railways. We should not forget the small scale industries which are not only profit making but also contributing a good fraction to GNP. What about cottage industries, unorganized transport industries, distribution network and so on. There are still lots of spaces to spread our legs.
2. We Indians are used to play it safe; we have some good savings tucked in bank fixed deposits, insurances or small saving accounts which do not fetch substantial return. Imagine the Indians discover the potential of stock market; our regulatory bodies are in right direction to prove that stock market is also a viable media to save or grow even for small investors.
3. Most of the developed markets are in a shabby condition, the investors are not very comfortable there and they are coming in flocks to emerging condition. The growing interest of them in Indian stock market is evident in the present rally.

So what is the optimum speed our market should go up? At an average 100 points of Sensex per day or 50 points or even 250 points to make our pundits comfortable. No one can have an answer.

So let us stop being Faberish till our fear over take our greed and bask in the rays of rising Sensex sun.

SPARK IN THE BANKING STOCKS-II

2007-09-27T20:48:00.000-07:00
The recent news of ING Vysya trying to acquire stakes in Centurion Bank of Punjab and Kotak Bank and the subsequent denial (or no comment) from ING Vysya indicates that there are some activities going on in Indian Banking Sector. After some subdued session the Benkex is actively participating in the present rally. State bank of India is already shining with all the news of stock split, bonus and preferential allotment of shares. ICICI Bank is trading at all time high. The growing interest of foreign banks to have foothold in our capital market certainly needs some vehicle. The mid cap private banks are the best bet for them.

How and where the FIIs have their exposure is a fascinating study. I have come across such a study in the Hindu Businessline (link-here); it sported a table on some prominent FII moves. FIIs are following some stock specific strategy not the sector specific buying. However it was noted the FIIs avoiding the oil refining sector and is going slow in pharma and health care sector (exception Glenmark, Glaxo and Nicholas Piramal).

Coming back to our context the FIIs raised their stake in Yes Bank from 15.3% in June-06 to 52.51% in june-07, i.e. a raise of 37.21%. It certainly is a substantial increase. Yes Bank has already established a niche model of banking which is different from other banks and seems it has all the support from Rabo Bank. Mr. Rana Kapoor is an ex-Rabo Bank Executive and Rabo Bank has a substantial stake. The above presents some rosy picture for the stock holders of Yes Bank.

The Centurion Bank of Punjab and Kotak Bank will definitely qualify to get a hold from Brokers if not outperformer.

Earlier post: SPARK IN THE BANKING STOCKS

HOW TO TRACK BULK DEALS IN INDIAN STOCK MARKET

2007-09-25T19:22:00.001-07:00

The small investors have many disadvantages in Indian stock market. They seldom get the correct news at correct time. Getting news late is equal to getting no news at all or at times results in negative action. Stock market in most cases reacts sharply to news and small investors left gaping in the dark and wondering why the stock price has reacted in a particular manner. (My earlier posts, here, here, here)

It is a known fact that the market mostly reacts to the tunes of big investors. The FIIs generally accounts for around 33-35% of total market turnover, domestic mutual funds around 10-12% and HNI have their mixed share. Stock price reacts positively if a particular stock is picked by these big investors and negatively if a stock is off loaded by them for the sheer volume traded.

It is also important to know how much big investors are holding a particular stock, or if the big investors have increased their holding in that particular stock.

There are few sites from which the above information can be accessed. These sites will serve the small investors better if utilized judiciously

http://www.sebi.gov.in/Index.jsp?contentDisp+FIItrends

http://www.nseindia.com/content/equities/eq_bulkdeals.htm

http://www.nseindia.com/content/equities/eq_bulkdealsarchive.htm

http://www.bseindia.com/shareholding/sharehold_search.asp

http://www.corpfiling.co.in

Words of caution: It seems easy to piggy-ride the big institutional investors but actually not so. These information are available only after the deals are made, at the end of the trading hours and by the time most of the benefits generally erode away. For small investors so there is every chance of being in the wrong side of a particular trade. One should remember that the mere presence of institutional investor in a particular stock does not necessarily enhance the intrinsic value of that stock. Big institutional investors may stay invested in any stock for many other reasons.

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GREAT MONTHLY RETURN IN STOCK MARKET

2007-09-24T22:19:00.000-07:00
It is heartening to see the present Bull Run of Indian Stock Market propelled some stocks to new highs. I have come across the following table in the Paisa Builder portal of IDBI, and found the portal is beautifully designed and many features are free (link here). Only hic-up for me till now, is the charting centre, which is Java based. It look me some time to download the charts, may be connection was slow at that time. The site is worth trying.
I have included the PE of the stocks in the table for our benefit.

The fast moving scripts generally poses a problem to small investors; we tend to book profit as the earliest. Part profit booking is the prescribed method here. I generally take out the cost of my total investment and be safe (i.e. I sell 50% of my holding if the stock appreciates 100% in three month time). One can think about his own way to be in safer position as the volatility of the market will be there for some more time.

Today’s Slogan: Better to be Safer.

SHAKY MARKET: BARTON BIGGS PERSPECTIVES

2007-09-18T22:38:00.000-07:00
The world stock market is behaving weirdly since mid July. There has been extreme volatility at times which is infusing fear into the minds of small investors.

Why this volatility? Barton Biggs, the famous Wall Street strategist has the answer and has lucidly put in Newsweek (p-35, September 17, 2007).

At present stock markets are mainly dominated by hedge funds and trading desks. Those are run by people who are under extreme pressure to beat the benchmark or they may be shown the door by their intolerant clients. Most of them are not exceptionally brilliant and they mostly follow the simple method of momentum investing. They get panicked once the “market acts badly” or goes down and sell into the decline. “Selling begets more selling and vice versa”.
Conversely when the “market acts well” or goes up they are panicked again as they may miss the chance to make back their losses, the buying panic develops. Hedging of Indexes is another reason for the volatilities, the fund managers who held the illiquid bonds sold the major indexes short to safeguard themselves from falling income positions.

Barton Biggs is feels that “it is certainly healthy that the mortgage high yield debt bubble has been pricked”. The world economy is healthy and the developing economies are main driving force at present.

To him the small investors should not get swayed by the gyration of the stock markets and stay invested in reasonably valued good stocks in long term perspectives or in index funds. The big global companies and emerging market funds will serve the small investors.

Mr. Biggs is a respected name in American financial market.

INSULATED INDIAN STOCK MARKET

2007-09-17T23:43:00.000-07:00
It seems that the Indian Stock Market has pulled up well from the global sub prime crisis faster than other developed markets, which prompted some pundits to state, that our market is well insulated from other major markets (ref). It needs some courage to come out with the above as the markets in the present context are inter-webbed as never before. If we look at the indices for the last three months we will have to agree to this theory. Lets look at our own Sensex against developed market indices….

We have a certain and definite advantage over them. Luckily we have our own well defined market for our products.

But what about our services sector? Let’s pick up the IT industries and check for their movement with Sensex, it is a bleak story over there.

Question can be raised how can our own index can overrule this vital sector, is our index is also manipulated (induction of Unitech in Nifty) to the disadvantage of small investors, who always look up at the indices for market guidance?

Should we be assured of that we are not insulated from the slow down of North American market at least for our flagship industry of IT solution providers. There will be certain growth in the other sectors.

But still it is a "India shining" story retold.

