Picking up the thread from last time, I move on to Jim Rogers.
Jim Rogers is unique in the sense he has traveled round the world twice once on a motorcycle and later in a custom-made Mercedes.
He is amongst the few investors who have actually traveled the world twice in search of pastures for investment.
He had started the Quantum Investment fund with George Soros which gave a return of 4200% (You read it right) when the S&P return for the same time was 42%.
Jim Rogers discovered stocks in an Eastern European economy bought them cheap, popularized the country amongst Western Investors and then got out after making a killing.
His daughter has a Mandarin tutor because he believes the future in the East. He had made a very famous statement few years back " In 1807 you should have been in London, 1907 in New York and 2007 in Asia"
He was bullish on Sugar and Gold when no one was bullish. He believes Gold has a very bright future. At the time he was bullish on gold was available for Rs 5000 for 10 gm and was considered a dead investment (Only my dear friend Taran has been bullish since then)
He believes India does not have the same potential as China and may break up in next 30-40 years.( I believe the opposite may happen. China breaks up and India pulls ahead).
Dictatorship does not work always.
Jim Rogers is bearish on the USD and one of his famous quote is
The dollar can go down to zero.
Our Central Bank will keep on printing money till we run out of trees.
He is obviously in the camp of bearish on USD, bullish on commodities especially gold.
Jim Rogers writes a blog which you can visit at:
http://jimrogers-investments.blogspot.com/
His book, The Investment Biker is a very good read.
Saturday, July 25, 2009
Sunday, July 19, 2009
Masters of Investing: Peter Lynch
Lets take a break from focusing on the markets and have a peek at the Masters who built fortunes in the markets.
As and when time permits, I would try and post about the greats of Investing.
Peter Lynch
Peter Lynch is one of the masters of the modern era of investing. He built up a career in Fidelity, the world's largest mutual funds.
He has written 2 Best-selling books, "One up on Wall Street"and "Beating the Street". These books are a must read for any investor in the markets.
He has a simple investment philosophy which can be imitated successfully by anyone. It is one of the greatest myths of investments that to be a successful investor you have to be a financial wiz kid.
Peter Lynch believes in keeping your eyes open and see what is selling in the markets. every Christmas he used to go to the malls with his daughters and see which item was selling like hot cakes. That would be his starting point for zeroing on to the scrip.
He talks about the "circle of competence" - or know what you own. Each one of us work in different professions. We may be knowing what sells in that industry.
To put it in Indian context. Around the period 2002-2003, Bharti Airtel mobile connections were selling the most. The share was at a throwaway price of Rs 50-60.
UTI Bank was setting up ATMs all over the place. It was growing aggressively.
1 more example is of Deccan Aviation. It was available for a long time at Rs 60 and almost whole of India was flying Deccan.
Even now, if you see every 1 out of 2 car in India is a Maruti. It comes out with new models which even in these days have a waiting list. It has been a Market leader for 25 years now.
Young India visits Malls. They spend a lot in the malls. Disposable incomes are rising. Pantaloon is a market leader in this segment.oung India wants to buy houses for living. The number of people taking home loans is rising. Check out the market leader in this segment.
Amul is the most visible brand we see. unfortunately, its not listed, else it would have been the bedrock of any portfolio.
The Peter Lynch model is just the starting point. Once you have that, you have to look at the EPS and Promoter capability.
Peter Lynch philosophy of investing makes it a simple, common sense approach to investment. I would reccomend one reads his 2 books. Simply facinating.
As and when time permits, I would try and post about the greats of Investing.
Peter Lynch
Peter Lynch is one of the masters of the modern era of investing. He built up a career in Fidelity, the world's largest mutual funds.
He has written 2 Best-selling books, "One up on Wall Street"and "Beating the Street". These books are a must read for any investor in the markets.
He has a simple investment philosophy which can be imitated successfully by anyone. It is one of the greatest myths of investments that to be a successful investor you have to be a financial wiz kid.
Peter Lynch believes in keeping your eyes open and see what is selling in the markets. every Christmas he used to go to the malls with his daughters and see which item was selling like hot cakes. That would be his starting point for zeroing on to the scrip.
He talks about the "circle of competence" - or know what you own. Each one of us work in different professions. We may be knowing what sells in that industry.
