MULTI-BAGGER ..... PRAJ INDUSTRIES

PRAJ INDUSTRIES                                   

Betting on Bio Fuels                                                                   Money Dalal

Cmp:49/-                                                                                         18-12-12.

Praj Industries (PIL), a leading manufacturer of ethanol and brewery plants with the domestic market share of 80% and 50% respectively, and a global market share of 8%, is well poised to leverage on the capacity expansion from these segments.

 Praj Industries ltd is a global Indian company that offers innovative solutions to significantly add value in bio-ethanol, alcohol, brewery plants, process equipment and water and wastewater treatment systems for customers, worldwide. Praj is a knowledge based company with expertise and experience in Bioprocesses and engineering. It has one of the largest resource bases in the industry with over 500 references across all five continents.

Money Dalal’s views:

 Praj is a long term story hence one need to have this stock in their bag for aiming the long term only.

 The key positive in this stock is that the Indian govt has initiated the process of blending ethonal with the petrol recently. The whole world is adopting this and now our policy makers started to curb the imports bill.

• ·         Rising crude prices are the key positives for this stock.
• ·         Brewery industries growing in a robust pace.
• ·         Sugar companies on expansion mode.
• ·         Waste water treatment has huge opportunity in the India.
• ·         Policy makers in india’s decision of more mix of ethanol in petrol.
• ·         Zero Debt Company with good track record of paying dividends.
• ·         Buy back at the price of Rs.90/-
  

Concerns: 

• ·       Margins are decreasing.
• ·       Lukewarm growth in order book.

With thanks 

Money Dalal

FDI IN RETAIL ......

For once, it is a pleasure to see the politicians talking and debating in the Lok Sabha. This is how things should function in the ideal world. But turn around to the Rajya Sabha and all the ugliness of coalition politics comes to fore.

FDI in multi brand retail has taken over all other policies and hopefully, once the voting gets over today, the Parliament will turn its attention to other policies. In the Lok Sabha, 251 votes are needed to get the go-ahead and UPA says it already has 261 votes in the pocket. Rajya Sabha on the other hand, is a completely different but depressing story.

It is high time that a decision is made on FDI at the earliest and we move on to other issues. Its been raging on for too long. If one may recollect, the Cabinet had approved 51% FDI in multi brand retail in November’11 but it did not get approval from Mamataji and hence was put in abeyance. But today, Mamataji is not much in the picture. The Congress has built it well, proposing to allow FDI in states which are not opposed to it; read that as “Congress governed states." What happens if in re-election, Congress loses its place in that State?

In a way, this partial allowance of FDI in multi brand retail is a good thing too. It will show whether or not it is good, in terms of employment, inflation, co-existence of kirana’s. If it proves to be good, maybe that in itself will convince the current states which are opposed to accept it too. And if it does bring in the evils which some states fear, then it is well and good that it is not being followed all across the country. The Congress governed states allowing the FDI will thus become experimental grounds.

In a nutshell let us have a look at the merits and demerits of having FDI.

A thumbs up!

It will do away with the middle men who have been holding the farmers to ransom. With companies procuring goods directly, costs could come down. Large retailers coming will mean investment in supply chains, cold storage, logistics, technology and global best practices. It will create employment The 51% equity means that foreign companies will have to necessarily tie-up with local companies. Markets will zoom if this goes through!

A thumbs down!

What if the companies do away with the middle men but they themselves become like middlemen? Costs could come down initially but once the MNCs get their foothold, will they start dictating the prices? Will global companies have a monopoly over the supply chains? It could encourage more migration into cities as foreign retailers can come up only in cities with a population of at least 10 lakh. Small mom and pop shops, kiranas could shut down. Markets are sure to tank if FDI is scuttled.

The market is already celebrating an approval. Does that mean that companies will have foreign retailers knocking on their doors immediately the next day after the approval comes through? Not likely. The nod would be more psychological, making more of a perceptional difference. For us and the companies to see the changes, it will take over 6 -8 months. Infact the most awaited entrant, Wal Mart, when it entered China in 1996, expected good growth with a short time but it took more than a decade for the Chinese operations to become successful. Thus the likes of Wal Mart, Tesco, Carrefour could see become a reality in some states in India. And yes, we are sure to have visitors from other “opposing” states, coming down to shop at Wal Mart or Tesco.

We cannot fight development and live in a spaceship. The small retailers may or not be affected; we do not know. Thus to shun it without knowing is foolish. Computerisation in banks, FDI in insurance; almost each and every thing has faced opposition but today we clearly see that every water finds its own level. LIC feared that it would lose business if FDI in insurance was allowed; has that happened? Infact LIC has only grown stronger. The advantages of FD in retail, in terms of developing the infrastructure, building the much needed supply chains, direct procurement from farmers; all will lead to better development. India is too vast a country, with too many people thus fearing closure of mom-and-pop shops is being too nave. Dubai, a city of malls has more small shops today than it did when there were lesser malls.

For the layman (in some states), what this news means is that there will be more malls, more choices, more shopping. This is the direction in which the world is moving today, either join it or get left behind. Can India afford to get left behind when we are already globally linked?

regards
money dalal

Avoid Emotions, Secrets of Investing

Few days back I had a discussion with one of my old friend. My friend is having very good experience in financial markets. He told his investment experience with me. He gained many experience in financial markets by loosing few lakhs of rupees. We need to learn many points in his experience. I am providing his words here below.

One of my friend told, we can earn huge income in share market. He ask me to invest in share market. I was thrilled his words. At that time I had 2 lakhs rupees in my bank account. I divided that amount and invested eight different stock as per his recommendation. I got gain of Rs.5000 in 3 days. In few more days my capital is yielded me another Rs.10000 gain. After month my total value in my account has increased to two lakhs and fifty thousand. I was very much enjoyed my situation. I told all this investment experience to my wife. She also thrilled and she took another one lakh rupees from his father. I invested that amount also in the share market.

