Confused Mind, Clear Answers (09-10)
Ref: 09-10 (Oct 2009) of 1st Oct, 2009
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This column is exclusively devoted to the questions from the readers relating to their investments or other guidance. Your cooperation will be highly appreciated.
Anil Selarka (Kalidas),
Hong Kong. 1st October, 2009
Link to this page
sir,
At present i would like to invest Rs 100000/- on shares .please advice me for long term investment.
Thank you sir,
udai shankar.m.
udaishankarmorla
27 Feb 10 at 6:57 PM
sir,
I lost Rs 500000/- for the last 6 months in Intraday trading.Now i want to go for long term trading. At present i have Rs 180,000/- only. please advice me some stocks for long term.
Thankinging sir,
udai shankar.m.
Kalidas Says ….Monday, February 22, 2010
Continue to read this blog. You have lost so much that you need to quadruple your investment just to break it even. It is possible only when the markets crash by 40% when you may find real values. At the moment, I do not see over 20% gain in some select counters.
udaishankarmorla
21 Feb 10 at 7:36 PM
should i wait for my price of RS 136 in hindalco and then buy these items or should i exit immediately on tuesday
Kalidas Says …. Sunday, November 01, 2009
Tuesday is far away. Monday is working day in USA. Let us see how Dow goes on that day. Watch GDR/ADR prices of Hindalco on Monday. It will be rough guide what is to come on Tuesday in India. (Is Monday holiday in India?)
PARESH RAWAL
1 Nov 09 at 7:40 AM
Dear Sir,
Can you please specify few high dividend paying stocks to acquire during current market fall.
Murali
Hyderabad.
Kalidas Says …. Sunday, November 01, 2009
You may check with the Moneycontrol.com – AllStat section which contain host of information about top dividend paying stocks. Scroll down to the page where other statistics are availbale. Check Top dividend Paying stocks (BSE) and you will get the result. You may sift this list and select the safest one out of them.
Please note that if the company is having declining sales and profits, the historical dividend rate may not be maintained. Similarly, if the company shows rising revenue and profit, and even if it is not dividend paying at the moment, the chances are it may come to dividend paying stage. Example: IFCI
Murali
31 Oct 09 at 7:14 PM
i am holding:
1. HINDALCO 10000 SHARES @136.25(CMP 121.75)
2. NHPC 40000 SHARES @ 37.40(CMP 30.5)
3. ALOK INDS 20000 SHARES @23(CMP 19.25)
4. RNRL 5000 SHARES@95(CMP 63.85)
WHAT SHOULD I DO WITH HINDALCO WHOC DECLARED BAD RESULTS TODAY. PLS ADVICE ON ALL. IS IT BETTER TO SWITCH SOME TO UCO, LICHF, ABHISHEK,DENA,SPICEJET,PETONET,IDEA
PLS HELP ME
Kalidas Says …. Sunday, November 01, 2009
HINDALCO: It’s profit is down more than expected. However, the company would have been at loss if the derivative losses are accounted for. The Autditor’s report for Mar 09 suggest that the company did not provide for Mark to Market losses (MTM) to the extent of Rs 313 crores. The Indian Auditors do not mention how many such contracts are outstanding. As such it is difficult to quantify the future losses.
Nevertheless, its Indian oprations are better. The Muri project should contribute well. The global Aluminum prices will continue to go higher, that is my view, at the most 15% from current level.
The company has very large stone around its neck – huge debt load of over US$ 3 billions or over Rs 12000 crores which does not get refinanced due to difficult market. It is therefore trying to raise Rs 2900 crores (25%) of such amount. It is a margin amount needed by the lenders before committing Rs 9000 crores (to make up total Rs 12,000 cr.) However, the company is in right sector at right time with wrong acquisition at wrong time on wrong terms.
It all depends how the company raises the money – through Preference capital or Equity. If it is equity capital, the EPS will go down. Presuming, the company raises money at Rs 108/share, it may have to issue 270 millions of new shares against 1.7 billion shares already outstanding. Its EPS will therefore contract by 20%. The stock could be rated down.
With difficult market, it is not clear whether the company or underwriters will be able to raise huge sum of Rs 2900 crores. If not, the company will have difficult time to fund the foreign currency debt. It may also baloon its losses there which is not provided for until now.
Yes, the company will do well about 18 months forward, but before that the stock may come down. If the company could raise Rs 2900 cr, then lot of pressure will be taken off in short term. The company waited too long to raise the money – peculiar Birla style. When the going was good, it should have raised money, not when the market sets for correction. Indian owners always want the last dollar, and that is their downfall.
The stock may rise (it could be boosted by the market makers to make fund raising success). This will be a blip only. My suggestion is to reduce the holding because the shareholders will be unfairly treated by reserving the discounted issue only to QIB and not other existing shareholders by rights issue. You are not going to get the new shares at discount therefore.
It all depends how the stock behaves on Monday. Asian markets will be weaker, so cue for BSE will be initially negative.
Considering your large position, reduce your stake in Hindalco by 50% – large amount could be released due to high value stock – and use some of them in buying RNRL. Every share sale of Hindalco will get you RNRL, UCO, IFCI etc in the ratio of 2 or 3 to 1. Please note that Hindalco earnings will be on decline on EPS terms, and that of other solid companies like UCO, IFCI, DENA will rise.
The strategy is:
SELL 5000 Hindlaco @ 120* = +600,000
BUY 2000 RNRL @ 60* = – 100,000
BUY 2000 UCO @ 48* = – 96,000
BUY 2000 IFCI @ 41* = – 82,000
BUY 2000 DENA @ 53* = -106,000
BUY 2000 PETRONET@58* = – 116,000
BUY 8000 ABHISHEK @12.5 = -100,000
NHPC: The stock is under performer. It is very expensive relative to earning. It may drop sharply if the market continues to have bear run.
SELL 10,000 NHPC @ 30* = +300,000
BUY 5,000 DCB @ 30* = – 150,000
BUY 5,000 Spicejet@31* = -155,000
You may continue to hold Alok Industries ( I am a bit sceptical about this company somehow, but on face of it looks good to hold)
You may sell more of Hindalco in rally, and retain the cash. If they make cash call (equity fund raising) stay away for the time being until the FPO settles down. If in the meanwhile the market takes severe beating, watch the following stocks to buy:
Dish TV (Buy level 28~33 in strong weakness due to market. The stock on its own is on recovery track
RPOWER
PETRONET
LICHF
MRPL
ESSAROIL
I am not suggesting you new investment at the moment due to very fluid market overseas. India has to follow the overseas pattern, The interest rate risk in India is relatively low, so major damage to the economy may be less.
While swapping into other stocks as above, you may feel that you might be booking the loss, but it is on paper. You are also paying for other stocks relatively less price, much less than the loss on Hindalco. Booking loss at 15% and taking position in other stocks that have come down by 20% to 40% makes lot of sense. When the market rebounds, you will be in a position to recover faster than the present value shows. Mark down all current prices with date and talk to me after about 18 months, you will know the truth.
PARESH RAWAL
31 Oct 09 at 12:35 PM
Dear Kalidasji,
Pl. start NOVEMBER series of “Confused Mind,Clear Answer”.
- Ramesh, Mumbai, India.
Kalidas Says …. Saturday, October 31, 2009
Thanks again. It is started today.
Ramesh
31 Oct 09 at 6:01 AM
Dear Shri Selarka,
Your kind opinion on the current correction seen in markets – is it part of the bigger crash that you have been anticipating or just part of the usual correction seen after a quick rise?
Kind regards
Vineet
Delhi
Kalidas Says …. Saturday, October 31, 2009
Yes, we are drifting towards that unfortunate event. But it is at early stage. In times like this, the Government does everything to avoid such events, and use every kind of propaganda to assuage the feeling of its citizens. The USA is on non-returnable path, unless it takes the action as suggested in my book – SUB PRIME RESOLVED. My verdict is “United States is technically Bankrupt”
Some major event should occur that would trigger the crash. One could be possible bankruptcy of Bank of America. If Gold/Silver markets rise very fast, it will spell serious troubles for JP Morgan, Deutsche Bank, Citi Group, UBS, Barclays and HSBC.
India and Brazil may be spared from the route. If the markets do crash, the RBI and MOF may be forced to defer decision to raise the rates to control the inflation. In fact, inflation will take a back seat. RBI may be forced to ease the money market by reversing its recent decision to raise cash ratio, and also lower interest rates, instead of raising it. It is also possible that the Tax Rates may be reduced to protect the capital market.
Vineet
31 Oct 09 at 3:35 AM
Dear Sir,
Market is on a corrective mode now and as you had predicted earlier if correction deepens and nifty tests its Oct’08 bottom then all these goods stocks as suggested by you (RNRL,UCO,SPICEJET,RCOM,IFCI, Petronet,HP,BP,LICHF etc) will go down further by another 30-40%. No stock can withstand the bear hammering in the short term if market in it’s wisdom decides to correct sharply from here. Don’t you agree that it’s not the time to buy any stock howsoever attractive they may appear and instead sell on 2-3 days rallies to lighten up the portfolio to be in 100% cash. example- If nifty goes down to even 3600, RCOM may be available at 130. Isn’t it logical to buy a cheap stock even cheaper if possible in a weak market going by your prediction of the market.
Thanks for your opinion
NSri, Pune
Kalidas Says …. Saturday, October 31, 2009
The mentioned stocks have already come off by 20% except LICHF which dropped by 10%.
If the market corrects by another 450 points on Monday, being intraday low, only RNRL may correct more, but it will rebound after testing day low. The financials like IFCI may be markedly weaker, testing 41 or even lower to Rs 38.50 during intraday low. This stock has history to go down fast in weaker market, because it is not promoted by the major shareholders.
UCO, DENA will also come down with SBI. These may be very good picks because of higher earnings
Other stocks may drop between 5% to 7% . The spicejet may drop more although it is very strong on previous day. The main brokers may back off and allow it to fall.
Reliance group of late is much weaker due to weaker earnings at RIL. It may be a drag on the market. It might be sold off in every rally. I have a feeling that the RIL has already seen its best days for the time being. Its gas findings are also discounted in its higher multiples.
If you are losing about 11% or less, better cut the loss and stay liquid. At least sell 60% of such holdings and wait to buy back at lower level.
RCO may also drop but pick it up during this fall.
Try to pick up the high dividend paying stocks, because their dividend payout will be protected, and your yield at lower entry will be much higher.
In short term, even quality stocks will suffer. Some defensive stocks like ITC and Hindustan Lever may gain. Oil producers like ONGC in spite of higher oil revenues may fall, due to its being index nature. However, watch Cairns Energy for major drop to add position.
NSri
31 Oct 09 at 3:01 AM
Reliance Communication has gone down by 43% since one month. Shall i buy RCOM at this level or wait further?
CMP:175.95
1 month ago:308
52week low:131.35
52week High:359
What is you target for this stock?
Anbarasu,
Madurai.
Kalidas Says …. Sunday, November 01, 2009
Yes, you can. It is within buy range now.
No specific target now, because entire telecom sector is having hangover of per second call charge.
The industry may consolidate at lower level for some time. but it will rebound. telecom is like a food commodity.
right now, the sector is weak and also the market is weak. It is a liquid stock that is financed heavily by banks. So margin calls bring it down more than anything else. It does not have negative news such as Bharti Airtel
Yes, you may buy RCOM on Monday at about 10:30 to 12:00 PM when it could be near day low.Buy only slowly. If the stock rebounds, just sell it out to take short term profit. Do not count on average cost, just deal each stock on its individual price level.
Anbarasu
30 Oct 09 at 5:13 AM
Dear Kalidasji,
Initially i opened Silver and Gold savings account with a local bank in SGP and parked some funds. I made about 5% profit in approx 2 months and took the trade off the table. At the same time I wanted to reduce my risk on the capital and hence i also went the options way and made about 30% on GLD / SLV calls as a prototype. I realized that i could be in the options game for about 1/10th the risk with more profit potential. With a working prototype, i put some more money in the options account and have taken following positions.
GCZFY – GLD Jun 2010 103 Call
XUXAQ – SLV Jan 2011 17 Call
Have also bought following Bull Call Spreads, so that my premium is lower and i am protected against IV crush:
GCZAY/GCZAZ – GLD Jan 2010 103/104 Spread
SLVAQ/SLVAR – SLV Jan 2010 17/18 Spread
My Jan 2010 spreads are primarily inline with your bullish breakouts around Dec/Jan and i am hoping that price is above my spread and both (long and short) legs expire in the money by Jan expiry.
Since gold/silver play looks promising and is long term play i will be exploring calendars too. This will help me to generate income by writing short term calls against a long LEAP. I have not explored buying low and selling high just in premium itself. Can you please elaborate? Are you referring buying at Low IV and selling at high? Thats what means low cost for an option in my opinion – are you saying the same thing.
Since you have specialized LEAPS, could you suggest some low cost income strategy. I like options a lot based on the unlimited potential they have in any kind of trend or even in a trendless market.
Regards,
The Monk, Singapore.
The Monk
30 Oct 09 at 1:58 AM
Dear Kalidasji,
I have bought some LEAP options in GLD and SLV expiring in Jan 2011. I am trying to play a leveraged game with minimal fixed risk which is the cost of the options. This makes my cost of entry low with possibly good returns if gold/silver go up. The shrinking of silver to gold ratio is another factor that can make profits on silver even if gold doesnt move. Having said this, one of the key things that works against me is the time decay on the long term option. Hence i would like to understand from the timing perspective: What is so critical about Dec contracts of Gold and Silver? Also, when do you expect a good big jump in these metals?
Regards,
The Monk, Singapore.
Kalidas Says …. Friday, October 30, 2009
What is the symbol. LEAPS was my speciality when I was dealing in US market. You can do calender spread or even write Put options if the premium is high.
In LEAPS, the strategy is to pay the premium when it is low and take the premium when it is high. I used to write lot of puts with great result. When we are bullish, we write (sell) the puts with out of money buying as hedge. Then play both sides in a trading game.
December is a major month for Gold and Silver when the players cash out or reverses the bet. It is also a major hedge against the spot market, so the players cash in the profit or take loss.
The Monk
30 Oct 09 at 1:02 AM
Hi,
I have NHPC 1600 shares @ 35.70Rs/- and NTPC 400 shares @ 181 Rs/- and Reliance power 130 shares @ 184 Rs/-. Which of these stocks I can further invest in and whats your recommended and target price for them?
Regards
Anand Siva
Sydney
Kalidas Says …. Friday, October 30, 2009
When you have a choice between Public Sector and Private Sector, choose Private Sector. The key shareholders of private sector want to have higher share price because it increases the promoter’s wealth.
NTPC is a very large company (Is it in BSE/NSE Index?) with large market cap. It’s growth is stagnating. It is not that cheap either. It has better sex appeal due to infrastructure play. In short term it may fare better than RPOWER. But on 2 to 3 years basis, RPOWER may give larger return regardless of outcome of Ambani dispute.
NHPC is more expensive than even NTPC with too many shares. In bad market, such stocks could come down more than 70% which will be time to buy aggressively. I would look at the level of Rs 18 or below for profitable entry. At the moment, the stock is neutral. I would switch into other stocks like Abhishek Industries Rs 15; Spicejet when it is at about Rs 29/31; Arvind Mill Rs 34 or about; Development Credit Bank DCB at about Rs 34 (buy at 29-31 in correction; IFCI (when at Rs 41 or below)
ANAND SIVA
29 Oct 09 at 6:20 PM
Hi,
I have 200 Shares of Bharati Airtel @ Rs 370/-. Please advice if I can buy on dips to average out? Can I hold this stock for long term gain?
Regards
Anand Siva
Sydney
Kalidas Says …. Friday, October 30, 2009
It may be a good company, but its profits may decline. Further, it is trying to get into overseas market paying top dollars which is its first major mistake. I think that success had gone into Mittal’s head. He is beginning to make mistake.
Nevertheless the stock is a popular one. Considering your original cost, you may buy progressively into this company on market weakness.
The return on this stock may not be over 20% from current price of Rs 298 or Rs 300. To me, this company may enter the period of declining growth in profit, though its revenue may rise. May be I am wrong. I do not want to discourage you from buying more at current level. If new purchase make money, just sell it.
ANAND SIVA
29 Oct 09 at 6:11 PM
Kalidasji,
Recently have read several news articles that Indian and Chinese government are encouraging there citizens to buy gold, whereas most of western countries do not.
I’m trying to understand is Indian/Chinese govt. is really caring about there people & encouraging them to invest in gold or if banks selling gold trying to make profit or is there another catch?
Appreciate your response
Thanks
Suma
Detroit ,USA
Kalidas Says …. Friday, October 30, 2009
No government anywhere will encourage its citizens to buy gold or silver. If they do, who will buy their bonds to finance the deficits?
In spite of Indians buying over 800 tons of gold every year, the stupid RBI or Government of India never created proper market for the Indians to trade the gold through RBI, the way bonds are traded.
In spite of Indians buying 800 tons of gold, has not the idea entered into RBI or dumb officials of Finance Ministry to issue Gold bullions with RBI marking of 0.999 when the countries like Canada, South Africa (Kruggrand) and Switzerland (who issue PAMP SUISSE gold nuggets), so that innocent Indians are spared from the clutches of dishonest gold traders who jack up the price and play with purity?
When the physical demand of Gold and Silver in India is so consistent, why not stupid RBI issue gold bullions to be made available through nationalzed banks instead of importing from Swiss banks and pay them hefty charges? It is the fundamental responsibility of RBI/MOF to protect the investment of the Indians and ensure that illiterate Indians (farmers and other lesser privileged) are not cheated out by crooks and scoundrels.
suma
29 Oct 09 at 3:51 PM
What is your view on the fall in RCOM stock? What range should investors buy this stock? What is your long term target(+1 year) for this stock
Prince of india
Abu Dhabi
Princeofindia
29 Oct 09 at 9:57 AM
Kalidas ji,
I have DISHTV 1510@43.27. CMP is 35.85 (17.5% down). It seems a major crack is going on in the entire stock market as you have predicted. What strategy do you think is appropriate at this point of time. Is it right time to average or just hang on to my current holdings for a pull back?
I have strictly followed 2 rules so far in my investment strategy.
a) I never bought any scrip for more than 5000 INR in one trade.
b) I never bought any scrip for more than 50K except DISHTV since my total investment is limited to 6L.
But my current investment in Dish TV is already around 65%
I appreciate your guidance
KeeYes
Tokyo
Japan
DISH TV has raised the money around Rs 24 or so in the right issue. The stock may not fall below Rs 28.50 easily when you can buy more. The company’s fundamentals are improving on my personal assessment. In fact, I intend to buy into this stock again. Last time I had bought at below Rs 14 and sold out in high mid thirties. I would now buy back on long term basis.
The entertainment is my favorites sector in such recessionary market. When the people do not go out to spend money in restaurants, they will stay home to watch more of Cable or Dish TV. Its demand growth will only rise.
KeeYes
29 Oct 09 at 7:01 AM
Dear Sir-
Which is goood bet at Rs. 60 RNRL or PetronetLNG or both.
Thanks,
Siva
Chennai
Kalidas Says …. Friday, October 30, 2009
Quality wise Petronet. The sales volume in Petronet rose 30% in September 09 qtr to Rs 3400 crores, which means that the company may have sales revenue of Rs 12,000 crores in full year ending Mar 2011 (In march 2010 it may be around Rs 10,000 cr)
It is extremely well poised to hit the EPS to reach Rs 14 inless than 18 months. The stock could rise to Rs 210 in less than 18 months. This stock is now entering into strong growth phase.
RNRL may gain faster than Petronet in short term if the Ambani dispute is resolved soon. Its immediate target is Rs 140 on successful outcome – Period 4 months
Buy 65% Petronet ad 35% RNRL at any price below Rs 80
Siva
29 Oct 09 at 6:32 AM
Kalidas Ji,
Good evening….!
i wanted to seek your advice on investing in the market….i have 10 lakh rupees with me to invest. How i plan to invest this money is by buying stocks worth 10000 rupees everyday the markets are down….This way i would be investing close to a lakh rupee every month (considering appox 20 trading days in a month. 10 days down). i am really looking forward to this strategy as my investment would be spread over a period of around 1 year…Also if any day there are major correction (>4% in the selected stock i may buy more). So is this a good strategy to buy…..i intend to invest this money in not more then 15 stocks…..(7 large cap, 4 each in mid and small cap space. Out of 7 in large cap, 2 would be in defensives). I forgot to mention that i would be buying close to 25-30% of this 10 lakhs in the form of gold….Please advice…
Thanks & warm regards,
Anupam
Kalidas Says …. Saturday, October 31, 2009
Not every day at any time, but if the market is down at least for 3 days, then that strategy from 4th day will work better.
If the market is down more than 50% from recent high, then only I would invest into 15 stocks. Otherwise, better stay invested in not over 8 to 10 stocks.
Otherwise, it does make sense. Please note to keep some amount – about 15 to 20% to invest when the market is in free fall. Buy only good stocks.
Anupam
29 Oct 09 at 5:38 AM
Sir,
I bought 1000 Dena Bank at 75/- which is also its book value. The stock is down to 60/- now. I am ready to hold it for long term but would like your advice if anything needs to be done in the short term.
Regards,
Ravi,
India
Kalidas Says …. Friday, October 30, 2009
All banks stocks are very good buy. I have already given 3 years target to some other readers. Buy progressively in small lots with correction of 15% to 20%.
I would buy this stock right upto Rs 120 progressively if the market is restored to normalcy. The stock could reach Rs 180 to Rs 240 in 3 years basis (Provided there is no market crash – if there is one, buy more of Dena)
Ravi
29 Oct 09 at 4:08 AM
sir,
My query is regarding two power companies Tata Power and Reliance Power both are in power generation and transmission. My query is Tata Power production and distribution at present gives Share Price 1400 approx but Reliance Power has a huge Ultra Mega Power plant to built. After completion of the project of RPOWER what share price we can see, approx. in next 5 years.
Regards
Dainy
Raipur
Chhattisgarh
Kalidas Says …. Friday, October 30, 2009
We can not predict this manner. Reliance Power in expansion mode, so it has to raise the capital periodically. Tata Power is a matured company, and it is undynamic.
I would trust RPOWER more than Tata Power. In fact, I will sell TATA Power and swap into RPOWER.
There are many who have invested in RPOWER in IPO with a effective cost of Rs 800 (Basic cost of IPO + interest cost on financing leverage while applying). Considering 1:1 bonus, the cost comes down to Rs 400 or so. So, expect much consolidation between Rs 360 to 400 level.
The growth in RPOWER depends on successful outcome of gas related dispute between Ambani brothers that may drive up the sentiments. The stock could double in 18 months but further gains are limited until old IPO investors are out of the stock.
dainy
29 Oct 09 at 2:25 AM
Sir,
What would be a good entry point for LIC HF? The CMP is 760.10 now.
Thanks
Sreejith, Hyderabad, India
Kalidas Says …. Friday, October 30, 2009
The market is in correcting mode. RBI did not raise the interest rate which helped the housing sector. However, in next meeting, RBI may raise interest rate by 0.25% due to galloping inflation and commodity prices, esp in food segment.
My view is that long term interest rates may not rise in India which is good for the housing sector. Some short term aberration is not ruled out. The rally today on the back of US rally may peter out soon.
LICHF is good stock to own, but it has quadrupled since I first recommended about a few months ago. It has seen its recent high, so do not expect fireworks. I would allow it to correct by more than 25% from current level if I were to make a fresh entry. If I am current holder,I would cash in near 810 or more (70%, retaining the balance) and wait for it to drop 40% from my sale level.
Do not think it may not happen. Anything can happen in the stock market. If I can not buy LICHF, I will focus on some other valuables. The idea is to make money – whether in LICHF or anything else.
sreejith
29 Oct 09 at 1:30 AM
Dear Sir,
Earlier you have recommended Dish TV. The stock has come down to 37 again. Following are some of the specific questions in my mind:
1. Do you see it as a long term buy or a trading opportunity?
2. The company has been in losses for quite some time. Perhaps because they are still in kind of deveopment phase. The company is also heavily in debt. They have consistently given negative profits. When do you think it will turn around to positive territory?
3. Even if it post positive earnings before interest and tax, do you think it will be able to get rid of the heavy interest payments easily? How long will it take for this company to bring down its debt to equity ratio?
4. Last generic question: How is a company which files for bankruptcy different from Dish TV (i am assuming that Dish TV will not go bankrupt as it has been suggested by you)?
Regards,
YSB
Delhi
Kalidas Says …. Friday, October 30, 2009
It is a long question, needing more elaborate answer. I will reply this weekend.
For your information, the company has returned to operating profit for 3 quarters in a row. The losses are due to depreciation charge. The interest cost is also coming down – which may be interpreted as having its debt level down or interest cost is less due to lower interest rates.
The company’s sales is growing at 30% clip (last year it was 70%). The company may reach Revenue of Rs 1000 crores this year. Until the company reaches the sales of Rs 1800 crores, it may not post Net Profit after depreciation and interest. It may take over 2 years to achieve that growth. However, the revenue data on more positive side, and the fact that it will be able to increase equity out of recent right issue, suggest that the break even point may come down further.
On the face of it, it may look like bankrupt company. It does not seem to be. It is in a business where the dead elephant is more valuable than the live one.
YSB
29 Oct 09 at 12:46 AM
I do not remember having read your views on Alok Industries Ltd.
CMP: 20, P/E: 6.3, P/B: 0.33, Consistantly dividend paying company appears to be highly undervalued. The only negetive I see is the Debt/Eequity @4:1.
Can it be a good investment for retired persons and a value pick considering the prospects of valuations picking once the new capacities come in streem and debts are retired over longer term.
Kalidas Says …. Friday, October 30, 2009
When the company trades at very low P/E consistenly, there must be something wrong.
I never followed this company until you asked me this question. I normally look at the Auditors’ notes to the accounts to get more information. I found some very disturbing disclosures there. The company has invested several crores in subsidiaries and also lent them large amount as “interest free” loans. It also lost on derivatives and has over Rs 169 crores of derivative contracts outstanding. Whether derivative contracts reflect “investment amount” or actual value of derivative contracts is not know. (Most derivatives are leveraged – nearly 5 times to almost 20 times in FOREX contracts). The companies in India do not disclose such vital information.
Dividend payment is a bait from such companies. I have also many Indian companies who declare the dividend but never pay. They send the “Tax Deduction at Source Certificate” to the investors, without actually paying the dividend.
Under the circumstances, I am not inclined to suggest this company. It has multiple source of investment and losses. This is certainly not the stock for the retirees and widows.
One may take small speculative position but not the investment position. When I can make GOI owned UCO/DENA/IOC/SOE refineries and double or treble the money over 3 years, why look at such fashionable bride?
Abhimanyu
28 Oct 09 at 1:37 PM
Dear Anil,
Further to add Mr Manivannan K query, I have done some quick search over the internet to understand more about his query and found below quotes.
Go to http://goldsilver.com/home/ and you can see the below message there
When Push Comes To Shove,Posted: Oct 27 2009 By: Jim Sinclair
Posted: 10/28/2009 00:34:00
October 30th the Fed is planning to curtail QE regarding Treasury auctions.
November 4th is the FOMC meeting most likely to contain discussions of timing for the exit from economic stimulation.
November 7th is the G20 meeting at which BRIC nations will anticipate a cessation of QE and a commitment to establish a currency alternative to the US dollar.
Plus two other interesting events.
1. A Bradley Day
2. Consideration of the DaVinci Ratio
So fasten your seat belts because our long discussed rock and hard place will be reached shortly.
Since all our readers know about your prediction about Gold. Can we expect the trigger by this week and would like to know your valuable opinion.
I have bought gold for 2100 pounds and Silver for 500 Pounds thru Gold Money so far. Can I make more purchase of Gold and Silver now (Gold – 1000 pounds and Silver -1000 Pounds)?
Please advice.
Regards
Selvan UK
Kalidas Says …. Friday, October 30, 2009
When the powerful government like USA is in serious trouble, they will remove all stops to paint rosy picture, even if it is against stark reality. How do we believe that the GDP rose @ 3.5% when the unemployment rose to all time high. Is United States producing without any human help? Is it possible?