WAITING FOREVER TO BE DISCOVERED BY WORLD

2007-09-12T00:14:00.000-07:00
Recently I have gone through a profile of Ramesh Damani (ET, 8th September,2007), the wily fox of Indian stock market. His conviction on the value of a stock impressed me. He is successful by any industry standard. His portfolio shows some unfancied stocks (like VST) which are giving a slow and steady run. His ability to identify the undervalued stocks has made him some fortune. Examples SBI (last market correction) and TISCO (after Corus deal), he picked them up not so long ago.
There are many undervalued stocks if you look into the market; they are also featured by any finance periodicals. The Outlook Money in their one of the August issue has identified six such stocks which are not fancied by the market though their valuations are very attractive. The author lacked conviction to suggest those stocks and recommended caution while investing in them. For our benefit let me list those stocks:

ANSAL HOUSING & CONSTRUCTION
FCS SOFTWARE SOLUTIONS
GIC HOUSING SOLUTIONS
SANGHI INDUSTRIES
SREI INFRASTRUCTURE FINANCE
TELEDATA INFORMATICS

Except Teledata and SREI all the other stocks were showing negative trends though on paper they have excellent credentials in them. They all have the potential to become multibaggers. But still they are unfancied by the market, they are waiting to be discovered for a long time. One will agree one year is a long time in a Bull Market like ours.
What matters is the visibility of a stock to be successful in the market. To me the stock should be visible to big players and which they can manipulate if required.
What is best for a small investor: to invest in a value stock like Mr. Ramesh Damani or in a visible fancied stock which has already started its run?
In the first case the investor may have to wait for some really long time because his thousands and lakhs will not impress other small investors.
In the second case he will make some quick bucks if he is careful and exit the stock well ahead of time. (Remember the greed and fear theory?)

The choice is on the Small Investors.

WHERE INDIAN STOCK MARKET IS HEADING

2007-09-09T18:52:00.000-07:00

When I took a hiatus from this blog, the Indian market moved like a yo-yo. The whole world financial market was in a doldrums. Panic selling out weighted the actual problem. The reason, as aptly put up by George Wehrfritz in Newsweek is - "The force that tethers all of these debacles to the growing number of Americans who can not pay their mortgages is one that increasingly sets the cadence for global commerce: risk." Now-a-days the credit risks are spread as tradable product to the willing customers. This dispersion has a cascading effect to the whole world financial market.

Luckily the American Central Bankers pumped liquidity (a staggering $ 325 billion) into the system and the Fed raised hopes for a rate hike. The news simply pumped the much needed air into the Indian bubble. The stock market rallied for continuous eight days. It now seems that the market tank was the much needed correction.

But there are words of caution flying around like "fourth generation financial crisis", "US economy knocked into a serious recession", "crisis beyond today's bad debt", "cusp of a system changing crash" etc. But issues like how the plunging stock price will affect the large economies vis-à-vis emerging markets are not still very clear.

It seems the American market is certainly not over the hill. The ensuing crisis in Asian market raises question about the ability of Asian markets to stands of its own. Rise of China as manufacturing hub of the world and India as the global service provider was the answer to international financial reorientation. But both the economies are still heavily dependent on North American and European markets and will be so for at least for some time to come.

The complex web of international financial market is sure to leave some mark on Indian stock market. The use of complex securities as buffer to global turbulence leaves a question mark on the efficacy of the present financial system (here I means the Banks). There will be a contradiction between the old guards and the new evolving financial frameworks. It is better if the old guards viz. the financial institutions understands and prepare themselves for new financial order (sooner the better) they will survive and prosper, otherwise they will be doomed and with them the helpless and poorly informed small investors.

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SELLING OUT MEANS SHELLING OUT

2007-08-22T18:43:00.001-07:00

The wild swing of stock market is putting us in defensive mood. Nobody is certain in which direction the stock market is going to take its next course. Pundits are of the opinion that it may further go down in a month or two for some weird reasons which are very complex to comprehend for a RSHI.
Now the question from small investors is: "Should we sell out everything we have in market to cut further losses?"
Now the answer is a "No, absolutely not".
The reasons are:
The present volatilities are the inherent characteristics of any stock market in short term perspectives. We should not worry over it. It is shown historically stock investment in long term perspective has always yielded positive gains. It is more so in the emerging markets.
Let's take, we have sold out our position in order to reinvest when the market is at bottom. So that when the market goes up our new investment will go up. Selling high and buying low, Simple logic. But can anybody correctly identify the bottom. answer is again a "No". The seasoned investor never tries to achieve this particular feat. We small investors mostly end up buying above our selling price. One famous pundit said once that it is a fallacy for a small investor is that, they always end up buying high and selling low.
Timing the market is nothing short of gambling. The odds are always heavy in gambling. So if we are not sure what the market is going to be tomorrow, we should simply stay invested till the wild YO-YO of the market is over.

THE BIGGEST BULL RAKESH JHUNJHUNWALA

2007-08-20T02:26:00.001-07:00

There is only one Rakesh Jhunjhunwala in Indian stock market.
He is an iconic figure and has evoked lots of interest among the small investors. He said to have made his investment decision rationally, not out of fear or greed. I have come across his latest portfolio (July, 2007) at www.indiastreet.com, so could not resist noting it down for future references.

Company
%Stake
Shares
Price
Value
Praj Industries
10.72
9,000,312
436
393
Titan Industries
6.68
2,966,062
1300
386
Nag. Construction
6.6
13,750,000
196
269
CRISIL
7.63
550,000
4083
225
Lupin
3.5
2,817,000
712
200
Bilcare
11.62
1,650,000
1132
187
Pantaloon Retail
1.66
2,330,895
504
118
Karur Vysya Bank
4.83
2,606,808
351
91
Geojit Fin. Ser.
8.61
18,000,000
46
82
Prime Focus
6.94
882,500
890
79
Shushan Steel
2.35
1,000,000
738
74
Bharat EarthMove
1.47
538,767
1197
64
Hind. Oil Explor.
3.9
3,056,605
136
42
Viceroy Hotels
13.08
3,750,000
99
37
Aptech
2.04
879,775
368
32
Infomedia India
5.37
1,056,062
282
30
HEG
3.17
1,273,588
222
28
Punj Lloyd
1.93
1,008,000
273
27
provogue (India)
2.51
480,000
552
27
Geometric Soft.
3.51
2,175,000
118
26
Ramsarup Inds
9.22
1,615,020
146
24
REI Agro
2.16
970,295
203
20
Hercules Hoists
5.66
90,572
2110
19
Zenoteeh Lab.
3.87
1,116,381
170
19
Jhunjhun. Vanas.
41.11
3,083,200
54
17
Gemini Comm.
8.16
715,175
220
16
Agro Tech Foods
4.31
1,051,200
148
16
Mid-Day Multimed
4.47
2,250,000
48
11
Sarla Performanc
10.61
737,375
113
8
La Opala RG
18.66
1,977,382
38
8
Basant ,ll.gro Tech
8.8
701,000
53
4
Alphageo (India)
1.62
80,000
406
3
Century Extrus.
16.64
7,820,842
4
3
Rameo Systems
1.01
154,755
159
2
TTK Prestige
1.1
125,000
136
2
Orissa Inds.
32.38
2,356,875
6
1
Jindal Stainless
0.07
90,305
152
1
Maadhav Granite
1.4
125,000
101
1
Gomti Finlease
35
1,050,000
11
1
Frontline Corp
19.05
952,280
11
1
Vadilall nds.
2.86
205,578
47
1
Gangotri Iron
7.18
309,460
31
1
JSW Steel
0.01
13,124
699
1
OCL India
0.13
58,333
154
1
Pochiraju Industries
1.74
312,000
25
1
Nicco Parks
3.15
147,333
48
1
Yash Papers
3.27
708,804
9
1

Direct link: here.