In next week my capital never given any profits nor loss. Few weeks back share market corrected sharply. My investment value went down to one lakh rupees. I was in more panic as my investment in going down to negative zone from fifty thousand profit. My friend to told, Don’t worry you investment will raise soon.  But after that my investment was came down to one lakh fifty thousand slowly. Finally I last my hope in market and sold all my shares and re-paid the loan I took from my father-in-law. But after that all my invested shares are raised above my buying price.

Okay now check the image above. You can see all emotions which my friend experienced. Even if you are more brilliant, it is difficult to get rid of human emotions. So we should not take decision on the basis of emotions. If we follow some following factors our investment experience will always be good.

Investment factors to learn without Emotions.

1. If we like to see an movie. What we will do? We will check all reviews before going to that movie.  But in investment factors we are not concentrate about reviews. We are not reading or analyzing share reviews before investing. Share investment is not a time passing work. We need to learn what we are doing. Without analyzing we should involve in any investments.
2. When the market fluctuation we should focus on our emotions. We should not follow our emotions. Those who are not following their emotions they will make profit in financial markets.
3. Timing is more important. Even if it is the good profit making company share, we should buy in right time. We have to control our emotion and wait until the share is reaching our expected price.
4. We should not invest all our capital in  same time. We have to divide our capital 8 to 10 times and invest periodically when the price coming down. Before investing we have to analyse about that company.
5. We should not take a loan for share market investment. Most of the time this strategy will give negative result.
6. Without losses investing in share market is not possible. Even very good analysed stock will give losses. We have to take it as experience. We should be panic in the loss.

So we should not take decision on emotions. Correct research and analysis will make you good investor and it will yields you in good profit.

How to Succeed in Share Trading As a Beginner

In this modernized world the word Share trading is commonly known to all and the eagerness never leaves anybody without to earn quickly. But people (Trader/Investor) thinks always that market reacts opposite to what they done.  The thinking is common to everybody but in this article we give some hints to become successful earner in Share Trading. If we follow below given points you can be one of the successful.

 

1. Choose a best platform trading terminal as a beginner. Many provide good service and we need to choose on the basis of Brokerage, Customer Service, Clear Statement in periodicals, Good software with back office facility, Doubts to be cleared on trading with smile in face whenever arises, Easy payout withdrawals without any hidden demands.

2. Avoid over imagination about share market to become quick rich without any inputs. Try to know all news on share market. Be practical before trading any stock knowing about all factors on why the stock getting higher or lower. It can be known by visiting many popular financial websites.

3. Before trading any stock the entry and exit level should be decided and fixed without any changes in mind. Rumors are always mixed in air as a layer in stock market. Entry level is known as trigger price and Exit level is known as Target price or Close price. Exit level may be profit or loss.

4. Broker, Friends, Relatives, Neighbors and Analysts may some something about technical and fundamentals but not only this gives profit. Taking the right decision at right time to book profit at right price gives complete sweet taste of the investment done.

5. Do not dump huge money in similar sector, which any news may hit so the total investment go reverse at any time. Always Beginner may try with small amount with positional calls which is known as Delivery trading. Short term target of 5% at beginning may give profit.

6. We should not try to trade on all trading days, which may ruin our capital. Always do not buy any stock when it becomes sudden high or low. It may turn next day on opposite direction. Always try to buy a stock at lower price and sell at higher price. Experience with fundamental analysis makes one to know the low price or high price of the stock.

7. Usually Investors and Traders expect to react market on their own wish. But it is not possible at all, we need to follow market and try to take maximum profits from it. Indian Market will always follow International markets so we must know what does other foreign Indices show.

8. FII’s are the major part of market so our share trading also needs to follow them directly or indirectly in some way. All sector might have indulge FII’s input so we must be careful while booking profits.

9. We should not get panic at any time. We should follow strict discipline with confident. Patience is the key success in share market to maintain by all Traders and Investors. Very often we follow others style, but in share trading it does not work out at all times.

10. If we need to success in share trading as a beginner we need to choose the best technical team to guide us by paying fees as they fix. We need to check their accuracy, past performance, and they support us while market hours for Intraday trading and Delivery. There are many websites providing share market recommendation now a days, choosing the best is a huge task and maintaining accuracy consistently by them is also difficult. But generally we guide everyone to become successful in Share market as a beginner.

Technical tools used to predict stock trend .........

Day trading in stocks is risky, more so if you are untrained. However, if you have an eye for spotting market trends, you can make a neat pile in quick intra-day deals. There was a time not long ago when trading was a simple game of buying and selling stocks based on one's conviction. Now, technical analysis- a science of predicting future prices from historical price data-has given investors new tools. "Technical analysis increases the probability of your call being right," says Abhijit Paul, assistant vice president, technicals, BRICS Securities. But, we reiterate what we mentioned in our report, "The Kick of Quick Bucks," in the October 2011 issue, though day trading looks easy, nobody can take the right call every time and there will be days when one loses money, at times a lot of it.
How it works
Technical analysis is done on the basis of historical price movement plotted on a two-dimensional chart. One reason it has become popular is that anybody can look at the chart and see how prices have moved.
For example, in the chart, Easy Reading, you can see open, high, low and closing prices of the Bombay Stock Exchange Sensex on July 7, 2011.
How to pick a stock
Good volume and volatility are a must to gain from trading. While volume should ideally be at least 500,000 shares, the stock should have a high beta, or volatility. This means if the index rises 1%, the stock should rise by more than 1%. Those who don't understand the concept should see to it that the difference between intra-day high and intra-day low prices of a stock is at least Rs 10.
Identifying the right stock and fixing a stop-loss level is a must, says Paul. One must stick to the stop-loss. Generally, stop-loss is fixed at 1.5-2%, which means the stock is sold if it falls 1.5-2% below the purchase price. Big traders generally fix stop-loss at about one-third of the expected profit. For example, if they expect a stock to rise 10% in three days, they set a stop-loss at a point the price falls by 3%.
Once you zero in on the stock, look at its volumes and price trends. Generally, higher volumes with higher price rise indicate an uptrend, but it should not be considered a thumb rule. "Volume is misread by a lot of people," says John Barrett, an instructor at Online Trading Academy, which teaches stock trading. Big volumes and large moves sometimes throw up big tops and bottoms, says Barrett. This means if both volumes and prices are increasing, it may be the last leg of the rally.
Stock Trends
Identifying trends is important. But how do you spot a trend? It's difficult, as the market never moves in a straight line. A stock will never fall continuously on a given day and rise on another. "Generally, higher highs and higher lows indicate an uptrend, whereas lower highs and lower lows mean a downtrend," says Shrikant Chouhan, senior vice president, technical research, Kotak Securities.
"Look at the trend. Look at news related to the stock," says Chouhan. For example, if the rupee is falling against the US dollar, it's common knowledge that technology companies will gain.
Analysts and market experts take the help of various parameters to confirm if a stock is a trade pick. The most used are available in any technical analysis software. These include 200-day moving average, relative strength index, moving average convergence divergence, or MACD, Fibonacci retracement and candle stick price chart. The terms may sound daunting, but software available nowadays makes technical analysis easy.