Both governments and media are hying the recovery on the basis that the weakness is slowing down, so indirectly the strength is picking up. When a city is under curfew for 5 days, the shops are opened during day time for people to make purchases of essential items. Does the replacement demand is growth demand?
President Obama, Bernanke and Tim Geithners are all bulshitting by spreading the talks of economic recovery. If that was so, how come that the banks nationwide are closing down in quick succession. All activities are ultimately translated into money which is finally stored in banks or people’s own cupboard. When the banks are getting defunct, may be they are small, then where do we see the recovery.
The precious metals like Gold and Silver are bought based on concept. Gold reached $ 850 in 1980s and Silver reached the zenith of $ 50 in 1984 or about. Since then US government has printed or contracted over $ 8 trillions of debt. The gold today at $ 1029 should have been at $ 2500 to $ 3000 and Silver at $ 50 to 70 by now, but they are still at 65% less than those projections.
I for one can not control what the government and other officials would say – they are all liars. They want to stay in power and avoid revolt in their own country. They are trying to suppress those resentment by spreading lies. Gen Rommel of Adolph Hitler era had said once that ” If you repeat the lies 1000 times, the people will begin to believe it”. President Obama and his gang is no different than Hitler’s gang in spreading lies and rumors. Public Relations then and even now, is a major weapon for politicians. They will do anything to make them believe.
I am supremely bullish on Gold and Silver. If I were to invest entire life savings today in any other product, no other asset comes closer to gold and silver.
Then again, it is your view versus mine. If you agree with my views at least 60% to 70% to what I have been saying, you would be buying gold and silver physically. I always give reasons for my theory, belief and forecasting. I never make loose talk. My chapter on Gold in my book “Sub Prime Resolved” is one of the finest write up I have ever penned in my life. Gold is a truth and it will not remain in shadow. When the people suddenly realize that America does not have gold as claimed, hell will break out giving swiftest rally ever seen in last 200 years, forget last 10 years.
That is my belief. December contracts for gold and silver are very vital. We will know in less than 2 months or maximum 3 months, where the gold will be going.
Those who believe in bankrupt Americans will themselves go bankrupt. Liars are liars, never trust them. Sometime if you make them friends, you make money, but finally they will make you bankrupt.
To me you have made good decision to buy gold in small lots over a few months. I am sure that you will make decent money.
I can not rule out small hiccups in the meantime, because we deal with the politicians and their approved media. Fox News was denied pool interview at the White House only because the network is vehemently against Obama administration. Most media make friends with the bureaucrats inside the administration because they fear that they will be shunted out if they dare go against the authority.
Selvan
28 Oct 09 at 10:11 AM
Dear Sir,
Thanks for your clarity on picking up those stocks that come down most where in your mentioned If the stock comes down on its own weakness (that is when the market is normal), then you have to avoid those stocks.
Reference to MIC Electronics it fallen to 11% in a single day due to poor results (stock specific) but still it is in your recommendation. One observation from my side is its volumes all of a suddeen increased since past one week at a higher price. Is there any other reason for recommending this stock.
Thanks in Advance.
Sruthi
Bangalore.
Kalidas Says …. Thursday, October 29, 2009
I am yet to study again after disappointing result. The stock was doing very well for some time, and it does seems that the insiders and their accountants played havoc ahead of result. It is likely that the stock was driven up by them knowing fully well that the quarterly result may not be that good. When the stock was driven up by this quarter, they dumped the share few days ahead in the market. When the company reported poor numhers, they were obviously benefitted. They covered their shorts around Rs 33 or so, and the stock soared almost 10% from day low. This is a clear case of insider trading.
There was no reason for the company to report such poor numbers. Either they did it deliberately to postpone sales/revenue to the incoming quarters or there may be some other reasons.
The company is in excellent growth oriented industry. There could not have been almost 50% decline in profits just under one quarter. I will investigate and let you know in a day or two.
Sruthi
28 Oct 09 at 9:39 AM
Dear Kalidas sir, Swapped from LMW (Lakshmi machine works) to Abhisek Industries 4000 shares at 15.90. CMP is 14.95. Can we buy more or wait for further correction. I can buy upto 20000 shares. Your advise is required.
Thanks and regards
Ravi, Chennai, India.
Kalidas Says …. Wednesday, October 28, 2009
Low value stocks may suffer more in weak market. 10% correction in their price is not attractive enough to buy more. Wait for such stocks 30% correction. The difference of Rs 1 here and there can be made up within a day in stronger market.
Ravi
28 Oct 09 at 8:44 AM
Dear Kalidasji,
I have been buying RCOM at 260, 225 and at 200. Does it make sense to buy more below 200?
Out of IFCI and UCO Bank, which one will you pick right now. I am more inclined towards UCO because of good long term outlook. Please advise.
Regards,
Harish
San Diego, US
Kalidas Says …. Wednesday, October 28, 2009
Buy RCOM more @181+. Agreed UCO is better choice, but you have to see which one comes down more between them.
Harish
28 Oct 09 at 8:14 AM
Dear Sir,
Any views on RNRL as per current developemnt in supreme court , holding 4500 @ 85 , shall we continue to hold or swapping to other counter is advisable at CMP.
Will be highly obliged on having your advise.
Regards,
Raj V,
Ghatkopar,Mumbai.
Kalidas Says …. Wednesday, October 28, 2009
Buy more 2000@ 61. I do not see better substitute now. Until then stay put
Raj V
28 Oct 09 at 7:16 AM
Dear Kalidasji,
SBI issued 5 year USD bonds as per this link:
http://www.ft.com/cms/s/0/4bc01f7a-be5c-11de-9195-00144feab49a,dwp_uuid=a6dfcf08-9c79-11da-8762-0000779e2340.html
If my understanding is correct the buyer would have bought based on the assumption that this transaction will be profitable including the coupon. Can you please elaborate the transaction and give your views if this is worth investing, particularly with more banks to follow SBI.
Regards,
TheMonk, Singapore.
Kalidas Says …. Wednesday, October 28, 2009
Much debated SBI Dollar Bond terms are not known to me until now. your link does not convery anything. To me, this bond is not going to profitable to any one. For people of Hong Kong, where the HK$ is pegged to US$, not much harm may be seen to HK Investors. Those who live in USA may not also get pinched because there is no exhange risk involved for them. For others investing at the beginning of fall of US$ will lose heavily on two counts – one in terms of local currency value (they lose if $ depreciates) and they lose in capital value if interest rates rise in USA.
To me this is not a profitable investment. However, some NRI get financed to the tune of 80% to 90% at Libor+1% max, whereas they get much higher interest rate coupon. For them, it is straight Interest rate arbitrage. Say they pay 1.25% and receive say 4.75%, so they gain 3.50% arbitrage money. If they are leveraged 5 times, their return is X*3.5% + 4.5% (original margin money) where x is the leverage. If leverage is 4 times, they make 4 x 3.5% + say 4.5% = 18.5%. When the real interest rates rise, their funding cost will be higher and they lose interest rate arbitrage advantage.
You may have heard this issue being subscribed 5 times – mostly from NRI who get financing from government owned banks. to me SBI offers poorest terms.
The Monk
28 Oct 09 at 6:58 AM
Dear Sir,
In one of your response, you mentioned to pick up those stocks that come down most.
What is the reason for buying a stock which come down most. Why the chances of going up is high when everyone thrown out.
Thanks in Advance.
Sruthi,
Bangalore.
Kalidas Says …. Wednesday, October 28, 2009
There is simply no reason. It is just human psychology.
When a counter becomes very active, large traders take part into it and go long on to those stocks. When the market takes vicious turn, they off load the long position as fast as they can.
Also, for such counters some day traders buy the stocks on margin basis. When the bets turn sour, the financing bank give them “margin call”. if they do not meet margin calls, the lender or financing bankers sell out the position in the morning by 11:00 AM as result of which temporary imbalance between buyers and sellers arise. Sellers outnumber buyers or buyers simply disappear if they find the seller to be large one, especially large banks or institution.
There could be many reasons – unless the stock comes down due to stock specific reasons (that is negative news about the company), it is always a buy opportunity. Smart investors plunge into buying when the seemingly good stock becomes suddenly cheap and they turn sellers in big rally if some stocks make headway run. If the stock comes down on its own weakness (that is when the market is normal), then you have to avoid those stocks.
Act first and ask questions later, is their approach.
Sruthi
28 Oct 09 at 1:59 AM
I have sent you some personal queries to your emailid readers.kalidasji@gmail.com but it returned so i have resent it to your other email id.
Thank you,
Ravi,Chennai, India
Kalidas Says …. Wednesday, October 28, 2009
Received it, will be replied within 2 days. The above cited email address was wrong. The correct email ID is readers.kalidas@gmail.com (“ji” is not required)
Ravi
28 Oct 09 at 12:18 AM
Dear Sir,
My self and my friend together ordered one copy of your book and after my friend, I too have completed it. Now, after reading the book, we feel, we need one more copy and keep it as reference for the children (because my friend is at Mumbai and I am in Tamil Nadu).To receive the book at Tamilnadu, is it the same procedure as earlier(payment through HDFC and sending mail to you). Please clarify.
Also, post your comments on the following.
It seems major ‘behind-the-scenes’ actions are under way to suppress gold (and silver) prices until the middle of Thursday afternoon. There are two significant events this week that could exert pressure for higher gold prices.
1) The U.S. government’s Treasury debt auctions will sell the greatest amount of debt ever sold in one week. The net debt increase of $153 billion is so high it will exceed the current authorized federal debt limit. Flooding the financial markets with so much debt is a sign of weakness for the U.S. dollar. As the dollars declines in value, the price of gold in U.S. dollars invariably rises.
2) The options contracts expire in two days. If the spot price at the close of trading on the day that gold (and silver) options contracts expire is higher than the contract price on a call option, the owner will exercise the option to demand immediate delivery of physical gold. There is a major block of call options at $1,050, so expect prices to stay below that level through Wednesday night.
H.R. 1207(the Federal Reserve Transparency Act of 2009), the bill in Congress calling for an audit of the Federal Reserve System (that would also likely result in an audit of the U.S. government’s gold holdings) is under current consideration in the House Financial Services Committee. Hearings began last month. With over 330 co-sponsors of this bill and of the Senate’s companion bill S. 604 (over 75 percent of all members of Congress), there would be reasonable prospects of enactment.
A couple of months ago, various Fed officials have tried to intimidate Congress and the public by stating that enactment of this legislation would result in higher interest rates, higher consumer prices and a falling value of the U.S. dollar. None of these threats seemed to have stopped H.R. 1207 from moving along.
On Oct. 20, a new tactic to combat H.R. 1207, S 1803 the Federal Reserve Accountability Act introduced. This alternative bill pretty much guts any attempt at Federal Reserve accountability by allowing only limited audits of the Troubled Asset Relief Program and similar high profile bailouts. I expect to see Fed officials pushing for this bill as a way to sidetrack H.R. 1207.
So, as said by Kalidasji, Fed is in war foot to hide the truth, support Dollar and stop accountability(paricularly for gold reserve)by all means. But sure will fail. After price dip during the first few days this week, expect the current bull market in gold to come roaring back. Kalidasji’s Gold chapter will be proved soon. Many co-boarders had asked for a good time to buy gold, of course, the reply given by you is exactly correct.
With regards,
Manivannan K
Cuddalore, Tamilnadu-India
Kalidas Says …. Wednesday, October 28, 2009
Regarding book, the procedure is same. You may pay through HDFC and let me know your full mailing address with contact telephone number. NOTE: Use revised payment instructions, as IFSC Code for HDFC has been changed.
Other issues will be replied here later in the day.
Manivannan K
27 Oct 09 at 7:33 PM
Dear Sir,
MIC Elctronics has posted poor results:
http://www.indiainfoline.com/Markets/News/News.aspx?NewsId=348469
You have given a call to accumulate it. Is it because you consider the results to be anamoly and from next quarter the results will be fine? I had 2000 MIC at 36.5, I sold 1000 at 51 and holding the remaining 1000.
Thanks,
v8r, Stockholm.
v8r
27 Oct 09 at 7:30 AM
Dear Kalidas,
I have been reading you for the last two years. Thanks a lot for your unbiased (Economy) analysis and views.
What would be the impact of HR1207 Bill(Audit the Fed – Ron Paul) if it is passed without significant change. When Alan Grayson asked Bernake, he said he didn’t know who was the recipient of US $500 Billion Dollars during his testimony in the US Congress Finance Oversight committee. If you want I will provide the youtube video link.
Could you share your thoughts and views?
Rajesh Kannan D
Kalidas Says …. Tuesday, October 27, 2009
No views. It is a politics
Rajesh Kannan
27 Oct 09 at 6:06 AM
Dear Kalidasji..
Just continuing my query, i have one more imp. newsrelease about CIC investment in this company as shown below:
Please kindly give your views;
Thank you sir;
Sreeram, UK
China Investment Corporation invests in SouthGobi Energy Resources Limited
October 26, 2009: China Investment Corporation,through its wholly-owned investment subsidiary Fullbloom Investment Corporation has entered into an agreement to invest US $500 million in a 30-year secured convertible debenture issued by SouthGobi Energy Resources Limited (“SouthGobi”). SouthGobi is a TSX Venture Exchange-listed coal mining and exploration company with main producing assets in Mongolia. The instrument is convertible to common equity of SouthGobi.
Citigroup Global Markets Asia Limited acted as financial advisor to CIC in this transaction.
Sreeram, UK
27 Oct 09 at 5:50 AM
Dear Kalidasji:
I have invested in a COAL based company TSX: SGQ (Southgobi enegry) on Toronto xchange, this company has operations in Mongolia and seems to have huge potential becos of its neighbours China as big consumers.. CMP:12.80 my Purchase price 2.50 holding since 2yrs, its volumes rencently increased based on the news of its IPO in Hongkong xchange.. and its planning to increase it annual production..
It rises and fall on low volumes
during 2008 peak/downtrend i sold 40% of my holdings at 15.00 odd price.. now holding 60% (3000) shares;
Can you give me your opinion on this stock based on the info i gave or on COAL how its future would be..
In brief: my PP: 2.50 – CMP 12.80, 52week High-low 14 – 4.0
Many Thanks,
Sreeram
Kalidas Says …. Tuesday, October 27, 2009
It is always difficult to evaluate a resources company because many items are unique with reference to the country and also the company’s activities.
This company’s 80% shares are held by Ivanhoe and one of the major investor is BHP Bilton who converted warrants into shares.
US$ 500 Millions investment by CIC is reported to be on 30 years basis. Full terms are not disclosed.
It will go a long way. The future is on energy. It is not known when the funding will be completed. It will be long term investment by CIC.
The company appear to have lot more of upside. Once the stock is listed on Hong Kong Stock Exchange, it will rise very fast. China is investing in resources based company. Although Coal is still viewed as pollutive and non-green product, it will continue as alternate major source of energy. China is diversifying from USD cash to Asset rich mining companies.
Refer the Southgobi website- southgobi.com
Stay with the stock. It has lots of upside.
Sreeram, UK
27 Oct 09 at 5:24 AM
Kalidasji
Do you think the increase in interest rates in US and RBI’s hawkish monetary policy announcement today will trigger a large correction in stocks, which you were cautioning your followers. Does today’s correction gives buying opportunity for long term investors? What is your advise for long term investors sitting with 50 -60 % cash?.
Regards,
Mohan, Mumbai, India
Kalidas Says …. Tuesday, October 27, 2009
This is beginning of future trend that may develop within 30/45 days. It was a good buying opportunities for short term investors, not long term. The investment is ripe for long term when it could give investors return of 200% to 500% in 3 to 5 years.
That is when the stocks correct by 50% to 70% (leaving 50% or 30% value intact. That is, if the stock is at Rs 100 becomes Rs 30. Now, from 3o to 100, it has to gain Rs 70 or 220%. The percentages always look large when the base is low.
The current correction in price is just 7% to 10% – which is nothing for long term investors. Yes, for short term investors, it may be a time to buy.
Once can accumulate the stocks like UCO Bank (Rs 52.60 – down by 15% from recent peak), RNRL 75+ which is almost Rs 14 down from recent peak, IFCI at 47 (allow it to fall by another Rs 3) down from recent peak of Rs 61; MIC Electronics Rs 40.50 – down 11% today and from recent peak of Rs 52; Dena Bank Rs 64 ( will buy at Rs 58 to 61) etc.
What you need to do is to pick up the strong stocks in this correction or those stocks that come down most.
It is still a trading market. If US market recovers today, everything will be green tomorrow.
Mohan
27 Oct 09 at 3:28 AM
Dear Kalidas sir, I swapped Avon corporation 10000 (my purchase cost Rs8.25) to Uco bank at 52.95. Can i make fresh purchase at this level or can i wait for correction.
Thanks and regards
Ravi, Chennai, India
Kalidas Says …. Tuesday, October 27, 2009
Not a good swap. You do not swap lower value stocks into larger value ones. Yes, you can sell larger value stocks in favour of lower value stocks.
Never mind, you picked up good price. If US market recovers today, UCO may jump by 6% to 8% tomorrow, when you can sell for quick short term profit. You may buy more later. Right now the market is very fluid.
Ravi
27 Oct 09 at 2:02 AM
Kalidasji,
Interesting story…pl.visit the link
http://www.rollingstone.com/politics/story/30481512/wall_streets_naked_swindle
Regards
Rang-Jama, Bangalore, India
Kalidas Says …. Tuesday, October 27, 2009
Those who had close connection with Treasury Dept would have done this. Paulson, Treasury Secretary was from Goldman Sachs. Can you guess who could have been that trader,and why no actions were taken against him?
Rang-Jama, Bangalore, India
27 Oct 09 at 1:32 AM
Sir,
Here is a link of interview with Dena Bank Management on the Q2 results: http://www.moneycontrol.com/news/results-boardroom/expect-loan-growth20-22-for-fy10-d_420941.html
NII is low because the booked some 32 crore of interest under the head, other income. This NII has actually gone up. Thanks for your reassuring words.
Pawan,
Delhi, India
Pawan
27 Oct 09 at 12:37 AM
http://www.bseindia.com/qresann/news.asp?newsid={817EB642-40F7-4901-A0C0-5BC0558FFB0B}¶m1=1
Link copied again.
Sandip- Syria
Sandip
27 Oct 09 at 12:18 AM
Dear Sir,
Compact Disc India Limited, BSE 526141,CMP 61.15 P/E 1.65 EPS 41.27 further Below is the Latest result link
http://www.bseindia.com/qresann/news.asp?newsid={817EB642-40F7-4901-A0C0-5BC0558FFB0B}¶m1=1
I have requested your views long back but you said that you will comeback after studying the script.
Could i request you once again to have your views.
Regards,
Sandip – Syria
Sandip
27 Oct 09 at 12:16 AM
Sir,
I have the following positions
RCOM 1000 at Rs. 265.00 CMP 217.30
RCOM 1000 at Rs. 231.00 CMP 217.30
RNRL 4000 at Rs. 87.5 CMP 79.10
SATYAM 4000 at Rs. 114.00 CMP 110.00
I have invested 35% in Gold, 5% in Silver, 29% in equity and have 31% (Around Rs. 13 Lakh)cash which I have set aside for further investment in equity. I can hold for long but wanted to seek your advise if I should go for any swapping now (because all my equity holdings are currently under loss). My current gains are 8% in Gold and 58% in Silver so far.
Chetana
Bangalore, India
Kalidas Says …. Tuesday, October 27, 2009
No need to invest any more. The market has suddenly turned ugly due to rise in market interest rates in USA. Stay put. You are in good stocks. You may sell some RCOM (about 300) and Buy 1000 RNRL at Rs 75+=
Chetana
26 Oct 09 at 11:07 PM
Hi Anil,
Have a question on UB holdings…Its the holding company for Vijay Mallya. It has huge debt taken on for KFA and United spirits, however for providing these guarantees, it gets paid by both companies. The intrinsic value of this company is huge. Could you comment on this
txs
William – Bombay
Kalidas Says …. Tuesday, October 27, 2009
Stay away. To my knowledge, UB has pledged almost all shares to the banks to secure the lending to KFA. If KFA fails, so does the UB Holding.
Be clear in your post. Do not write like “Its the holding company for Vijay Mallya”. A holding company is for subsidiaries, not the ultimate shareholder. Further, the debt is not taken by UB Holding – it has merely guaranteed the debt of its subsidiaries for which it Mallya pledged his shares in UB to the bankers of subsidiaries.
When you say, intrinsic value of “this company” is huge, which company you are pointing at? How did you arrive at intrinsic value at being huge?
If the subsidiaries like KFA fails, the shares of the UB will be sold off by the lenders to KFA and others, and intrinsic value of UB will be near zero. Mallya had no right to extend the guarantee of UB for the debt of KFA. He thinks everything as his own heritage. Other shareholders count nothing.
He is a show man who will spend fortune for Formula1 type of exotic sports. He is not a businessman – a super jumbo eccentric self egoistic spendthrift on mega scale. Do not trust with your money on such gamblers. STAY AWAY
William
26 Oct 09 at 11:04 PM
Kalidas ji,
I have a query regarding gold purchase. This is a double posting of the query which I sent to your email. (I did not get response for my email query and I guess you might have missed it in your busy schedule)
Tanaka Gold traders are selling gold coins bars in Tokyo Japan.
The current price for 1 gram is 3200 JPY (Approx. 1560 INR)
They sell 5 gram coins and bars from 10grams onwards.
If I buy 50 grams bar, I have to pay (50 * 3200 JPY) + 4500 JPY (Approx. 2400 INR) commission which comes around 78960 INR. I have read in one of the queries that an import duty of 500 for every 10g should be paid. So my total cost comes to 81460 for every 50gram.
They say it is 99.999 purity with London market mark in the bars.
The link is unfortunately in Japanese, but I am pasting it here just to refer the picture of the bars & coins.
http://gold.tanaka.co.jp/commodity/shohin/g_coin.html
I am planning to buy 50grams once in 2 months and would appreciate if you give your valuable advice.
Thanks,
KeeYes
Tokyo
Japan
Kalidas Says …. Tuesday, October 27, 2009
I can not read Japanese – what could I possibly say?
Wait for a minute. Here is the English website.
Check its contact details in English website with the Japanese version. It looks like it is a genuine trader.
The commission works out to nearly 3% which is normal nowadays. (Commission = 4500/50*3200% = 4500/160,000% = 2.8125%).
Why do you want to count duty in Indian Rupees, when you are in Japan? The duty is just Rs 100/10 gm or Rs 500/50 gm if you take it to India. Take proper bill from your Japanese dealer in English.
Go ahead and buy it.
KeeYes
26 Oct 09 at 9:05 PM
Dear sir,
Just a short reminder on my question regarding the Motorola holdings that I have in my portfolio..still awaiting for your guidance on what to do as I haven’t heard from you.
Thank You!
Nisha, Hong Kong
Kalidas Says …. Tuesday, October 27, 2009
Sorry, it skipped from my mind. I will try to reply tonight
Nisha
26 Oct 09 at 7:58 PM
Dear Sir,
Satyam and Tech Mahindra are to be merged after 8 months. Is that a good or bad for Satyam stock?
Here is the link from economic times.
http://economictimes.indiatimes.com/infotech/software/Satyam-to-be-merged-with-Tech-Mahindra-after-June-next-year/articleshow/5166435.cms
I have around 500 shares. Please advise.
Thanks,
Suraj,
NY, US
Merger is still long way off. Further, Mahindra group is a professional – they are not thieves. They will be fair to all shareholders. Mahindra and GE Shipping are considered as Best Management outside India.
Do not worry, If you want to buy more, go ahead in the correction today. Tech Mahindra paid Rs 57/shr while taking over. They are not going to let down other shareholders.
Suraj
26 Oct 09 at 7:25 PM
Dear Kalidas Ji
I believe that oil prices will keep rising on the longer term. In view of that believe, could you please suggest the stocks in India that would benefit, similarly stocks or sectors to avoid.
Thank you
Anil Doshi
Malaysia
Kalidas Says …. Tuesday, October 27, 2009
ONGC, Cairns, RIL, Essar Oil and possibly Videocon Industries (last choice) who are the producers of oil. For refiners, the second choice, will be all State Owned Refineries (HPCL, BPCL, IOC, Indian Oil, MRPL) and gas operators like GAIL, Petronet, GSPL, RNRL and Indraprashtha Gas
Anil Doshi
26 Oct 09 at 5:27 PM
Shiv,
I have been buying gold from APMEX and they are good. Recently I carried few ounces (bars) of that to India during my trip in September to gift it to my mom.
Here is what I have read from Customs website and my experience.
Import duty on gold is Rs 20 per gram if you are importing bars/coins with manufacturer’s serial number and weight is mentioned in metric units. Anything other than that is charged at Rs 50 per gram. All my bars were serially numbered still I ended up paying Rs 50 per gram as I bought troy ounce bars. Please go through the link
http://www.cbec.gov.in/budget0910/explnotecus.pdf
If you are planing to take it to India always buys in grams.
Regards,
Kishore, CA,USA
Kishore, CA, USA
26 Oct 09 at 1:18 PM
Sir,
Please give your opinion on Development Credit Bank( BSE-532772, NSE-DCB, ISIN-INE503A01015, CMP: 37.75).
I was thinking of accumulating this counter for long term holdings (its a private bank, hence may have limited growth but seems ok otherwise + fast to respond to changing trends). Do you think its worth-while?
regards,
Ashish Dandekar, Doha, Qatar.
p.s. Wishing you a very belated happy new year.
Kalidas Says …. Tuesday, October 27, 2009
Hold it for a while due to rise in interest rates yesterday in USA
Ashish Dandekar
26 Oct 09 at 12:23 PM
Sir,
I will be traveling to US for a year on work permit.
So I was thinking of buying gold in India but after reading your suggestions for a fellow reader, I am planning to buy the gold in US. But I have few concerns.
1. On searching in Google, different sites mention varying amount of import duty ranging from 250 to Rs 500 per 10gram. Can you pls point me to reliable website?
2. Also if it’s Rs 500 per 10gm, then do you still advise to buy gold in USA?
Pls advise.
Shiv H, Bangalore India
Kalidas Says …. Tuesday, October 27, 2009
The custom site will give you accurate details. Visit the following site.
Gold Import Duty – Click Here
See Page 14 which reproduces the duty structure for gold and Silver. Ignore other pages.
Silver attracts Import duty of Rs 500/kg.
I would not know if the rates have changed since then. The above information is direct from Govt of India’s Customs site.
Now, your question – “Also if it’s Rs 500 per 10gm, then do you still advise to buy gold in USA?”
The gold you will be buying for over 200% return whereas the duty of
Rs 500/10 gm (even if it is Rs 500) comes to 500/16500% = just 3%. The real duty as per above table is only Rs 100/10 gm which is just 0.60% if the gold is in the form suggested. Otherwise, you may have to pay Rs 250 which is just 1.5% of value.
Would not you pay 0.6% to 1.5% duty when potential gain could be 100% to 200% from current level?
Shiv H
26 Oct 09 at 11:46 AM
Dear Anilji,
Thank you for the response. I have made my first investment in the markets today of around Rs.40000 (1000 Abhishek @15.95, 200 UCO Bank @ 57 and 150 Ambuja Cements @ 90).
Shall wait further and follow this space regularly.
Thank you again.
Regards,
Sonali, Chennai
Sonali Bhatt
26 Oct 09 at 10:53 AM
Dear Kalidas ji,
IFCI has fallen to 50.90 after touching 61.7 2-3 months back.I had sold out between 56-61, thanks to your timely advise. Does it make sense to invest in this counter again at this stage or shall I stick to Abhishek Ind/UCO Bank/Satyam/Petronet.
I am also buying RCOM at every dip while holding RNRL.
Thanks,
Harish
San Diego, US
Kalidas Says …. Tuesday, October 27, 2009
Financial stocks are weak. The rates rose yesterday in USA which caused tremors for the first time. First warning shots were fired that will have lasting impressions.
IFCI has not corrected enough. Interest rates are enemy to financial stocks. So wait until it hits Rs 41 to 43.50 level.
