Friday, June 27, 2008

A blog after a really longtime......

But it took me long to assimilate and indeed sorry for the delay..
I don’t know where to start, how to start but I will make an attempt. It was January where the same markets were booming and now each day I see stocks at throwaway prices. Are the indeed so cheap? What's the difference in the same markets from Jan to June.............that it has corrected nearly 30% from the tops...
Small caps have lost nearly 50-70% some even reduced to 1/4th of their market cap (or price). How and why did this take place?

It all starts so.... A fresh year starts in January all parameters were under control...easy available of liquidity, companies all set for their capex expansions plan, credit at cheap (if not cheap at least at moderate) rates , Inflation (around 3.5%) well under control and hence the economy was all set to grow from there. In addition markets boom in January as well generally. January brought all new hopes to FIIs , retail investors, companies and even to the Indian economy.

But the world is dynamic. Inflation crept up as crude which was expensive went more expensive i.e. from 95 to 135$ a barrel up nearly 35%. Crude had already rallied last year from $70 levels to $100+ and the rally continued. Crude took energy prices up as well as other commodities creating a huge problem for not you or me but everyone. US suffered from the rise but emerging economies suffered much more as emerging economies (Indian and China) were the place driving the demand story for crude. Supplies were almost constant. Discovery new fields were on a decline as per the trend. Short Term crude prices are projected at $150/ barrel some say even $200 barrels. On the other side of the coin we have people stating $60/barrel. My idea on this is....the price is high as the demand has increased. Demand cannot come down very quickly as shifting to alternative energy sources immediately is not so easy. Moreover, Growth continues so Short term demand seems robust, keeping short term inflation robust. The only way to fight inflation is to increase interest rates (REPO ,CRR, PLR and so on). But that may hinder growth as credit will become expensive in the short term for consumers as well as companies eyeing their capex plans.

As Growth might slow down, definitely not too much , we see the demand to lower, thus in turn bringing stability by stabilizing the demand supply curve. Production may also increase as promised by some of the OPEC countries. Inspite of this, from these levels crude looks bullish. I am definitely bearish keeping the long-term perspective wherein non-conventional sources and renewable sources called crude alternatives may come into play. But it is not as easy as I said.

To cut a long story short, I will have a cyclical representation.

(need to show a diagram)

Crude is all ok, but what does it imply to our economy? Lets take an eg…The reality sector is hit hard so hard that even the top favorites are at below IPO price. The scenario needs to be understood carefully. The prices of raw materials will increase due to inflation. Development needs credit which will be difficult to find as lower no of capital investors due to slower growth. Moreover if credit obtained it will be quite expensive creating high interest costs. This will make the company suffer on margins. Moreover consumer demand will slow down which may be investor driven or end consumer driven. End consumers may find difficult to buy property at high interest rates or EMIs. This will also mean that funds may be blocked in developed and undeveloped land creating in a slight competitiveness, decreasing property prices. Decreased property prices will also decrease investor morale as well as hit company margins. It may continue till inflation rises and interest rates are hiked until an equilibrium all parameters are obtained.

This is not to end up with all but the interest on credit and capex plans of all companies from engg to Consumer durable (CD), capital goods (CG) , infrastructure , power and banks as well. In fact, bank margins may decrease due to high interest rates. Lending of credit will be also on a decline. All types of capex plans signify growth. Any hindrance in it means a slower growth. The question is how slower? And the answer is how much inflation………..and to reduce it, is a the rate hike in interest enough.

So we go round the bush and end on inflation. How can single commodity crude drive inflation? Energy is a must, for life to sustain and increase in energy demand is imp for growth to sustain. Crude is not just energy but its byproducts have an array of organic compounds that generate a dye to turpentine (industrial solvents) to water proofing agents and even drugs. It affects every individual directly or indirectly. Every individual travels or buys goods that use logistics. Nothing grows in a city where I live called Mumbai. So it affects me a lot indeed.
Hence is crude is a lot to an industry and an individual but not only energy. Moreover rise in crude promotes rise in various cereals and foodgrains used for generation of ethanol via fermentation. Ethanol is a crude substitute. Thus foodgrains are at a shortage as they are used for energy purposes. In addition crude drives the energy basket increasing prices of coal, cooking gas, etc. It also drives gold and precious metals along and sometimes even base metals (copper, zinc, aluminum, lead ,tin) sometimes. Hence in one way it drives inflation.

Another large concern is political instability in India as well as US due to elections. In short too many negatives and too less or none positives.

So…..What can one do in the scenario…

India and China will have to grow and there is no doubt. Population will rise consumption story will continue flourishing it as a better domestic economy. Global problems may subside, like crude which is globally affected we import it so we import inflation. Land has to become less and infrastructure is a prime need in infrastructure ruined country. Its like India has to grow …so infrastructure has to…
So if valuations are low one can look at long term. Global problems need time to get stabilized so do political problems need time. We import inflation as we import crude and rise in crude is a global mega-problem. The apt saying describes the recent fall “ Sell in MAY and go AWAY”. But after every may is a January which makes markets boom.