SAILING IN TURBULENT STOCK MARKET

2007-08-17T18:44:00.001-07:00

The drama of free fall of Indian stock market staged in this week was not entirely unexpected. We could smell the storm. My last few blogs (here, here and here) actually dwelled on the impending danger. It does not require much intelligence to see the dark cloud in the horizon. (I felt like "Faberish" while typing out my last few blogs.) I was expected to book profit but there was hardly any profit to book. So I left my investments as such.

One can see few silver linings on the dark clouds too.

The market correction in the matured markets is justified; the earning of them is already saturated. But for Indian stock market, there is still a long way to go before to be saturated enough to crystallize out. The forward earning potential is still justified for the companies barring a few. The global credit situation if you analyze should not affect the Indian stock market. The initial jolt on our stock market by the global phenomena will be a temporary phase.

It is time to pick a few cherries in the bargain. We never know where the bottom is. The so called technical analyses are mostly fluke and few exceptions prove the rule. One should wait to exhaust his money to see the market pick up again. But in a bull market like Indian stock market, the price you pay for any stock will be surpassed after some time, if the fundamentals of the stock are good. One should see the fundamental first.

After every correction and especially after a tank like this the market generally reorganizes itself. There will be switch of sector, try to gauge the value sectors. May be banking, may be IT or may be anything which remained in the dark eclipse few weeks back. To me the last run of few sectors beyond calculations are not going to be there anymore.

The YoYo of the index will be there, one should not care to book profit if the chance presents itself. In this kind of market the swing traders fares best. Do not panic for the index movement, panic if your stock goes down despite with good fundamentals. Exit immediately from it, if necessary book loss.

The market probably may go down a few notches in coming days. If you have some investment there, languishing, concentrate on something else. The next cricket match is a good idea.

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SPARKS IN THE BANKING STOCKS

2007-08-15T18:49:00.001-07:00

It was suggested by market Pundits that Bank stock will be subdued after some major policy changes all over the world. But Indian investors and traders are prudent enough to rubbish those suggestions and reconfirmed their interest in them. It seems the growth of Indian banking sector will be highest amidst global uncertainties.

Private Banks especially the better ones showed some good runs in the recent past. Bank of Rajasthan, Yes Bank, DCB and even sleepy Centurion Bank of Punjab were all sparkling for different reasons. But probably traders are also betting on proposed decontrol of banking scenario in near future. The private Banks will be the target of bigger International Banks for acquisition. Most of the private Banks are still attractively priced and there are still plenty of spaces to grow, for them. ICICI Bank is already holding its own forte.

The present star among the subdued Public sector Banks (PSB) is State Bank of India. The Bank is planning to grow unlike its peers. So it is attracting the attention of investors. The stock has already seen a run and is poising to run further. The news of stock split and the plan to raise capital to keep up with the expansion needs are already there. Also the news that State Bank of India is to mop up close to INR 6000 crores through equity offering which will dilute the holding of the government to 55% from present 59.73%. All these developments are poising to increase share holders value further.

I am no so sure about other PSBs.

We are in a growing market and the outlook of a growing market will be different to other matured markets. Why Pundits can not see it?

Small investors may accumulate some of the above; they should give returns beyond our expectations.

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BELIEVE IN INDIA STORY

2007-08-14T00:23:00.001-07:00

I believe in "Shining India" story,

because..........

INDIA a nation of youth

INDIA a growing economy

INDIA have political parties which are above segment-politics

INDIA is growing by snubbing small divisive forces

We are in midst of a fantastic Bull Run of our capital market and we are lucky to be there.

There may be some turbulence at times but we are in winning side.

MERA BHARAT MAHAN

EMOTION AND ECONOMICS

2007-08-10T03:39:00.000-07:00
The Indian stock market is swinging like a Yo-Yo. The market is trying to find its groove but so far has not been able to do so. World market cues are also baffling. The question of liquidity due to recent policy changes is a major laggard in stock market.

But is the situation should not be so bad in Indian market. Indian stock market is going up despite some small hick-ups here and there if we consider in a long term perspective. The market index is in overall Bullish trend.

The basic tenets of stock market say: the market depend on emotion of traders. When greed overcomes fear it is a bull run. But now it seems fear is overcoming the greed. Should we be prepared to have a bearish phase of our market?

The Sensex and Nifty movement yesterday and gap down opening today illustrates the fear. Some development in Europe, which may not have much bearing in our market has resulted in a solid tanking of our market. The fear is back.

Small investors are to exercise extreme caution at this point. Bearish phase historically never benefited small investors. It is too complex to make profit from a bear market for a small investor.

Book profit
Keep some money in your pocket

may be the slogans for the next week.

BIG BROTHERS ARE WATCHING

2007-08-08T18:54:00.001-07:00

Hacks of activities were there in our stock market for the last few weeks. Sensex and Nifty swinging like a faulty pendulum. The greatest effect was US mortgage crisis which resulted in a meltdown of 600 Sensex points. RBI revised monetary policy and increased CRR from 6.5 to 7 percent. Inflation fell to 4.36 percent. US subprime worries heightened. Crude price is going up. And what is not happening?

All these made a serious concoction which made everybody heady, prompting some mistakes from small investors. We sold our holdings as if to save the world from the falling sky. On panic we looked for clues from other (world) markets, though we are insulated from many vagaries other markets are facing. Watch the World market , even bears will wear caps with horn today. The Raging Bulls will stampade.

But what about our big brothers FIIs are doing during the period? They quietly picked up stocks worth Rs. 675 crores between July 27^th and August 1^st, according to report. They picked up stocks after Sensex fell to abyss on those days.

The India Shining story is very much intact, it is a long term story and very credible. The story is inviting small investors to invest in Indian Capital Market.

The infrastructure sector needs a critical look-in and maybe some stocks there are still left as undervalued. FIIs are heavily invested in that sector, recent inclusion and increase in holdings are Ansal Properties, GVK Power and IDFC.

(It is always good to see the known stocks going up, outstanding among them is Cummins India, the stock is touching INR 400.)

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SMALL WONDER

2007-08-06T03:43:00.000-07:00
It was a market yo-yo for last few days. We, small investors are not only baffled but also puzzled what will be market tomorrow or days to come.

Some stocks are standing apart from the pack despite the ongoing on slaughter of the market.

Two stocks are coming to my mind where probably investors are betting in the present rainy days. one is State Bank of India and the other is Crompton and Greaves. Both the stocks are showing their robustness and going up in slow and steady pace.
One can see the movement and the pattern for last few days. Also it can be noted that for every sharp increase of price is supported by volume too.

The growth of SBI is phenomenal considering it to be a large cap stock, good result and news is prompting investors to get interested in it. SBI to me a long term story. It was heartening to see the investors faith in it and its movement in today's forgettable market.
Still I maintain that in any slide of market, the market reign supreme. It does distinguish between good stock and bad stocks in that condition. Small investors should invest in small quantum of their money.