Harish
26 Oct 09 at 9:42 AM
Sir,
Here is the link for summary results of Dena bank. I do not know where to find more details of this.
http://www.business-standard.com/india/news/dena-bank-net21-to-rs-124-cr/76737/on
Awaiting your opinion as Dena closed down almost 10% today.
Thanks,
Pawan,
Delhi, India
Kalidas Says …. Monday, October 26, 2009
Nothing negative. The reason for fall was perception that RBI might raise interest rate or at least raise the Cash Reserve ratio to tackle rising inflation caused by higher commodity prices. Almost all banking shares have skidded. The rise in NPA is considered marginal. The only cause of concern is the lower interest income. In that case, how did they increase their profit by over 21% or so?
Just because some stock comes down sharply does not mean that there is something wrong with the stock. You have to read in totality – whether market corrected, whether stocks in same sectors corrected, and if so the reasons therefore.
You can not view any news in isolation. The fact about this company is that its profits rose, which is stock positive. The stock fell in tandem with general fall in interest sensitive sectors like Real Estate and Banking on fear of high inflation that might force interest rates higher.
Everything will be in place by tomorrow when the people realize the truth. Of course, we do not know at this moment how big brother Dow will react tonight.
My original opinion stands. No changes are necessary.
Pawan
26 Oct 09 at 8:06 AM
Dear Sir,
Would really appreciate if you could share your views on Punj Lloyd (Cmp 215.70). I am planning to buy 200 shares for long term. Is this the right time or should i wait for some more time for the market to react to the results for some more downside.
your views would be greatly appreciated
Sam Sahota
Hyderabad, India
Kalidas Says …. Monday, October 26, 2009
Expensive by my standard. I would not touch it even by remote poll.
Where were you when it dropped less than Rs 70 last year. Why do you want to invest into this stock on long term basis when the market is near 12 months high?
Sam
26 Oct 09 at 4:26 AM
Sir,
Dena Bank results have come out today. The NPAs are up and stock is down 8% right now. Please provide your inputs.
Thanks,
Pawan,
Delhi, India
Kalidas Says …. Monday, October 26, 2009
Do not ask me my opinion without providing me the link. I have yet to see the full text of the result announced.
Pawan
26 Oct 09 at 3:26 AM
Dear Kalidasji,
I hold Hotel Leela shares, purchase price- 29. I saw that you have been advicing sell on Hotel leela recently while it was hold for target of 60 earlier. Could you please share your views on the reason for sell, is it sell for short term ?
regards,
Sonali
Frankfurt, Germany
Kalidas Says …. Monday, October 26, 2009
You are wrongly reading my suggestion. My suggestion was aimed at those who wanted to swap the position. Hotel shares are laggards nowadays due to sluggish Airline traffic (the Air Business Travelers are the biggest customers). But they will be able to ride the low season.
It may be noted that Hotels are also Real Estate play. They usually have strategically located Prime Properties. If one is positive about the real estate market in India, then he should become positive for hotels. India is the only country in the world, that would see gain in real estate prices in next 2 to 3 years whereas other western countries will continue to face troubles.
As you must have noticed, many readers have turned short term investors. If your question is whether the Hotel Leela will go to Rs 60 on long term basis, the answer is yes, because they bought back several millions dollars of Convertible bonds at 50% discount, which profit will be rellected only in March end quarter or year end. We are now in October, so the stock is going to keep lower profile in the meanwhile, which is the general trend in the industry, not specific to Hotel Leela.
sonali
26 Oct 09 at 1:17 AM
Sir,
A humble request and suggestion for the column.
Since market conditions change, stock prices move etc making the prospects of a stock different, could you please create a new page where all your recommendations are mentioned say in a table along with your current view on them in very concise form like Buy, Sell, Hold or may be buy below XX and sell above YY.
I see a lot of people, including me, asking about the same stocks again and again so they will get the whole list as well as update on a single page.
I understand it is too selfish of us to ask you all this for free.
Thanks,
Pawan,
Delhi, India
Kalidas Says …. Monday, October 26, 2009
It seems that most readers who ask me for 2 or 3 years hold period horizon get worried by some short term movements. I find most of them are short term traders and I would not hesitate to say that very very few are long term investors.
It is not possible for me to give day to day input for all those stocks. When I change my views, I would mention it over here with reasons. Other non-stock reasons such as market in US, India, FII buying or selling, Court related matters etc. are not going to affect the companies in longer term. Those events do happen, and I can not give opinion on minute to minute basis.
The readers may take their own view. Once I have given some fundamental reasons, they should use it as tool to form their independent decision on short term developments. I want my readers to be really “independent’ in thinking, and should not look forward to me for “spoon feeding” for short term matters. Otherwise, how would the readers develop their ability to invest at any time.
Please therefore look forward to me for policy and strategic thinking, not day to day operational part. Even when I recommended LICHF at Rs 180, I was asked by one reader, will it go to Rs 140? And if it does go to Rs 140, he will ask again whether will it go down to 120? There is simply no end to it. When I give the final target of Rs 1500, what makes the difference whether you paid 180 or 140. Many now regret for not having bought that stock which has zoomed to Rs 800+
Pawan
26 Oct 09 at 12:48 AM
Sir,
I am having 1000 RNRL shares at Rs.94/share. Similarly, 400 RIl shares at Rs.250/share. Considering RNRL winning the case, how many shares of RIL shall I swap with RNRL. I am holding – 550 original free RCOM shares, 1000 Hotel Leela (Rs.33), 1000 Dish TV (Rs.45), 1000 Spice Jet (Rs.20), 1000 Abhishek Industries (Rs.14.85) of your recommended scrips.
Regards,
V.S.Kumar, Jorhat India.
Kalidas Says …. Monday, October 26, 2009
Take profit on Hotel Leela, Hold Dish TV, Take profit on Spicejet, retain Abhishek, and keep both RNRL and RII for the time being. Also RCOM is worth the hold for the time being. If you see the market weakening more, sell it at the market.
V.S. Kumar
25 Oct 09 at 6:45 PM
Kalidasji,
I forgot to add one more question in to my first query is this the best time to buy gold or wait for some more time when gold to go down,becaz dollar is becoming strong.
I’m so confused.Appreciate your answer
Thanks
Suma
Detroit,USA
Kalidas Says …. Monday, October 26, 2009
This is the best time. Who told you that dollar is getting stronger? Do not take one day’s upward reactionary move as indicator of trend.
suma
25 Oct 09 at 12:02 PM
Kalidasji,
Planning to invest in gold, have following queries
1. Will it be a good investment for next 2-4 years & approximately how much physical gold would have appreciated in INR,and what percentage we need to put?
2. Please let me know which bank in Bangalore is offering best price
We are planning to go to bangalore in coming months
Appreciate your response
Thanks
suma
Detroit,USA
Kalidas Says …. Monday, October 26, 2009
I have already answered in my article on gold. You live in USA, why do you want to know how much will it appreciate in INR terms, unless you are going to buy in India.
1. The gold will rise more in USD terms than INR. If GOI allows the INR to find its own level, which will be prerequisite for free floating of INR in international market, the INR may rise as much as to Rs 26/$.
It is therefore advisable for you to buy in USA and not in India. What you gain in gold may be washed away somewhat in INR appreciation, if that happens.
2. It is advisable right now to place about 15% of total investible fund in Gold and about 5% in Silver.
3. Banks in India will not offer good price for gold. I have discussed it here number of times. I suggest you buy only in USA instead of in India unless you have very strong reasons for not doing so (say, for tax reasons)
4. What you can do is to buy Gold from company like APMEX in USA, buy physically and take delivery in USA, take the gold to India, declare at the customs (go to State Bank of India counter to make te payment of import duty), and pay 2% import duty. You may then keep the gold in locker which can be operated by your parents. Do not trust other family members. If you do not wish to keep it in locker, you may have to keep it in home in safe and have it insured against theft. (insurance is not must if your place is very well secured). If you keep the gold in locker which can be operated only by you, then you can not sell it when you wanted to.
You do not have to go anywhere in India to buy the gold.
Still, the best option for you is to buy Gold in USA. You are in total control and can sell it back to APMEX itself at your will. I am in Hong Kong; I never bought gold in India in last 25 years.
DO NOT trust gold with anyone except your own family, including father and mother, but not others (brothers, sisters etc.)
suma
25 Oct 09 at 10:24 AM
Respected sir,
you have earlier indicated that correction in market is a bit far off.
Whether 27th Oct. 2008 when Sensex made bottom or 9th March 2009 when most of the stocks made bottom should be considered for start of 1st phase of new bull market in order to work out expected reaction in the market?
regards
arun
mumbai, india
Kalidas Says …. Monday, October 26, 2009
Why do you go into such futile exercise. It is not going to make money. We are not in prediction game like Astrologers. I give focused view. Too generic view often misguide the investors.
When the market makes the high,no one wants to sell, and when the market falls to very low, no one wants to buy the stock. So let us not talk about the market, nifty, high or low.
Everyone wants to worship the”rising sun”
arun
25 Oct 09 at 10:10 AM
Dear Sir,
In last 2 days, both GSPL and Petronet have announced their quarterly numbers and as expected have come come out with strong numbers. Infact, GSPL has come out with a stellar performance. I have surplus of Rs.75,000 to invest and had zeroed in on Petronet LNG, but after seeing the results of GSPL, i am bit confused.
* Can you please advise me if i take one year perspective from here, say by December 2010; which stock of the two will give me a better return?
* Also in what range can i invest in them. I am willing to invest in Petronet in the range of 65 – 70 and in GSPL in the range of Rs.75 – 80.
Thanks,
Avinash Desai
Chennai, India
Kalidas Says …. Monday, October 26, 2009
Both have same business. One is more operational than other. You may buy both in the ratio you desire. I can not narrow down the selection by having threadbare analysis. My approach is “macro” not micro. You may set the target to your liking. The prospects for both stocks are so great that it is immaterial whether you buy at Rs 65 or 75.
On one year basis, may be GSPL is better. I invest mostly on 3 years horizon for value stocks. If they perform better in short run, fine, take the profit and retain cash with a view to reinvest in same counters later in correction.
Avinash Desai
25 Oct 09 at 8:47 AM
According to you, what are all the factors of the company to be considered before buying its shares?
Need your view on 3i Infotech and its future.
Anbarasu,
Madurai
Kalidas Says …. Monday, October 26, 2009
Too general question. You have to go through my articles from time to time. 3i infotech – I do not follow high tech stocks because I do not understand them. I therefore avoid that sector.
Anbarasu
25 Oct 09 at 7:40 AM
Hello Sir,
Could you please share your views on the company Austin Engineering Comapny Ltd with BSE Symbol AUSENG. The volume is picked up for this company for quite some time. P/E is 4.93 and EPS is 18.
It looking very attactive at the price range of around 88 Rupees.
Regards,
Vijay, Bangalore.
Kalidas Says …. Monday, October 26, 2009
I do not follow this stock. It is a very small company.
Its financials are not ascertainable. Some financials are available on Moneycontrol which may look attractive. They are in good growing business, but the growth in sales is not so perceptible.
I have therefore no opinion. Kindly do not ask questions about some remote companies – there are over 6000. I do not have means to study them. I go for companies having turnover of at least Rs 500 crores.
Vijay
25 Oct 09 at 4:05 AM
Sir,
LIC Housing Finance has gone up from December 2008 lows of about Rs. 160 to current CMP of about Rs. 850. Lot of us missed the bus.
GIC Housing Finance during the same period has gone up from lows of Rs. 30 to CMP Rs. 92, after touching Rs. 100. Those who are reside outside the metropolitan areas need relatively smaller amounts of housing loan. (I believe) GIC Housing Finance caters to such requirements, they have the reach, and this Market is huge. I request you give us your assessment/ recommendation on this scrip.
Suresh Krishna, Thane, India
Kalidas Says …. Monday, October 26, 2009
LICHF and GICHF are not comparable. LIC has the greatest reach right upto villages. Do not think that LCIHF has gone up 4.5 times whereas GICHF has only gone up 3 times, and that is why it is cheaper.
Stock market is a beauty pageant too. The most beautiful girl, even if she is stupid, wins the contest. So also, the popular stocks excel over others in competition.
I disagree that GICHF has huge reach. Banks are the financiers and they are out aggressively for housing finance. I had been to one of the office of GIC, and could not locate proper person after spending 15 minutes – and the office was worse than hair cutting salon.
GICHF will be underperformer compared to other commercial banks and housing finance specialists like LICHF, HDFC bank, ICICI, SBI, BOI and others.
Suresh Krishna
25 Oct 09 at 3:18 AM
Hi Kalidasjee,
ELSS stands for Equity Linked Savings Scheme – the GOI gives Tax benefits under 80C for investing in ELSS.
Ravi Sehgal, Bangalore
Kalidas Says …. Monday, October 26, 2009
I am replying all your queries over here.
1. As practice I do not trust any mutual fund, including UTI. If you have heard the story in childhood days, about Cat and Monkey, where the monkey tries to divide the piece of food. He goes on eating one bite at a time from the heavier side of the scale, and he takes a little more, so that other side of scale tilts. He again takes a bite from other side in same manner, until entire piece of food is eaten away by him.
There is not much difference between Monkey and Mutual Funds. Do not bother about ELSS or non ELSS – and never try to save on taxes on the income you earned. you have to count the Net Return. Further, if you sell the stock after 12 months, there is no tax anyway. So better manage your own funds.
If at all you want to invest into any mutual fund, do so at the time of market crash, and that too in new mutual fund (which will be rare) because only those mutual funds will be making big money.
Since your father is retired by now, and want to invest Rs 5 lakhs now, better do so slowly. In any case, banks do pay 8% for senior citizens.
Buy the following stocks: ( I am recommending mostly large cap stocks due to your investment profile – low risk)
OIL & GAS
1. Cairns India 200 shrs @ 285 = Rs 57,000
2. Essar oil 100 shrs @ 160 = Rs 16,000
3. MRPL 500 shrs @ 87 = Rs 43,500
4. RNRL 500 shrs @ 85 = Rs 42,500
BANK & FINANCE
4. UCO Bank 500 shrs @ 59 = Rs 30,000
5. IOB 200 shrs @ 134 = Rs 27,000
METAL
6. SAIL 100 shrs @ 180 = Rs 18,000
7. JSL 200 shrs @ 110 = Rs 22,000
Others:
8. Abhishek Ind 1000 shrs @ 15.50 = Rs 16,000
Total Invested: Rs 271,000
Wait for market correction and invest more in same stocks. Try to invest into those stocks which come down most.
In the short term, if you see gain on any counter by 20% or more, take the profit and retain cash. When that stock comes down, buy back with same funds.
ravi sehgal
25 Oct 09 at 1:41 AM
Dear Sir,
You gave a call on 3rd Sep to accumulate strongly for TTML at price around Rs.33/- and also your opinion was that the downside risk is at most 15% if market corrects.
Now TTML is at CMP of Rs.32/-. There has neither been substantial downside nor upside seen till now.
Now you are suggesting to swap TTML with other stocks like Abhishek and RNRL. I can see RNRL may have an opportunity of quick rise in case of favorable legal verdict, so also Abhishek may rise due to some good fundamentals.
Is this a short term opportunistic play or you feel in long run TTML may give superior returns though the movement now is slow?
This query is to understand your rationals , not to question your suggestion.
Thanks,
-Santosh,
Bangalore.
Kalidas Says …. Sunday, October 25, 2009
You must understand two things about stock markets. The market is dynamic. The situation may change on broad front as result of which some stocks or opportunities may become more attractive than other established names.
TTML was recommended long time ago. It is at same stage that Spicejet was at about 6 months ago. TTML has strong equity partner at parent company level, not at subsidiary level (TTML) which is listed entity.
TTML has been having almost 17% growth in sales, but at the same time, the competition is tough with more than proportionate rise in the selling expenses. It is reporting losses, but they are after heavy depreciation charges of Rs446 crores. In other words, the company has been having operating profit if non cash items like Deprecition is excluded.
The company is in serious need of capital infusion. It will not come back to Net Profit until it reaches the Sales revenue of Rs 750 crores per quarter or Rs 3000 crores per year, which is still long way off, considering only 17% rise in revenue per year. It will take about 3 years on Sales revenue alone, unless the hemorrhaging of profit margin shrinks – it is unlikely in near term.
TTML was cheaper at that time. With the emergence of stocks like RNRL, Abhishek Industries, Spicejet etc. there are quicker substitute than TTML – they can give faster and quantitative return than TTML. If the market corrects severely, TTML can fall back below 20s and if the company does take FPO route to raise the capital (they have negative equity), the stock price could drop further (after initial 15% rise at the most, because in India the FPO is often seen as positive when it is negative everywhere due to dilutive effect.
Further, there are simply too many shares forTTML – almost 18970 lakhs or 1.897 billion shares. If they decide to raise the capital, they may have to issue another 900 million shares minimum, that may make the share capital size almost unmanageable for such small company. There are simply too many papers (shares) in the market. TTML will have to consolidate the shares or what we call “reverse split” which may make existing 5 shares or 8 shares into one. That will reduce the paper supply, raise the value of shares to over Rs 150 to Rs 240 depending on consolidation, that will finally attract major funds. Major funds do not invest in penny stocks. Rs 33 = $0.70. Any stock below US$ 5 is considered Penny stock by the fund managers and they have unwritten code of conduct not to invest into penny stocks.
When did LICHF start rising? only after it passed the threshold of Rs 230 to 250. These are practical rules of investing, which you will never find “first in business worldwide” business channels.
If IFCI becomes cheaper at Rs 33 again in spite of host of profitable quarters, will you want me to recommend TTML where similar situation is almost 3 years away or IFCI which has already returned to profitability, dividend payment and growth?
Everything is relative in dynamic stock market. What we write here is also not ” Ten Commandments”. I do suggest situations good for 3 years or so, but if better opportunities emerge in the meanwhile, we have to do the swap. Don’t we swap home for better when we find new home more attractive than the present one?
Important Note: TTML operation is limited to Maharashtra circle alone. If the parent company decides to inject other profitable sectors into present company, the perception about the company will change overnight. It may get back its charm and people will rate it as “growth oriented”. It happened in Hong Kong for stock like China Telecom.
Santosh
25 Oct 09 at 12:00 AM
A Brief Write up on the functioning of the National Spot Exchange Ltd (NSEL) by its MD & CEO Mr. Anjani Sinha is attached, for your review.
http://www.goldconvention.in/pdf/p7.pdf
Muthu, Chennai, 25-Oct-2009
Muthu Manickam
24 Oct 09 at 9:54 PM
Dear Sir,
You have recommended Abhishek Industries to buy and your 1 yr target is Rs. 30/-. Can you please let us know what is possible downside risk, if your much anticipated market crash happens.
Thanks,
-Santosh,
Bangalore.
Kalidas Says …. Sunday, October 25, 2009
I have replied this before to another reader about the risk factor. In market crash, the blue ships loses 35% (minimum), second liners 50% and third liner 60%.
There is always downside risk. Even when you walk on right footpath, some drunkard driver may hit you with his car and cause you severe harm. There is therefore risk everywhere. Face it all the time.
In market crash, some illiequid stocks like the Abhishek suffer more due to virtually no buyers in the market place, and the stock comes down with no turnover.
This company is on recovery track. Take the risk of 30% as basic cautionary measure.
Santosh
24 Oct 09 at 12:17 PM
Sir,
You mean to say that Mr. Ekta can hold his position in NHPC and no need to expose more?
J. Ganesan
Salem, TN
Kalidas Says …. Sunday, October 25, 2009
I write simple English. it does not convey double meaning. To be specific, YES
J Ganesan
24 Oct 09 at 10:15 AM
Dear Sir,
I have purchased 100 shares of Shriram Mills Ltd.
(BSE: 503205) 2 years ago. Purchase price = Rs. 670.00, CMP – Rs. 130.00.
I have purchased the shares at the advice of my broker and learnt a lesson not to do so, again.
Recently I have received letter from Company for approval of Special Resolution pursuant to Section 81(1A) and other applicable provisions of the Companies Act, 1956 for issue of 16 millions warrants Convertible into Equity Shares of Rs. 10 each.
Most of the warrants shall be issued to related parties.
Is this a positive or negative development?
Please advice.
Narendra; Kolhapur (Maharashtra) India.
Kalidas Says …. Sunday, October 25, 2009
Before posting your query make sure that the name is correct. It makes me very angry if the reader does not take basic care. Moneycontrol ite did not return any result. The correct name or new name must be
“Shree Ram Urban Infrastructure” with same BSE Code 503205.
As a practice, I never invest into any company having God’s name somewhere inside it. The reason is that the management of such companies try to exploit reader/consumer’s psychology by using God or Goddesses name, to indicate that they are as pure as God or Goddess or Gold. The reality is stark opposite.
Coming to your point, this company changed name to Infrastructure to cash in on investor’s demand for infrastructure play. The top executives of such companies sit on toilet seat and read the newspapers, and then try to figure out which name appears most to the liking of the people. Infrastructure – okay, let us have a company with some “Infrastrucure” name into it. Telecom, let us start telecom company. Oil, let us start oil company etc etc.
This is a very very small company. At one point of time, it used to have very big name – Shriram Mills – thereafter I do not know what happened. The company used to have mill in Worli which could have very large value. However, we do not know how large. The management of this company must have eschewed most of the assets and this is why this company looks like a “shell” company.
The company has share capital of Rs 23.17 crores with Rs 10 as face value. (Share capital of Rs 230 Millions) It means that there are 23 Millions shares outstanding of Rs 10 each. If they are going to issue 16 Millions shares to related parties @ Rs 10 per share (and not existing shareholders),it means that these “Chor management” wants to engulf the entire company (When the market price is Rs 127 and it used to be over Rs 600 as you have said, how could they issue shares @ Rs 10 to present promoters and related parties?)
It appears that the company may have found some developers to redevelop the land which is a prized piece in Worli area. By issuing the shares at Rs 10 when the market price is Rs 127, they want immediate benefit of 1100%, and you are asking me, whether this is positive or negative development?
Of course, it is negative development. You must oppose the resolution and also write by Registered Post to the SEBI, NSE, BSE and Company Board objecting to such highly discriminatory resolution which has effect of handing over whole company and benefits of its assets to the management and main shareholders.
You may also write to the company board or Registrar of Companies by Registered Post asking them to liquidate the company, realize all assets and distribute the amount pro-rata to all shareholders in view of above.
And a question arise, how the hell you paid Rs 600 odd rupees when the company was not worth Rs 20? Do not blame your broker. It is easy for investors to blame broker when the things go wrong, and when the things go right, they never complement the brokers, but instead they pose themselves as smart investor.
Make it a practice to take both credit and debit for your decision. Never engage in blame game, if you really want to make big money.
Narendra
24 Oct 09 at 7:48 AM
Dear Sir,
I am reading and hearing quite a bit about over capacity in the cement sector. Also there is decrease in the cement export as well. I do not have the links to support these arguments but will look them up.
Have you come across these negative reports on cement sector?
What is your short term and long term target for ambuja cement?
Thanks,
v8r, Stockholm.
Kalidas Says …. Sunday, October 25, 2009
Infrastructures and construction activities are going solid all round. The constructions of roads, bridges, housing estates etc are all in active category.
Cement and Steel are brothers and sisters. They go together. Steel of course is a big brother, having wider application than cement. A cement plant to be viable should have minimum capacity of 5 Million Ton per year.
If steel starts contracting fast, take it as prelude in lower demand for cement. Right now, steel consumption is on upswing (may be partly due to rise in value), so will be the cement.
Almost all banks are going for Home Finance aggressively. In Hong Kong, the home mortgage finance constitute 55% of overall loans and advances. In India, this ratio is much much lower. If India has even 20% finance devoted to Home sector, there will be huge demand for concrete or Cement.
Watch the above indicators – instead of listening to those idiots analyzing based on charts and numbers. You have to have nose to smell the trend; and the Charts do not smell.
Only some time ago, a reader wrote that Gold import has come down in India and therefore demand for gold must have been less. only other day, a newspaper report emerged that Indians bought over Rs 8000 crores (US$ 1.6 billions) worth of gold on festival day alone.
The difficulty with those analysts were that they equated imports with the consumption. When the consumption is expected in November, most of the imports take place 3 months in advance, and then the activity dies down for a few months.
v8r
24 Oct 09 at 5:57 AM
Dear Kalidasjee,
I have done investment in Mutual funds ( some ELSS and some non ELSS). Some of the ELSS mutual funds ( 5 star rated by Value Research online) have given only return of 5-10 % over a period of 3 years and some non-ELSS have given return of 10-12%.
Do you this is the right time to take out the money and be in cash or should I wait for the market to rise further.
Kalidas Says …. Sunday, October 25, 2009
I have asked this question before – What is ELSS? Reply to this link and I will get back to you.
ravi sehgal
24 Oct 09 at 5:49 AM
dear sir,
will you pl let me know the contact details of nsel in hyderabad , so that i also want to buy .
B.subrahmanyam
hyderabad india
Kalidas Says …. Sunday, October 25, 2009
Such simple thing can be found out by googling your search, writing full name in the search box.
Anyway, I am providing you with two links
1. Website link of NSEL
2. More info about NSEL
b.subrahmanyam
24 Oct 09 at 3:50 AM
Recently I had a comparison done for buying Gold in Hyderabad and it turned out that the National Spot Exchange Limited (NSEL) offers the lowest price.
Following are the prices in INR inclusive of VAT (as on 31/08/2009) – of an 8g coin 999 purity – for a comparison:
Bank of Baroda – 13260
State Bank of India – 13220
Bank of India – 13450
Tanishq – 13804
Reliance Jewels – 13200
Delhi Bullion Market – 13200
National Spot Exchange – 12350
It is traded on the exchange and therefore price movements can be taken advantage of, as the prices in banks & showrooms remain constant for a particular day.
What surprised me was that the coin had the MMTC stamp & certification. I called up MMTC to learn that their price for the same 8g coin (incl of VAT) was Rs.700 more than what I got it for!
I took the coin from Karvy Commodities Broking.. and got the delivery on the same day evening from their branch. Karvy charges a brokerage of Rs.300 per coin; not aware of other members of NSEL in Hyd. NSEL has got its delivery centres at Ahemdabad & Hyderabad currently.
Product Specifications:
Available in: 8g only
Price incl of VAT
999 purity
Certified by IBMA
Approved by NSEL
Tamper proof packaging
Today’s price while I write this is INR 12700 for 8g while the future’s on MCX is INR 12745 for 8g. In my belief this is the cheapest source of genuine product (MMTC).
Regards,
Abhyasi
Hyd, India
Kalidas Says …. Saturday, October 24, 2009
excellent. You are living up to your name – Abhyasi
Abhyasi
24 Oct 09 at 2:59 AM
I would recommend Narandas Manordas at Zaveri Bazar in Mumbai. We buy gold bars from them. This shop is 200 years old and is very reputed for gold lagdis. They sell only bullion and not ornaments. They have a very good reputation for selling the highest purity of gold at a decent price. However, as Kalidasji mentioned please do compare before buying.
For selling you can get best rate from Jugraj Kantilal at Zaveri Bazar. You will see a long queue coming out of their shop. I sold some old ornaments and lagdis last year for my sisters marriage and compared with other shops to find that this shop offered the best deal.
Regards,
TheMonk, Singapore
Kalidas Says …. Saturday, October 24, 2009
Thanks for sharing info.
The Monk
23 Oct 09 at 9:10 PM
Dear Anilji,
I am a silent follower of your Blog for last few months(It was recommended by one of my Sister’s Friend). However, i couldnt make any investment as i had my sister’s marriage followed by my marriage.
I have never invested in Stock Market personally, though both my Dad and now my Husband are active investors. I have my hard earned savings of Rs. 1.5 Lakhs which i wish to invest in the market over a period of next 2-3 years and find number of stocks from your list for the same (Petronet, GSPL, UCO Bank, Abhishek, Spicejet, RPower and Maytas Infra).
1)Can you please suggest me the allocation i should make or should i just stick with 2-3 scrips?
2)Should i invest the entire 1.5 Lakhs now (say Monday) or invest in 2 lots of 75k?