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Moving Averages
One of the widely used tools is the 200-day moving average. You simply have to plot the 200-day moving average on the price chart. When the price of the stock rises above the moving average line, it's a buy signal, and when the price falls below the moving average line, it is a sell signal. One can also look the 50-day moving average or the 10-day moving average. Trading is a game of probability. So, you have to arrive at your own methods to decide which parameters suit you the best. In the graph, Moving Averages, you can see the Sensex movement compared to the 200-day moving average of the Sensex. The brown line is the moving average line. In February, the line went above the price bars and the Sensex started falling. When the 200-day moving average fell below the price bars in April, the markets started going up. In thegraphic, the Sensex is below the moving average, indicating bearishness. But this is just one parameter. Relative Strength Index (RSI)
RSI compares the magnitude of recent gains to recent losses to see if an asset is oversold or overbought. RSI is plotted on a scale of 0-100. Generally, if it is above 70, the stock is considered overbought and so one can look to sell it. Similarly, an RSI of less than 30 indicates the stock is oversold and can be bought. In the chart, Relative Strength Index, you can see that RSI was near 20 in October 2011, signaling that L&T's shares were oversold. It reversed from 20 and the stock moved up.

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Moving average convergence divergence (MACD)
This is a very important tool used by technical experts. You just have to select the MACD and plot it on a chart. The MACD comprises two lines, fast and slow. The fast line is the difference between the 26-day exponential moving average and the 12 day-exponential moving average. The slow line, also called the signal line, is the nine-day moving average. So, the blue line in the chart, MACD, is the fast line and the brown line is the slow line. With technology, these calculations are automated and a graph gets plotted at the click on the mouse.When the fast line crosses above the slow line, it's a buy signal, and when the slow line crosses the fast line, it's a sell signal. The chart shows that the MACD is the best way to predict the movement of a stock.
Fibonacci Retracement

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Fibonacci retracement is based on the assumption that the markets retrace by a few predictable percentages, the best known of which are 38.2%, 50% and 61.8%. So, when the market retraces 38%, it will generate either a sell or a buy call depending on the trend. You have to plot Fibonacci retracement from the peak price. The software will give the above mentioned retracement levels. When the price reaches the 38.2% level and bounces, it means the price of the stock at which the chart plots the 38.2% retracement is the support level and you can buy. However, if the price falls below the 38.2% level, you may look at the price at 50% retracement level as your next support. The chart, Fibonacci Retracement, shows how the 38.2% retracement is working well for the Ranbaxy stock.
Support and Resistance You may hear or read technical experts recommending support and resistance levels. But plotting support and resistance and finding it yourself is a simple job. As you know, prices move in a zig-zag fashion and form lows and highs. A support is plotted at the daily low price and resistance at the daily high price. For example, in the given chart, Chouhan says he sees support of 4,700 for the Nifty and if the index falls below this, it may fall further to 4,300. He has plotted resistance at 5,177 levels. Take a look at how he managed to get support and resistance for the Nifty from the October 7 graph, Support and Resistance.

42% Return :: SBI Magnum Emerging Businesses Fund

SBI Magnum Emerging Businesses Fund’s NAV as of 24.11.2011 was Rs. 41. Today, it is Rs. 56.49. That means investors have gained a hefty 37.78% return on their investment in a year’s time.
If you had invested in a SIP of Rs. 1,000 per month, can you guess what your return would have been? 42.69%!
Well, that’s no mean feat considering that I haven’t been able to achieve that in my own portfolio despite being constantly on the lookout for multibagger stocks.
Credit goes to Fund Manager R. Srinivasan who followed the simple technique of first identifying the sectors that were in fashion and then taking concentrated bets on the leaders in that sector.
So, which are the top-most sectors that are in vogue today: Consumption, Financial services and automobiles. SBI Magnum Emerging Businesses Fund simply loaded up nearly 43% of its funds in these sector sectors. Of this, Consumer goods got the highest weightage of 16.41%, followed by financial services of 16.35% and automobiles at 11.07%.

The other interesting aspect is that R. Srinivasan was not afraid of investing in high PE stocks. He selected the best stocks in the consumption sector such as Page Industries, Hawkins Cookers & VST Industries. VST Industries has been the outperformer with 71% return followed by Hawkins (42%) and Page Industries (36%). In the financial sector, Srinivasan loaded up on Muthoot Finance and Shriram City Union Finance. While Muthoot Finance delivered about 25% return, Shriram City Union Finance gave blockbuster returns of 75% on a YOY basis.
Srinivasan is obviously also a believer that SpiceJet is a potential multibagger and has invested 5.07% of the Scheme’s funds in that stock.