YO YO movement in most cases (if you consider market history) result in long term lowering of market index, so it may not be healthy to enter market with a very long term perspective.

PREDICTING SENSEX-II

2007-08-01T18:49:00.000-07:00

We know nobody can predict sensex /nifty for sure, at best one can only guess.

This month end many traders are poorer and wiser to respect the market force. The force was there and was visible to everybody. Till now no emerging market can ignore North American consumers and the policies framed there.

The small investors utilized the correction on Friday and bought some stocks at lower rate.

But the savage market correction yesterday put some shiver down the spine of us. Market can be so ruthless!!

Now nobody is sure if the market reached bottom. Every pundits with their "Market Patrika"s in hand are confused and contradicting himself in every next sentences.

What about the "stock specific formula" the pundits advocated, may be worth a trying now. But doubts are in mind does a market slide down spares the "good stocks". Probably not, yesterday was a eye opener. But still good stocks are better bet than others.

The most discussed among the lot is Reliance Industries; it has the potential to see new highs at every rally. (My target is INR 2000 plus)

The second one right now is Reliance Energy, it is a different story after the Sesan episode. (My target is about INR 900)

The present star among engineering companies are L&T and BHEL, steam are still there. (My short term target is 20% up form the present level)

Can one ignore Educomp Solutions? The stock is going up with recent news. (My target is INR 2900 in medium term.)

Forget the IT and Bank stocks for the time being. (Infosys, SBI, ICICI etc are excluded)

These stocks are worth picking up in the present correction.

Volatility will be there in the market in coming days but we are in the midst of a very good Bull Run of an Emerging market. Theoretically one should avail the opportunity of this kind of corrections.

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PREDICTING SENSEX

2007-07-28T21:46:00.000-07:00
Can anyone predict future? If someone can do so, it will be an easy life for him. He can take appropriate steps in time and avoid pitfalls. If he is philanthropic he can take steps to avoid major world crisis and make the planet most peaceful to live. In due course of time, he will be the leader of humankind and will be no less to God. Can we imagine God as a trader? But alas, no one can predict anything ahead of time, and probably that is the reason our life is so exciting.

But one can sense that some thing is brewing and is most likely to happen. Name it sixth sense or good judgment or approbation of incidents. It does not need great intelligence to predict a rush-drunken driver to meet with some accident, a beautiful intelligent girl to ditch her dumb and poor boy friend. It does not need any dose of intelligence to forecast that tomorrow the human population in India will be more by half a million. To predict that during Market-crash the small investors will suffer most. These all predictions are mainly based on statistics and our pre-designed prejudices. But these predictions may not always hold good. If the drunken driver stops his car, locks it and takes a taxi to his destination he will avoid accident. Similarly, the boy sees the light and ditches the girl before the girl ditches him. Population growth is in the hand of government, any strict law of abstinence will stop it overnight.

What about small investor? It is an enigmatic repetition. Always the greed overcomes the sense of small investor. And the build up frenzy of Bull Run becomes a snowball which simply grabs him and pulls him into a deep ditch. It is not that he cannot see the market is balancing on thin ice, but still he will wear his skating shoe for a dance and he will regret for a long time to come. It is always easy to advice but difficult to practice.

What about big investors or market operators, they hedge their position and minimizes their loss in this kind of situations. They have enough resources to see well ahead of time what is going to happen in other words they always have the correct information.

But who could forecast the household spending power of North Americans has so much bearing on our market, which is not even a major consumer-good producer.

Was it a kind of pretext to pull the market into red?

Lets not be so “Faberish”, or Doom-sayer.

The present correction is presenting the small investor a great chance to revise his position and invest some more spare money. Pundits say that sound basic makes a stock strong candidate for investment. It is the time to forget short term trading for the time being. I believe the India Shining story very creditable and stock market is the platform to make fortune.

But I should be cautious, to what level the market will correct is most difficult to guess. I should actually see or can feel it. Because by that time; I will be pacified, devoid of any excitement of this Bull Run. I can even buy stocks in small batches, less than 25% of my buying capital at one time. Some good stocks are there which merits the attention of small investors at any time and remained expensive in Bull Run.

Reliance Industries: great pick if price is lowered by another two hundred
BHEL: yet to realize potential with good order book, difficult for valuation.
L & T: long term story, but should we pick below two thousand?
SBI: PSU, with its own limitation. INR 1400 should be OK.
HDFC: fantastic and consistent run, may need revaluation in your portfolio.

Correction are welcome for any bull run, it brings the traders to earth and makes them humble.

A humble person can always judge better.

NB: I am suffering from tech phobia, a slight here and there in the dash board, the look of my blog got changed and the links got missed, which I did not wanted to. I am sorry and I will correct it soon. It happened when my blog picked up momentum with increasing number of readers.

SMELLING SENSEX

2007-07-25T19:09:00.001-07:00

We are in midst of a fantastic rally of our capital market. Both the market indices "Sensex" and "Nifty" are designed beautifully so that they depict the economic progression of our industries. In other words, these indices actually give a picture of the economic progression of our country.

Economic progression is generally a synergic effort. No single sector can go ahead of others by miles. In the process it will drag other sectors along with it. Or we can say the other sectors are pushing one sector up.

It is some what odd that the present run (from around 13000) is actually participated by only a few stocks (5-7 stocks, out of 30 of Sensex). The remaining stocks are sitting in the sideline. The recent good result of many other stocks failed to cheer the market in their favor. Forget about erstwhile leaders of the market like IT stocks, HLL, Hero-Honda etc. they are not only underperformer, they are being dumped.

One can smell a rat there, and question about the type of money coming to the market at recent times. Some are very new, not so reputed and entered our market through participatory notes mechanism. (I am told this participatory notes mechanism has some flows in it.) Is that kind of money jacking up those particular 5-6 stocks? Small investors beware; those fast moving stocks may look attractive but have some hidden dangers in them.

Like all small investors, who do not have access to genuine news at appropriate time, I am also expecting the market will reach 18000 or even 20000 by the year end. Probably the market operators are successful to build up frenzy in us, the small investors. The small investors in most cases, loses their hard earned money in any market manipulation.

Market, during Bull Run rarely follows the trickle-down theory, it is seen from history, it rewards the already rich and robs the poor.

Sometime it is better to be 'pessimistic',

......................................................or should I say 'pragmatic'.

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ABOUT CHOICES

2007-07-23T01:36:00.000-07:00
It might be interesting to note that a stock does not know who owns it and does not care also. Only the owner is aware that a particular stock is in his portfolio. The investors take pride in owning a particular stock that he chooses and proud to have the stock even after all the good thing of the stock is long gone. I have seen so many people owning stocks of little value in present context, but the owner chooses to ignore the fact completely. It is about making choices, so to owning a particular stock. We have the wide open choices of stocks and other investment avenues before us and we can choose the best fit according to our choice.

The performance of a particular portfolio can not be excellent from the very first go. The probability of having an excellent portfolio is always very low. It is also observed that only a small percentage of investors/trader is able to beat the market by a good margin. Even a nominal good performance of our portfolio will lead us to wealth.