Many Thanks in advance.
Sonali Bhatt
Ghatkopar, Mumbai (After Marriage Chennai, India)
Kalidas Says …. Saturday, October 24, 2009
Since you are beginner, better invest into solid companies to start with. Also my personal opinion is that the market is far ahead of its fundamentals. However, there are some bargains always.
Do not think that you will buy 1/2 now, and 1/2 later when the market corrects. When the market corrects, you will be looking at the losses on past investment, and will therefore avoid new investment even at much lower value. Read this section, and you will find hundreds of investors who bought some scrips at the height of the market, and did not have courage to buy when the stock came down to even 20% or 30% original value.
Having regard to your investment budget of Rs 150,000, I suggest not to go for more than 5 stocks at any time. Have a very strict discipline in this regard.
At the moment, you can buy the following:
Abhishek Industries – 1000@ 15.75 Value Rs 16,000 appx
UCO Bank 200@ 59 Value Rs 12,000 appx
Ambuja Cement 150 @ 91 Value Rs 13,500 appx
Total Investment = Rs 41,500 or so
Sonali Bhatt
23 Oct 09 at 12:06 PM
Hari Sharmaji
Namaste
This is Vijaya Kumar G, from Bangalore. Could you please share your mail ID. I seek your guidance and future predictions about me, as per My Haroscope.
I do not know whether my maild ID is visible or not.
If it is acceptable to you, I request Anil Sir, to provide your mail ID to me to take your advise
Thanks
Vijaya Kumar – Bangalore
Vijaya Kumar G
23 Oct 09 at 10:03 AM
Dear Sir,
what is momentum? How I find the stock is gaining momentum?
Regards,
Rajmohan babu
Congo
Kalidas Says …. Friday, October 23, 2009
Take last 30 days average volume – you can find that our from Economic Times Historical Price (Price History) for each stock. If the volume gains by 20% consistently by 2 or 3 days, there could be sizable gains ahead. When the volume doubles or trebles with rise in price, then we can say that the volume has gained momentum. Many join the rally after seeing other neighbours or friends.
There is no hard and fast formula. In blue chips the volume indicator is 10% or more, for second liners 20% or more and third liners with very low value of stocks (usually below Rs 20), the yardstick would be 30% to 50%. The momentum is the number of shares traded x value – that is, the value traded for that stock, or the money that flowed into that stock
Look at the following: Abhishek Industries Ltd. the normal volume was below 50,000 shrs. It rose to 148K on 20/10 (NSE), then fell to 86K on 22/10 (The stock usually falls for one day before making big move later) then rose 962K, nearly 18 times with rise in value to 16.20 or up 10%. It is just beginning. This is how you normally see.
Once you have made a practice of looking at the selected stock during weekend, you usually do not go wrong easily. This is why I always teach to focus on few stocks, not every stock you see moving. Are we getting into every moving train or only those that will lead us to the desired destination?
Abhishek Industries Ltd.
Open In new window
Date
Today’s Open
Today’s High
Today’s Low
Today’s Close
Volume
BSE
22/10/2009
15.00
16.20
14.60
15.70
962766
21/10/2009
15.00
15.20
14.70
14.75
52426
20/10/2009
15.00
15.70
14.95
15.00
102951
17/10/2009
15.30
15.75
14.75
15.25
19752
16/10/2009
14.80
15.20
14.80
14.90
48522
NSE
22/10/2009
14.90
16.30
14.90
15.70
905185
21/10/2009
15.00
15.25
14.70
14.80
86764
20/10/2009
15.45
15.80
14.90
14.95
148406
17/10/2009
15.00
15.40
15.00
15.20
37805
16/10/2009
14.70
15.15
14.70
14.90
51937
Rajmohan babu
23 Oct 09 at 6:25 AM
Dear Anil,
I have bought Gold for 1000 pounds for this month (total Gold Investment 2100 Pounds).
For Silver Gold Money is charging 4.24% fee is that fine to pay 4.24% and buy Silver.
Please advice.
Regards
Selvan. UK
Kalidas Says …. Friday, October 23, 2009
Yes, it is normal
Selvan
23 Oct 09 at 4:17 AM
Dear Anil Ji,
Thanks for giving all readers time amidst your busy schedule.
I want to buy gold ( for Investment purposes) in Mumbai . How do i buy it, can you suggest some dealer who can give with guarantee on purity. It will be my first investment after reading your articles.
thanks in advance
Kumar Sharma
Mumbai, India
Kalidas Says …. Friday, October 23, 2009
Depends where in Mumbai you live. You may try big jewellers like Tribhovan Bhimji – but insist on Gold Bar or lagdi (what they call) with 990 or 999 purity. Buy against bill only even if you have to pay 2% VAT.
Check the rate from them. Use the following formula:
[(International Price + 2% Import duty) x Rupees Exchange rate x 10) divided by 31.10 = Basic Price of Gold per 10 grams in Indian Rupee for 0.999 purity.
The jeweller may add x% (2% to 3%) towards his margin. That will be your Net Price of Gold. The unknown factor is X which is dealer’s margin. It may be a normal trading practice in Mumbai – which you can check by visiting a few shops before actually buying.
For instance, the price based on International Price of Gold at the time of this writing is as under:
US$ 1060 + $21.2 (Import duty) = US$ 1081.20 Imported Gold price
x Rupee Rate of 46.50 = Rs 50,275.80 per Troy Ounce (= 31.10 grams)
Now, Price per 10 gram = Rs 50,275.80 x 10/31.10 = Rs 16,165.85 per 10 grams
Add Dealer’s profit margin x%
Your cost will be Rs 16,165.85 + (16,165.85×3% say)
= Rs 16,165.85 + 484.97 (Dealer’s Margin @ 3%) = Rs 16,650.82
There are some variables like Exchange Rate (where I have taken Interbank rate, whereas Customer rate will be inferior by 0.5% max), and Dealer’s margin.
NOTE: If you take the bill, you have to pay Value Added Tax @ 2% or so on top of above. You should take the bill and pay the VAT to protect yourself against any cheating. Also make sure that the gold bar bears the purity stamp of 0.9999 or 0.990/ DO NOT buy if the purity is not mentioned. Have the purity mentioned on the bill also.
This is only indicative. Before you buy, understand the rate, formula and have it cross checked (even I can make mistake) before settling down on actual purchase.
DO NOT pay any labour charges per gram. Do not buy Swiss Bank’s certified gold bar which may be expensive by another 10%. Use locally made row bar from such reputed shops.
Kumar Sharma
23 Oct 09 at 4:12 AM
Sir,
I am waiting for your target for particularly on ABHISHEK industries.
- Ramesh, Mumbai, India
Kalidas Says …. Friday, October 23, 2009
Abhishek Industries – Kalidas View:
Target 30, 60, 90 (One year, two years, three years)
Ramesh
23 Oct 09 at 4:05 AM
Hello Sir,
Please give me advise on the above shares, I am confused if I should hold them or i sell them and switch to other shares.
Thanking you in advance.
Regards,
Brawny M
Pune, India
Kalidas Says …. Friday, October 23, 2009
Your stocks are not followed by me on regular basis. Give me a day or two
Brawny M
23 Oct 09 at 3:18 AM
Dear Kalidas ji,
This information about HDFC warrants can be useful :
HDFC raises Rs 4.3k cr in warrants, NCDs
BS Reporter / Mumbai August 21, 2009, 0:40 IST
- HDFC advances on Rs 4,000cr QIB issue
- HDFC: Cashing in at the right time
- HDFC to raise over Rs 4,000 crore through QIBs
Housing Development Finance Corporation (HDFC) on Thursday announced that it had simultaneously issued warrants of Rs 301 crore and non-convertible debentures (NCDs) worth Rs 4,000 crore through the qualified institutional placement (QIP) route.
The 10.95 million warrants, priced at Rs 275 each, entitle the holder to convert each of them into a single equity share of the corporation within three years from the date of allotment at an exercise price of Rs 3,000 a share.
So, if a holder decides to convert his warrant into equity, the total amount paid per share would work out to Rs 3,275, a premium of 46 per cent to the closing price on August 17 — the date of the launch.
In a statement, the company said the maximum dilution that could take place if all the warrants were swapped for equity shares would be up to 3.5 per cent of the expanded equity share capital of HDFC.
The company has also issued NCDs worth Rs 4,000 crore. Out of the total Rs 4,000 crore, Rs 2,000 crore was raised through zero coupon NCDs with a maturity of two years an annualised yield of 7.15 per cent.
The remaining amount was raised through NCDs with a maturity period of three years, having an annualised yield of 7.85 per cent.
“The composite cost of funds to the corporation as a result of the simultaneous issue of warrants and NCDs will be 4.25 per cent per annum,” HDFC said in a statement. The NCDs and warrants will be issued only to domestic qualified institutional buyers (QIBs) and will be listed on the Bombay Stock Exchange (BSE) and National Stock Exchange (NSE).
The lead managers for the warrants were Citigroup Global Markets, Goldman Sachs, JM Financial, Kotak Mahindra Capital and Nomura.
The lead managers for the NCDs were Axis Bank, Citigroup Global Markets, HSBC, JM Financial and Kotak Mahindra Capital.
Kalidas Says …. Friday, October 23, 2009
Not so attractive. The warrants were issued to cover the issue related expenses of about 4.5% as mentioned in the prospectus.
While the Housing Finance sector is very attractive, it may be noted that almost all banks are foraying into this segment, posing stiff competition to HDFC, who used to have monopoly a few years back. Further, LIC Housing Finance is posing very serious threat to the HDFC. The HDFC has access only to debt like funds above which comes at hefty cost of 7.85% exclusive of expenses. If they raise the money at 7.85% plus, and if the interest rates go down, where do they stand? They are bound to lose money by at least 2.5% over the period which may amount to Rs 100 crores per year from second year onwards.
The conversion price is foolishly set at Rs 3000 which is at about 20% premium not 46% as you have said. When the stock is already trading at higher P/E multiples of 31.7 on existing earning structure, and much higher P/E at higher cost (lower profit or EPS) structure, HDFC warrant holders will be losing entire amount by then.
LICHF is trading at half the P/E multiple of 14.7 as compared to HDFC, and that too, with much brighter earning prospects. In fact those who are holding HDFC stock should instantly sell it and swap it into LICHF. A time will come when both stocks will shake hands in the middle of price range – that is – LICHF will rise and HDFC will fall.
Not a good proposal. HDFC is going to set itself on declining trend. Those who buy warrants now, may make money in short run, but when the reality sets in, they will lose entire 100% of their capital.
I would not touch this issue. It is hopeless.
amar, jaipur
23 Oct 09 at 2:44 AM
dear sir, should diamonds allso be converted into gold? i hv heard people say that there r too many diamonds in the world.
Kalidas Says …. Friday, October 23, 2009
Post your message with care.
Reminder: Spell check your message, before you post.This is very important. Also ensure that the words are properly capitalized. We want clean inquiries which do not tax the readers.
Diamonds : Kalidas View:
Anything that comes out of ground is limited in numbers. It takes hundreds of years to convert a mineral, coal or other deposits into diamond. Do not believe stories that there are too many diamonds in the world. When FED is printing trillions of dollars in printing press, why don’t same people say that there are too many dollars or other currencies in the world. They can be printed at the flick of the switch.
I do not understand diamond that easily. When you can not value any asset easily, it is not worth for investment. Yes, for diamond traders, it is easy, because it is his profession. But as layman, I never understand, and in fact, try to sell out entire chain of diamonds by converting into silver or some agriculture land (that is my hobby).
We know the value of the gold easily. If you are wearing a gold chain, you will have rough idea how much it is worth. Can you say that about diamond?
In recession like the one we are witnessing today, the value of gold, silver, palladium and platinum will rise at the cost of diamond. I would personally switch, but again, diamond is such a status symbol, that ladies often buy it to show off their social status.
Decide yourself what do you want to do – to show off yourself in society or you want real investment product easily saleable without much room for cheating. Answer will be self evident.
anupama
22 Oct 09 at 9:12 PM
Dear Readers,
I have found a plug in which permits a reader to append or reply to existing comments. All comments relating to main comments will be nested.
There will be reply button at the end of each comment. Press it to reply. Your comment will be appended to that comment.
It may help other readers to communicate or present their views on their preferred comment.
There is another plug in that permits not only permits threading, but also serializes the comments number and assigns sub number within that comment. However, it did not work well for me. I am trying to contact the author to get it working. (for instance, a comment appears under serial number 251. Any reply to this comment will appear as 251.1, 251.2 etc, so that any other reader quote that number while posting their comment. I am trying this out and will let you know later.
Please reply to this feature on Suggestion Box.
Anil Selarka, Author (Kalidas)
23/10/2009, Hong Kong
Anil Selarka
22 Oct 09 at 8:02 PM
Dear Anilji,
Namaskar
If you feel like, I,m waiting for your time of birth and place, possibility of this blog to greater heights to be established / explored as you had written. Again, Please,if you donot wish to give the details, No issue please. Just to mention humbly that I am a 5th generation Astrologer, though professionally works as GM with a 3.5 Billiion Company. regards
Hari Sharma
Kalidas Says …. Friday, October 23, 2009
I am interested. I will send you details tonight by email.
Hari Sharma
22 Oct 09 at 7:55 PM
ITI Ltd is loss making (nearly 3000 crores) GOI controlled company. CMP Rs 42.00 Equity Rs 288 crores. Public share Holding 7.02%
Two or three months back, revenue secretary issued statement that all losses should wiped at one go, but he did not divulge the way. May it be bugetary support or disinvestment or land sale.
Long time back, I had invested 300 @ Rs 85. 200 @ Rs 40.55 and 200 @ 41.55.
Will this share zoom to three or four times when all losses wiped out?
What is your opinion about a heavy loss making company (quoting @ Rs 42 now) share prices will fly after the company falls in the zone of no profit no loss? May I accumulate more shares?
http://www.itiltd-india.com/upload/newsevents.html
link is for perusal and detailed reply. Thanks in advance.
Mathi, Madurai, India
Kalidas Says …. Friday, October 23, 2009
Yes, you are right. If I know Government of India (GOI) very well, they will fund the losses by outright grants without even taking equity stake.
They did it before in case of SAIL when GOI lent Rs 8000 crores (80,000 Mln) when the stock was at Rs 5. Had the GOI taken equity even at par, it would have got 8000 Mln shares, that at today’s prices would have been valued at Rs 1,480,000 crores. That could have wiped off the entire budget deficit for over 20 years and allowed it to reduce Income Tax rate from 30% now to less than 18% . But then, GOI does not have Kalidas as its financial adviser.
I used to invest into this company long time before. It is old generation Telephone company. With Mobile technology booming, the chances of its succeeding in fixed line business is less – look at what is happening to fixed line operator stocks like MTNL and BSNL.
Whether the share could double or treble depends on how GOI funds the losses – by outright grant as done in the past or by extending debt line at lower rate of interest. It is a difficult to anticipate the psychology of the GOI at this stage.
Investing at this stage below Rs 50 for you does make sense. The PSU are generally big winners over long term basis. Buy more if you want to sit over it like a hen hatching the egg, expecting chicken some time later. It is low risk better return investment at this stage but the time period is uncertain.
Mathi
22 Oct 09 at 11:52 AM
For Sruthi,
You refer interpretation of financial statements by Benjamin graham. This is the link of this e-book
http://www.scribd.com/doc/6583153/Benjamin-Graham-the-Interpretation-of-Financial-Statements
Regards,
Rajmohan babu
Congo
Rajmohan babu
22 Oct 09 at 11:09 AM
Dear Sir,
Can you give some clues on strength of balance sheet of companies for investment opportunities and risk zones before buying shares. I will be thankful if you could suggest some books/references on gaining knowledge in this area.
Thanks in advance.
Sruthi
Bangalore.
Kalidas Says …. Friday, October 23, 2009
Sorry to disappoint you. I never studied any books because I was my self a banker, cost accountant and lawyer. My knowledge is practical.
There are several books around. Pick up some basic books. Ask any student of B.Com or Chartered Accountants to show you some elementary books on balance sheets, cash flow and P/L. That might help you. Otherwise, Internet is the best medium to search specific topics.
Sruthi
22 Oct 09 at 9:19 AM
Sir, I have 2000 NHPC@ 36(cmp 33). Shall I jump from this tortoise or in long term it may beat other rabbits too? If yes, shall I increase my investment in this counter?
Ekta, orai
Kalidas Says …. Friday, October 23, 2009
Yes, you may. No need to increase investment on this counter.
ekta
22 Oct 09 at 8:55 AM
Kalidasji,
My questions are as follows:-
1) If correction is far away for the time being, why don’t we jump into the market and enjoy the rally? If yes, please suggest some scripts for 10-25% return in 1 month.
2) I was sitting 100% cash till diwali, but now I had invested 20% in petronet@76 and uco bank@60. Both are unfavorable for short term. Shall I increase more after each 10% correction?
Sunny Singh, Bhopal
Kalidas Says …. Friday, October 23, 2009
When the people look at the rally on daily basis, he feels the same way.
A farmer does not look at the sky unless it is monsoon season. A smart investor always wait, does not matter how long, for outstanding opportunities.
Play short term at your risk.
Rejoinder:
You may buy Abhishek Industries which is gaining momentum. Another stock that has just begun the upward journey is GV Films (no fundamentals – just ride the train and get out while the train is still in motion). My partner bought GVF 50,000 @ 1.94 two days ago at my instance (and another reader who came on line – he bought at 2.10)
Please note that if nothing happens to the market in next 10 days, above stocks should get you decent return on short run.
UCO Bank – Kalidas View: You may buy more below Rs 60. If you want to trade, place the limit order at 53.35
Petronet – Kalidas View: It can rise at any time. t is one of the best investment stocks. Sometime, good stocks do not attract traders, so wait until its volume rises by 20% to 30% – that would be the moment of entry. However, make sure that the stock rises with the higher volume. If the stock falls with higher volume, then avoid it.
sunny singh
22 Oct 09 at 8:49 AM
Dear Sir,
I got news from many brokers that SAIL would touch 250 in a month’s time. The reasons behind it were increasing metal prices and disinvestment decision by government.
Shall I take some short term position in this stock? I don’t expect much correction in this counter even in severe correction also. Is it a safe bet?
Sunny Singh, Bhopal
Kalidas Says …. Friday, October 23, 2009
I do not suggest Short Term position based on scattered reports. Please do not ask me such questions again. SAIL is relatively safe bet today. but please understand, we are at top end of the market. Any major stock could crash by 30% in bad market.
sunny singh
22 Oct 09 at 8:36 AM
Respected sir, I want to invest 50k in UCO bank. Would it fall to rs.50 or so in recent correction so that I could take my position? I had already bought 500@60. Actually I want to make some trading along with long term hold.
Would it be correct or not?
Kanhaiya, Lucknow
Kalidas Says …. Friday, October 23, 2009
You have come to a wrong place. If you want to do trading, there are hundreds of stocks, do not ask me. I am not good at it.
My target for UCO is Rs 250 in 2 to 3 years – whether you pay 50 or 60 make no difference. It is your decision.
kanhaiya
22 Oct 09 at 8:29 AM
Dear Sir, we had bought abhishek industries today at 16/-. Please tell whether it is a short term play or a long term hold? Shall we buy more? What’s Your expected targets for the same?
Ekta, orai
Kalidas Says …. Friday, October 23, 2009
My all suggestions are long term. Play short term at your risk. I expect this stock to be super performer. It can give 300% return in 3 years
ekta
22 Oct 09 at 8:23 AM
Dear Anil Ji
This in continuation of my query on RNRL and your advice from time to time.
Contrary to what was apprehended about the role of the Hon’ble Supreme Court, today’s development indicates that the Hon’ble Court has started touching those sensitive issues being circumvented by RIL and it appears evident that RNRL is inching towards the favourable decision.
With this, we request you to please keep a watch on the day today development and possibly give your valuable opinion till 17th November 2009 (the last day of hearing I believe). This will benefit a large community of your readers having investment in RNRL.
Meanwhile, please give your opinion for the investment oppotunity in Deep Industries having CMP 129 (the highest price touched Rs. 250/- around in Jan 2008).
In one of your mails you promised to send me the article ‘Rebalancing the portfolio in depressed markets with excel sheets). I am eagerly looking at that, please.
Thanks for your valuable time.
Best Regards
Kamlesh
Kalidas Says …. Thursday, October 22, 2009
I must tell you at the outset that I do not know the latest developments on RNRL-RIL dispute. One reader mentioned that Supreme Court directed the parties to resolve the matter out of court, and based on that statement I advised the reader. Now I find that the facts are totally different.
I have comprehensively covered RNRL issue in the past. On its own, RNRL has every reason to win the case (I am a lawyer too). On that premise, I advised the readers to take the position. I also took some position (very smallby my standard)
If the Supreme Court is going to decide the matter after one month, my advise to sell the stock now has to be ignored. I advise all readers to inform me factual position by quoting the link. I made this mistake once, and I do not want to make it again. If the dispute is still pending, RNRL must be HOLD and should not be sold.
I do not know about the other stock. (Deep Industries) As I mentioned before, I usually do not go for the little known or small companies who do not have Sales Revenue of Rs 500 crores or less. I therefore can not give opinion on other unknown stocks. I follow at the most 200 stocks – and there are over 6000 stocks in the market place. I can not nor do I want to study all those stocks.
The article is mailed to you separately by email today.
Kamlesh
22 Oct 09 at 8:15 AM
Based on the following parameters, please advise how do we take a decision on buying/selling a stock:
- Sales
- Net Profit
- Share Cap
- Market Cap
- Book Value
Alternatively, if you have any other parameters in mind, please enlighten us with your wealth of knowledge.
Anup Maheshwari, New Jersey, USA, 22 Oct 2009
Kalidas Says …. Friday, October 23, 2009
Stock market gives return on stocks having growth and profit. This is why Sales an Net Profit play important part. Read my article – Rebalancing Portfolio in Depressed Market” that applies to even new investment.
My theory is – If the company sell its products more, it will make money one day, even if it is losing on short term, provided the company has manageable debt. This is why I touch upon larger companies having good sale volume. The reason for picking up Spicejet was same – I saw volume rising and break even point coming close. It worked. I used the same principle in case of IFCI, and of late in Abhishek Industries.
Share cap – I could not understand your query
Market Cap – It is important in two ways –
Many fund managers measure their performance with reference to MSCI Index (Morgan Stanley Capital Index). Morgan Stanley includes only those stocks that are widely held, often over 40%. This is why they do not include the stocks like MRPL which is 87% held by ONGC. Once ONGC pares its stake to less than 60%, MRPL could fly. The reason for SOE (State Owned Enterprises) oil refiners to remain weak is due to their non inclusion in MSCI index, because of GOI holding over 70%. In short, widely held stocks enhances the liquidity that cause rise in prices. All fundamentals remain same – it is just the practice.
Also, you have to watch the stocks that could become part of index due to rise in value and some existing Index stocks losing its status. For instance, I predicted many years ago when ONGC was at Rs 94 t 138 that it will become king of the Indian stock market, and that it will become part of BSE/NSE index. It worked massively.
Market Cap is nothing but the Number of shares x Current Market Price of the stock. The stock value rises or falls depending on the market and also above factors.
Book Value: it used to be major factor about 20 years ago – now no more. Nowadays, the emphasis is only on Earning Power of the stock, not the book value or Asset Base. Yes, it does play important role in tightly controlled Government owned companies having over 60 years of existence, because they have Fixed Assets valued at say 10 paise or cents per square foot whereas current market value could be 1000 times. The book value works when the government policy changes. For instance, many textile mills in Mumbai got massive boost to their share prices because Maharashtra Government agreed to permit redevelopment of prime land assets that were valued at Rs 1/sft and now valued at Rs 10,000/sft
Anup
22 Oct 09 at 8:14 AM
Dear Kalidas-ji
I had posted the below post on Oct 20, request you give your view on the same.
“I have Reliance Communications shares
RCOM:500@450 CMP:231
I would like to know your views on whether:
1)Should I hold these shares (If so how long)
2)Buy more of RCOM to average it out
3)Sell them and swtich to other shares(If so could you suggest which one to buy)
”
Thanks,
Naveen – Bangalore
Kalidas Says …. Thursday, October 22, 2009
I had posted the reply, but somehow disappeared at that time.
This is the stock which has to double just to recover your investment. If you try to average down your cost, it will require substantial fresh investment. I do not know your financial affairs, so unable to suggest. Normally, when the stock halves, we buy 2 times just to average down, if it is a good company.
If I ask you to sell, you will have to book substantial losses – almost Rs 1.15 lakh. Can you take it? Why did not you buy more when the stock dropped to less than Rs 150 at one time?
You have to find a situation where the stock has prospect of trebling or quadrupling, so that your losses are not only recovered, but also make money for waiting for so long.
At the moment, I could see that happening only in UCO, DENA, IOB in safe stocks, or Abhishek Industries (which may not sound as good quality as RCOM). My suggestion is as under:
SELL RCOM 300 @235 – you get Rs 70,000 or so
BUY Abhishek Ind 5000@16 or so = you spend Rs 80,000
If RCOM falls later, and Abhishek goes higher, you can sell Abhishek and resume your position in RCOM at that state.
You have to study my article “Rebalancing Portfolio in Depressed Market”, where all answer lies. I find increasingly difficult to provide solution all the time which is already detailed. I want my readers to beomce independent in conducting their financial affairs, instead of depending too much on me for specific guidance.
Naveen
22 Oct 09 at 7:43 AM
On 20th you advised Priya to Buy RNRL @89
On 22nd you advised Rang-Jama to sell RNRL @85
Reason?
Abhimanyu
Mumbai
Kalidas Says …. Thursday, October 22, 2009
You are right. If you were following this column, you would have known that Supreme Court has decided not to decide the dispute, and instead remanded back to the brothers for out of court settlements.
My suggestions to Rang-Jama was based on the position he had and his cost. Since his loss was nominal, and quantity small, I had suggested swap.
My original recommendations on RNRL stands, but the stock will continue to underperform because the case has remained undecided, and the limbo remains. In short term, it may underperform. A swap into other stocks on short term basis will resolve this problem. Further, the market is also softening. The weaker stocks show more losses in weak markets. RNRL now has its own short term weakness and the broader market weakness too.
Unless the dispute is resolved, it is better to have small position in the stock, not large ones. The downside however is not great because the stock has not risen for over 2 months. As such, its downside is limited (not over 15% at the most).
Abhimanyu
22 Oct 09 at 6:32 AM
Hello sir,
My best wishes for Diwali (belated) and new year ahead.
Please advise on my investment in following
Gitanjali Gems 500@ 125 CMP 124
Indowind Energy 600 @45 CMP 41
Electrosteel casting 600 @44 CMP 43
I have started following you from last few month and have benefited from it(holding UCO Bank and Abhishek)
Thanking you.
Regard,
Brawny M, Pune
Brawny M
22 Oct 09 at 5:47 AM
Kalidas Ji,
Belated Diwali Wishes……May you live a healthy and prosperous life……
I wanted your vies about htis stock named Micro Technologies……..seems to be a good stock on financial parameters……strong RoE, Roce, low Debt, 3xPE etc…..
Could you please cpmment on the above stock????
Kalidas Says …. Thursday, October 22, 2009
There are hundreds of stocks out there like the one you mentioned. I usually go for companies having dependable history and large volume base (usually over Rs 500 crore, preferably Rs 1000 crores)
Financial parameters are academic for small companies. Those companies know pretty well that small investors would look at those parameters, so they tailor make it many times.
When a company has sales volume of Rs 500 to 1000 crores, we can safely guess that those companies are publicly well known in business circles. It is difficult to make up many parameters rosy in relatively large companies.
That does not mean that smaller companies are not good – they are – but I would buy them when they have attained strength on their own in their line of business.