Interestingly, SBI Magnum Emerging Businesses Fund’s stellar performance is not a flash in the pan. Its’ past performance has been as impressive with a CAGR of 22.99% since inception. That’s no mean feat as any portfolio manager will tell you!
Also interestingly, SBI Magnum Emerging Businesses Fund outperformed the more fancied IDFC Sterling Equity Fund managed by star fund manager Kenneth Andrade and also HDFC Mid-Cap Opportunities Fund (G). On a YOY basis, IDFC Sterling Equity Fund managed only 29.3% while HDFC Mid-Cap Opportunities Fund eked out returns of 23.6%. Both were way below SBI Magnum’s 37.78%.
Now, the question is about the future: Yes, taking a concentrated bet on a few stocks in a few sectors is risky. But the question you have to ask yourself is whether the great Indian consumption story is getting over in a hurry. Given the huge population of high income individuals that the Country is generating and their propensity to consume branded products, stocks like Page & Hawkins are bound to do well. Also, the finance sector is set to take out once the interest rate regime is relaxed. So, there is no need to be wary. If you are looking for a Mutual Fund, SBI Magnum Emerging Businesses Fund is an excellent choice.

Stock Market Basics you Must Know ..........

If you are searching for an excellent investing strategy, then you should definitely take a look at the stock market industry. It is one of those incredible opportunities that normal people like you and I often miss out on. But, is it a risk free sector? The answer is no. So, what are the basic things that one should know before they set out to invest in stocks? There are different strategies that can help you generate handsome returns from various stocks. But you need to be careful about where you invest and how you invest.

Stock Market Basics

A lot of people do the mistake of going for the most popular stocks. Now, this is playing it safe. You are not going to make much out of it because there are too many people who have invested in it and hence lesser dividends for each. On the other hand, if you can find out relatively lesser known companies, that have potential for huge growth in the future, you might as well make a fortune out of it. It takes a lot of research to discover such undervalued companies with prospective future.

It is never a good idea to place all your eggs in one basket. You need to be diverse in your approach. Invest in different companies from different sectors. You never know which stocks are going to fall and which will raise. There are simply too many variables at play and not even a hard core stock market specialist would be able to predict it correctly. By investing in multiple sectors, you reduce the risks involved in the investment. As time goes by, you will be able to identify the shrinking sectors as well as the ones that expand. Thereby, you will be able to reallocate your investment to more prospective sectors.

It is imperative that you invest in a sector that you are knowledgeable about. If you prepare a list of the most successful stock market professionals, you will realize that they all made the bulk of their investment in a sector that interested them. When an industry interests you, it makes it easier to keep abreast with the latest developments, thus helps in making good investment decisions.

One should keep their emotions in check while trading. Just because a stock had delivered you returns for a fair amount of time don’t mean you have to stick to it when it starts causing losses frequently.

Opting to install investment software’s in your computer is a good idea. You can use the internet to understand more about the various versions available out there. This will help you to keep up-to-date with the developments of your stocks.

Never consider the stock market as a get rich scheme. This has been the mistake that a lot of people commit. They expect to turn millionaires overnight. What they don’t realize is that just like any other business, even in stock market you need to be patient and perseverant. This is one business where you are assured of returns if you invest diligently.

High Dividend Yield Stocks For 2013 ..........

As we all know that High Dividend Yield Stocks can be consider as a safe haven where safety has greater priority compared to high returns. Specially, when the market remains volatile and lot of uncertainty arises due to headwinds coming from Domestic and Globally. Investors can still get a decent return on the Investment made in High Dividend Yield Stocks. Investing in a such kind of High Dividend paying companies is also one of Value Investing Strategy.

Best High Dividend Yield Stocks
Sr. No	Company Name	Sector	Latest Price (Rs)	Face Value (Rs)	Dividend Per Share (Rs)	Dividend (%)	Dividend Yield (%)
1	HCL Infosystems Ltd.	IT – Hardware	43.45	2.00	8.00	400.00	18.41%
2	Oil India Ltd	Oil Exploration	488.95	10.00	47.50	475.00	9.71%
3	SRF Ltd.	Textile – Manmade  Fibres	228.65	10.00	14.00	140.00	6.12%
4	Indiabulls Financial Services Ltd.	Finance – NBFC	231.40	2.00	13.00	650.00	5.62%
5	GHCL Ltd.	Chemicals	37.85	10.00	2.00	20.00	5.28%
6	Andhra Bank	Bank – Public	111.10	10.00	5.50	55.00	4.95%
7	Corporation Bank	Bank – Public	416.30	10.00	20.50	205.00	4.92%
8	Balmer Lawrie & Company Ltd.	Diversified	617.35	10.00	28.00	280.00	4.54%
9	Aarti Industries Ltd.	Chemicals	79.25	5.00	3.50	70.00	4.42%
10	KCP Ltd.	Cement & Construction Materials	34.45	1.00	1.50	150.00	4.35%
11	Graphite India Ltd.	Electrodes & Welding Equipment	83.65	2.00	3.50	175.00	4.18%
12	Deepak Fertilisers & Petrochemicals Corpn. Ltd.	Fertilizers	133.00	10.00	5.50	55.00	4.14%
13	Union Bank Of India	Bank – Public	200.40	10.00	8.00	80.00	3.99%
14	Indian Bank	Bank – Public	192.00	10.00	7.50	75.00	3.91%
15	Banco Products (India) Ltd.	Auto Ancillary	65.80	2.00	2.50	125.00	3.80%
16	Syndicate Bank	Bank – Public	112.70	10.00	3.80	38.00	3.37%
17	PSL Ltd.	Steel & Iron Products	60.30	10.00	2.00	20.00	3.32%
18	Rural Electrification Corpn Ltd	Finance Term Lending	226.95	10.00	7.50	75.00	3.30%
19	Jammu & Kashmir Bank Ltd.	Bank – Private	1020.70	10.00	33.50	335.00	3.28%
20	Power Finance Corpn. Ltd.	Finance Term Lending	196.20	10.00	6.00	60.00	3.06%
21	Bajaj Holdings & Investment Ltd	Finance – Investment	833.20	10.00	25.00	250.00	3.00%