To reach the desired destination the small investor should be aware fully open to make changes to his position with time. Now, how to keep a portfolio, many stock pundits have different theories and one theory is diagonically opposite to any other in practice but inherent aim is same, making money. It is easy to get confused and get lost in the maze of stock market theories and start practicing them in parts. We should not forget the basic tenets of the very reason of being in the stock market

i.e. MAKING MONEY.

Recently few large cap stocks are standing apart from rest of the flocks (my previous blog), worth mentioning are

L&T
Reliance Industries
BHARTI AIRTEL
SBI
ICICI Bank

May be awareful change of position is in card.

STRONG AND STRONGER

2007-07-19T22:26:00.001-07:00

The opening of market today is very strong and heady, apparently seems to be full of promise. For small investors it is not the time to jump into the frey and fight it out. In stock market parlance there are few words which are ominously true at times. The word come into my mind right now is "Black Friday", many a corrections and slides starts on fridays. Calculated steps are required to stop erosion of capital.

But who knows, may be another healthy run like yesterday is in offings. Lots of stocks seems to be attractive right now, every stock seems to be flying high in colours. Last time somebody said "During tide even the deadwood also come to shore."

I am persevering in HCL Tech but sold off IDBI, though I had to absorb some loss, but I must keep my smile intact.

I have some stock in my mind for today, lets see them in action today

Gatewaty Distipark

Idea Cellular

Reliance

Tech Mahindra

It sometime fun to see action from gallery, but who wants to miss the real action in the ring.

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BIG OPERATORS VIS-À-VIS SMALL INVESTORS

2007-07-17T21:36:00.000-07:00
Though the term “Operator” does not seem right for all high net worth investors or institutional investors, the term somehow stuck to them. They have the capacity to manipulate the market. They can artificially jack a stock up or dump it down the drain and that is for anybody’s guess. If they choose to operate in cartel they can manipulate the whole market. We have the terms Bear Cartel and Bull Operator in capital markets.

The recent additions to the term “Operator” are Foreign Institutional Investors (FIIs) and Hedge Funds. When they come; they come in swarms and when they go, go out in swarms. These dangerous/vicious Operators can even ruin the economy of a country if the regulators are not careful enough. The established cartels and regular Operator treat them in awe. They have enormous money power and very well designed market operation employing best brains, which can upset any apple cart. There are lots of stories floating around in market, how so and so were really upset and had to gulp down some bitter pills against their very will. At times; it seems to be some kind of poetic justice meted out for some unjust operations affecting the Really Small and Helpless Investors (RSHI) that was carried out some years/months/days earlier.

The small investors are helpless spectators of the drama. The intelligent ones utilize the tide and reap the benefits. But most jumps into the arena a bit late and sadly have to converts their trade into investment with some real long horizon (*). My policy is to be the spectator and not try to be intelligent. I will invest only after studying the script and invest in them if the script can satisfy my basic requirements of sound fundamentals and low P/E and good earnings. (Change of strategy!!)

Cummins India is coming back to news as some Broker house has put it into buy; probably now it is making good chart patterns. I still have the opinion that the script has potential to go further up and may touch new highs, though I had come out of it as I did not had enough space for profit booking. It is still buy in correction.(*)

The TCS result has put some interest back into IT space. The IT picture seems to be gloomy in near term, but Indian IT Companies have the dominance and enough fire power to pull their act together again. I had a long night on Sunday, and decided to stay put in HCL Technology at least till result. My gut feeling says it will break the resistance of INR 350 in near term, I repeat that is gut feeling only.

I have two stocks in mind which may offer some short/medium term trading opportunity.

Centurion Bank of Punjab: Sometime unreasonable P/E defies justification if good stories are anticipated.

JBF Industries: May be another story of pulling the act together.

Both stories are touch and go. Careful study will be required.

LONG NIGHT TONIGHT

2007-07-13T23:05:00.001-07:00

I was busy friday and could not track the market, it was a fantastic rally. Am I missing the rally? Probably I am in wrong sectors.

Probably I have the mentality of defending my decisions I took earlier (HCLTech abd IDFC). IT and Auto sector is not taking part in the rally. Am I hoping against hope that IT story is too near term.

I will rethink and realign my strategy so that I can make most of the opportunity.

But where the market is going? Should I take a long position or a short. How can I defend against capital loss?

May be a long night tonight. But I should come to a conclusion tonight, and scuffle my position on monday.

5, 50, 500, 5000. Store N number of mails in your inbox. Click here.

INTROSPECTION ON INFOSYS RESULT

2007-07-11T02:02:00.000-07:00

Ultimately the tension is over, Infosys result is out. though the result is not bad enough, but the concern is about the guidance for the next quarter. The guidance is based on the present rupee valuation and any appreciation of rupee may hamper its earnings. Many market observers are really upset by it and the stock reacted by going down by almost 4% at 2:15 PM today and pulled the entire IT pack with it. The major downward puller of Sensex today is Infosys.
Infosys management squarely put the blame on appreciating rupee and came out as: “This is an extraordinary quarter as the rupee moved by 7%. We assumed a guidance of 43.10 earlier, now the rupee average for the first quarter is 46.6. We have lost around Rs 287 crore in revenues for the first quarter. For the whole year, from the guidance we would have lost around Rs 1,000 crore. So, it has been an extraordinary quarter and that’s why we have revised the rupee guidance for the full year” V Balakrishnan, Chief Financial Officer, Infosys .
Market is certainly not happy with the explanation, and probably trying to put the money in different sector where more than 20% growth is possible in the next quarter. Pundits are not writing the stock off, and have enough confidence in it, as it was exhibited in past. JP Sinha of Ambit said "The fundamentals are still intact and the entire fall is led by the rupee, which has appreciated by almost 6.5%. I am not willing to write it off and it is a good time to buy."
Now it is introspection time for small investors. To put more money or come out of the IT pack I consider there are still many milestones to achieve by the Indian IT Industry. To identify I started to look at the earning estimated put up by Broker Houses for my stock HCL Technology . The findings are below from indiaearnings.com
ABN AMRO : net profit is seen down 11.2% at Rs 267.5 crore (Rs 2675 million), QoQ. During the same quarters its revenues are seen up 0.9% at Rs 1590.8 crore (Rs 15908 million).
M Oswal :net profit is seen up 1.4% at Rs 336.5 crore (Rs 3365 million) YoY. During the same quarters its net sales are seen up 2.2% at Rs 1611.2 crore (Rs 16112 million) in the corresponding quarter previous year
JP Morgan: net profit is seen up11.3% at Rs 347.4crore (Rs 3474million), QoQ. During the same quarter its net sales are seen up 0.9% at Rs 1590.8crore (Rs 15908million) QoQ. net profit is seen up 24.9% at Rs 376.1 crore (Rs 3761 million) versus Rs 301.2 crore (Rs 3,012 million) QoQ. During the same quarters its revenues are seen up 2.2% at Rs 1611.3 crore (Rs 16,113 million) versus Rs 1577.1 crore (Rs 15,771 million) in the previous quarter.
I was about to leave the IT scene today then suddenly I saw this.

There is a major accumulation of HCL Technology today. Lets wait till the result of HCL Technology is out, risk taking appetite is neccessary in Stock Market. I'll keep a stop loss at around Rs. 330/-.