Suyog
22 Oct 09 at 4:51 AM
Dear Kalidas,
Market is dropping and I am holding the following
RNRL 500 Nos @ 86 CMP – 85
Kalidas View: Switch to MRPL or just sell
RCOM 400 Nos @ 233 CMP – 232
Kalidas View: Hold
DCB 1000 Nos @ 42.2 CMP – 39.7
Kalidas View: Take the loss on 500 and buy more of Abhishek Industries from same proceeds (you can buy 1000 more)
Abhishek Inds 1000 Nos @ 15.2 CMP – 15.5
Kalidas View: Buy more
Suzlon 600 Nos @ 92 CMP – 85
Kalidas View: No view
Satyam 300 Nos @ 86 CMP – 112.7
Kalidas View: Rising, Hold. your cost is too low to suffer major damage.
Petronet 500 Nos @ 74 CMP – 73
Kalidas View: Hold for long term. No short term play. Do not look at it
Should we buy to average out or sell anything?
Rang Jama
Bangalore – India
Kalidas Says …. Thursday, October 22, 2009
It is always difficult to make a trading call. My suggestions are usually based on the presumption that the investor will make at least 50% in short term and 300% to 400% on 3 years horizon. One should not buy long term stocks like Petronet based on short term perspective.
I do not like to give portfolio advice to every investor. I do not follow all the stocks they owned. However, use my suggestion as guide under each stock line.
Rang-Jama
22 Oct 09 at 3:25 AM
Hi Kalidasji,
You have advised to buy Ashok Leyland long back. I have 1000 bought at 27/Share.
Please advice me, is it the right time to book profit.
Thanks,
Sreenivasa
Bangalore
Kalidas Says …. Thursday, October 22, 2009
Not yet. It is about to go higher. Wait for expected rally in a few days. Sell into that rally. 47 to 53 sale value
Sreenivasa
22 Oct 09 at 1:21 AM
Dear Kalidasji,
Here is some pointers to a web article.
Will India Unload a Massive Quantity of Gold and Silver on the Markets? – http://www.safehaven.com/article-9540.htm. It is year old but still relevant. Do you agree with the writer that even at $5000/Ounce Indian will not be net exporter of Gold?
I am curious about a ballpark figure on how much Gold reserves India has (privately held and not RBI’s). I believe it would be easily cross 8k tons. What is your guess or hard figures ?
Came across one more Goldbug “Max Keiser” he calls for Paulson, Geithner, Bernanke, Goldman Exec to be tried in Haig for financial terr****m – http://maxkeiser.com/category/max-keiser-videos/.
If your research (US holding less than 8K tons) is correct and assimilated in the world then, as predicted by you Rs 30-40K/10 gm which would be very modest. There are outrageous predictions by Peter Schiff and Max Keiser $5000/Ounce (this is without knowing your research/book) may be a reality.
You also asked me some question including why I am not buying Gold thru Apmex ? Is it possible to send a mail to your id directly? If yes, then please point me in right direction.
Regards,
Dongre, NY
Dongre
21 Oct 09 at 8:20 PM
Dear Sir,
Hope the D-Day would begin from tomorrow!!! As you had long time back stated that Moody would down grade the Indian stocks which would force the US funds to pull out of India, just now on Bloomberg UTV there is a flash news that Moody has down graded 13 Indian Banks including SBI, ICICI, HDFC, PNB, OBC, Canara Bank etc,
Will this trigger a fall in all the bank stocks tomorrow ? little confused whether I got the news correctly…. Could you advise on this please!!!
Muthu Saravanan, Chennai, 21.10.09 11.15 p,m
Kalidas Says …. Thursday, October 22, 2009
Downgrading a few banks is not enough. In fact, both Moody and S&P have lost credibility.
If they downgrade India below Investment Grade (below BBB), then only there could be selling by some pension funds.
I have always maintained that Moody is always “moody” and Standard & Poor always have “Poor Standard” in their assessment. Their name conveys all.
Do not worry. Let them get out – where will they put funds into?
Muthu Saravanan
21 Oct 09 at 11:49 AM
Dear Anilji,
Thank You for the response. As usual, i shall keep an eye on the column and wait for the apt opportunity with patience..
Its really comforting to know that you are so worried for small investors likes us and dont want us to act in haste. Very rarely we see people with these characteristics in todays World.
I thank God for the day i first came in contact with you / your website. God bless you and all the followers of this Blog.
Thanks & Regards,
Avinash Desai
Chennai, India
Avinash Desai
21 Oct 09 at 10:25 AM
Sir,
i am grateful for your advice on Hindustan Copper( BSE code:513599) on 12.10.09 and holding the same.My cost is 225, CMP 255.50, Quantity 100. It is going up since last 2 days. Kindly advise target price for next 1-2 months.
regards
arun
Mumbai, India
Kalidas Says …. Thursday, October 22, 2009
It is a medium term play. Also subject to lot of take over rumours, main contestant being Sterlite group (my guess only). Do not even look at it until it reaches Rs 357. I can not give you “ball by ball” commentary on each stock. Above is the target.
arun
21 Oct 09 at 10:23 AM
Dear Sir,
I have some some of your recommended stocks in my portfolio.
As you are seeing a correction ahead in year 2009 soon, should I sell all these and book profit/loss and buy back when market corrects.
Or you see some stocks has the potential to rise in short term and better to hold for a while
Avon corp – 2400@8.87, CMP 10.52, 18% (profit)
Hold it for a while
GAIL – 78@327, CMP 381, 16%(Profit)
Take profit at about 387 or so
Hotel Leela – 650@32.85, CMP 39.15 , 19%(profit)
Just sell
Spicejet – 1110@23.7, CMP 39.60, 67%(profit)
Sell for the time being
TCS – 70@478, CMP 632, 32%(profit)
Sell and book profit
Glenmark Pharma – 40@311, CMP 240, 23%(loss)
Don’t know much about thic company. Make your own decision
Thank you,
-Santosh, Banglore
Kalidas Says …. Wednesday, October 21, 2009
My anticipated correction may be far off for the time being. However, my suggestions are found below each stockline.
Santosh
21 Oct 09 at 7:38 AM
I would like to know about SRF Limited. (Fundamentals, Technicals, Future growth and your opinion about the company)
M. Anbarasu
Madurai.
Kalidas Says …. Wednesday, October 21, 2009
I do not follow this company. I will comment later on after seeing their financial and historical records.
M Anbarasu
21 Oct 09 at 7:23 AM
Dear Anil Ji
You have been kind enough to guide the mass on various shares including RNRL.
While I have been following the guidelines given by you in the past to divest half of the portfolio, I still hold a reasonable quantity of RNRL shares.
In light of the today’s suggestion by The Honourable Supreme Court to both the brothers to resort to arbitration route, kindly give us your considered opinion as to what will be the future course of action for investors like us. Please also let us know whether the suggestion (if implemented) is going to be a favourable situation for RNRL as the ‘Arbitrator’ shall be a single persona entity and whether there still exists a chance to go for appeal if the decision given by the Arbitrator is not acceptable to any of them.
In fact, it is surprized to see that The Honourable Supreme Court is also trying to pass on the buck though there exists none higher than it in India.
Please spare a few minutes in replying this as early as possible.
With warm Regards
Kamlesh
Kalidas Says …. Wednesday, October 21, 2009
It is the practice of every court to ask both parties to settle the matter out of court as first choice. However, in advance situation like this, the Supreme Court tarnished its image by not deciding. When someone comes before the court, it is the fundamental responsibility of the concerned court to decide the matter, not to wrap it under the carpet. It was really horrible.
If Arbitration does not work out, the Supreme Court will have no choice but to decide the matter on merit. It may be long drawn process, but mostly in favour of RNRL.
The clear decision from the SC would have helped the stock of RNRL. The present indecision will negatively impact the RNRL marginally, and the appreciation may not be as great as expected. In any case, such neutral decision may help MDAG group more because they may treat it as no direction of the court to abide by the agreement.
I have not seen the judgement or decision. I would look at it tomorrow and let the readers know. At the moment, RNRL price may not jump as much as expected. So any rally should be taken as opportunity to reduce the position for the time being. However, do not get out completely. It is still a cheaper stock to own.
Kamlesh
21 Oct 09 at 6:17 AM
Dear Anil,
I have bought gold for 1100 pounds thru Gold money at the rate of around 1080(Including 2.74% commission) and now I have 5000 Pounds ideal money and which I don’t require till Nov 2010.
Can I make additional gold purchase with this money? If yes, do I need to purchase in regular interval (1000 Pounds each month) or buy gold for all 5000 pounds now?
Confused, Please clear my mind.
Selvan. UK
Kalidas Says …. Wednesday, October 21, 2009
You can either buy Gold or Silver. Silver will rise faster than gold, but it is equally volatile. You have to have stomach to digest silver.
The real rise in gold prices are a few months away. It makes sense to buy @ GBP 1000 per month. Since sterling is rising, you tend to get more gold, although the appreciation in terms of GBP may not be as good as USD. However, British banks are still in as worse situation as US counterparts. Buy therefore @ GBP 1000 per month until Mid December only, and then stop.
Only today, BOE governor Mr. Melvyn King stated in BBC interview that there is nothing like “too big to fail”. These banks can not expect them to be bailed out by the governments all the time. It suggests that there will no more attempt to save the banks in future. We are therefore approaching D-Day earlier than we think.
Selvan
21 Oct 09 at 2:21 AM
Dear Sir,
Wish you a Propersous New Year
Would like your View on INDOTECH
INDOTECH – Market Cap 333.47 | * EPS (TTM) 27.19 | * P/E 11.55 | * P/C 10.17
* Book Value 137.81 | * Price/Book 2.28 | Div 124.00 | Div Yield 3.95
Market Lot 1.00 | Face Value 10.00 | Industry P/E 25.49
Thanks
Varsheet Jain
Mumbai
Kalidas Says …. Wednesday, October 21, 2009
Relatively cheap stock (compared to peers) but nothing very exciting. Not much growth is seen. Not much Capital work in progress, that suggests that nothing much on horizon except repeat demand or routine performance. This stock is infrastructure play, so it has that sex appeal.
Trading at 3 times the book value is something I do not like for a manufacturing company. Also relatively a small company that can not guarantee massive volume growth. It is run of the mill stock, although it is on buy list of some brokers.
I think we have better alternatives than this company. Do you own this stock- if not I would appreciate if you would avoid such query.
Varsheet
21 Oct 09 at 12:00 AM
Dear Anilji,
I am still awaiting your response on my query posted to you twice this month, but am afraid it has missed your attention both the times.
Posting it again and eagerly awaiting your response.
“As we are eagerly awaiting your next list of stock recommendations on the auspicious occasion of Diwali, i cant resist to get your opinion on the recent bullishness in the equity markets worldwide. The so called correction continues to elude all of us. Its getting beyonds one’s imagination that what happened last year (the fall to 2700 Nifty levels) was overdone or the rise this year (upto 5100 Nifty now)is overdone? I would like to know your perspective on this? Whats the downside risk from here to our Markets if one decides to invest in this new Samvat?”
Regards,
Avinash Desai
Chennai, India
Kalidas Says …. Wednesday, October 21, 2009
It has not missed my attention. My view is well known. When I am convinced that the present climate of investment is fraught with risk of over 40% downside for blue chips and 70% to second tier/third tier stocks, I do not give out list of stock recommendations. Yes, I do deal with the specific situations which I mention it all the time.
I have often found that many follow my words diligently, and would not have patience once I give out some recommendations. It cautions me not to make those readers vulnerable to the downside.
It is tempting to invest, especially after seeing NIFTY at 2700, and now hovering over 5100. The whole world says that the recession has ended, there will be jobless recovery, and that growth is reruning . My view is totally opposite, so I am keeping a low profile.
I will deal with some specific situations nevertheless. Watch this column.or the stock column
Avinash Desai
20 Oct 09 at 11:26 PM
Hello Sir,
..
First of all a very Happy Diwali and a Prosperous New Year to you and your family
What are your views on entertainment sector. How long do you think this sector will take to come up again? Do we need to wait till the next budget where Govt. brings entertainment in its radar?
I have Adlabs in my portfolio –
100@450 Rs. with CMP: 358.35
Should I stay invested? If yes, for how long?
Along with the stock, it will be great if you can express your views on the sector as well.
Regards,
Sumit Gupta
Kolkata
India
Kalidas Says …. Wednesday, October 21, 2009
Entertainment is my favoured sector, but there is so much of depth that one has to be choosy. How many people will buy Rs 500 ticket at Metro to watch the movie – I would not.
I like the company, but not the price. Further, your position is relatively small. Think of switching to others in same sector.
Sumit Gupta
20 Oct 09 at 9:38 PM
Hi Kalidas-ji,
Wish you a prosperous year ahead. 2 questions this time.
Since INR is getting stronger against dollar, will it have negative impact on export business – to be specific – Abhishek Industries ?
Since your book should have reached the “target” people by now I suppose, do you sense any impact or effect somewhere ?
Thanks.
Sudipta, Kolkata, India.
Kalidas Says …. Wednesday, October 21, 2009
Indian have phobia of exports being hurt when the rupee rises. The bankrupt USA wants stronger dollar, and everyone likes that idea, and in our own country, we hate our own currency. Misplaced priorities.
India does not only export but also import. If Rupee rises, the oil cost comes down which brings down the cost structure in every industry and segment.
Coming to Abhishek, it is well diversified, It has small level of exportable commodities in terry towel, but the Indians in India need more terry towel than semi-nude Americans on the beaches. Look at the whole overall business, such as yarns, chemicals, paper etc.
My book has not reached desired people as yet. I have not even started marketing in USA because I was holed down to India for more than a month. My book may be read by intelligent people who can understand. Right now, we have many popular readers who want to see the markets higher regardless of other reasons.
Sudipta
20 Oct 09 at 11:55 AM
Dear Sir,
I have Reliance Communications shares
RCOM:500@450 CMP:231
I would like to know your views on whether:
1)Should I hold these shares (If so how long)
2)Buy more of RCOM to average it out
3)Sell them and swtich to other shares(If so could you suggest which one to buy)
Thanks
Naveen
Bangalore
Naveen
20 Oct 09 at 11:49 AM
Scrip:TTK prestige
BSEId :517506
NSE Id :TTKPRESTIG
CMP:314
Purchase cost:Rs125
Qty:100
What shud i do? shud I add as the result of this quarter were good? Should i add more?
Hrishikesh,Mumbai.
Kalidas Says …. Wednesday, October 21, 2009
Sell it. It has gone up too fast in too short time. Further, pressure cooker business is not very high growth consumer business, although the company’s brand is famous. It is just price, too fast rise and too short time. Do not be greedy. Just get out
hrishi
20 Oct 09 at 9:53 AM
Hello sir,
HDFC Warrants (HDFC W1) on NSE are trading at around Rs. 480 (lot of 370 shares) and are convertible after 3 years into 1 equity shares each. Can you please throw some light into this, whether it is worth investing in them as upon conversion in three years, we would share 370 shares of HDFC (CMP 2795). It looks like a steal, but I would like to know your opinion before I consider investing in them, as there may be some catch that might not be overtly visible.
Thanks in advance.
Regards,
Krunal Patel
Baroda, Gujarat.
Kalidas Says …. Wednesday, October 21, 2009
You have to give me full terms of the warrants – such as conversion price, period of conversion, etc before I could comment. I have no access to such information.
Krunal Patel
20 Oct 09 at 8:33 AM
Dear Anilji,
When I do not receive a response from you, I feel whether I have posted a wrong question or have repeated something that you have already answered. Please excuse/correct me if I am wrong.
Best regards,
Ragav
Chennai
Ragav
20 Oct 09 at 8:32 AM
Sir,
Please Let me know your opinion on Apollo tyres. It performance in last quarter has been very good. Is it a good buy at current levels.
regards
Kumar
Pune
Kalidas Says …. Wednesday, October 21, 2009
The Tyre stocks are generally poor performer everywhere. They are unable to pass on the higher cost of raw material (in this case Rubber) to the Auto manufacturers easily.
The company’s performance is stagnating so far as profits are concerned. There is not much growth. Although the auto industry will be the biggest growth sector in the years to come (that means the Tyre companies should gain), the inability of this industry to capitalize on mother sector’s growth is limited.
Do not read too much into one quarter’s report. Yes, it was good, but in India, there are always accounting adjustments near the year end. If two or more quarters are highly profitable, then it may be indicative of trend.
These stocks are best bought when the auto industry is in dumps or recession. I would prefer Auto producers directly rather than poor Tyre producers.
The stock is trading at 17 times P/E. This is not the time to buy this stock – but to get out.
Kumar
20 Oct 09 at 5:29 AM
Dear Kalidasji,
Please let me know your views on TTML, as per your earlier posts, you were suggesting to buy it.
Is it still holds good, or need to sell as telcom sector is not doing. Pls suggest i have bought 2000 share at 34.50. Or do i need to switch over to some of stocks. Please advice.
Regards,
Priya,Bangalore
Kalidas Says …. Tuesday, October 20, 2009
Yes, you are right. It is a gross under performer. Better switch to the following in the proportion:
Sell TTML 2000 @ CMP (32.50 or about)
Buy RNRL 400 @ CMP (89)
Buy Abhishek Industries 1000@ CMP 15.30
Buy IBRetail 500@ 35.80 (CMP)
Priya
20 Oct 09 at 2:57 AM
Dear Anil Ji,
——————————————————
A coincidence that i struck upon Gold,
Its precious like god and need not be told.
As we yearn to gather its fine dust,
polishing our minds away of its long held rust.
Under your guidance do we long to revive,
Under your vision do we shape our destiny to survive.
So much for so, that i dont know what qualifies for your b’day gift.
We learned to sail from you, ignoring the vicious drift.
My humble request is for your to accept my wishes so sincere.
For once we take you granted and put you in the list of our ones so dear!!
——————————————————
Happy Belated B’Day to you and your wife
+
A prosperous Diwali to you and your family
Girish,
INDIA, Pune (Maharashtra)
g.rateshwar@gmail.com
Kalidas Says …. Tuesday, October 20, 2009
Great! I did not know that you could write beautiful poetry. What was my dream is your authority. Best Wishes are the most precious gift. They can not be valued in terms of money or other physical standard. Accepted and also wish you the Happy Diwali and prosperous new year.
Girish
20 Oct 09 at 1:55 AM
Dear Kalidasji,
Happy Diwali and Happy New Year. Wishing you healthy and prosporous life.
Your blog is great learning experience for us. Its unbelivable that someone is providing such valuable guidance at free of cost with such humbleness.
Kalidas Says …. Tuesday, October 20, 2009
Thanks for your wishes. We also wish you Happy Diwali an prosperous new year.
Narendra
19 Oct 09 at 11:39 PM
Dear Sir,
Wish you a very Happy New year.
I would like to know your long term views on
1) Fortis Healthcare- FORTIS : 1000 @ 105 CMP: 111.55
2) Tata Motors- TATAMOTORS: 505 @ 290 CMP: 576
I can hold for 3 year or more.
3) Please suggest good long term play in renewable energy or power business which can give me around 300% return. I can Invest 5,00,000 for 3 years.
Harsh patel
Ahmedabad, India.
Kalidas Says …. Tuesday, October 20, 2009
I am negative on Fortis – I think once I replied to some other reader. t is overstretched company. I would not touch it for another 2 years.
Tata Motors, in spite of some problems, is relatively better, though I am not in favour of buying this stock due to heavy debt load caused by Jaguar take over. Its best selling segment is Medium range vehicles like Indigo, not low end “nano” or high end ” Jaguar”. In spite of that, the management is still wasting time for other blood sucking segments. Ratan Tata should retire for good.
To be specific, sell 400 shares of Tata Motors since you are in decent money. Reduce your position in Fortis Healthcare.
Harsh Patel
19 Oct 09 at 12:24 PM
Dear Sir,
I wish you a very happy Diwali and Hope you both had a great birthday.
I guess today i can testify that i got into stocks with ignorance and had huge losses on most of the scripts. Today i have made up my losses and even made profits with your advice. Still learning the trade and trying to be less impulsive and more reasonable.
Thankyou sir for all your help.
Have a great year ahead..
Varghese Pune
Kalidas Says …. Tuesday, October 20, 2009
Thanks
varghese
19 Oct 09 at 10:09 AM
Dear Sir,
With changing times Govt of India in last few years introduced tax benefits on investing in equities through ELSS mutual funds.
Is it possible to introduce similar tax benefits for investment in Gold and Silver either in physical or ETF formats.
Wishing you Saal Mumbarak..!!, a very happy prosperous, peaceful New Year.
Ajay Kulkarni.
Ghatkopar – Mumbai, India.
Kalidas Says …. Tuesday, October 20, 2009
What is ELSS? Equity Linked something?
Investment should be based on fundamentals, never based on some or other tax benefits. If you make 100 and have to pay 25, what is wrong in that? One has to take Net Benefits. Those who pay too much attention to tax benefits as offered under one or other scheme endup losing or making less money.
Introducing Tax Benefits is in the hand of the government. Let us not dwell into hypothetical situation for gold or silver. Pay no attention to ELSS related matters for those precious metals. If you feel that the investment in gold/silver is good, just buy them, tax or no tax benefits.
Saal Mubarak to you as well.
Ajay Kulkarni
19 Oct 09 at 8:58 AM
Kalidas ji,
I wish you a very happy Deepavali.
Belated birthday wishes for you and your wife
Regards,
KeeYes,
Tokyo
Kalidas Says …. Tuesday, October 20, 2009
Thanks and also wish you Happy Deepavali
KeeYes
19 Oct 09 at 8:17 AM
Dear Anilji,
Many thanks for your emails.
I do not know whether I was in a haste to sell all 500 shares on Spicejet a day earlier as against your advice to sell 300 shares.
On DCB you are advising me to sell as it is only 100 shares, I am keen to buy more, shall i buy more?
I thought of having Stocks upto 12 as per your advice on the article and also thought of investing more when the next correction comes in. I thought of being conservative as well as used same proceeds from the sale I made. Shall I buy more or hold for the next correction.
Thanking you once again for all your guidance.
Best regards,
Ragav
Chennai
India
Ragav
19 Oct 09 at 7:24 AM
Dear Anil ji
Wish a very happy belated birthday, May all pervading almighty confer long an happy life to both of you.
May I know the timing of birth and place.
Give me a chance to read between the lines and come back to you..
Can I have you mail id too
Hari Sharma
Hari Sharma
19 Oct 09 at 6:20 AM
Please suggest for long term investment prospective (4-5 years) in GMDC (CMP- 114.60 INR). Not to be expecting any OMDC like miracle, but 300%-400% growth … or suggest any 3 script for 5-6 year horizon, return 300%-400%.
Regards
Yogendra, NOIDA, India
Kalidas Says …. Monday, October 19, 2009
Let me tell you the history – Mining or mineral stocks never made money for investors for over 20 years. Due to bullishness in metals, these stocks are making money, but these are the last golden days. Once they are over, it will take a few generations to make money or even recover the original investment.
These stocks traditionally trade at 5 to 6 times P/E. The stock of GMDC trade at nearly 17 to 18 times P/E. that is, the growth of 300% is already discounted by historical standard.
The reason for low pe multiple is that these are mostly single product company, whose earnings are usually worked out with reference to quantity and market price of their product. When the earnings of any company can be worked out easily, not much excitement is left, as result of which most interest in the counter is gone. The stock market works on expectation, not reality.
Yes, based on infrastructure story, India may yield some return on stocks like this, but it will be far too risky bet. When we can make money in solid counters like UCO, SAIL, Petronet, GSPL, Cairns, Dena and LICHF, State owned Refineries like HPCL, BPCL and IOC, why take a chance in such lower ranked stocks?
I do not say that this stock may not work – but with the whole world teetering on recession, and labour costs in mining centers on rise, the downside risk is relatively more than other safe counters.
Yogendra
19 Oct 09 at 4:10 AM
Dear Anilji,
Many Happy Returns on your birthday! (belated)
May You Be a Millionaire in Money, Billionaire in Blesings, Trillionaire in True Love & Squillionaire in Spirituality. Happy Diwali & A Prosperous Year
Ahead!
Warm regards,
Abhyasi,
Hyderabad, India
Kalidas Says …. Monday, October 19, 2009
Thanks – Wow. You covered me everywhere. Even Warren Buffet might become jealous of me. Happy diwali
Abhyasi
19 Oct 09 at 3:41 AM
Dear Kalidasji,
Happy Diwali to you & your family. Saal Mubarak. Also belated birthday wishes to you & your wife.
Regards
Amit
Germany
Kalidas Says …. Monday, October 19, 2009
Thanks and also wish the same for you and your family.
Amit
19 Oct 09 at 3:29 AM
Dear sir,
Thank You for your valuable advice on my last question. I am still anxiously waiting for your guidance on my Motorola shares which I had enquired about on the 13th Oct…
Wish you a very Happy belated Birthday & at the same time wish you & your family a very Happy Diwali.
Best Wishes,
Nisha, Hong Kong
Kalidas Says …. Monday, October 19, 2009
You may have to wait for a few days more. There are some Long Term Equity Options available which may not be help, but it is difficult for simple investors. Let me find some simpler solutions.
Nisha
18 Oct 09 at 8:20 PM
Dear Sir
This new is in contrast to your response to Mr V C Ayyapan on . Saturday, October 17, 2009 http://www.bloomberg.com/apps/news?pid=20601087&sid=a6LFzbBpxVC0 headding “Treasuries Show No Lost Appetite With Zero Dollar Returns ” My understading is that people are buying treasuries with zero interest rate. Why so? Or here also invisible Fed agents are buying to confuse the world.
Shiva
Bangalore
Kalidas Says …. Monday, October 19, 2009
Will you buy it? The people are afraid of putting the money into the banks. So they think that the treasuries are cheap and safe. They buyers are mainly US funds, not retail investors. Treasuries are like a parking lot. Those who park there will lose heavily when the rates rise. for every rise of 1% in the interest rates, the treasuries will lose 10% minimum. The obvious safety will become a trap gate.
Shiva
18 Oct 09 at 8:01 PM
Dear Kalidasji,
Wish you and your wife a belated happy birthday and a very happy diwali and a prosperous new year too !
Best Regards,
Sri Chanakya,
Iceland
Kalidas Says …. Monday, October 19, 2009
Thanks and wish you the same.
Sri Chanakya
18 Oct 09 at 4:59 PM
Wish you and your wife happy birthday and saal mubarak.
Regards
Manoj
AK NZ
Kalidas Says …. Monday, October 19, 2009
Thanks
Manoj
18 Oct 09 at 4:12 PM
dear sir,belated happy birthday and a very happy diwali.Sir,i wanted to understand what u meant by demonitizing of dollar by U.S.A. Allso how is it related to gold prices, What are the chances of U.S.A government do this Anupama NewDelhi.
Kalidas Says …. Monday, October 19, 2009
Thanks. Your question is in 3 lines, it took me over 4 chapters to reply in my book Sub Prime Resolved. US government may not do it immediately, but will do so when US markets come into squeeze again. They have no choices.
anupama
18 Oct 09 at 3:15 PM
Dear Sir,
Wish you and your wife a very happy birthday (belated)
Regards,
NandakumarAS
Switzerland
Kalidas Says …. Monday, October 19, 2009
Thanks.
Nandakumar
18 Oct 09 at 2:26 PM
Dear Kalidasji,
Wish you many more Happy & Healthy returns of the day. Our good wishes to you and to your wife. You are my best teacher I have ever seen in my entire life.
Thanks and regards
Saravanakanth, Salalah, Oman
Kalidas Says …. Monday, October 19, 2009
Thanks
Saravanakanth
18 Oct 09 at 11:58 AM
Dear Sir,
My heartiest wishes to YOU AND YOUR WIFE for a Happier and Healthier LONG LIFE and many More Happy Returns of the day.
Regards
T. Muthu Saravanan, Chennai, 18.10.09
Kalidas Says …. Monday, October 19, 2009
Thanks
Muthu Saravanan
18 Oct 09 at 11:31 AM
Dear Kalidasji,
Wish you a Happy Birth Day! Let the Almight give you health and more wealth to you!
Will there be any impact on share prices of Reliance Group if and when Ambani Brothers come to an amicable settlement or out of court settlement? If so to what extent?
V.C.Ayyappan
Muscat, Oman
Kalidas Says …. Monday, October 19, 2009
Thanks. I think I have already covered about Ambani brothers. Peace is always better than war. However, when the peace returns, the excitement is gone. The stocks may remain docile after initial euphoria.