Value Investors look at the Intrinsic Value of a firm. They hold stocks for long term and look to gain from dividends, capital appreciation, buybacks, bonus issues etc. One of the indicators of a firm’s value to the shareholders is its dividend yield.
Dividend:
A sum of money paid regularly (typically quarterly) by a company to its shareholders out of its profits (or reserves). Dividends are mostly paid quartely or annually.
Why is dividend important?
Dividend is a direct income for a shareholder without selling any of the holdings. Therefore a shareholder can hold on to the stock and still earn an income sitting at home. In a bull market, dividend would add to the overall capital appreciation and improve gains. In a bear market, a high dividend stock can offset some of the capital loss. Hence, a high dividend stock would always find favor in any market conditions. Rising dividends also indicate financial soundness of a firm and a strong cash flow.
Dividend Yield:
Dividend yield gives the income earned from stock holding from dividends alone. It is calculated on the basis of the dividend paid per share and the current market price per share. Dividend Yield = (Dividend per share/CMP) x 100
For example, HCL Info’s dividend yield is given by: Dividend Yield = (8/43.45) x 100 = 28.41%
This implies, if the earnings and dividend payout ratio remains the same for this financial year, if an investor purchases shares of HCL Info at current market price, he/she would earn a return of 20% from dividends alone.

Markets to look for progress on economic reforms this week

Stock markets are likely to remain volatile this week as investor sentiment will be guided by the ongoing Winter session of Parliament as they track the progress on economic reforms, experts said.

The week will see truncated trading as stock markets will remain closed on Wednesday on account of Gurunanak Jayanti. Besides, the expiry of November derivative contracts on Thursday will also keep stocks volatile, experts said.

"The Winter Session of Parliament has begun but no business was transacted in the first two days, raising concerns over the fate of various Bills which are proposed to be presented and passed during the session," said Dipen Shah, Head of PCG Research, Kotak Securities.

"If some of the proposed Bills are taken up and passed, we can see the sentiment turn bullish and markets trending higher over the next few weeks," he added.

According to Rakesh Goyal, Senior Vice President, Bonanza Portfolio: "In the coming sessions, markets are likely to see further buying. Investors' shall be looking for global cues and other post-reforms actions within the country for further market direction."

Analysts also said that global market developments will be key for domestic stock market. "Investors will also track the GDP data for the second quarter which is due on November 30," said Alex Mathews, Head Research, Geojit BNP Paribas Financial ServicesBSE 0.42 %.

Expectations of more reform measures in the Winter Session of Parliament in view of the rejection of the no-trust motion against the government pushed up the BSE benchmark Sensex by 197 points to 18,506.57 last week.

Besides, persistent foreign fund inflows into equity market are likely to boost the market sentiment, experts said.

Again : Subbarao goes against his panel .....

(Any opinions expressed here are those of the author only)

Finance Minister P. Chidambaram is not the only one walking alone.
Duvvuri Subbarao, the Reserve Bank of India (RBI) chief, also seems to be on a solitary, and one hopes, contemplative walk.
It’s not just the government putting pressure on the central bank to act and cut rates.
Minutes of a RBI advisory panel on monetary policy released on Wednesday showed Subbarao went against the advice of most external members, including economists and academics, in deciding to keep rates on hold at the Oct. 30 meeting.
Five of the six external members present had suggested a cut in the repo rate, with two suggesting a chunky 50 basis point cut. The governor thought otherwise, opting to lower the cash reserve ratio by 25 basis points.
The members arguing for a cut said that demand side pressures were not evident and there was a need to revive investments.
However, Subbarao said restraining demand was essential as inflation was expected to rise over the next few months.
In India, deciding rates is the prerogative of the RBI governor unlike the formal voting mechanisms at some banks like the U.S. Federal Reserve and European Central Bank.
In an interview to the Wall Street Journal earlier this year, Subbarao had said that going against the panel’s view was not always an easy option.
“It’s difficult … It’s certainly something you don’t do lightheartedly. You do think twice before going against their advice.”
Yet, Subbarao has done that repeatedly. He raised rates sharply in the second half of 2011 citing inflationary pressures, when the panel had suggested gradual increases.
That reveals a side to him which many had not expected when the career bureaucrat switched from the helm at the finance ministry to Mint Street, where the central bank is headquartered.
It’s not been an easy ride of late. Chidambaram has been piling pressure on Subbarao to cut rates, even holding a hurriedly called press-conference a day before the Oct. 30 review to put forward a fiscal roadmap that lacked any details on how it would be achieved.
Subbarao was not swayed, prompting the finance minister to say, “if government has to walk alone to face the challenge of growth, well, we’ll walk alone.”
The RBI governor has taken a key risk with his decidedly tough stance on inflation, which by his own admission, involves sacrificing short-term growth.
The economy continues to sputter with declining private investment demand and weak external demand, raising shrill calls from the industry for rate cuts.
Sujan Hajra, chief economist at Anand Rathi Securities and a former central bank official, supports Subbarao.
“The perspective for the governor is much bigger. His decisions are pretty balanced,” he said.
“At this moment, a rate cut won’t have positive gain for the economy,” Hajra said.
And one must not forget the adage that the central banker’s job is taking away the punchbowl just as the party gets going.
Subbarao’s detractors may argue that the party looks far away.

Tata Coffee & TV18 Shareholders ...........