IT STOCKS FOLLOW CYCLE

2007-07-09T18:43:00.000-07:00
Tomorrow is an important day for market- Infosys result day. Market is going up and on its way up catching many experts on the wrong foot. The result will determine whether the market will go further up or may pause a bit with correction.
I am dependent on the result, for the IT stock HCL Technology, I have in my portfolio.
Good result will buoy it up. Market is already anticipating some good result, seeing the movement of IT stocks in last two sessions.

Stocks follow cycle. A company grows, matures and then declines. Best time to buy a stock is when it grows. At present it is India shining story, so most Indian stocks are growing. Rate of growth depends on management and business model. Some stocks have unique business model which is difficult and even impossible to copy. A good management can change the scenario of a business.

At present the growing Indian IT industry have some very good business model and robust management, which is evident from the growth of the companies. The top five Infosys, TCS, Wipro, Satyam and HCL Technology generally lead the way for the smaller companies.

I wonder if Rakesh Jhunjhunwala has some stake in IT industry. If not, why?

We are not at par with Chinese in manufacturing sector, it is their forte. But IT and ITES is our forte, if it goes wrong, there will be some grim picture to portray. Lets keep my finger crossed and ears open, and ready for action at the drop of a hat.

Am I as nervous as the market?

IS SENSEX ONLY A NUMBER?

2007-07-06T20:15:00.000-07:00
Yesterday another milestone (15,000) achieved by Sensex or Indian Capital Market. Though market pundits tried to down play it by statingthat it was just another number waiting to be crossed, everyone including them were ecstatic. The Really Small and Helpless Investor (RSHI) will have renewed believe in the market.

Literally Sensex./ Nifty means nothing to small investors with very small amounts to invest in pricey Large-cap stocks. The dismal amount of dividends the index stocks yields in comparison to money invested is nothing. One of my friends (another RSHI) invested some good money around twenty Grands in ten shares of Infosys, the recent dividend he received was some pittance sixty five rupees only. It seems and is really worthless to have ten shares of an costly index stock, most of that sixty five rupees will be taken away by bank as transfer commission. I wonder why the dividends are not deposited in bank account directly. All Demat account holders must have a bank account and must be submitted while opening the Demat.

You can see the dividend declared by ONGC is another pinch of salt to injury. Had they not declared the dividends the stock price would have gone up leaving the small investors benefited. He would not have to deposit his cheque which the Bank Clark frown upon. The dividend payment policy is beneficial only to Big Investors and (for PSU) the Government, not to small investors. This is one of the main reasons the Really Small and Helpless Investor (RSHI) stays away from big index stocks, though the Large-cap stocks have shown excellent momentum in recent months.

The less costly Mid-cap and Micro-cap (Oh terminology! actually Small-cap) stocks do not provide this dilemma. The profits in most cases are utilized in expansion and stock price reacts.

(RSHI should preferably stay away from PSUs, I will have a public musing in this blog in coming days.)

I am very happy about the performance of Yes Bank, the run is not smooth but that’s a stock should do, correcting itself while going up.

Concern was about my second investment of HCL Technology, but CLSA predicted earning growth should be 62% for the next result. Only thing is rupee devaluation, Infy will lead the way as everybody believes. Probably wishes are shy away.

I purchased 100 stocks of IDBI at 117.90/- yesterday (with little conviction that market will not go down), but I have my own doubts. It was a spurt decision, will I repent later?

‘LARGE’-ly Lucky?

2007-07-05T18:48:00.000-07:00
Stock market is a complex system, many factors plays their own part in it. There are so many variables that can influence the next second of it. At times they work for us and at again work against us. That is what traders believe as luck. So basically investing is stock market is to be at a place where one does not have to change his position of because of compulsion.

But generally greed takes over after some time with a growing stock. Being confident in ones position is a way to mask his greed. It is the human nature.
“Do not marry your stock” well said but investor generally do not marry his losing stock, only the slow moving stocks.
In the name of investment RSHI generally sit on their dead money hoping his money will grow at least as fast as the market. Are they at sea after investing in a good stock? At least that is true for me. I become so attached to my stock, that I can not even look beyond. Anything other looks bleak to me and I am not certain if the new stock will perform. I ignore, though aware, that if it does not perform, I can exit my position at any time.
Investing long term for small investor is a good way to increase his capital. But there is a better and safer way out, the mutual funds. They give good returns; even they beat some very good index stock over a year. The reason is simple; they are managed by professionals and have a hell lot of money (our money) in their kitty. They can effort to diversify and hence take risk. Long term investors should take recourse in mutual funds.
Really Small and Helpless Investor (RSHI) is in market to multiply their money as fast as possible by minimizing risks.

So far in this blog only Mid-cap and Small-cap stocks were discussed, as they are at a better position to grow. But in Indian market the Large-cap stocks are also as potential as Mid-caps as the market shows time and again.

Click to see the last three months rally of these Large-cap stocks

RELI: intrinsic value?
L&T: possible demerger?
BEML: diversified order book?
HDFC: merger on card?
SBI: split on card?

Are these stocks are still buy at dips?

Sensex/ Nifty are going too fast. It is too hot for RSHI to take a position more than a week even. Tread cautiously and book profit.
But if it goes even higher RSHI will miss the rally.

SMART MONEY AND DEAD INVESTMENT

2007-07-03T02:06:00.000-07:00
I often hear people putting the term smart money here and there. To me, very simply put, smart moneys are those which are getting return, often beat the bank interest by a fair margin. It is for the interest of a Really Small and Helpless Investors to know or assess whether their money is smart enough in a long term investment.

My small capital can earn much more than the bank interest if I study the market and roll my money. I would rather prefer to roll my money for some quick gain instead of sitting on it, which is possible in the present bull market.
Diversification with a small capital is not a good idea, because there are much small head areas to diversify.
Risk aversion by being disciplined (not being greedy) is another key. Sell at my target price, at prefixed time period (whichever is early) and being courageous to book loss if necessary. It seems 10-20% profit in a month is a very good bet.
Timing the market is a dumb idea. Nobody can predict stock prices and choose correct timings; at best I can guess it.
Really Small and Helpless Investors (RSHI) are generally the last to be tipped off. I should apply discretion, to accept them.
Day trading is most risky, avoid even though there are enough time at my disposal.

After selling of Cummins I asked my broker to buy IFCI. As I knew the person for some time he came up with advice that I should not buy when the Sensex / Nifty is at its peak and asked me to wait for some time. I heeded his advice and repented after the day, IFCI made a nice run today. Missed bus carries no passenger. May be a correction is on anvil, after listing of DLF. Respect history.

The following stock are in my mind, I should study them

IDBI- It is ripe for one month investment for 10-20% growth.

Yes Bank- less than a month, next target may be Rs. 220/-. RSHI may exit below that level.

BLUNT DECISION MAKING IS AN ART NOT SCIENCE

2007-07-01T21:42:00.000-07:00
The question of selling Cummins (500480.bo) frequented my mind all day long, and my friend told me to consider and search the followings for the company and not to regret in future
1. EPS
2. P/E
3. PEG
4. Operating profit margin
5. Net profit margin
6. ROE

I heard those terms before like most RSHI. But hardly have the time and resource to scout them for all the stocks I have in mind.

I have a “nine to five” job; it is a modest eleven hours per day including the journey time. I don’t have the confidence to give up my present job and start “stock”ing. Don’t have access to that kind of money too.