V.C.Ayyappan
18 Oct 09 at 11:30 AM
Dear Kalidasji,
Best wishes to you and your wife.
Regards,
Shaikh
Kongsberg, Norway
Kalidas Says …. Monday, October 19, 2009
Thanks
Shaikh
18 Oct 09 at 10:08 AM
Dear Anilji,
I am not sure if you have read my post of 17th October 2009. I now wish to advise that I have sold Spicejet of 500@36.9 yesterday and purchased Dena CMP 77.65 and SAIL CMP 185.55 of 100 & 50 shares respectively.
Thanks & Best regards,
Ragav
Chennai
India
Kalidas Says …. Monday, October 19, 2009
Already replied.
Ragav
18 Oct 09 at 8:30 AM
Dear Sir,
Wish you and your wife many more happy returns of the day.
Regards,
Sandip – Syria
Kalidas Says …. Monday, October 19, 2009
Thanks
Sandip
18 Oct 09 at 8:07 AM
Dear sir,
Wishing you and your wife Happy Diwali and many many happy returns of the day. We all followers prey the almighty to give you sound health, wealth and long life. We are greatful for the knowledge you are sharing with us.
Can you share your opinion on ‘FINOLEX CABLES’ CMP-48.60
Regards
Swami.
Congo. West Africa
Kalidas Says …. Monday, October 19, 2009
Thanks. The named company is not on my favored list.
RENUKSWAMI
18 Oct 09 at 7:37 AM
Dear Kalidasji,
What is your one year,two year and three year target for Abhishek Industries,RNRL,Reliance Power and Spicejet.
Waiting for your new article on Real Estate.
If possible pl. cover all the recently suggessted stock under STOCK WATCH column.
- Ramesh, Mumbai, India.
Ramesh
18 Oct 09 at 6:24 AM
Kalidasji,
Your advise on UCO, & LICHF has been very profitable for me. My heartfelt thanks.
I just sold UCO at 60, my purchase was at 39.
Will renter again after correction.
I would like your thoughts on companies which will benefit from the defense & security orders. I believe this will be a big industry for domestic companies from here on.
Kalidas Says …. Monday, October 19, 2009
No idea. The information is so sketchy.
Vivek
18 Oct 09 at 4:56 AM
Sir,
Please through some light on Karuturi Global as they are rapidly expanding agricultural operations in Ethiopia. On the other side they are consolidating by expanding their current floriculture business. I am having 4500@13.5. CMP is 15.65.
Narasaraju
Bangalore
narasaraju
18 Oct 09 at 4:04 AM
Dear Sir,
Wishing you and your wife Happy Diwali and Happy B’Day.
I plan to Invest 1 Lakh: 33K in UCO Bank, 33K in Dena Bank, 33k in Abhishek Industries. Should I go ahead or wait for correction?
Thanks,
v8r, Stockholm.
Kalidas Says …. Monday, October 19, 2009
Thanks. I already gave my opinion. It is okay
v8r
18 Oct 09 at 3:45 AM
Anil Ji,
Best wishes to you and your wife.
Regards
Saagar
Singapore
Kalidas Says …. Monday, October 19, 2009
Thanks
saagar
18 Oct 09 at 2:53 AM
Dear Sir,
Wish you and your wife many more happy returns of the day. I am thankful for all the knowledge you shared with us.
Happy Deepavali
Regards
Vijay,Bangalore
Kalidas Says …. Monday, October 19, 2009
Thanks.
Vijay
18 Oct 09 at 2:25 AM
Dear Kalidas
Wish you and your family a Happy Diwali and a prosperous new year.
Belated Many Many happy returns of the day to both of you…..
Warm Regards,
Kiran Khair ( KK)
Andheri , Mumbai
Kalidas Says …. Monday, October 19, 2009
Thanks
kiran
18 Oct 09 at 1:16 AM
Dear Anilji,
Wish you and your wife a very happy birthday. May god shower lots of blessings for healthy wealthy and a long life.
Naidu, hyderabad, India.
Kalidas Says …. Monday, October 19, 2009
Thanks
B.D.Naidu
18 Oct 09 at 12:58 AM
Dear Anil Ji,
Wish you and your family a Very Happy & Properous Diwali and a Happy New Year Ahead.
Also, wish you and your wife a very Happy Birthday!
We wish and pray that HE rewards you good for all your guidance to many who follow your blog and benefit from it !
Best Wishes,
Anurag
Noida
Kalidas Says …. Monday, October 19, 2009
Thanks
Anurag
18 Oct 09 at 12:49 AM
Dear Sir,
JSL (CMP-108.70) and ITC (CMP-250.90)
Can I buy more quantity this price range?
Regards,
Rajmohan,
Pointe Noire, Congo
Kalidas Says …. Monday, October 19, 2009
JSL is in the process of capital raising exercise. Even then, it is worth investing at this price. ITC is evergreen stock. When you have to park your funds without getting out of the market, use this counter. It is the cash rich company with mind boggling prospects. Such stock perform well in down market. In bullish market they are under performer. Buy it only in correction with buy target of Rs 230 or about
Rajmohan babu
18 Oct 09 at 12:45 AM
Dear Sir,
Wish You Very Happy Birthday….
Regards,
Rajmohan babu
Pointe-Noire, congo
Kalidas Says …. Monday, October 19, 2009
Thanks
Rajmohan babu
18 Oct 09 at 12:11 AM
Dear Kalidas Sir,
This is regarding investment to a multi level marketing company “Fine india Pvt Ltd” Please find below link for your refernece:-
http://www.fineindia.net/plan.html?num=3
To my surprise they claim to give 10% interest per month
Quote:”you get upto 25% Promotional Income each month However we have not given less than 10% any month and we will try our level best to give maximum Promotional Income which is above than 10% up to 25% every month. We had already given 13% for the month of December 2007, 11% for January, February, March 2008, 10% for April 2008, 11% for May 2008 and 10% for the month of June 2008 to current month of this 2009. Our past record shows that we haven’t distributed less than 10% for any month and for the same, we are committed to give every month.”
Please let me know whether its worth investing.
Deepak
Bangalore
India
Kalidas Says …. Monday, October 19, 2009
I do not even take a look at these kind of companies. Most of multilevel marketing companies are hoax. Who will give away over 10% per month?
These companies run on high commissions. They borrow from one and handover the other. It is more like Cat & Monkey game. Stay away.
Deepak
17 Oct 09 at 10:56 PM
Guru,
Ignorance is darkness, darkness is weakness , weakness is death.
Knowledge is light, light is strength, strength is life.
Thanks for your noble job, driving away darkness and spreading knowledge.Wish both of you happy Diwali and birthday.
-Venkat, Chennai
Venkat
17 Oct 09 at 10:37 PM
Dear Sir,
My wife was very happy to see your message as it was her choice though bit late
Wish you and your wife Many many returns of the day.
It sounds like Marriage anniversary wishes but Birthday wishes sir
It is pleasent coincidence that you are celebrating your birthday with Diwali this year.
Shiva
Bangalore
Kalidas Says …. Monday, October 19, 2009
Thanks. it is a coincidence, of course.
Shiva
17 Oct 09 at 8:30 PM
Dear Anil Sir,
Wish you & your wife a many many happy returns of the day. May God bless both of you with health, wealth and prosperity in your life.
HAPPY BIRTHDAY TO YOU & YOUR WIFE.
-Ramesh, Mumbai, India
Kalidas Says …. Monday, October 19, 2009
thanks
Ramesh
17 Oct 09 at 7:58 PM
Respected Sir,
Wish both of You a very very Happy Birthday.You are the first couple i have come to know sharing the same birth day.
Have a great Day.
Regards
arun
Mumbai
Kalidas Says …. Monday, October 19, 2009
Thanks. Even my daughter was given the same day for birth, but she was delayed by 10 days. My eldest brother and his wife share same birthday. May be this runs in our family – thanks anyway
arun
17 Oct 09 at 7:53 PM
Hello Mr. Kalidas,
I am in US and I have stocks/ETFs in IRA (Retirement) Account. I cannot sell them but can change the portfolio to something else. If there comes a correction in US, my IRA Account will lose money. Please suggest where I can transfer my investment which will not have any impact during the correction….I mean which treasury/debt fund would you suggest.
Regards,
Anup, New Jersey, USA, 17 Oct, 2009
Kalidas Says …. Sunday, October 18, 2009
I will give you general guidance for the time being, because I have to study specific situation relative to USA. My judgement and thinking is based on the following lines:
Now,
Anup
17 Oct 09 at 2:25 PM
Dear sir,
I Wish you and your family a very happy Deepavali.
Whats your opinion on Mangalam Cement CMP 131 (EPS -42; PE around 3; Dividend Yield – 4.20%; Book Value – 107, Birla Group company).
Is it a good buy now?
Muthu, Chennai, 17-Oct-2009
Kalidas Says …. Monday, October 19, 2009
The financial may seem incredible. Why the stocks trade so low relative to earnings? It seems that the company is embroiled into dispute with various Tax authorities such as Income Tax, Sales Tax, Excise Dept etc for a number of years. This could be the reason. Another could be the realignment of B K Birla group. This company will go to whom, one does not know.
On the face of it, the stock is trading very low. I would like to know the reason for the stock trading so low in a bull market. One may nevertheless small position due to value as shown. Serious position is not recommended due to above reasons.
Muthu
17 Oct 09 at 8:46 AM
Kalidas Sir,
I am making my portfolio and interested in one midcap finance stock to invest 10% of my money. From your blog, I see you recommend several banks like UCO, Dena and LICHF in non-banking finance space. Please suggest which one of these should I pick for maximum gains?
Thanks in advance and wish you Happy Deepawali.
Pawan,
Delhi, India
Kalidas Says …. Sunday, October 18, 2009
Thanks – Happy Deepawali to you as well.
4% in UCO, 4% in Dena and 2% in LICHF
Increase your exposure to LICHF if it corrects to Rs 600 or less due to market reasons. Targets are as under (1,2 3 years)
UCO (120, 180, 250)
DENA (120,180, 300)
LICHF (1000, 1500, 2000)
Pawan
17 Oct 09 at 8:31 AM
Dear Kalidasji,
WISH YOU AND YOUR FAMILY A VERY HAPPY DIWALI!!!
On your valuable advice I sold Bartronics, Havells, IDBI & IFCI.
Bought Spicejet 500@39,
Abhishek Ind 500@15.10
Satyam 100@110.10,
UCO 100@56,
ISPAT 800@23.75,
DCB 100@40.
As you know earlier I had Spicejet of 100@100 and now bought 500 more @39, should I sell it out now or hold. I read your recent comments on Spicejet and understand that I need to sell, please confirm or correct me if my understanding is wrong.
From this Diwali, I hope with your guidance I should be able to make good my loss as well as do a decent earnings/profit on shares.
Thanking you once again for all the valuable time you provide to your readers and guide them with all knowledge with No intention of any personal returns. Let this Diwali bring more light and properity to you as well as to your readers.
Best regards,
Ragav
Chennai
Kalidas Says …. Monday, October 19, 2009
Sell about 300 for the time being. If the stock corrects more, then use same proceeds to buy back after allowing few days.
Others appear okay. No need to keep small position in DCB. Just sell it. Please note that there is no point of diversifying into so many stocks when your budget is very limited. Keep only 2 or 3 stocks
ragav
17 Oct 09 at 6:47 AM
Dear Kalidasji,
Happy Diwali and best wishes to you and your family.
I wanted your views on JK Lakshmi Cements CMP- 136, do you think it should be kept for long term ?
regards,
Sonali , Germany
Kalidas Says …. Saturday, October 17, 2009
I looked at it long time ago. It is a pure cement play, but the question is why the company is trading at such low P/E? It is also consistently profitable and paying taxes, so the profit could not have been inflated.
The only unknown factor is the quantum of warrants/options given to employees or others which generated additional equity shares @ Rs 97 some time ago. Another is revaluation of properties that led to rise in reserve. It is a book entry.
I could not locate any negative news. The cheapness of the stock is mind boggling. It does look like an interesting play with good prospects. Franklin Investment is also shown to have bought 650,000 shares. It is a value play.
Continue to track news relating to this company. On the face of it, it is worth investing small amount, not large. I would invest large amount if more is known for underp erforance.
Yes, it is worth keeping long term. Its true value does not appear to have been reflected.
sonali
17 Oct 09 at 6:44 AM
Dear Kalidas Ji,
I have been a silent follower of your advice from the past two years now and have gained immensely over this period. I have made decent money by following your advice and have learnt a lot from you about the financial world. It feels very comforting to know that there is someone who can provide you with genuine and sincere advice. I wish you and your family a very happy Diwali and a great new year ahead.
Wish you the best of Health and Wealth.
Best Regards
Jas Singh
New Delhi
Kalidas Says …. Saturday, October 17, 2009
Thanks.Good that you made money. When I am in New Delhi, buy me a coffee. I am not Dronacharya who will demand “thumb” from Eklavya. A cup of coffee will do. Happy Diwali
Jas Singh
17 Oct 09 at 6:42 AM
Dear Sir,
Wishing you and your family a very happy Dipavali.
May god give your more health,wealth and prosperity.
Regards,
Shiv H Bangalore,India
Kalidas Says …. Saturday, October 17, 2009
Thanks – Happy Diwali
Shiv H
17 Oct 09 at 6:30 AM
Dear Kalidasji,
Wishing you a very Happy,Healthy and prosperous Diwali and the year ahead.
May God always Bless you.
-Ramesh, Mumbai, Indai
Kalidas Says …. Saturday, October 17, 2009
Thanks, Same to you
Ramesh
17 Oct 09 at 5:35 AM
Sir,
This Diwali, may the scrip called Life pay U dividends of Joy & issue Bonus of Good fortune. may U get all the rights issue 2 njoy success in life .let there b no volatile correction in ur happiness & U hit upper circuit of prosperity everyday. Wish U very very Bullish Diwali 2009.
regards
arun
Kalidas Says …. Saturday, October 17, 2009
Reminder: To get reply, please append City and Country name to your signature invariably.
Thanks for your message. Kindly avoid short hand format. Wish you happy diwali too.
arun
17 Oct 09 at 5:33 AM
Respected Sir,
Wish you & your family a happy and prosperous Diwali
I beg your pardon for not appearing on the blog as I was away on job related work and I really missed the blog as I was transfered from pune to Ghaziabad.Now I am updating my self with your last valuable postings.I need your book kindly send the email with full details of mode of payment at ghaziabad.
kd chahar Ghaziabad India
Kalidas Says …. Saturday, October 17, 2009
Thanks. I did miss you – remembered you when I was in Pune last month for about 2 days. I will send you email to you tomorrow for the book related instructions. Wish you happy diwali.
kd chahark
17 Oct 09 at 3:55 AM
Dear Kalidasji,
Wish you and your family a happy and prosperous Deepavali. I gain confidence when I read your articles. Will there be correction before end of 2009?
Ayyappan
Muscat,Oman.
Kalidas Says …. Saturday, October 17, 2009
Thanks. wish you same. Yes, there will be correction in 2009. Watch the interest rates in USA. When the US government returns to the market for borrowing, there would be havoc. China will not be buying any treasury bond and the crude oil will be sold mostly in Euro, causing severe fall in dollar value.
The Arabs control almost 35 mbpd, that is, almost 40%. If they start using Euro instead of US, and presuming that Saudi Arabia does not follow dollar disdain, almost 25mbpd having market value of $2 billions per day will be traded in Euro, that is, there will be $ selling and Euro buying to that extent, per day. On monthly basis, it will be $60 billions.
At the moment, the interest rates are low, because the US government has been printing notes instead of raising money through borrowings. Once they are forced into the market to raise the money, the interest rates will flare up, which will cause massive correction. It may happen before Dec or extend into January. I have no means to know whether FED will continue to print or come to the market for borrowing.
V.C.Ayyappan
17 Oct 09 at 3:34 AM
Dear Kalidas ji,
Wishing you a very Happy,Healthy and prosperous Diwali and the year ahead.
May God always Bless you.
I would like to express a heartfelt thank you and gratitude for the selfless Guidance and Knowledge you continue to provide to us,the small investors.
Once again a heartfelt Thankyou sir.
God Bless
pps
Mumbai,INDIA
Kalidas Says …. Saturday, October 17, 2009
Thanks. Wish you happy diwali
Prithipal S Bajaj
17 Oct 09 at 3:33 AM
Dear Kalidasji,
Wish you best of Health, Prosperity and Happiness on this Diwali.
Regards,
Sharma, Mumbai, India
Kalidas Says …. Saturday, October 17, 2009
Thanks. Same to you
Sharma B
17 Oct 09 at 3:27 AM
Dear Anilji’
I am a silent follower of you. Many thanks for your valuable advises. Please give me you openion on buying Lloyds TSB capital Suordinated Perpetual bond with a coupon rate of 6.9% fixed with maturity in year 2049. The bond is available at market at $78 against Face value of 100
Regards
Mohan, Abudhabi,UAE
Kalidas Says …. Saturday, October 17, 2009
The perpetuals always trade at discount, often by 50% – in your case the discount is just 22%, although the Coupon is relatively high.
Wait for the market crash and then enter. Since the company has no maturing obligations, only current yield matter which is quite good (about 10%)
To me, the current prices are slightly higher. Buy between 65 and 71. Otherwise, buy some now and wait to buy more later.
Please note that these are subordinated bonds, so have no security like non-subordinated bonds. The banks are in terrible mess, so expect better yield to enter. 10% is not bad, but not that great for financial institutions in distress.
Mohan
17 Oct 09 at 1:41 AM
Hi Kalidasji,
Wish you and your family a very happy Diwali….
Last Diwali, my portfolio was in deep red, over 70 % down ! Thanks to your guidance, i restructured my portfolio with the stocks you have recommended over the past one year and i have almost entirely recovered the losses and more importantly become ‘wealthier’ in terms of financial knowledge. So a special thanks to you on behalf of all those of us who have benefited similarly, for giving us the gift of goddess Saraswathi, knowledge and the gift of goddess Lakshmi, wealth.
Please continue to guide us…
Krishna,
Bangalore,India
Kalidas Says …. Saturday, October 17, 2009
Thanks for letting me know. I love when others make money or recover the losses. Wixh you happy Diwali and Happy New Year
Krishna
16 Oct 09 at 11:47 PM
Dear Sir,
Wish you and your family very Happy Diwali and properous Happy New Year.
Regards,
Raj V,
Ghatkopar,Mumbai.
Kalidas Says …. Saturday, October 17, 2009
thanks and wish you the same
Raj V
16 Oct 09 at 11:14 PM
A very Happy Divali, and very joyous and prosperous festive time to you and your family!
Suresh Krishna, Thane, India
Kalidas Says …. Saturday, October 17, 2009
Thanks and also wish you the same. I was in Thane for about 5 days staying with my Lawyer friend and my classmate. Wish to meet you next time.
Suresh Krishna
16 Oct 09 at 6:54 PM
Dear Sir,
Wish you and your family Very Happy,Healthy and prosperous Deepawali.
Shiva and Family
Bangalore
Kalidas Says …. Saturday, October 17, 2009
Thank you and also wish you the same. My wife saw your gift when she went to India this time after about 3 years and she liked it. Thanks for your kind gestures. Happy Deepavali and Happy New Year
Shiva
16 Oct 09 at 6:20 PM
Dear Sir,
Wish You and Your family very Happy Deepawali
Regards,
Rajmohan babu,
Pointe-Noire, Congo
Kalidas Says …. Saturday, October 17, 2009
Thanks and also wish you the same.
Rajmohan babu
16 Oct 09 at 2:30 PM
Thank You, Sir.
I got your answer to varsha’s request.
Ravinder Poojari,
Hyderabad, India.
Ravinder Poojari
16 Oct 09 at 2:02 PM
Dear Sir,
Happy Diwali.
Upon your advice to some of other friends in this blog, I took call on spice jet at Rs. 42.0 in the assumption where it’s going to touch 50+. Now it’s seems to me dipping day by day. Will you please advise what kind of the strategy do you want me take in this counter.
Spice jet 600 (Q) 42(C) 36.10(CMP)
Being a silent reader and follower of your good words and suggestions, if I took a wrong decision in regard to SpiceJet, please excuse me. Apparently this is mistake to take late entry and I am felling sad to ask your advice. But, I still don’t think is this is the end of good story.
I hope you can forgive me.
Ravinder Poojari,
Hyderabad, India.
Kalidas Says …. Saturday, October 17, 2009
There are 5 categories of investors.
First Category – Those who read the events in advance and first to enter the stocks when no one is recommending.
Second category – of investors are like Eagles in the Sky. They see the stocks convulsing and edging higher in higher turnover. They take the strategic position well in advance.
Third Category – of investors are like those getting into moving train. They are extreme momentum player. They think nothing – just seeing who is buying and how much. They are short time investors or speculators who read only the prices, nothing else matters for them.
Fourth Category – are Onlookers who suffer from hesitancy. They listen to CNBC or other tips and feel of having been left out. They enter the stocks after they have moved up by 15% to 30% in last few days.
Fifth Categoy – of investors are those who are fence sitters and suffer from double mind. They are afraid of losing money, in fact they are afraid of making money. Their ears are as sharp as dogs, and listen to everything in media. However, they enter the stock at later state, as if others made money and they could not. They win on longer terms but in immediate short term, they face about 30% downside risk.
You know where you will be fitting in. In any case, you do not have to worry too much. The stock will come back later, but not so soon. At the same time, downside may not be that great as originally seen.
Is 600 shrs lot for you?. You are in good stock at wrong time. that’s all. The company is swinging on positive side, so you will eventually make money. However, make a habit to buy the stocks in correction after identifying the potential. Do Not Chase as if you are chasing a beautiful girl – there are many romeos in the line.
Wish you happy diwali. Do not get disheartened. You will make money anyway in this stock, 36 or 42 does not matter.
Ravinder Poojari
16 Oct 09 at 1:57 PM
Hi kalidas ji
im varsha, 13 years old from salalah
your website is really great.. filled full of greatest knowledge one could gain..
thanx
varsha
Kalidas Says …. Saturday, October 17, 2009
thanks, you little girl. I never thought young kids like you are reading my financial blog. Wish you good luck and happy diwali.
varsha
16 Oct 09 at 12:56 PM
wishing you a Delightful Diwali
Varsha, Oman
Kalidas Says …. Saturday, October 17, 2009
Thanks and wish you the same.
varsha
16 Oct 09 at 12:49 PM
Dear Kalidasji,
Wish you and your family Very Happy and Healthy Diwali. Thank you for guiding us with your invaluable knowledge.
Best Regards
Saravanakanth, Salalah, Oman
Kalidas Says …. Saturday, October 17, 2009
Thanks, wish you same.
Saravanakanth
16 Oct 09 at 11:45 AM
Dear Kalidasji,
Firstly I Wish you a Very Happy Deepavali and New Year.
In last few months I have come across Goldbug, Peter Schiff, who is standing for senate from Connecticut. Lot of utube link if one searches for “peter schiff was right”. Peter Schiff predicted the housing bubble in 2008. He is also writer of book Crash Proof 2.0. But as you said before it is about how to profit, but not providing solution to the problem. http://www.europac.net/video.asp.
please let us know if you find this interesting.
Very similar viewpoint as yours. If he get elected to Senate, a good candidate for sending your book or at least excerpts from chapter on Gold.
So called correction is still eluding. I am in cash and gold, little in equity and do not want to risk anything. I do not see Gold ETF would give good returns as USD would depreciate against every currency and even with INR (today USD=INR 45.91). Your views Please.
Thanks,
Dongre, NY
Kalidas Says …. Saturday, October 17, 2009
Interesting. Saw some of his clippings. I DISAGREE with him that China will depeg its currency from dollar as result of which Renminbi would double or treble.
Only reverse will happen. If he feels that $ will lose value, China with over $700 Billions in USD will lose more than the entire FOREX that India holds. It has already lost that much by now. It is said that when a big borrower fails, he will take down him his biggest lenders. That means that all of Japan, China, Hong Kong, Taiwan and Singapore will fail with United States.
He simply DOES NOT KNOW China which is a myth. Its government will let you know what they believe that you should know. He also does not know how much Gold Indians have. If gold goes that high, every woman folk in India will come out to sell their gold and buy new home, which is their dream.
Remember, even Warren Buffet misread the Indians when he bought silver in millions of ounces, presuming great rise, only taken aback by the constant selling of silver by Indians. Finally, he came out with nominal gains by selling silver at most inooportune time. Was he smart investor if you see today’s silver prices? Of course not.
India will come out supreme, instead of China. Brazil, Australia and India will become tremendous economic powers in that order on upward climb, whereas US, UK, Europe will climbing down with China, Japan, Taiwan, Hong Kong and Singapore. South Africa will be another winner with Russia. India still faces tremendous risk from Al Quaida and islamic extremists – Brazil and Australia do not have that threat.
Since you are in USA, why do you invest in Gold ETF in India? You may buy physical gold (from APEX) while in USA or some other Gold ETF trading on NYSE which are denominated in USD. After all, your expenses are in USD, not in rupees. You also benefit if your rupee is repatriable, if your quantum gold was bought as NRI. so even if you do not benefit from price terms in rupee, you get extra return in Rupee appreciation by 7% – your net gain remain slightly less were you invested in gold or gold ETF in USA.
You are waiting for correction – yes that will come anyway. Even top bhaktas like Walmiki, Vashishtha, Prahalad, Narsinh Mehta, Meera had to wait for ages before realizing their dream. Same applies to investors who have patience to make really big money.
Brazil leads the nations in letting its real appreciate by 35% and still not taking any action. Stupid RBI – always wanting to weaken the rupee and this is why I rate that institution as “pig” always out in the dumps and dirts.
Swami Vivekananda once said, what you eat goes into your brain. If you eat pure things, noble and correct thoughts enter your mind. RBI – well never mind. Even pigs have their day.
Dongre
16 Oct 09 at 11:01 AM
Dear Sir,
Let me take this Opportunity to wish you a Happy Diwali and Saal Mubaarak.
Please note that i am repeating my query here as i had posted the same a week back, but looks like it missed your attention…
“As we are eagerly awaiting your next list of stock recommendations on the auspicious occasion of Diwali, i cant resist to get your opinion on the recent bullishness in the equity markets worldwide. The so called correction continues to elude all of us. Its getting beyonds one’s imagination that what happened last year (the fall to 2700 Nifty levels) was overdone or the rise this year (upto 5100 Nifty now)is overdone? I would like to know your perspective on this? Whats the downside risk from here to our Markets if one decides to invest in this new Samvat?”
Regards,
Avinash Desai
Chennai, India
Avinash Desai
16 Oct 09 at 10:36 AM
Dear Shri Selarka and everyone visiting this blog,
Wishing you and your family a very happy festival of lights.
May God bless you and be with you always.
Vineet
Delhi
Kalidas Says …. Saturday, October 17, 2009
Thanks. Wish you same
Vineet
16 Oct 09 at 10:10 AM
Hello Sir,
Wish you and all your family members a very happy deepavali.
I have shorted IFCI @52.75 in futures.Does it have any chance of coming down before 26th Oct?I know you dont do F&O, but please tell me the stock has any chance to tank.(Today Bank of America reported a loss of $1 billion, One of the harbinger of market correction)
Kalidas Says …. Saturday, October 17, 2009
You shorted when FII were making big come back on Indian exchanges. You have to short it in the rally, not when the stock is consolidating at lower level.
Bank of America has nothing to do with IFCI – they don’t go hand in hand. Better cover your shorts. Another alternative is to cover the Oct and short the Nov in a rally when the stock is at around Rs 58 to 63. Short after when the volume is strongest on the rise
Yes, you are right – I do not advise on F&O – Don’t raise this query again. I may ignore it. I replied only because of the auspisious day, that is, Diwali. Be an investor – not a gambler.
sathya
16 Oct 09 at 9:42 AM
Dear Sir,
Wish you and your family a very happy, healthy and prosperous Diwali & Saal Mubarak.