Tata Coffee has had an incredible run on the stock market with its’ stock price soaring nearly 50% in the past three months. The move has been in tandem with parent Tata Global Beverages surge in the wake of the partnership with the Starbucks chain.
Today, Tata Coffee shocked investors out of their wits by unexpectedly surging to an all-time high of 1,348 and hitting the upper ceiling limit of 20%.
Some analysts have been bullish on Tata Coffee’s prospects. In a research article by Bhavana Acharya in BusinessLine, a strong buy call was given when Tata Coffee was quoting at Rs. 1059. The author pointed out that the fall in the Arabica prices augured well for Tata Coffee because its margins would increase. She also pointed that the (then) valuation of 16 times TTM EPS was very reasonable especially in the light of the turnaround in the affairs of its USA subsidiary Eight O’Clock coffee.
Well, Bhavana Acharya can take a bow because her predictions have indeed come true.
Rakesh Jhunjhunwala’s latest stock pick TV18 Broadcast continued its strong run on the bourses with a 14% surge today to reach Rs. 35.65. TV18 Broadcast has nearly doubled in 3 months.
Interesting, Samir Arora revealed in his interview to CNBC TV18 that even he was “super-bullish” on TV18 Broadcast. He revealed that apart from his Fund Helios Capital, he had bought tons of TV18 Broadcast, before the rights issue, in the rights issue and after the rights issue, for her personal portfolio as well. He jokingly complained that Rakesh Jhunjhunwala had robbed him of the “thunder” of being the discoverer of the stock.
Anyway, now the bottom-line is whether there is any more juice left in either on the stocks.
Tata Coffee reported superb results for Q2FY 2013 with a 109% growth in net profit to Rs 36.8 crore and a 15% growth in total income to Rs 477 crores. This growth came because of a sharp turnaround in its global subsidiary Eight O’ Clock Coffee. The instant coffee operations continued to show substantial growth which was aided by better operating results from coffee plantations coupled with a favourable foreign exchange on the exports. Tata Coffee will also benefit from the relationship with Starbucks to supply coffee seeds for its outlets in India.
TV18 Broadcast will be a beneficiary of the digitization process. It is a dominant player in the Media sector and at a market capitalization of about Rs. 6,000+ crores, it is not very expensive. Of course, can you go wrong when two super-bulls are bullish on the stock.
So, my take is that both are great stocks to add to the portfolio slowly and steadily at every decline. In 5 years time, you will be looking at super-duper multibaggers.

200% Gain In 90 Days .......... TBZ (Tribhovandas Bhimji Zaveri)

TBZ rightly deserves the honour of being called a rocket multibagger stock with gains in excess of 200% in just 3 months. But what has caused these explosive gains and is there any juice left for latecomers


Tribhovandas Bhimji Zaveri (TBZ) came out with its IPO in April 2012 at the price of Rs. 126 per share. The IPO met with lukewarm response from the investors and drifted aimlessly for quite some time. The stock was completely out of favour and slumped to an all-time low of Rs. 88 on 16th August 2012.
That was the turning point for TBZ and there was has been no looking back since then. It has been on a steady upward march and has been regularly breaching the upper circuit levels. It touched its all-time high of Rs. 276.05 on Friday, 23rd November 2012.
What seems to have captured the market’s attention is the news that Tribhovandas Bhimji Zaveri will invest about Rs 1,200 crore in the next three years for opening 43 showrooms across the country. At present, TBZ has 18 showrooms across 11 cities, including metros as well as Tier-1 and Tier-2 cities. The news of the expansion came at an opportune time – at the beginning of the Dussera & Diwali festivals.
This news appears to have led to the buying frenzy in the TBZ stock.
Interestingly, the other jewellry stocks such as Gitanjali Gems Ltd, Goenka Diamond and Jewels Ltd, Thangamayil Jewellery Ltd & Titan Industries joined the party.
However, now the million dollar question is whether if you were lucky enough to get into TBZ at lower levels, you should hold on or bail out by encashing your gains.
S. P. Tulsian is very clear that speculative interests are driving the stock and so investors should get off. He said “One can call jewellery stocks as speculative element … I will throw caution on … Tribhovandas Bhimji Zaveri (TBZ) .. in fact I am not at all convinced with the valuations, in fact we have seen the fate of TBZ when it got listed, there were no buyers but maybe after couple of months when the stock had seen the under ownership since then the stock is moving up. We have been talking that the retail investors get attracted at the very high level and I do not see the fundamentals to justify these valuations both for Goenka Diamond as well as for TBZ“.
Sudarshan Sukhani also added the same word of caution when he categorically said “Tribhovandas Bhimji Zaveri (TBZ) is something that you need to avoid completely. It is a stock that did not list well and then it is running away at some point of time. We have seen hundreds of these stories; they have literally dismayed and disappointed investors in the final reckoning. We do not know when that final reckoning comes but my advise is stay away, if you have some momentum trades, take your profits and go. This is not an investment idea by any chance“.
Common sense also dictates that when a stock balloons the way that TBZ has done, there has to be heavy correction and consolidation before the upmove resumes.
So, I began selling my TBZ stock at about Rs. 225+ and cleaned out my inventory at about Rs. 255. Now, I am waiting for the big crash to come to vindicate my selling out!

Shopping list for 2013 .............

2013 is round the corner and so it is time to prepare your shopping list for the best stocks. We identified 12 top-quality stocks that are expected to give good returns in 2013 