To put it in Indian context. Around the period 2002-2003, Bharti Airtel mobile connections were selling the most. The share was at a throwaway price of Rs 50-60.
UTI Bank was setting up ATMs all over the place. It was growing aggressively.
1 more example is of Deccan Aviation. It was available for a long time at Rs 60 and almost whole of India was flying Deccan.
Even now, if you see every 1 out of 2 car in India is a Maruti. It comes out with new models which even in these days have a waiting list. It has been a Market leader for 25 years now.
Young India visits Malls. They spend a lot in the malls. Disposable incomes are rising. Pantaloon is a market leader in this segment.oung India wants to buy houses for living. The number of people taking home loans is rising. Check out the market leader in this segment.
Amul is the most visible brand we see. unfortunately, its not listed, else it would have been the bedrock of any portfolio.
The Peter Lynch model is just the starting point. Once you have that, you have to look at the EPS and Promoter capability.
Peter Lynch philosophy of investing makes it a simple, common sense approach to investment. I would reccomend one reads his 2 books. Simply facinating.
Saturday, July 18, 2009
At Crossroads Again
It was a spectacular rally this week. We bounced off 3918 and are at 4374 in no time.
So where could we head from here?
Fundamentally:
Results are pretty decent. TCS results beat the street. They have tightened the Operational efficiency. In plain terms, cost cutting rather than new orders.
For me, the most significant result was that of IBM. IT looks to have arrested the downward spiral. When the recession ends IT will bounce back the strongest because of pent up demand. The companies which make use of recession induced belt tighteneing will be the ones which will prosper more. Infy and TCS lead the way.Infy too had increased profit margins.
Larsen Order Book size was smaller than expected. They have a sufficient order book to execute. Not a matter of concern.
Monday has the RIL-RNRL hearing in the Supreme Court. That will set the trend for the week. Chief Justice of India will head the bench hearing it, KG Basin Gas is the key to India's economic success and this needs a speedy resolution
Technically:
If we see the elliot waves and take this entire as a down move
we have Wave 1 down 4693- 4143
Wave 2 up 4143- 4484
Wave 3 down 4484-3918
Wave 4 up 3918 - 4390
Now wave 4 should have ended at 4267. In extraordinary cases, it can extend upto 80 pc to 4370 with margin of error of 2-3 pc.
This means we are at crossroads.
Also, 4484 - 3918 tooks roughly about 6 sessions. Faster retracement means trend has changed and the above countis invalid. This means Monday-Tuesday we should cross 4484.
The monthly pivot is at 4375 and we cross this 4609 else 4058 - 3825.
So, all 3 methodologies suggest we are at crossroads.
Astrological:
Lets see how the eclipse plays out. Thanks to Natasha for the below link:
http://hogueprophecy.com/predictions/?p=387
India is better placed than other economies because of domestic demand. P/E of 15 at EPS of 800 would suggest 12K is ideal for buying. Closer to 15K risk reward starts veering more towards the risk part.
Markets keep throwing buying opportunities. The trick is to keep cash in hand and keep holding.
Holding shares for 5-10 years at least make people rich.
1 way of doing it is the Free of Cost concept. Suppose you buy 100 HDFc Bank at Rs 1000. When it goes to rs 1500 sell half. (Depending on market conditions)
50 shares cost you Rs 500 now. Again, when market dips buy 50 shares to make your shares 100 in number.
Every year, you will get 1 exit and entry point. So at no point, you have no shares and your cost keeps coming down. Once it comes to some ridiculous low price and is blue chip stock, keep it and forget it. The dividends will pay you big time.
So where could we head from here?
Fundamentally:
Results are pretty decent. TCS results beat the street. They have tightened the Operational efficiency. In plain terms, cost cutting rather than new orders.
For me, the most significant result was that of IBM. IT looks to have arrested the downward spiral. When the recession ends IT will bounce back the strongest because of pent up demand. The companies which make use of recession induced belt tighteneing will be the ones which will prosper more. Infy and TCS lead the way.Infy too had increased profit margins.
Larsen Order Book size was smaller than expected. They have a sufficient order book to execute. Not a matter of concern.