The markets are demanding. Two things obviously, your money and your patience (time). So wait and watch and don’t loose it!!!!! (‘it’ means money as well as patience)

-Govinda Ahuja.

Thursday, May 22, 2008

NMDC puts upp a good show...

after bonus today inspite of heavy selling we saw NMDC moving uppp 4%
all i know 510 now (ex bonus 1500,15k ex bonus ex split,,,)
All people having holding can obiously hold retain...
gremach infra....mmoving upppp 161 on it.. agin longterm higfh risk high return...will check its progress and come back soon..

New pick Cerebra Info looks goood nice reults...small cap space
Cals refinireies too looks good (These are not my picks but i appreciate them)

Kalpana recommmded at 105 moves upto 130 (22% gains).
Praj from 145 to now 200.............will continue trhe rally until crude will rally
It comes under renewableenergy sector which contains...Suzlon , praj as well as Webel Solar power SE all will move in case crude touches 150$ a barel. We are all set to see a 150.
Along with it it will carry all refineries like cairn, reliance (not active now) and exploration like aban(was upp today a buy was given for longtem in earluier blogs.......) and HOEC (hind oil explo company)

Bartronics looks to slow down...profit booking partly recooomended..long term prospect still look good after this rise.....

Sterlite technlogies hold as well as GTl infra both are lions in telecom space....

Monday, May 12, 2008

Some small cap Ideas

Small caps ahave always been rsiky in tumbling markets...

Some a few that seem goood.
Kalpana Inds(CMP 105).........nice company a P/E at abt 5. A pretty decent P-BV and growth tooo...excellent product line.
Visesh Info...good in It space along with Cerebra Integrated Technologies.
Already people who lifescience were caught in a midcap Camson 90 odd
has bounced back to 120-130 levels
accumate all the above for a a risky high return play..

Among the largecaps....
Jindal Saw....
Bad results.
But this is a time toi accumalte it...
current levels looks expensive as per forward earnnings.
Can buy on markets crash at around 500

Wednesday, May 7, 2008

Sterlite technologies

try acculating this at every decline
CMP 225 arnd...
good lookn at at the longterm prespective..........
I am sinceely adding it...
its a high risk stock so if arent a risky guy its not ur bet...

a technical call again

bartronics again looks to be a buy from here...
main tain a stop of 225 to fetch 252 and then 280.....
292 is the top of the stock...
partially book profits close to 252 and 268.....
add if it rallies above 292 on good volume
obey 225 as a strict stop loss if it falls only with gr8 case of a heavy midcap sell offf...
keep having fun...
cya tc..

Monday, April 28, 2008


Bartronics touches 205 odd,,,,my call is part
LIC hosuing finance recvommended at 278 (price on april 10) runs to 357 (11.5% upp today).
It was on account of good results.
The consumption driven story of India will drive it........I give it a hold at 360 (+30% from calls given)
IRB infra (IPO recommended) today at 212. Hold again
NMDC back in action with a circuit.
One more addition the list my very old HEG... but at 260-280 reep longterm benifits...
Jp assco up as well touches 250 odd.....Hold add for longterm.....avoid addding on rises... a litlle satta driven..

Tuesday, April 15, 2008

A detailed list on each sector.

I think no retail stocks look cheap valuation vise even after the decline.
But still i like too in midcap space

Bartronics: Buy already given at 145 arnd. I maintain it to be one of the good midcaop retail proxies. I maintain an accumalte at 145 around. We can see a minimum of 50% returns in the next 12-18 months depending on market conditions. Prelimanry target is 180 and 225 looks a secondary target. The possibiliy of earlier highs closing 280 is also a possibilty but quite rear.
One the risk return plot i will give it a low risk medium return at 145.

Piramyd Retail.
Its not a proficatble company since today. After the Ibulls aquistion it has a good future as the group does not pose any funding problem. Time period looks stretched overall. I maintain a hold for now and a buy on declines close to 70. A period of 36-45 months looks advisable in this stock.
In the risk return plot......high risk , high returns. A turn around Piramyd retail looks gr8 and can be a multi bagger.

The space has been out of limelight after the current bear phase.
Some midcaps and small cap look good
Unity Infras(545), Gremach (good price to enter 115),
In the land bank companies.........I am a bit sceptical but DLF ,HDIL and peninsula Land look safe. I would take safety companies especilly in this space..........Land is a bit hyped and can correct owing to global liquidity problems. However i see only 10-15% downside from here .......
Below that actaully means we are in a severe property correction phase or the global liquidity condition is quite stretched.
Jp Assco.....looks to be consolidate....i see 180-205 a good buy zone. Medimu risk mdium return on the whole space.
Unity infra however low risk medium returns.
Gremach at todays price.......high returns, mdeium risk...
will come up with more sectors shortly....
diversify....keep some dark horses in.....
one multibagger and 5 loosers , still u will be a winner.
As u know (100 sonarki ,ek loharki :) )

Thursday, April 10, 2008

I had given V imp status to NMDC

in the earlier scraps if u see i had said NMDC is very imp a strong buy..
from 9500 to 14000+ (now splitted to arnd1410).
This is in a bear market.
I think the rally we continue and the next pt is somewhere arnd....1750 (17.5k)

Long term target i maintain 2500(25k,275% return) target.

watch out.