I don’t want to enroll myself to some SMS and Tips for Money Experts. I have seen them in performance, laundering money and giving peanuts in returns at best.

Stock price is a number that carries many information about the future prospect of a company. And also emotion plays a major role, if it takes over, the stock price and its valuations lose touch, the stock is then either over valued or undervalued. However the stock will correct itself accordingly in time. These are the thumb rule of the market.

But I am a very small investor. I cannot wait for the stock to correct itself aligning with its intrinsic value and that kind of blah-blah-blahs. I will sell the stock Cummins and book profit. I should not wail if the stock sees new highs. A bird in hand is better than two in bush.

Then where I will invest the proceeds? IFCI (ifci.ns) is not a bad candidate with a very low P/E and fantastic volume to boot. It is a momentum stock at present, already made a run. I will be aggressive and buy more if the stock corrects and hold it for about a month or two. Target: 20-30% growth of my small capital.

My second investment was HCL Technology (hcltech.ns), it seems the stock is not going anywhere, may be for the regained strength of Rupee. I have respect to the capability of Mr. Shiv Nadar. May be some good news in a week or so will push the stock up.

RULES & RUES

2007-06-29T21:01:00.000-07:00
I have a set of rules for the RSHI, the Really Small and Helpless Investors.

1. The first is to cut losses.
2. The second is not to forget the first. With the small capital at his disposal a RSHI can not effort to lose his money.
3. The third is to find out what the herd is following, I can jump in the band wagon and jump out of it taking some profit, before anybody’s guess. Trick is not to be greedy there. The herd, in most cases, follows some tips which may not sustain for long.
4. The fourth is not to convert a losing trade to investment. Investment is something different, needs a through study on fundamentals. But in trade, it needs the study of the market sentiment. By Jove, some gut feelings too. Yes it is true “Do not follow the herd”. But swimming against the current needs lot of strength in wallet.
5. The fifth is to think about the consequences of a losing trade.

Now, to my previous investments, my first stock Cummins is going up and seems to go on and on. Already it has achieved my target. Now I am in dilemma? If I follow the market pundits I should book part profit after achieving the first target. But with that small numbers of stocks booking part profit means nothing. Again I can not effort to lose the profit if the market goes down. My gut feelings says the market will go up further, as it did not correct itself even after the mega issue of DLF, as most RSHI anticipated (influenced by prime time TV experts?). Should I wait for another week? These thinking occur to most RSHI, as they do not have the access to correct information and research.

It occurs to me now why most RSHI loses his money in stock market. Either they tend to sell the stocks when the stock has not reached its correct valuation or when the market goes down. Most cases they do not sell the stock in down market as they have to lose profit and they turn their trade to investment. Then they wait for agonizingly long period of time.

My case, I will ask my free advisors for their valuable tips. I have time as market is going to open on next monday. It seems I can not do away with market tips.

SERENE SMALL-CAP AND MODEST MID-CAP?

2007-06-27T00:44:00.000-07:00

“We are in bear phase barring 6-7 stocks”.

May be it is true for Sensex and Nifty stocks. But if we consider Mid-cap and Small-cap stocks, it is entirely a different picture. They have outsmarted Sensex and Nifty by a wide margin. The launch of Mid-cap and Small-cap specific funds by all and sundry Fund Houses are the best proof of it.

Mid-cap and Small-caps offer ample opportunities, but question is how to identify them. There are thousands of stocks listed in BSE and NSE. To pick the winner should be definitely an arduous job. I am trying to frame rules for me for the vary purpose

The stock should be in news, so that people know that it exists.
The news should be in positive note. Financial well being and acquisition aboard goes well with Indian investors.
Investors’ interest is to be judged by the P/E value. It should be in higher range than its peers. Mid-cap and Small-cap stocks do not follow rationality; they tend to have unreasonable valuations.
Have any experts told anything positively in prime time TV, studied and reviewed in popular finance magazines? If yes it is a good sign.
Never go near them in downward market, they tend to go down at a much faster pace than the market.
Invest only the portion of your money, which you can effort to lose completely.
Monitor closely, book profit at the drop of anyone’s hat.

I will try to frame more rules and welcome anyone’s addition to this set of rules.

Some Mid-cap favorites of my fancy are:

Yes Bank because it has the potential to go further.
JBF Industries for the good stories behind.
Dena Bank as it is bookies favorite.
Finolex Industries for the high opinions of Small investors.
East India Hotel may be it is in an emerging sector.
Sriram Transport, you need logistics everywhere.

I will buy at least two of them after the market cools down and invest around ten thousand bucks on each. If I am lucky in picking up the correct scripts I may even double my money in double quick time.

GEMS FROM PUNDITS

2007-06-21T03:20:00.000-07:00
I got some tips from blogger friend about the recent discussion among market pundits by mail. It makes me to note down the followings for my future stock selection reference: (Was it in Capitalideasonline.com ?)

(All big names : Ramesh Damani, Anoop Bhaskar, Prasant Jain, Madhu Kela, Sanjoy Bhattacharyya, Raamdeo Agarwala and Rakesh Jhunjhunwala were there according to the source.)
Downside is very limited.
We are already in a bear market barring 6-7 stocks.
Profit growth will slow down.
There should be 25-30% profit growth y-o-y.
Some sector may be already saturated, eg. telecom or even technology.
Some emerging sectors demand critical follow up like hospitality.

Stock Pick by

Rakesh Jhunjhunwala
Tata Steel
Titan
Bilcare
Sanjoy Bhattacharyya
Tata Elsxi
Grindwell Norton
Rane Madras
Raamdeo Agarwala
Tata Steel
Glaxo
Dena Bank

I will exercise restrain and cautious in picking up stock.

Grindwell Norton
150.00
532661.BO RANE MADRAS
98.00
TATAELXSI.NS
328.00
GLAXO.NS
1,274.15
526853.BO BILCARE LT
859.00
TITAN.NS
1,161.65

Can we do away with market tips?

STOCK DILEMMAS

2007-06-14T22:15:00.000-07:00
I took the decision to enter stock market at a probably wrong time, the market is behaving weird. The word “volatile” is correct, though I did not appreciated the use before. Experts say “There is no right or wrong time to enter the market, invest in blue chips, sit tight for a few years and the return will beat the bank interest by a good margin”. I am doing it for last so many years, through mutual funds. Mutual funds are giving me good returns, some very handsomely. But the entry load at times gives me some jitters, they are so high. The fund managers are making money and living a good life out of our money. But honestly no complains either, till they give me some good returns.

I was missing the fun and excitement of stock market. The challenge to double your money at double quick time should be exiting. Identifying a winner is another story altogether. I mused on the followings:
To be an investor or a trader? Investor is out, I am going to be a trader. Day trading is exiting but with great degree of risks. Swing trading sounds good, but needs expertise or experience. SMS and Mail group costs almost my total profit from my small capital. And who can actually forecast stock, weather and luck correctly? Can I effort to lose concentration to my present job after some quick bucks with all the risks associated? How can I pick stock of my choice at my price if I do not follow it by minutes.

I am starting to read study materials, blogs and hearing experts opinions in TV. The biggest bull Mr. Rakesh Jhunjhunwala recently in an interview expressed his views on the present volatility of the market. In one sentence he told that market will never come below 11,000 marks. Does it indicates he foresees that the market shedding 3000 points from here on?