SpiceJet: Preferred Airline for FDI reforms as and when it happens, because of its operational eficiency, Low cost business model works out to yield more on domestic route and healthy expansion plans to explore international route. A strong recovery in yield in the domestic sector and rationalization of its international route should enable SpiceJet post substantially lower losses in FY13 and strong profits in FY14.
Prozone CSC: A unique proposition in real estate: Blend of strong B/s, annuity income generating asset, tier-2 cities land bank and a experienced international partner makes Prozone a niche player with virtually a debt free balance sheet. Fully paid land bank of 17.8msf (10.1msf (PZ share) across six tier-2 cities in India, PZ plans to develop 10msf (6msf PZ share) over next 5 years including 1.3msf of retail mall. Well planed project pipeline for next 3 years which would generate healthy cash flow. CSC’s partnership adds a lot of credibility to the company’s bandwidth and governed business approach Capital Store Centers (CSC) is one of the UK’s most valuable retail asset owners. The company operates 10 of the 25 large retail assets in UK and is valued at ~ 3bn pounds.
Omkar Speciality Chemicals: Expansion inline with expectation: Increasing capacity from 1700 mtpa in FY12 and plans to further increase to 6250 mtpa by FY14 through Brownfield expansion. In addition, the company plans to ramp up the capacity at the sites of Urdhwa Chemicals Private Ltd and Lasa Labs. Exports revenue to boost in FY13 earnings from new products: Omkar Speciality has started focusing more on export oriented segment and planed to launch about 5-6 new molecules during FY12-13.
OnMobile Global: VAS value chain business model: OMGL it is the number one RBT service provider in the world. We believe interactive voice response system and speech recognition technology that OMGL is providing has good scope in utility VAS services. OMGL has already got all the four large operators in India to sign up for its video technology and expects video services to start showing positive results in the next 1-2years period.
Innovative Industries: Innovative has turn out to be one of the emerging leaders in the precision tube industry. Its plan to shift focus to higher margin segments such as Tubes and OCTG would give it an edge over its peers and the recent acquisition helped to reach new heights in global markets. IIL has received a patent for its ‘Cold Pilgering’ technology for a period of 20 years w.e.f April 24, 2009, also IIL has filed for two more new patents. Pilgering process saves cost of power by 80% whereas wastage cost by 7% which would make IIL competitive in pricing & improve its overall profitability.

MCX India: Ready to flag off new equity segment: Newly recognized equity trading platform, MCXStock Exchange (MCX-SX), is set to kick start trading in around 1,000 companies’ shares on November / December 2012 with around 700 members registered as of now. Leadership position: MCX has held on to its market leadership position, with a share of 82- 87% over FY09-12. Supply of technology platform by its parent, Financial Technologies, one of the leading developers of exchange related software and technology, gives MCX a competitive edge that is difficult to replicate
Tech Mahindra: Largest IT solution provider to telecom industry: With its global footprint and presence in more than 31 countries, Tech Mahindra is the largest IT solution provider to global telecommunication companies. As per the latest Voice & Data magazine’s Annual Survey, it leads Indian telecom software services market in FY 12 with 20.9 % market share. Acquisition like Satyam & Comviva will provide business synergies, diversification & scalability. With this Tech Mahindra stands to become leading telecom support service provider in India.
Axis Bank, with its large deposit base and fee income, may be among the private banks best placed to thrive in a rising interest rate scenario. Axis Bank has increased its CASA market share multi-fold over the past nine years (4.6% as of FY2012) on the back of robust branch and ATM expansion. It has opened 400 branches in 2011 & 230 in 2012. Expect an annual addition of 250+branches would lead to a 30-50bp increment in CASA market share every year.

Sterlite Industries: Parent restructuring exercise to trigger: The UK-based Vedanta Resources Plc will merge its Indian firms- Sesa Goa and Sterlite Industries- into a single entity Sesa Sterlite Under the merger, three Sesa Goa shares will be issued for five Sterlite shares. Post merger, the combined entity Sesa Sterlite would offer investors best in class resource diversification with top quality assets in zinc and oil. Additional Value to be added through Cairn India: Cairn India would become subsidiary of Sesa Sterlite with effective stake of 58.9%.
Maruti Suzuki India: Increased focus on diesel version to lead future growth: India is a price sensitive market and the sudden upturn in the prices of petrol has soared up the sales volume of diesel variants small cars in the country. In the first half of the current fiscal, the auto makers of the country has seen the diesel to petrol ratio go up from 60:40 to 85:15.
Indraprastha Gas: Robust business model, dominant position in the market and a rapid pace of expansion gives IGL an edge in the market. CNG run vehicles growing at CAGR of 32 % in last 5 years – Buses, Autos, RTV, and Cars/Taxi are main users of CNG. Their number has grown at CAGR of 32 % in the last 5 years. IGL being the sole CNG supplier in Delhi and NCR is benefiting from this demand.
Shasun Pharmaceuticals: Active presence in CRAMS in both API as well as the formulations businesses creates a huge opportunity for it to increase and diversify its revenue base. In addition, the company has several other APIs under development for products, which would turn generic in the next three to five years. Setting up its Greenfield facility in Vizag will enable Shasun Pharma to generate sustainable cash flows over the coming years. Shasun Pharma’s top line grew by 29 percent in FY12. Further Bottom line increase by 102 percent as compared to FY11.

Upside Breakout possible in Gold & Silver, Patterns on Weekly chart

It has been long time I haven’t written about precious metals, But accidentally saw the charts today. I found that COMEX gold and silver is ready for breakout from its descending triangle pattern, in this case I am expecting a positive breakout. Look at the weekly charts of silver as I see its ready for a breakout (may be in few weeks) see below chart.

But gold may take some time for giving a breakout in that pattern.  Look at the gold’s weekly chart below:

Trading position in Gold and Silver:

I will prefer to trade long on both of these precious metals, when the breakout happens. However, I will see when the downward sloping resistance line becomes invalid, at this very moment I will initiate long positions. In silver I see breakout earlier as compared to gold. Lets just wait for breakout, once breakout trade is active I will let you know.

Predictions for the next year ................

• Defaults and slowing credit growth will hurt bank profits. I believe it will impact bank stocks as well, but after seeing violent reactions such as the Fed's QEs or the ECB/JCB action, I can't say that the RBI won't jump to benefit its beloved banks (rather than encouraging new banks and letting the old ones go)
• I'm going on a lark here. Indian stock markets will crash. We might make an intermediate high (say 6,300+ on the Nifty) but I think we crash at some time next year. The trigger, this time, is likely to be internal - such as another silly government program, or large deficits, or the dollar-rupee equation hurting big time. (As compared to external such as a Greek default)
• Gold will hit new highs.
• Some stocks will go up more than 100% in the year. These, I hope, I will catch for at least part of the way.
• India will see job losses in sectors like IT and telecom and BPO and such. The impact will be felt beyond a year, perhaps, but the ball will start to roll and create both political and economic complications.
• The US will get over the "fiscal cliff" but there will be other issues that continue to plague it, with political uncertaintly and the Western economies will start creating walls to keep jobs within their countries, to work through recessions.
• At a personal level, I'll figure out things on the work front. I might transition into full time employment. Or, I might get back into creating a startup in the financial space again. A lot depends on how secure I can make my family's future, a position I intend to address in the next 12 months.
• And finally, I'll only buy stocks or short them after appropriate research. The last year has been very very indisciplined. More details on the site as things get clearer.