With Best Regards,
Prakash
Rotterdam, The Netherlands
Kalidas Says …. Friday, October 16, 2009
Thanks – wish you the same.
Prakash
16 Oct 09 at 9:00 AM
Dear Sir,
Wish you and your Family Happy Diwali and New Year!
Regards,
Vajeng
Bangalore,India
Kalidas Says …. Friday, October 16, 2009
Thanks. Wish you the same.
Vajeng Patidar
16 Oct 09 at 8:59 AM
Dear Sir,
Wish you and your family a Very HAPPY DIWALI.
Regards,
NandakumarAS
Switzerland
Kalidas Says …. Friday, October 16, 2009
Thanks. Wish you the same.
Nandakumar
16 Oct 09 at 8:42 AM
dear sir,
please give one stock for tommorow’s mahurat trading which we can keep till the next mahurat for good appreciation.thanks
anjum64
Kalidas Says …. Friday, October 16, 2009
UCO Bank, SAIL, RNRL – take your pick
anjum64
16 Oct 09 at 7:25 AM
I wish you a Happy Diwali. I am an ardent reader of your blog and your articles.
Thank you for your insights.
Ravi, Chennai, India
Kalidas Says …. Friday, October 16, 2009
Thanks and wish you same.
Ravi
16 Oct 09 at 6:29 AM
Dear Sir,
Wish you and your family a very happy Diwali!
Regards,
Shankar
Atlanta USA
Kalidas Says …. Friday, October 16, 2009
thanks, wish you same
Shankar
16 Oct 09 at 5:57 AM
Happy Diwali Anil. Many thanks for your knowledge sharing. I m proud to say that, I m readers of your blog.
Selvan
UK
Kalidas Says …. Friday, October 16, 2009
Thanks for your readership. Happy Diwali
Selvan
16 Oct 09 at 2:09 AM
Kalidasji,
Wish you happy Diwali & New Year.
Thanks for providing & sharing valuable knowledge. I have a life changing experience by following your writing.
Thanks.
Parag
Kalidas Says …. Friday, October 16, 2009
Good to know that, thanks anyway.
Parag, Surat
16 Oct 09 at 12:44 AM
Sir,
Wish you a very happy deepawali.
Regards
Badrinath
Bengaluru
Kalidas Says …. Friday, October 16, 2009
Thanks. Same to you.
badrinath
16 Oct 09 at 12:11 AM
Anil Ji,
wishes you and your family Best of luck and life always. you qre quite precious and deserve whatever one should because you know the art of passing it to others happily.
hope I can follow you someday, someway.
happy dipawali.
Saagar
Singapore
Kalidas Says …. Friday, October 16, 2009
Thanks
saagar
15 Oct 09 at 11:47 PM
Dear Anilji
Wish you and your family a very Happy and Prosperous Deepawali and New year. May Godess Lakshmi bestows her all Prowess and blessings on you and your family and also on all your followers.
Today this message is from an Astrologer – Hari Sharma and not from an Investor who is always troubling, reading , seeking and following to you.
Best wishes once again
Pandit Hari Sharma, MBA
Astrologer
Kalidas Says …. Friday, October 16, 2009
Thanks, coming as it does from an Astrologer. What does it say about my blog for the next year?
Hari Sharma
15 Oct 09 at 11:06 PM
Hello Sir,
1) I was following your advice on Spicejet and a post by Ms. Varsha about Q2 losses of SpiceJet. But I read another news article in ET which said that air traffic has been increasing from last 2 months so a possibility of revival exists.
2) Today’s ET also shows an article about some PSUs sitting really high on cash and a possibility of Govt asking for dividends and/or more investments. Here is the link:
http://economictimes.indiatimes.com/Markets/Analysis/Top-PSUs-may-have-to-justify-bulging-kitty-or-pay-dividend/articleshow/5129411.cms?curpg=2
Do you think one can look at some PSUs for investment?
Finally, a suggestion regarding this blog:
I think you can add a reply option to each post since at times I personally wanted to add some comments or questions on some advice or discussion. Presently every time a new post needs to be submitted even if it related to a previous discussion.
As always, I admire your efforts, knowledge and analysis.
Regards,
Sumit Gupta
Kolkata
India
Kalidas Says …. Friday, October 16, 2009
Other issues already discussed. About your suggestion, the software does not allow. There is a plug in that might permit threaded comments, but I have to work it out. If it can help, I will switch to that format. The difficulty will be that I will not know about the latest comments that could be answered
Sumit Gupta
15 Oct 09 at 11:04 PM
Dear Sir,
Wishing you a very deepavali ! My query: JP Associates is accepting FD’s at rates of 11-12% which is much higher than market average and attractive. Your views please ! These guys would borrow at such rates only when they have some problem, but is it worth taking a chance ?
(link: http://www.bajajcapital.com/investments/fixed-deposits/govt-companies.php )
Thanks,
Vijay Hegde
Bangalore
Kalidas Says …. Friday, October 16, 2009
Nothing unusual. Corporate interest rates are 1% to 2% higher than corresponding benchmark
Vijay Hegde
15 Oct 09 at 10:28 PM
Happily Deepavali!!
I have been waiting for recommendations on 16th Ocotober. It has not appeared so far. Kindly oblige me for an investment of 20 Lakhs for good gains in 12-18 months. Just 2 stocks for an appreciation of 100-150% is enough. This will enable me to buy a house for me in Bangalore.
Regard
B.D. Naidu
Hyderabad, India.
Kalidas Says …. Friday, October 16, 2009
You may have to wait. there are many other intrusions.
B.D.Naidu
15 Oct 09 at 9:50 PM
Kalidasji, The following link on spicejet reads its under loss in Q2. http://economictimes.indiatimes.com/news/news-by-industry/transportation/airlines-/-aviation/Spicejet-sees-Q2-loss-better-times-ahead/articleshow/5128167.cms
your comments please-
Varsha,Pudukottai,Tamilnadu
Kalidas Says …. Friday, October 16, 2009
This is what I was fearing. Consistent two quarter profit would have been indicative of trend. But it was not so here. Even if the company posts profit for Dec Quarter, we have to wait until April to see the March quarter whether that was too profitable.
The CEO’s comments that the next quarter would be profitable is an attempt to dampen the negative sentiments with some hopes. Although the ticket prices might see higher level, the fuel cost are on rise that might offset the higher revenue.
It was a fact that last quarter saw highly competitive fare war. My own naphew who came to Hong Kong on 3 months valid ticket from Mumbai to Hong Kong (return) paid only Rs 14,000 on Kingfisher’s inaugural flight. Since then it has risen to over Rs 24000 in matter of days. Even my wife is not getting seating by Cathay from Mumbai to Hong Kong and she is on waiting list for more than 7 days.
Yes, the travel load has improved, but not strong enough. An Airline is unprofitable if its passenger load factor falls below 65%. The current 75% load is not good enough. It has to rise above 85% to make it profitable.
The stock may underperform. It may drop for a couple of days, but CEO’s positive remark may bring it back. However, I do not expect the stock to go above Rs 43 in short run. If one’s cost of entry is high thirties, he should see the opportunity to sell even at nominal loss, and buy back when it goes to Rs 28~31 level. Right now, the market is strong enough not to let this stock fall very much. Use the strong market to lighten up if cost of entry is high.
My own holding is made out of buying below Rs 14 or so, I am not selling at the moment though because I have more price cushion. My above suggestion applies to only those people who have higher entry cost.
It may be a trading sell in a rally. Watch the oil price before buying Airline stocks.
varsha
15 Oct 09 at 11:45 AM
Dear Kalidas Jee
I am silent reader/follower of this very informative website. I would like to wish you and your family a very happy and healthy Deepavali.
Vikram
NJ US
Kalidas Says …. Friday, October 16, 2009
Thanks. Wish you same
Vikram
15 Oct 09 at 11:15 AM
Dear Sir
wish you and your family a happy Deepavali.
Brgds
Philip T Ranjan,UAE
Kalidas Says …. Friday, October 16, 2009
Thanks
Philip Ranjan
15 Oct 09 at 10:27 AM
Dear Sir,
Would it be wise to change all our holdings of US$ into HK$ looking into the current situation of the US since I am based in HK and have mortgages in HK$?
Thank You for your advise,
Nisha, Hong Kong
Kalidas Says …. Thursday, October 15, 2009
Hong Kong dollar is pegged to USD, so it may appear that the risk is less. However, the Hong Kong government appears to be under pressure to severe the peg or at least realign it with other world currencies Otherwise, it is facing prospect of importing inflation due to profound weaknesses of the US Dollar.
When US restarts the borrowing (to finance the trillions of dollars printed in last7 months) the interest rates will begin to raise its ugly head. It will generate lot of real pressure on Hong Kong government, because rising rate will destroy the Hong Kong Property market, the only real source of revenue for the government.
If HK$ is de-pegged, it will certainly rise by minimum 20% or so in short time. Many Hedge Funds will invade this territory to make a fast buck.
If I were you, I would convert over 70% of my USD holding into HK Dollars, for the simple reason that if the HKD is depegged, it will rise in value by 20% or even 30%; if the peg is not broken, what you lose is just small exchange difference not exceeding 0.5% which is a sort of insurance cost you will pay.
Therefore, if nothing happens, you lose only 0.5%; If HKD is de-pegged, you will have chance to win over 20% to 30$ due to appreciation.
Your mortgage is in HK$; so if HK$ appreciates, you would lose in the event of de-pegging. If peg is not broken, you lose only 0.5% and your position in USD vs HKD remain unchanged.
Since your property is in HK, it can potentially be a winner to the extent of free margin money (property value – loans). That will be the time to cash in the property and transfer the money to other currency including USD or buy some property in USA because the property in real term is cheaper and exchange rate also worked in your favour.
Nisha, Hong Kong
15 Oct 09 at 7:51 AM
Dear All Readers and Well Wishers,
On the occasion of Deepavali and onset of New Year, I wish all my readers “HAPPY DEEPAVALI” and “HAPPY NEW YEAR OR SAAL MUBARAK”
It may not be possible for me to acknowledge Reader’s feelings individually, but let me reassure you that your interest lies supreme in this web log. If I have by chance hurt anyone’s feelings, please forgive me on the last day of the year that follows in a day or two.
It will be my earnest endeavor as always to reply each Reader individually and as clearly as possible. Sometime, it takes a bit longer when I am not seized of the stock or subject matter.
When I was the stockbroker, I was using fantastic machine called “Bloomberg”. There was no information or data in the world that I could not search out from this wonderful machine. I call it a “Eighth Wonder of the World”.
While outside the stock broking business, my access to world of information was limited. This is why it takes longer for me than it used to The bloomberg web site has serious limitations, and as such it is no match to fully dedicated terminal.
I wish all Readers to recompose themselves, and move forward with full force, vigor and common sense. Your best wishes are accepted with full grace and heart.
Enjoy your new year with the best of the things around with full participation of your all family members, eaual, elder or younger folks.
Anil Selarka, that is, Kalidas
Hong Kong
Anil Selarka
15 Oct 09 at 7:33 AM
Dear Sir
I wish you and your family a very happy Deepavali
Thanks & Regards
Vijaya Kumar G
Bangalore, India
Vijaya Kumar G
15 Oct 09 at 6:25 AM
Dear Anil Ji
Thanks for pasting the link for the article “Rebalancing of Portfolio in Depressed Market” (with excel sheets).
To my hard luck, both the links are not openable (as it gives a message that ‘done but with some error’.
I will be grateful if you can kindly suggest any other means of downloading / opening the same.
With regards
Kamlesh
Kalidas Says …. Thursday, October 15, 2009
I will send you PDF file by email to you tonight
Kamlesh
15 Oct 09 at 5:37 AM
Hi Kalidas,
Can you please advise me on Hindalco & Cairn.
Hindalco is trying to raise capital which could lead to equity dilution. Cairn, I have been holding for over a year now.
Hindalco 1000 (Q) 86 (C ) 135 (CMP)
Cairn 300 (Q) 232 (C ) 279 (CMP)
DCB 1000(Q) 40 (C) 40 (CMP)
Petronet LNG 500 (Q) 72 (C ) 76 (CMP)
Satyam 650 (Q) 86 (C ) 116 (CMP)
Dish Tv 500 (Q) 46 (C ) 45 (CMP)
Vijaya Bank 1000 (Q) 46 (C ) 51 (CMP)
PSL 500 (Q) 133 (C ) 165 (CMP)
Thanks
Goel
London, UK
Kalidas Says …. Thursday, October 15, 2009
I am not really interested in giving portfolio solutions. Occasionally, I gave opinion out of respect, but it is very time consuming.
In your case, start taking profit in Hindalco after about 7 days. Cairn is a long term buy even now – it has not seen its potential. It just completed $ 1.6 billions financing in most difficult markets. Others are good to hold, Know nothing about PSL
Goel
15 Oct 09 at 4:25 AM
Hello Anilbhai,
This query is about Singapore Real Estate. After the initial dip market has picked up and is going higher and higher. There are stories that it will go up further due to the opening up of Integrated Resort (Casino Project) in Q1-2010 and sustain after the opening as the project will create a lot of jobs in SGP.
What is your view with regards to this project? Should i wait till Dec for a dip or just get in? Apologies for a very specific query, but the decision is big for me and your advice will be helpful.
Regards,
TheMonk
Singapore
PS: Played call options on GLD and SLV (ETFs) and made 30% in a week although the amount was small.
Kalidas Says …. Thursday, October 15, 2009
No views on Singapore property market. Before I invest into any market, I take the view of the currency, then valuation and the upside potential. Otherwise, one may make 30% in property and lose 30% in exchange, that will dilute or wash out his overall gains. This is what is happening for Indian gold investors; the gold rose 30%, rupee rose 7%, so their gain is limited to 23%
Further, when the Governments start promoting Horse Racing, Gambling (Casino) and Prostitution, the country loses focus, and the population is misdirected to wrong business and priority. It s more like investing into vices. Such idiotic governments prohibit smoking but permit other serious vices that debouch or bankrupt the minds of the younger generations.
Further, never invest into the cities having extensive gambling, prostitution or horse racing, as well as into religious centers (like Nashik, Banaras, Hardwar etc). The properties there never rise in real terms.
Rahul Dev Burman has composed many songs that have relevance to stock market. One of his song was ” Jis gali mein tera ghar na ho saajna, oos gali se yoon tu gujarana nahin” . That is never visit a lane (or city) if it is not your dwelling place”
The religious places have number of Dharamshalas, go to Nashik or Hardwar, Banaras or Naathdwara, you will know. When those properties are available for rent for free, who will stay at the hotels, an expensive property by any standard?
The Singapore government has started degenerating. First, it gambled with extremely large investment in bad banks like Citigroup, UBS where billions of dollars have been virtually lost, and now going for casinos. Has Casinos in Macau, Las Vegas or Atlanta contributed to any prosperity? No. I have no respect for governments who become party to convert its women population into prostitutes by opening casino. Have they run out of ideas?Why not they promote healthy businesses or bring in real talents.
May be in short term, Singapore property may benefit due to low interest rates, not due to casinos. Casinos generates crimes, drugs related offenses, and many other vices. They are liability, not assets.
Make your own judgement.
The Monk
15 Oct 09 at 3:04 AM
Dear Sir,
Still waiting anxiously for your suggestions on my portfolio of Motorola shares and advise on what to do with it.
Thank You so much,
Nisha, Hong Kong
Kalidas Says …. Thursday, October 15, 2009
I do not have access to all quotes of MOT including LEAP or Long Term Equity Options. That will give you some alternative. I may take some time to reply you. I will reply you by email
Nisha
15 Oct 09 at 2:59 AM
Dear Kalidasji,
I am following your advise in respect of Abhishekh Industries.
I would like your opinion on Punj Lloyd, Ion Exchange & PNB. I am a long term investor with a horizon of more than 5 years.
Vivek
New Delhi
India.
Kalidas Says …. Thursday, October 15, 2009
This is no time for long term investment on 5 years basis. Wait for the crash and then plan
Vivek
15 Oct 09 at 12:58 AM
Dear Kalidasji,
Happy Deepawali. Can you pls reply to my query sent on 25th September and also to a personnel email sent to you on 10th October whenever you have time.
Regards
Ravi Sehgal, Bangalore
Kalidas Says …. Thursday, October 15, 2009
Give me the subject. I was out of town when you posted it.
ravi sehgal
15 Oct 09 at 12:45 AM
Dear Kalidas sir, wishing you and your family Happy Diwali. And also wishes to our friends in this forum a happy and prosperous diwali.
Thanks and regards
Ravi, Chennai, India
Ravi
15 Oct 09 at 12:23 AM
Dear Sir,
Spice is starting Internation routes, Is that the reason it is laying low?
http://business.rediff.com/report/2009/oct/15/spicejet-to-fly-overseas.htm
regards,
Sandip – Syria
Kalidas Says …. Thursday, October 15, 2009
Still a long way off. Expected 3Q result soon may cause the lower activity International Routes are unprofitable for most airlines.
Sandip
14 Oct 09 at 11:44 PM
Dear Kalidas ji,
In what order would you pick the following stocks
RCOM, RNRL, Satyam, Uco Bank, SpiceJet, Abhishek Ind,Petronet, Indraprastha Gas?
Both Satyam and RCOM are weak these days while others are stable.
Thanks,
Suraj, NY
Kalidas Says …. Thursday, October 15, 2009
Satyam is weak with other high tech due to stronger rupee.
RCOM is weak due to two factors. Due to recent competitive outburst of “per second billing” AND recent accounting controversy about the license fees.
Due to dollar weakness, the weakness in export oriented industry will continue for a while. However, stronger market will result into rotational switch over from metals after about a few days.
Spicejet quarterly numbers are due anytime. Wait until then.
Petronet and Indraprasth are solid long term buy with a view on 2 or 3 years. Abhishek offers excellent point of entry. MTNL also offers excellent entry point.
UCO, DENA and IOB are solid banking stocks. Development Credit Bank is another stock in private sector.
The order of the stock is
Short Term: RNRL, RCOM, Satyam
Medium Term: Spicejet
Long Term: Petronet, UCO, DENA, IOB and Indraprastha
All in the order mentioned.
Suraj
14 Oct 09 at 9:48 PM
Kalidasji, (I always like writing this name)
While going through the recent market moves I feel that the market may go higher now until probably end of the year thereby making it expensive similar to the levels of January 2008.
Am I right to say that one should sell all equities (except oil) by end of November and switch to gold by then (since gold will start rising only when equities are too expensive and inflation concerns mount)?
Regards,
Atul
Singapore
Kalidas Says …. Thursday, October 15, 2009
Gold has already started rising. It may halt near $1085 and then climb to 1150 in no time. Silver will also go $21 once it breaches $18 which is a very critical level. If Silver crosses $18 and stays over it for 3 days, it will hit $25.50 before settling down for big profit taking at $31
Nowadays, the people are not afraid of heights. The media has joined the governments by keeping talks positive and not painting bleak picture. Instead of stating positive growth figures, they say negative features have slowed down, and that is the beginning of recovery.
The fact is that after almost 7 months of downfall, the people have to buy back basics to keep the life going. It is not recovery. It is only a replacement demand, not growth demand.
They say it will be a “jobless recovery”‘ – more like Condom Sex? Sex, Sex and Sex – with no babies?
Atul
14 Oct 09 at 8:36 PM
Dear Kalidasji,
The link below given is similar to what you say about US$ and Gold. You may like it.
http://www.dnaindia.com/money/comment_the-dollar-is-dead-only-awaits-burial_1296066
Happy Diwali and Saal Mubarak.
Rang-Jama, Bangalore, India.
Kalidas Says …. Thursday, October 15, 2009
Happy Diwali and Saal Mubarak. Read the article by the way.
Rang-Jama, Bangalore, India
14 Oct 09 at 12:27 PM
Dear Sir,
As we are eagerly awaiting your next list of stock recommendations on the auspicious occasion of Diwali, i cant resist to get your opinion on the recent bullishness in the equity markets worldwide. The so called correction continues to elude all of us. Its getting beyonds one’s imagination that what happened last year (the fall to 2700 Nifty levels) was overdone or the rise this year (upto 5100 Nifty now)is overdone? I would like to know your perspective on this? Whats the downside risk from here to our Markets if one decides to invest in this new samvat?
Regards,
Avinash Desai
Chennai, India
Avinash Desai
14 Oct 09 at 12:21 PM
Hello Kalidas sir,
Can you please advise me on ICICI and RCOM.
ICICI 50(Q) 1069(C) 920.65(CMP)
RCOM 70(Q) 607(C) 231.60(CMP)
I am planning to sell ICICI at CMP and switch to RCOM.
Am I right in doing so? Or is it better to sell both and switch to UCO/Dena/Abhishek Ind?
Please advise sir.
Thanks
Suresh
Chennai.
Kalidas Says …. Thursday, October 15, 2009
Sell ICICI – all at CMP – you realize Rs 46,000
Buy RCOM – 130@ CMP – you pay Rs 29,000
Buy Abhishek 800@CMP- You pay Rs 12,000
Buy UCO/Dena 100 @ 56 – You pay Rs 5,600
You may then build the position in UCO/DENA/Abhishek/Dev Credit Bank slowly while getting out of RCOM in less than one year. If RCOM goes up to Rs 385 or so, sell 800 you bought today and retain the balance.
Suresh
14 Oct 09 at 10:18 AM
Will RCOM be a safe buy at Rs 130-140 Levels. What is your taget price? Can it double within a year from where it is now?
Abu Dhabi
UAE
Kalidas Says …. Wednesday, October 14, 2009
Why should it drop to Rs 130 to Rs 140 level? It is a major leading telecom company, not bankrupt one. You want to know whether it wll double from here and at the same time you want to see the half the price than it is now. I do not understand your query.
Princeofindia
14 Oct 09 at 2:35 AM
Dear Sir
By the time writing this message Spicejet is trading nearly 5% down around Rs 38.35/-, from previous close of Rs 40.35 on 12.10.09, relately with less quantity.
We know that you normally advise to hold share for relatively long time to reap benefits.
I hold around Rs 2500/- shares bought at Rs 37/-. In one of your earlier mail told to observe trading quantity and its momement to guess about its forthcoming 2Qr results.
May be you have some access to the info about its forth coming result. If so please share your openion at this time whether to hold it or to book profits.
Thanks
Vijaya Kumar G
Bangalore, India
Kalidas Says …. Wednesday, October 14, 2009
I am in Hong Kong. How can I have info that you are talking about. I am not insider.
I was told by my broker today that the company related people sold about 150,000 shares 3 or 4 days back. However, I never believe my brokers – they usually have big talks. One day fall may not be indicative of potentially bad results. The stock usually conslodates between Rs 38 to 43 before going higher.
If you want to sell your stock to protect against downside, you may do so. I am not selling my inventory, because point of my entry is too low < Rs 14, some even in early double figure.
Vijaya Kumar G
14 Oct 09 at 12:21 AM
Kalidas ji,
I sent you a query on Gold investments through email. Can you please respond to my email.
Regards,
KeeYes
Tokyo
KeeYes
13 Oct 09 at 8:54 PM
Dear Sir,
Please share your views on my holdings of Motorola as mentioned on my previous enquiry? I didnt get a response as yet and its a big amount which is tied up, I was looking at selling it and buying 70% Gold & 30% Silver bars. Please share your view?
Looking forward to your suggestion,
Thanks,
Nisha Hong Kong
Kalidas Says …. Wednesday, October 14, 2009
Sorry, I missed you. I have to look at the Motorola shares. I will do that tonight and will let you know tomorrow. You are down by 50%, so you have to double the price (100% gain) to recover the losses.
I will try to reply you by tomorrow.
Nisha, Hong Kong
13 Oct 09 at 5:17 PM
Sir,
I am an avid but silent follower of yours since long. I had seen my portfolio market value eroding from 12 Lakhs to 4.5 Lakhs from the zenith of early 2008 to the nadir of early 2009. I did not have guts or intuition or any formal exposure to take quick but unpleasant decisions. It was a very painful period for a retired person like me. But then, I started following your recommendations, particularly IFCI, Jindal Stainless, Hotel Leela and Essar Oil and of late, Abhishek Industries, Spicejet and UCO Bank based on your recommendations to readers (I could not muster up courage to get into LIC Housing, and now regret it every time I look at its CMP). Thanks to you Sir, I have been able to recoup a very major part of the losses due to these actions.
Apart from expressing my gratitude, other purpose of writing this is: on October 12, Selva has written about Abhishek Industries – “If you could provide the reason behind this new pickup in your list ….”. I wanted to know if there any such “list” published by you, which I might have missed out. I will be eager to refer to it.
Suresh Krishna, Thane (Maharashtra), India
Suresh Krishna
13 Oct 09 at 6:38 AM
Dear Anil Ji
I am very keen to study your article “Rebalancing of Portfolio in Depressed Market” (with excel sheets).
I will appreciate if you can provide me the link for the same.
Please spare sometime for this request.
Regards
Kamlesh
Baroda
Kalidas Says …. Tuesday, October 13, 2009
Here is the link for the article and spreadsheet
Kamlesh
13 Oct 09 at 6:32 AM
Dear Sir,
Is the price of Rs 108 is good to enter Satyam (Mahindra Satyam). what will be short term and medium target for it.
Thanks,
Siva, Chennai
Kalidas Says …. Tuesday, October 13, 2009
I do not change my targets too often. When I first suggested at Rs 58, I mentioned target as Rs 160 and in momentum upto Rs 210. I stick to it.
Siva
13 Oct 09 at 4:11 AM
Dear Anilji
Namaskar,
With the news of goof up by R-com in results, how does it stand in comparison to Bharti Airtel for Investment.
regards
Hari Sharma, New Delhi , India
Kalidas Says …. Tuesday, October 13, 2009
Honestly, I do not follow Bharati Telecom. It is expensive stock. I also do not like this company because it is a cheat. During my previous visit, I bought permanent number by paying as high as Rs 999. When I visited India again, they cancelled my number and allotted to others. They also never replied. I therefore do not trust such companies.
In any case, when the whole world wants to invest in India, this Sunil Mittal goes out of the way to South Africa to buy some company there. I do not understand this highly admired CEO
RCOM is relatively cheap. So I prefer it to Bharati. Frankly, I do not own nor intend to own any of these shares. There are better choices available in the market such as Dena, IOB, UCO, Abhishek Industries, Spicejet, RNRL, Petronet and many others. Why go for such high flying low paying stocks?
Hari Sharma
12 Oct 09 at 10:57 PM
Dear Kalidas Ji,
My understanding to the latest news on R-Com is that, RCOM has not understated its revenues to the shareholders and has understated only to the DOT for the reasons to pay lower licence fees. Even this understatement, as per the spl audit report categorically shown reflects the same is not wireless income and not required for payment of any licence fees. As such there will be no big issues, it will be just short term media hype (for battle – MDAG Vs ADAG). And if the DOT demand higher licence fees, then there will be little change in EPS (on lowerside). And the income was already considered and no need for any increase in income as the income was already considered in annual accounts reported to the shareholders. Is my understanding is correct, kindly advice.
Thanks & Regards,
Balaji
Kalidas Says …. Tuesday, October 13, 2009
Different authorities have different rules for considering some item. or example, the depreciation is counted on straight line methods from the Company Registry point of view, but accelerated depreciation is considered from Income Tax point of view (such as initial depreciation, double or triple depreciation). Similarly, some income is considered on Accrued basis, whereas from Income Tax purposes, the income is shown on “as and when received basis”.
Even for us, we are NRI from RBI point of view, but in some cases we may not be considered NRI from Income Tax point of view.
We do not know what was the definition of income from DOT point of view which may differ from traditional accounting point of view. There is nothing unusual about this. So there should not be any controversy. Ask any Chartered Accountant, he will tell you more on this.
Balaji - Hong Kong
12 Oct 09 at 8:47 PM
Dear sir,
I haven’t recieved your reply as yet to my enquiry.
Regards,
Nisha, Hong Kong
Nisha, Hong Kong
12 Oct 09 at 8:10 PM
Dear Sir!
Could you please respond to my query today?
Regards,
Shankar
Atlanta US
Kalidas Says …. Tuesday, October 13, 2009
Check your email. It is already replied.