In my earlier blog I thought about Fortis and Binani Cement. I will wait for some time to pick the stocks up; I will continue watching them and pick up after some worthwhile trading on these stocks by some investors. Cummins India after some heady topsy-turvy is going up again.

I bought 30 shares of HCL Technology yesterday at Rs 339/-, effective price will be 2.2% more ie. Rs. 347/-. Above which I will make profit. Depreciation of Rupee is the main factor of my interest in software. I will look forward for around 10% profit in one month or less. This time I am not sure of my decision.

Ciao.

TIPS AND RECOMMENDATIONS

2007-06-07T03:39:00.000-07:00
Tips on market are plenty, they float in air. One can expect them from the most unexpected quarters. Taking lunch with two stock experts (self proclaimed!) load me with full of them. They also warns me about the danger of picking tips without any analysis. Market Tips are mainly, as I believe are unconfirmed news, may be rumours without any basis. But stock market investors rely heavily on them, specially the small investors like me.

Most of the small investors also believe that the free recommendations by Brokers and Broking Houses as a prelude to unload their or their customers holdings. At times, if you follow their recommendations you can find that, that is the truth. But they have to keep their reputations, they just can not do that every time. They have expertise to value a stock more fairly than us, the small investors.

One also needs hell lot of time to spare to identify a potential winner with very limited resources of information. (Cummins India took me some real effort. Hey, it is going up!!) We have to depend on the tips and recommendations. And most common phenomena is erosion of our small capitals/ losing money. One has to be aware of these two while investing.

I am studying Fortis and Binani Cement, will the Institutional Investors of these two scripts allow them to linger in such darkness?

Ciao.

HIGH SENSEX

2007-06-04T01:37:00.000-07:00
When I have decided to take a plunge in the capital market, Sensex is already at a very high point. There is probably a few notches to go up but a fathom less bottom to touch. Should I defer my investment till sensex come to a comfortable level?

But there are thousands of stock outside Sensex and Nifty. Some of which are still at very attractive price but lack of investors interest make them languish where they are. Investors' skill comes to handy to pick up those mid caps which may attract other investors interest in near term. I know many who invested in this type script but their investment remained dull, only due to lack of market interest, though the scripts have great potential in them.

I have identified a script, "Cummins India" which recently broke free of the stigma of low interest from investors as the volume has picked up. The script have great future, news (news2)shows that.

Yesterdays correction has prompted me to buy 30 numbers of the stok at Rs. 304.80, with brokerage it will come to around Rs. 307.00. I propose to keep the stock for about a month with a view of 20% appreciation. Lets see, I can effort some loss also if it does not come above it within my time.

Do not buy the stock at my reccomendation as I am a novice in the field.

Ciao.

CREATING ANT HILL

2007-06-01T00:50:00.000-07:00
Creating wealth with minimum investment requires tenacity and timely action. Indian stock market offers enough opportunities for small investors even with dismal amount of money to invest. For that one requires (my rules)
a demat account
some spare money, which one can effort to lose completely
understanding of the market dynamics
courage to take calculated risks
disciplines and rules, one should frame for himself and follow religiouly
open ears and judgements
a beleive that market spares no mistakes, not even the experts
willingness to fight it out
ability to learn from mistakes of others
ability to smile even with unintentional loss to book
boast successes and hide failures
Probably the first two are the easiest to have, and the last two most of us have already. The other virtues are not that easy to achieve, however we will credit them to the successful traders. Rests do not have them, may be in very limited amount.

There are many rules framed by experts one cand find them in websites, blogs, megazines and books. I will try to go through them and try to reframe my sets of rules. In the meantime I will continue investment and I will keep records of my investments in this blog.

Ciao.

Corporate house	Company	Promoters holding % (June-07)	% increase in last one year
ADAG	Reliance Communication	66.75	24.52
ADAG	Reliance Capital	52.40	16.95
ADAG	Reliance Natural Resource	49.95	4.89
ADAG	Reliance Energy	35.90	30.90
Mukesh Ambani	Reliance Industries	50.98	1.15
Tatas	Tata Steel	33.77	6.89
Tatas	VSNL	76.24	4.72
Tatas	Indian Hotel	29.17	0.77
Tatas	Tata Tea	35.40	6.45
Tatas	TCS	79.12	-4.57
Bajaj	Bajaj Hindustan	40.90	3.19
Bajaj	Bajaj Auto	30.11	0.33
UB	United Spirit	38.10	1.78
OP Jindal	Jindal Stainless	42.56	1.98
OP Jindal	JSW Steel	46.43	1.28
Infosys	Infosys	16.54	-2.87
Satyam	Satyam	8.79	-0.39
Wipro	Wipro	79.58	-1.51
HCL	HCL Technologies	67.55	-1.75

Company	%Stake	Shares	Price	Value
Praj Industries	10.72	9,000,312	436	393
Titan Industries	6.68	2,966,062	1300	386
Nag. Construction	6.6	13,750,000	196	269
CRISIL	7.63	550,000	4083	225
Lupin	3.5	2,817,000	712	200
Bilcare	11.62	1,650,000	1132	187
Pantaloon Retail	1.66	2,330,895	504	118
Karur Vysya Bank	4.83	2,606,808	351	91
Geojit Fin. Ser.	8.61	18,000,000	46	82
Prime Focus	6.94	882,500	890	79
Shushan Steel	2.35	1,000,000	738	74
Bharat EarthMove	1.47	538,767	1197	64
Hind. Oil Explor.	3.9	3,056,605	136	42
Viceroy Hotels	13.08	3,750,000	99	37
Aptech	2.04	879,775	368	32
Infomedia India	5.37	1,056,062	282	30
HEG	3.17	1,273,588	222	28
Punj Lloyd	1.93	1,008,000	273	27
provogue (India)	2.51	480,000	552	27
Geometric Soft.	3.51	2,175,000	118	26
Ramsarup Inds	9.22	1,615,020	146	24
REI Agro	2.16	970,295	203	20
Hercules Hoists	5.66	90,572	2110	19
Zenoteeh Lab.	3.87	1,116,381	170	19
Jhunjhun. Vanas.	41.11	3,083,200	54	17
Gemini Comm.	8.16	715,175	220	16
Agro Tech Foods	4.31	1,051,200	148	16
Mid-Day Multimed	4.47	2,250,000	48	11
Sarla Performanc	10.61	737,375	113	8
La Opala RG	18.66	1,977,382	38	8
Basant ,ll.gro Tech	8.8	701,000	53	4
Alphageo (India)	1.62	80,000	406	3
Century Extrus.	16.64	7,820,842	4	3
Rameo Systems	1.01	154,755	159	2
TTK Prestige	1.1	125,000	136	2
Orissa Inds.	32.38	2,356,875	6	1
Jindal Stainless	0.07	90,305	152	1
Maadhav Granite	1.4	125,000	101	1
Gomti Finlease	35	1,050,000	11	1
Frontline Corp	19.05	952,280	11	1
Vadilall nds.	2.86	205,578	47	1
Gangotri Iron	7.18	309,460	31	1
JSW Steel	0.01	13,124	699	1
OCL India	0.13	58,333	154	1
Pochiraju Industries	1.74	312,000	25	1
Nicco Parks	3.15	147,333	48	1
Yash Papers	3.27	708,804	9	1