Another strong buy i said was gremach infra...
keep accumalting on declines..
5 year hold. high risk, high return

LIC housing finance looks pretty decent for low risk people so returs will be low too..
target seems close to 350 (35% return)
buying zone best price at 250-260.

Infra(Land banks) is a bit out of lime lite...
collect ur favorite stcok at decline..
HDIL however is the safest...and the bluechip is DLF
The space needs time...

Tuesday, April 1, 2008

The economy still in the dark........the only way out is defense.

Economic prospective.
The major problems seen in recent time:
1. IIP nos pathetic, showing slow groth in manufacturing slow growth can be imagined overall in economy .
2. Crude ,Gold prices fuelling up...
Food grains price pushing upp......putting growth in inflatory zone. 6.7% is indeed a bad sign.
Control on infaltion can only be obtained by increasing interest rates which will also put growth under slower track. High Grwoth is good only if infaltion is under control.
3. The currency seems to sterngthen putting exports in terms of services (software, ITES) as well as all other export oriented themes
4. Elections next year hence political unstability is imagined.

The US is gradually moving towards a slow calm recession and no outcome seems possible. Interests rates at all time low, dollar weakning against all major curriences especially euro, crude fuelling upto 110$/barrel Gold touching $1000+/troy ounce are bad signs. Commodity infaltion putting gloabl central banks under pressure. Major banks registering liquidity crunch and is now spreading to UK thus the effect is large in terms not only in liquidity magnitude but geographical magnitudes too.........
The issue remains from subprime to morgtage lenders to Subprime bond insurers and now investment banks. Its now spreading to US economy and finally Global economies. The Us eletcions are on their way so nothing can be said about the future policy there too...

In this case whats the problem in Asia and emerging markets. We will narrow our spectrum a bit and talk on India and China. Where China's dependence on US for exports is large a slowdown may hit Percapita income as well as PPP in the US resulting declining exports and slowing the economy.
Whereas India which is still said to be a domestic economy will be less hit. Its true but still i feel the brunt will be faced here. We depend on software exports to the US and also services like BPOs and KPOs.The bulk of this comes from the US BFSI and manufacturing sector which in turn is in trouble. Reduction in projects will lead to a bit unemployement and salaries amy not move briskly. The so called "domestic economy" will not produce its growing middle class and the dream may be schattered. On the other hand we have a partial hedge by new clients from US and UK which may start outsourcing owing to cost cutting measures and to improve profitability in the recession.
Indias Booming infrastructure space has to face the problem of the global liquidity crunch. DLF (Forbes 2000, more than 3 quarters of BSE reality index in market cap) has canceled its REETS singapore issue. Projects are slowing down suffuring lack of investments. Thats a bad sign.
Things like tax limits raced in the budget may fuel domestic momentum and per capita income fulling domestic market a bit. Things like 60,000cr to the farmers by the Hon Union Finance minister is to appreciated as it will increase domestic agro productivity and help bring infaltion under control compared to the global scenario. But the Global infaltionary effects will still be prevalent.
What is to be seen in this year is:
1 How we can save ourselves from the global infaltion moves?
2. How the US economy moves and the effects on India's service sector?
3. Investments ?Will they continue? espeacially in reality and infra?
4. How the Indian and the US elections take place and what is the result?Hence what will be the new policy?
Its a chaotic situation for the short term. Long term India will produce better growth in Asia. It will be an imp investment destination. SO hold on...........invest for the longterm. Forget the shortterm jitters around buy at reasonable valuations. Be stock specific not sector specific.Do not discount on CAGRs but imagine the total global dependenices of the scrip and the effect on liquidity commodity prices on its earning.Its not simple to invest now in case of the global turnmoil. Time will produce results and produce above answers making the rainy sky of investment clear like a sunny day.Trust yourselves, if not invest only via MFs.

Wednesday, March 19, 2008

Markets bearish....
Bad sighne evereyday
Us economy slowing down
buy slowly....push money very slowly....
start buying now
Mundra port
Praj Ind
TATA power
R ccomm
Gremach infra-very imp
JP assco
NMDC-very imp
Punj loyd

Friday, February 1, 2008

results season buy cheaper cheapest

good results season

tor from declines buy for mining sector beautiful set of nos
Ashpura minechem good below 280 as well as GMDC

PRAJ inds still good gremach infra looks good on every decline

in some good pharma pics jupiter bioscisences is good
enjoyy tc:)
if u on cash buy long term upternd is sure

Friday, January 18, 2008

Mkts in correction good time to buy if u sit on cash...

geodesic info good in IT for long term players.....2-3 yrs holding minimum 18 months....
Power grid looking existing at levels lower from here.....
GTL infra looks does......................Gremach infra (at 390).........
Stock specific ideas will be better
Sadbhav recommended at 600 already at 1400 my call hold.....50 PE multiple is fairly priced.........
alll for the day
buy quality pay value......