Monday has the RIL-RNRL hearing in the Supreme Court. That will set the trend for the week. Chief Justice of India will head the bench hearing it, KG Basin Gas is the key to India's economic success and this needs a speedy resolution
Technically:
If we see the elliot waves and take this entire as a down move
we have Wave 1 down 4693- 4143
Wave 2 up 4143- 4484
Wave 3 down 4484-3918
Wave 4 up 3918 - 4390
Now wave 4 should have ended at 4267. In extraordinary cases, it can extend upto 80 pc to 4370 with margin of error of 2-3 pc.
This means we are at crossroads.
Also, 4484 - 3918 tooks roughly about 6 sessions. Faster retracement means trend has changed and the above countis invalid. This means Monday-Tuesday we should cross 4484.
The monthly pivot is at 4375 and we cross this 4609 else 4058 - 3825.
So, all 3 methodologies suggest we are at crossroads.
Astrological:
Lets see how the eclipse plays out. Thanks to Natasha for the below link:
http://hogueprophecy.com/predictions/?p=387
India is better placed than other economies because of domestic demand. P/E of 15 at EPS of 800 would suggest 12K is ideal for buying. Closer to 15K risk reward starts veering more towards the risk part.
Markets keep throwing buying opportunities. The trick is to keep cash in hand and keep holding.
Holding shares for 5-10 years at least make people rich.
1 way of doing it is the Free of Cost concept. Suppose you buy 100 HDFc Bank at Rs 1000. When it goes to rs 1500 sell half. (Depending on market conditions)
50 shares cost you Rs 500 now. Again, when market dips buy 50 shares to make your shares 100 in number.
Every year, you will get 1 exit and entry point. So at no point, you have no shares and your cost keeps coming down. Once it comes to some ridiculous low price and is blue chip stock, keep it and forget it. The dividends will pay you big time.
Saturday, July 11, 2009
The Road Ahead?
It was a tumultuous week for the markets. The largest weekly loss since October 2008.
The budget kicked it off by not living up to its expectations.
Fundamentals:
The key trigger for further rally was the Union Budget. It has disappointed sorely. FIIs were net sellers about 2 weeks before the budget also. Budget gave them fresh impetus to sell.
The budget is out of the way and the 2 next triggers are Monsoons and Q1 results.
The monsoons at best this year would be average. This will impact rural demand and also cost the government in relief packages. The fiscal deficit of 6.8% is already quite high.
Q1 results will not be spectacular. Infy has already toned down expectations or rather not made great noises. Ironically in the history of Infy, this is the first time employee strength has actually gone down.
This does not bode very well for consumption or consumer led demand.
Fundamentals dont point to a rally in the immediate future. There may be a small technical bounce though.
Technicals:
The much feared Head and Shoulders pattern seems to be coming through with targets of 3600-3800.
Also, as per Elliot, we would now be in a corrective of the whole upmove from 8047- 15600. Retracement could come to 11823, 10932 or 12714 on the sensex.
This could last for about a month or so.
Astrological factors:
We have the solar eclipse coming in on July 22nd and lunar eclipse around August 6th. Astrologically, markets tend to fall around this period. There is athe famous Putz crash window.
here is an ineteresting link:
http://yelnick.typepad.com/yelnick/2009/07/astrological-fireworks-in-stocks.html#more
Global factors:
The US markets seem to be flattening and seem to be in a no hurry to go anywhere. Economic data is also mixed pointing to a flat to negative bias.
Conclusion:
All the above factors point to a flat to a negative market for next 3-4 weeks. Lets see how things pan out. For now, it remains a traders paradise.
The budget kicked it off by not living up to its expectations.
Fundamentals:
The key trigger for further rally was the Union Budget. It has disappointed sorely. FIIs were net sellers about 2 weeks before the budget also. Budget gave them fresh impetus to sell.
The budget is out of the way and the 2 next triggers are Monsoons and Q1 results.
The monsoons at best this year would be average. This will impact rural demand and also cost the government in relief packages. The fiscal deficit of 6.8% is already quite high.
Q1 results will not be spectacular. Infy has already toned down expectations or rather not made great noises. Ironically in the history of Infy, this is the first time employee strength has actually gone down.