Hope you had a great day!

Why is Indian Stock Market rising when Economy is falling?

Economy is at its worst, Rupee’s value is slipping, and estimates of GDP growth are falling by each report.
When all looks so glum then why is Sensex the index of growth booming?

Firstly economy and Sensex are two different things, but a booming Sensex infuses investor confidence in economy. Hence it is important for the Sensex to stay float at all times. Currently we are close to 18k at 17,783, though a fall of marginal 0.38% on Friday; it shows no sign of stopping.

Why?
FII – Foreign Institutional Investors are the answer. Economies all over the world are failing, including the emerging markets like India and China. But there is much more confidence in the Indian market than others.
Because every time there is a chance of slowing down or a big correction takes place, suddenly someone pumps in money (black money) and the Sensex bounces back. If not completely gradually, though faster than it will be if everything was happening due to legitimate reasons. So there is a fair amount of investor confidence. There is nothing called overnight phenomenon without any major fundamental change in economy.
So, we have had a lot of FIIs, $11.5 billion has been pumped in the stock Markets by them since January 2012. Things were basically worse off in other countries. Though off late most of the big stock indices have shown a positive trend like the US’s S&P 500 has gained 7.9% and Ibex-35 of the sour Spain is doing well.
This is because of nothing but a hope, that Euro crisis will be resolved using bailout packages, hence infusing liquidity into the markets. This hope stemmed from the fact that European Central Bank’s governor is keen on saving Euro and had categorically said that he would do “Whatever it takes” for the same. US Federal Reserve may follow suit and propose a bailout package if the economy fails to pick up.
So following the global trend of hope and the local trend of magic (black) money being poured in along with the FIIs, the Sensex (for now) is aiming for the sky.
The need of the hour isn’t just bailout money. Bailout money is like buying a kid chocolate because he scored less.
Though it is necessary to give the industries a little something to stand up again and improve productivity, it is important to re-structure the economy and improve the fundamentals. Otherwise we will have to face the same predicament over and over again.

Stocks SIPs Might be risky ............

Not all financial market innovations benefit investors. When applied to the wrong products or clients, some of them can, in fact, do more harm than good. The concept of systematic investing falls in this category. Used in equity funds, systematic investment plans (SIPs), which allow you to invest in a fund through fixed monthly instalments, work brilliantly. However, the same concept applied to individual stocks may materially peg up the risks to your portfolio.

Stock SIPs

With mutual fund SIPs taking off, many brokers and trading platforms today offer SIPs in individual stocks. They allow you to accumulate a stock by buying it at a daily, weekly or monthly frequency, based on standing instructions. You can set up SIPs based on the number of shares or a specific value to be invested per month.

Why do investors prefer SIPs at all? Consider how SIPs actually help improve returns from equity funds. Most of us invest in equity funds because we believe that they will deliver better returns than most other avenues over the long term. However, the problem is that stocks don't deliver that return in an orderly fashion. As markets are punctuated by runaway bull and bear phases, your entry point into equities makes all the difference to returns. SIPs, by phasing out your investments, help you avoid investing at market peaks and help you benefit from corrections after your start date.

Concentration risks

Having said this, why should SIPs work well for equity funds, but not for individual stocks? That is on account of two factors. One, SIPs in an individual stock may result in portfolio concentration. SIP investments result in your accumulating large exposures to a single asset. A five-year SIP of Rs 5,000/month in an equity fund will add up to investments worth Rs 3 lakh at the end of the period, based on cost alone.

Given that a fund, in turn, holds a diversified portfolio of stocks, this may be an acceptable holding for a Rs 15 lakh portfolio. But what if you bought Rs 5,000 worth of a single stock every month? At the end of the period, a fifth of your portfolio would be invested in it, a risky proposition. Investors may not readily recognise the concentration risks posed by stock-SIPs, because it is easy to lose track of your purchases when you make monthly investments.

The second risk arising from stock-specific SIPs is that you could well be betting on the wrong horse. By automating your investments, SIPs force you to accumulate more and more of an asset without checking back on it. But such an auto-pilot approach to individual stocks can be fraught with risk, especially in today's environment, where a regulatory change, a recalcitrant client or even a blip in the Rupee can cause a drastic shift in a company's fortunes. This logic would apply to a stock that does exceedingly well too. With a SIP, you could end up blindly adding to a stock as its valuations get richer and richer.

Finally, no matter how savvy the investor, stock selection is a game of chance. While some stock choices may turn out extremely well, others may fall flat on their face. Making big bets, month after month, on just 5 or 10 stocks of your own choice can subject your portfolio to considerable damage, if many of your choices turn out to be lemons. With the investments on autopilot, monitoring and rebalancing such a portfolio on an ongoing basis will be an uphill task too.

Work well in portfolios

SIPs, on the other hand, are likely to work quite well if applied to a complete portfolio. Investing a fixed sum every month ensures that you buy more units when markets fall and less when they rise. The real advantage of using SIPs in an equity fund is that you are not buying the same set of stocks every month.

Whether stock prices fall or rise, the fund manager is likely to be closely monitoring the portfolio and replacing stocks at regular intervals. Those who don't put much faith in active managers can take the SIP route to an index fund. In that case, your portfolio returns will be hitched to the fortunes of the broader market and will not rely on luck alone! 

With thanks

money dalal ....

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