This does not bode very well for consumption or consumer led demand.
Fundamentals dont point to a rally in the immediate future. There may be a small technical bounce though.
Technicals:
The much feared Head and Shoulders pattern seems to be coming through with targets of 3600-3800.
Also, as per Elliot, we would now be in a corrective of the whole upmove from 8047- 15600. Retracement could come to 11823, 10932 or 12714 on the sensex.
This could last for about a month or so.
Astrological factors:
We have the solar eclipse coming in on July 22nd and lunar eclipse around August 6th. Astrologically, markets tend to fall around this period. There is athe famous Putz crash window.
here is an ineteresting link:
http://yelnick.typepad.com/yelnick/2009/07/astrological-fireworks-in-stocks.html#more
Global factors:
The US markets seem to be flattening and seem to be in a no hurry to go anywhere. Economic data is also mixed pointing to a flat to negative bias.
Conclusion:
All the above factors point to a flat to a negative market for next 3-4 weeks. Lets see how things pan out. For now, it remains a traders paradise.
Monday, July 6, 2009
Expectations kill the Budget
The news channels hyped up the budget and raised expectations to sky high levels.
The Budget was a good one considering the time the government had to prepare it.
It was not good considering the expectations set out by the Economic Survey.
Removal of FBT, GST roadmap, Commodity Tax roll back all are good signs.
As the FM pointed out budget is not the only forum for reforms.
One more good signal was that the government is not going to let stakes in companies fall below 51 pc. This clears all the speculation on disinvestment.
The next triggers for the markets are the monsoons as well as Q1 results. Q1 results should be as per expectations.
Monsoons remain a cause for worry.
To add to it, the benchmark 10 year bond yield has crossed 7 per cent. This will make borrowing more expensive for the corporates.
I feel the markets may not run away from here. Let us keep watching how things pan out.
The market has now changed into a sell on rallies market from a buy on dips market.
The Budget was a good one considering the time the government had to prepare it.
It was not good considering the expectations set out by the Economic Survey.
Removal of FBT, GST roadmap, Commodity Tax roll back all are good signs.
As the FM pointed out budget is not the only forum for reforms.
One more good signal was that the government is not going to let stakes in companies fall below 51 pc. This clears all the speculation on disinvestment.
The next triggers for the markets are the monsoons as well as Q1 results. Q1 results should be as per expectations.
Monsoons remain a cause for worry.
To add to it, the benchmark 10 year bond yield has crossed 7 per cent. This will make borrowing more expensive for the corporates.
I feel the markets may not run away from here. Let us keep watching how things pan out.
The market has now changed into a sell on rallies market from a buy on dips market.
Friday, July 3, 2009
Economic Survey and Rail Budget point to a Reform driven Budget
The Economic survey pointed to a reform oriented budget. It spoke of all the things which are needed to drive growth ahead.
The Rail Budget was good in the terms that they were not many populist measures which would burn a hole in the Railways pocket.
The Budget could be a good one because:
1. Government has a strong mandate. This is the year where its most likely reforms can be done.
2. The government has taken a tough decision like hiking fuel prices.
All this points to a reform driven budget.
The key things I expect from the budget are:
1. Roadmap for disinvestment.
2. More sops in income tax for the housing sector.
3. More tax benefits for salaried class investing in Infrastructure Bonds.
4. Removal of FBT and rationalization of tax structure.
5. Change in Income Tax slabs.
If the budget is a good one, the markets may rally till 4700-4750.
Remember this is the last positive trigger and may well be the last upmove before a good correction.
The Rail Budget was good in the terms that they were not many populist measures which would burn a hole in the Railways pocket.
The Budget could be a good one because:
1. Government has a strong mandate. This is the year where its most likely reforms can be done.
2. The government has taken a tough decision like hiking fuel prices.
All this points to a reform driven budget.
The key things I expect from the budget are:
1. Roadmap for disinvestment.
2. More sops in income tax for the housing sector.
3. More tax benefits for salaried class investing in Infrastructure Bonds.
4. Removal of FBT and rationalization of tax structure.
5. Change in Income Tax slabs.
If the budget is a good one, the markets may rally till 4700-4750.
Remember this is the last positive trigger and may well be the last upmove before a good correction.
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