Shankar
12 Oct 09 at 1:40 PM
Dear Sir,
May I get your valuable comments on the below news about reliance communications about the recently published audit report?
http://www.moneycontrol.com/news/cnbc-tv18-comments/excl-rel-comm39s-audit-shows-gapsstated-actual-revenue_419054.html
Thanks
Nithra
US
Kalidas Says …. Tuesday, October 13, 2009
Nothing much to say about. We have to wait for the official report. RCOM was correct in saying that such leakage of report without any copy being given to it, signifies the instigation by the MDAG camps.
I have mentioned earlier that when the brothers quarrel with each other, one tries to cut the neck of the other, and one party may send feelers or unsigned complaints to other government departments like Income Tax, Excise Dept, and in this case DOT. This is why I was negative in investing into family disputed companies.
The period in question dates back to 2005 to 2008 when RCOM was under the control of Mukesh Ambani in undivided empire. He knew what was wrong in RCOM, and that is why he gave away to ADAG almost free of cost. I had suspected massive losses in RCOM due to free telephone unit in aggressive campaign. Someone has to pay for it – nothing is free in this world.
The fact that both Bharati and Idea have come under similar investigation lend belief that there could be industry wide practice, not so unique to RCOM.
One such item was Pre-Paid card treatment. Under strict accounting rule, any advance payment received by the utility company is its liability and may be treated as income only when the services have been utilitzed. Therefore, until such services were utilized, the advance payment may not be treated as “Income” which may be subject to license fees.
Kotak is an opportunistic player, not a good name. It could have close ties with the RIL or MDAG group. It is impossible for them to find out so called irregularity unless they have inside info or someone fed them with this mischievous report. If it was done by Mukesh, it was acceptable practice, and now that it is in ADAG stable, it is NOT. How could it be.
In any case, it all depends on how the DOT takes the view. These are technical questions. No public company want to underreport its revenue and therefore its profit willingly because such practices have negative impact on stock prices. If licence fees were avoided, then revenue was also avoided, so also profits, so also underpayment of Income Tax as well.
MDAG has GOI in its pocket, ADAG was vehemently opponent. It is a battle royal.
This could place RCOM stocks under pressure. The fact that the stock was coming down for over last few days suggest that the above report was leaked out to the market participants in advance.
This is why when the families collide, rattling sound is heard by all neighbours. It confirms my earlier assessment not to invest into family disputed companies on long term basis. My recom for RCOM, RNRL and other ADAG company was only on short term outlook basis.
Even now, I would be a buyer of RCOM in deep correction on the following reasoning. If market rumours or special audit is correct, there will be not only payment of licence fees, but also restatement of higher revenue and profits of RCOM for previous years. The income is usually higher than the license fees. The EPS will rise for the past years, so it is indirectly stock positive.
However, public talks or chats or chovats will make the stock gyrate heavily at times. I would try to sell the stock in short term if my losses are not over 9%. I will then wait for the matter to settle down and wait for the deep correction when it can be bought back.
Nithra
12 Oct 09 at 1:04 PM
Dear Sir,
Reliance communication seems going down further. CMP – 247/- . Do you see the stock can go down further, so that we can accumulate a low price? Also what is your short term and long term target to sell it .
Thanks,
-Santosh.
Bangalore
Kalidas Says…
This is already low price. Just buy it.
PS: due to Special Audit report, there could be negative impact on stock price. Wait for an opportunity to buy when it is suddenly down by 10% to 20% in a day. It is a large company. It is not going to disappear overnight due to alleged irregularity. Read more on this in my reply to another reader above you, 13/10/2009
Santosh
12 Oct 09 at 9:40 AM
sir
I have bought the following stock in my portfolio. Please advise whether I can average, add more or sell at current level.
COMPANY: Hindustan Copper
BSE Code:513599
CMP:209
Buying Price:225
QTY:100
arun
mumbai
Kalidas Says …. Monday, October 12, 2009
You have bought at 225 and stock is at 209, why do you want to average? You average only when the stocks are down by 30% for second liners and 20% for blue chips.
You bought a good stock at good price. It is not so liquid though. It is consolidating at this level for quite sometime, so it should do well.
In fact, I enquired about this stock only today. Earlier, I had bought from Rs 38 to 79 (2000 shares) and sold all the way to 350 or about. I wanted to buy back, but the price difference was not so strong enough from my sale level.
Do not compare your investment with my investment. I did that over 5 to 7 years ago.
arun
12 Oct 09 at 7:36 AM
I am a student from Madurai, Tamil Nadu, India.
Interested in share trading not investment.
Choosing trading has some personal reasons.
Could you suggest me some stocks for short term trading purpose and teach me what factors are to be considered when choosing a stock.
My initial capital is Rs.10000/-
Anbarasu,
Madurai.
Kalidas Says …. Monday, October 12, 2009
sorry, but I do not trade much, though there are always some trading opportunities. I do not advise on trading opportunities, esp. very short term.
Try your luck with RNRL. Your capital of Rs 10000 is too small for trading purpose. You have to have size to trade.
Anbarasu
12 Oct 09 at 6:06 AM
Dear Kalidas,
Could you provide more details for Abhishek Inds like the entry price, exit price and hold on duration ?
If you could provide the reason behind this new pickup in your list, your readers will understand better.
Thanks
Selva
chennai
Kalidas Says …. Monday, October 12, 2009
It will appear under Stock Recommendations on 16/10
Selva
12 Oct 09 at 3:36 AM
Dear Sir,
I am reading your comments in the section ‘Confused Mind clear answers”. You have recommended investment in Gold as well as silver. At this juncture, which is the better bet for investing for a period of 4-5 years.
Kalidas Says …. Monday, October 12, 2009
Silver is better than Gold from % appreciation point of view. However, it is very volatile – it used to drop 20% in one session. Those days are history. However, from storage point of view, gold takes much less space for storage than silver. Further, the dealers’ spread in silver is relatively high – 2% to 5% in non city centers. I am more of silver and palladium investor than Gold because I have enough of yellow metal. In spite of more relative risk, I love silver very much.
Gold is therefore more liquid, easily saleable, easily storable and darling of all – investors, savers and speculators. If you are new to this investment, start with Gold.
The bull run in both the metals have not started as yet. The momentum buying is yet to start. The market will be good for 2 or 3 years when the financial crisis would have been played out.
I would not plan on 5 years basis.
RAJESH SHARMA, DELHI, INDIA
12 Oct 09 at 12:08 AM
Dear Sir,
I have not got a reply yet. Could you please respond?
Shankar
Atlanta USA
Kalidas Says …. Monday, October 12, 2009
I will certainly reply today evening.
Shankar
11 Oct 09 at 3:21 PM
Dear Anil Ji,
In the latest dramatic move Anil asks Mukesh to resolve all issues cordially. Please see the link below:
http://economictimes.indiatimes.com/news/news-by-industry/energy/oil-gas/Anil-asks-Mukesh-to-resolve-all-issues-cordially/articleshow/5112727.cms.
What do you read out of this impacting the stocks of both the business houses?
Regards,
Anurag
Delhi
Kalidas Says …. Monday, October 12, 2009
Finally, the blood has proved thicker than water. Both groups will benefit but ADAG group will be the biggest winner in the market. I think I would be proved right on RNRL, RCOM, RPOWER and RCAPITAL. MDAG group stable will see relatively less price rise, except in its infrastructure units.
It now looks like Supreme Court may not decide the case and may revert it back to the disputing parties for inter-se settlement out of court. It is still too early to evaluate the statement of RIL.
ADAG group scored over MDAG in making the settlement offer in public. MDAG group will be hard pressed to respond, and this is why it stated that Anil should have approched Mukesh privately. Why should a public listed company CEO approach similar CEO privately? – I don’t get it.
Even if the Supreme Court hears the case, the sympathy will be in ADAG favour. It could be also a tactical move two weeks ahead, however, real intention of both brothers could not be doubted.
Dhirubhai may have to take a leave from heaven to revisit Reliance group to ensure that everything runs well again!
Anurag
11 Oct 09 at 11:10 AM
Dear sir,
I have invested through an ELN last year and my USD$100k got converted into Motorola shares at USD$19. Today its trading at $8.45. It seems there maybe a correction in the near future so I would like your advise on whether I should sell this stock at this current price even though such a big loss and what should I invest it in? I also have a small amount in Citic Bank (picked it up at the IPO in HK) & Alibaba (also during IPO in HK). Should I sell these too?
Thank You,
Nisha, Hong Kong
Nisha, Hong Kong
11 Oct 09 at 10:49 AM
Dear Sir,
I was going through your old post “Time to buy stocks” of oct 2008.
Majority of them have increased threefold or doubled from their price of oct 2008. I can’t believe the accuracy with which you have given stats about those stocks, but sad thing is that i couldn’t buy them due to shortage of funds,
But few of them are still trading at the buy price or appreicated around 30% from price mentioned in the article.
So can you pls suggest on the below stocks :
Balaji Telefilms (CMP 68)
Essar oil (CMP 150)
Dish TV (CMP 44)
Royal Orchid Hotel(CMP 71)
Indian Hotel (CMP 75)
TAJ GVK (CMP 146) Can we still enter at this price ?
Pls advise.
Regards
Shiv H ,Bangalore India.
Kalidas Says …. Sunday, October 11, 2009
Only DishTV is worth it. Other at basic entry level is ABHISHEK INDUSTRIES. Mid Entry level is Spicejet. UCO, DENA and IOB are other good stocks to enter at. Others to avoid for the time being.
Shiv H
11 Oct 09 at 7:55 AM
Sir,
Could you please share your views on swiss frank ? Does it make sense to hold franks ?
Regards, Naresh Kumar, Faridabad
Kalidas Says …. Sunday, October 11, 2009
Currently, it is gaining due to rise in gold prices. However, there is a strong disconnect between Dollar and Swiss Francs which has not been reflected in the prices. The US took serious actions against tax defaulters by penalizing the UBS with the consent of Swiss government.
The serious investors will think twice before going to Switzerland again. They may be waiting for another alternative. Once they find it, they will go out of SF and switch to that currency.
I prefer only Aussie Dollar. This is the currency for the future. The future belongs to commodity currency. With high profile, better banking system and economy, Australia is well placed to capitalize on USD weakness. I first recommended it around 66 level (USD 0.66/AUD) sensing the upheavals in commodity market.
China no longer trusts the USD. Instead of investing into non dollar currency making US unfriendly, it is slowly buying real assets of those countries, thereby buying their currencies indirectly. US can not force China not to S assets, so it serves its both purpose – buying AUD assets without attracting attention and also getting away from USD
Naresh Kumar
11 Oct 09 at 2:14 AM
Sir,
Amongst Canadian dollar, Australian dollar and Indian Rupee, which do you think will appreciate the most against the US dollar (period 1 year, 2 years).
Currently, I am earning in USD and saving/investing in INR.
Do you think saving in FCNR (foreign currency non-resident deposits) in India in CAN$(2.5% for 1 year deposit in SBI) or AUD$ (5.91% for 1 year deposit in SBI) should be explored.
(for comparision, NRO fixed deposit is currently 6.25% per year, after tax will be 5.56% (TDS 11% in my case) this is comparable with AUD$ FCNR, thus if AUD$ appreciates more than INR, I will get more returns).
Regards,
Ashish Dandekar
Doha, Qatar
Kalidas Says …. Sunday, October 11, 2009
AUD, CAN$ followed by India Rupees. Retain in AUD
Ashish Dandekar
10 Oct 09 at 1:38 PM
Sir,
Almost everybody expects gold to shoot up versus US dollar but the dollar is itself weakening against other currencies. So if dollar goes to 30Rs, gold buyers in India may not make any profits even though gold doubles in dollar terms. How long do you think Indian govt. can keep the rupee from appreciating against the dollar?
Pawan,
Delhi, India
Kalidas Says …. Sunday, October 11, 2009
GOI would do what it has been doing over 50 years. It will not float the rupee – if it floats freely, you will see massive gains in rupee in short time. It was at Rs 39 when BJP was ruling. Why should there be cry when it has just appreciated from Rs 49 to 46.
If some one buys gold, and he feels that Rupee will go higher, he can have forward contract with his bank to fix the exchange rate. I do not know whether ordinary person can do that, but businesses can certainly do that.
There is no other way.
Pawan
10 Oct 09 at 7:55 AM
Sir,
Regarding Shiva’s question on Obama and his Nobel prize:
1) United States went to war with Iraq when Saddam Hussein wanted to price oil in non-dollar currency.
2) There was a lot of talking in various media last week of Oil being priced in Gold rather than dollars.
Makes me wonder if Arabs & Iran are making sure that America will not attack them, if they start charging for Oil in Gold by giving Obama the Nobel peace prize (it will be very funny if Obama, after getting the Nobel Peace Prize, declares war with Arabs or bombs Iran).
However, fun aside, the implication of pricing oil in gold is enormous for gold (as the annual world production of gold will have to pay for the annual world production of Crude, i.e an $80 billion market (gold at $1000/Oz) has to grow to $2.5 trillion market (oil at $80/barrel) i.e. Gold to appreciate more than 30 times).
Please give your thoughts as this has completely numbed my brain and I have started feeling that I should take even more exposure to Gold/Silver (around 20% of my money is in physical Gold/Silver, should I think about 30%?).
Regards,
Ashish Dandekar
Doha, Qatar
Kalidas Says …. Sunday, October 11, 2009
I have not heard any talk of oil being priced in Gold. Oil is a mass commodity with daily consumption of 88 Mln Barrels per day (mbpd), whereas gold being produced every year is just 2500 mtons. Gold is simply no match to the oil quantity being traded.
The Arabs can price the oil against basket of currencies or Euro or GBP. Alternatively, they can price it in their own currency. They have several options.
I think 20% exposure is more than enough. We belive in God, yet we do not go to temples or churches every day. So even if Gold is good, there is a limit to which one must accumulate. Gold is not a stock that can be traded at whim.
Ashish Dandekar
10 Oct 09 at 7:52 AM
Dear Sir,
Continuing with the discussion on Gold ETF, I fail to understand why GOLD ETF should trade at different prices when they represent physical gold kept in the vault of the institutions.
Please look at the CMPs of the follwing gold ETFs traded on Indian bourses
BENCHMARK MUTUAL FUND Gold ETF: Rs.1567
Reliance mutual fund GOLD ETF: Rs.1520
SBI MUTUAL FUND GOLD ETF: Rs.1598
QUANTUM GOLD ETF: Rs.778
KOTAK MUTUAL FUND GOLD ETF : Rs 1560
UTI MUTUAL FUND GOLD ETF: Rs.1571
Except Quantum Gold fund which represent half gms of gold rest all represent 1 gm of physical gold and should ideally trade at the same price, inline with the international price of the gold. To elaborate it further 1 gm of gold representing SBI ETF is trading at Rs.1598 whereas that of Reliance is trading at Rs.1520. Is there something more to it which I have missed out. Is it not currect that Gold ETFs are backed by underlying physical gold.
Nsri,Pune,India
Kalidas Says …. Sunday, October 11, 2009
Please realize that Gold ETF is a derivative. It is not gold by itself. Any derivative may trade at premium or discount to the spot prices of respective commodity.
When you are paying Rs 2 or 20 for some futures or options in F&O segment, it is nothing but the premium or discount to the underlying commodity. It is a fact of life.
You are trying to figure out too much by making a mole a mountain.
We believe in God. When we go to the temple or churches to pray his idol, that idol itself is a derivative of the God, not the God himself.
NSri
10 Oct 09 at 2:52 AM
Sir,
WHy Nobel comittee did such blunder of giving Obama The Nobel ? The guy himself says he does not deserve it.:-).
Every sensible soul on the earth is laughing at this decision. Is there any hidden agenda?
Shiva
Bangalore
Kalidas Says …. Saturday, October 10, 2009
A policy of appeasement.
shiva
9 Oct 09 at 6:38 PM
Dear sir
Please read this artical(http://marketoracle.co.uk/Article14102.html). Ofcourse you would have known
such incidents before. You always say when buyer insists on phycial that is when prices shoot up.
But in reality different thing is happening if what is written in this artical is true.
My question is if such things are happening how do you expect price shoot up? Behind the scene
most of the buyers will accept 30% or even 50% price hike and agree upon the cash settlement. Things may go even 100% or 200% cash settlement without market knowing.
For the world or open market price hardly move.
Personally if I were a buyer though I love phycial I am ready to settle down with 30% price hike in a day or two.
But again i will repeat my process. There is no end. It is easiest way to make money for hedgefunds or big FIIs.
Shiva
Bangalore
Kalidas Says …. Saturday, October 10, 2009
in futures market in USA, the Gold futures are settled physically with cash option. Those who do not want hassle, they settle for cash dollar. However, the long term investors from Middle East and some hedge funds insist on physical settlement rather than cash.
This is why, a few months ago, theDeutsche Bank had to rush to ECB for supply of physical to bail them out, when the counter parties insisted on physical settlement and refused to accept the cash dollars. They were right on doing so – the gold shot up by 15% and $ lost value by over 7% during same time.
shiva
9 Oct 09 at 6:19 PM
Hi Kalidas-ji,
Thanks for your clarification on Gold ETF. I am holding the newly launched SBI Gold ETF. A very strange behavior came to my notice in this ETF and hence I wanted to share with you, in case you find out something interesting in it.
I was checking the price-volume data of the transactions in this ETF since its inception (May 28, 2009). The average daily turnover is around 20 Lakhs, the lowest being 1 Lakh and highest being 86 Lakhs.
There are only 3 exceptions to this. One is on 8-Sep (121 Lakhs) and another on 9-Sep (122 Lakhs). But what left me surprised is on 22-Sep and the turnover was 2746 Lakhs !! Very clearly something unusual happened, may be some institutional buying or selling. There was not much of a price fluctuation on that day, just as good as other days.
We have covered 3 weeks after that, but the average turnover is again just around 20 Lakhs in line with its 5 months average.
I am not sure if this means “something” or it not. Since it is a learning phase for me, can you please help ?
Sudipta, Kolkata, India.
(this guy is becoming your fan day by day).
Kalidas Says …. Saturday, October 10, 2009
Don’t read too much into it. For every seller, there is a buyer, please remember that.
Occasionally, there would be more turnover, may be due to Gold ETF did not get subscibed initially and placed out later or some other reasons. You will never be able to find out.
Better focus on the Gold ETF itself, and how it moves with the changes in the gold price. That is what is going to make money for you, not anything else.
Sudipta
9 Oct 09 at 12:31 PM
Please provide your view on buying shares from Indiabulls Power IPO.
Sumit Kr. Agarwal
Kanpur, INDIA
Kalidas Says …. Saturday, October 10, 2009
I never follow IPO. I always buy from secondary market, never ever bought IPO shares in my 25 years of investment life.
SUMIT AGARWAL
9 Oct 09 at 10:30 AM
Sir,
Can you elaborate a bit more on Abhishek Industries?
Sreejith
Hyderabad
India
Sreejith
9 Oct 09 at 9:16 AM
Kalidasji,
I am a big fan of yours. You have been recommending your reader to invest/switch in Satyam, UCO, RNRL, RCOM, Spicejet, Abhishek Ind. Just a humble suggestion, if you can create a section or may be under Stock Watch, where you put a liner why you suggest, for what duration, targets if any. This would help your regular readers to understand more
what they are investing into and many repetitive question from readers.
Thanks
Nitin
Washington DC
Nitin Pillai
9 Oct 09 at 8:14 AM
Informative data of USA
27 states in the US now have unemployment rates above 8.5%
60% of Americans don’t have enough money saved to retire
2,690 employers performed mass layoffs (firing of 50 or more employees at once) in August (up from 533 in July)
REAL incomes continue to collapse: at an annualized rate of 5% for the three weeks of August 28-September 23
REAL weekly unemployment claims have topped 500,000 since January
US bank loans have been falling at an annual pace of almost 14% since the early summer
Shipments in capital goods fell 1.9% in August, similarly, rail shipments which slowed their rate of decline the last few months, have begun to accelerate downward again
Industrial production has dropped 11%
Fannie Mae’s August data shows a surge in delinquencies from $4.2 billion to $70 billion.
Ketan,Hongkong
Kalidas Says …. Friday, October 09, 2009
If Obama reads this, he will kill you.
ketan
9 Oct 09 at 6:25 AM
Fantastic writing by the author Satyajit Das May be you have read him, in case you haven’t here are some links.
Martin
Goa, India
http://www.wilmott.com/blogs/satyajitdas/index.cfm/2009/1/16/2008–Look-back-in-Horror
http://www.wilmott.com/blogs/satyajitdas/index.cfm/2009/1/25/2009-Prospects–Trench-Warfare
And here is a link to one of his interview I like the stories part.
http://www.pearsoned.co.uk/Bookshop/article.asp?item=903
Kalidas Says …. Friday, October 09, 2009
He is a renowned authority on derivatives. However, he does not offer any solution as I have in my book. It is always easy to criticize but always difficult to offer solution.
Martin
9 Oct 09 at 1:45 AM
Sir
Can you tell us any better technical software is available for free download?
What is the range or time period you expect this market will start to decline and range of the bottom.
What is your opinion on the idea cellular
Bought 90(Q) @ 75(Bought Price – through IPO) CMP 64
Regards
R.Yuvaraj
Kalidas Says …. Friday, October 09, 2009
The company has lot of debt, though it has wide popularity. To me it is expensive bet. Switch to Abhishek Industries (Rs 14.30). If that stock goes to just Rs 18, you would be in money. SELL 90, and BUY 450 with same money and buy more if you can spare for another 460 shares
R. Yuvaraj
9 Oct 09 at 1:21 AM
Sir,
Warm Greetings to you. I have been following your advise for learning sake in last couple of months. I have tried experimenting with your suggestion and little bit of my homework and it has worked well. E.g. Bought UCO bank at 43.77 last month and am holding. Now I am in a dilemma. I want to experiment more but by selling one of the stocks in my portfolio. Here are a few, please advice.
COMPANY: ICICI Bank
CMP:906
Buying Price:731.10
QTY:40
SWITCH to UCO/DENA/IOB
COMPANY: Gujarat Alkalies
CMP:125.25
Buying Price:109.92
QTY:150
TAKE the loss (15%) and switch to ABHISHEK INDUSTRIES
COMPANY: Kalindi Rails
CMP:156.70
Buying Price:228.91
QTY:60
No idea about this stock Never followed it.
COMPANY: Punj Lloyd
CMP:276.15
Buying Price:372.31
QTY:75
Trade it for a while. When it rallies, sell it and buy back when it drops by 15%. You will be hard pressed to recover quickly because it has already advanced from all time low. What were you doing at that time?
COMPANY: Bharti Airtel
CMP:345.95
Buying Price:408.41
QTY:50
SELL and swtich to RCOM
Regards,
Sumit Gupta
India
Kalidas Says …. Friday, October 09, 2009
You must mention your location properly, otherwise do not expect any answer in future. India is a country, not the city, so be specific where you are from.
I do not advise on portfolio counselling on day to day basis. Better study my article “Rebalancing of Portfolio in Depressed Market” with excel spread sheet. You should do your work first when I have provided you with the tools. The reply against each stock is given as professional courtesy. Other readers please note that there will be no portfolio counselling in future.
Sumit Gupta
8 Oct 09 at 10:58 PM
Hi Kalidas-ji,
I know that you have already clarified this, but I am writing this out of sheer surprise and anxiety. Kindly help me to really understand it.
What you have stated below is that, even if Gold price becomes 3 times of what it is now, the ETF price of 1600 (now) cannot touch even 2500.
That means, when a physical investor makes 200% profit (Gold price 3 times), a paper investor cannot make even 50% (1600 to 2500 is almost just 50% increase). How much can he expect… 25% or 30% ?
In a more defensive approach, if we assume that Gold price will only double (100% profit in physical investment), then what does a paper investor get ? I doubt it will be 10-15% then.
The anxiety comes out of the fact that all my Gold investment is in paper form only. I have read each n every sentence of yours on the importance of physical investment, but then, I could not manage to buy physical Gold due to multiple factors – unavailability in my locality, lack of security, lack of experience in any physical buying and much more on personal side.
I do not expect to gain as much as a physical investor, I will be more than happy to have 80% of the net profit a physical investor makes. But according to your estimate, I think I am not going to achieve even close to that. If the % return is correct, then I am sure there are opportunities in equities which may give me higher returns.
Please suggest so that I can take a decision whether to hold my paper investment or switch to equities etc. Thanks for your suggestions as always.
Sudipta, Kolkata, India.
Kalidas Says …. Friday, October 09, 2009
If I have said that, then I am wrong. I did not literally mean that. What I meant was that if the physical gold rises too fast too high in short period of time, the relative derivative like ETF may start trading at nominal discount, say 2% to 5%, depending on the terms of the ETF and its exchangability into physical gold. It takes time for ETF to convert into physical gold – there is time difference – due to which if the gold prices drop, the actual realization could be lower. This fear is discounted in the price itself.
I hope this clarifies the matter.
Equities and Gold are not comparable. If Gold rises too fast, that means that there would be total lack of confidence in the economy, and both stock and bond markets could correct significantly downwards. Gold will be the solo winner.
Never attempt to equate pure gold with trash currency paper. Gold is God.
Sudipta
8 Oct 09 at 11:43 AM
Dear Sir,
Telecom shares expecially RCOM crashing day by day. Is it wise to keep the shares or move out to other sectors for sometime.
Sruthi
Bangalore.
Kalidas Says …. Friday, October 09, 2009
RCOM is still the BUY. The fears of per second call charges is excessively played out. Further, this will be the common theme for all operators. No one will be in advantageous or non advantageous position. This is why cheaper and better stock will win.
Charging phone based on actual usage is nothing wrong – it is perfectly rational. When you go anywhere, you pay according to quantity and usage, say in a restaurant, you pay for what you ate, not what did you see on the menu.
Sruthi
8 Oct 09 at 10:53 AM
Sir,
Long pending is your learned observations on
Punj Lloyed
BSE: 532693 | NSE: PUNJLLOYD | ISIN: INE701B01021
my position is
cost of buying-158
CMP- 277
quantity 150
when to exit to catch it again?
regards
Ajay
Delhi
Kalidas Says …. Friday, October 09, 2009
You are in too much money. How much more do you want? Just sell it and take a holiday
Ajay
8 Oct 09 at 7:49 AM
Dear Kalidasji,
I do not know whether you missed my earlier email.
My apologies for not mentioning the CMP.
Please find below the details.
BARTRONICS IN – 200 (Q) 249 (C) CMP 170
Why did not you buy when it dropped to less than Rs 50 or just 20% of your original cost? Looks like you have bad habit of following mercury. Once the temperature goes up, it stays there.
It is a progressive stock with good earnings. However, if the company raises the money by Secndary IPO to raise Rs 300 crores, that means, it would issue 2 crore shares or 20 million new shares, there will be dilution by over 70% in EPS. You are down by over 50% from current level. It will be hard to see that level if new shares are issued. Although the company is progressive, I would suggest you to switch as under:
SELL Bartronics Rs 168 200 shrs
BUY Spice Jet Rs 41 800 shrs + Buy 400 more (new investment)
HAVELL’S INDIA – 50 (Q) 650 (C) CMP 302
The company is in good sector, but the earning growth is stagnating. It would take hell of a time to double the money from current level. Just SELL and apply the cash to buy UCO/DENA/IOB that could double or even quadruple in 2 years
IDBI – 200 (Q) 177 (C) CMP 122
SELL and switch to UCO/DENA Bank. Also buy some more to average down the cost. You need to make just 50% to break even. If you buy more of UCO/DENA, you will recover investment earlier.
IFCI – 100 (Q) 90 (C) CMP 54
Switch to UCO
ISPAT INDUSTRIES – 400 (Q) 49 (C) CMP 23
Speculative, but Buy 800 to 1200 more
J P HYDRO – 200 (Q) 91 (C) CMP 78
Unable to check from Moneycontrol
REL.PETROLEUM – 100 (Q) 230 (C) CMP 130
It must have been swapped to RIL. Is it still trading as RPL?
SPICEJET (ROYAL AIR) – 100(Q) 100 (C) CMP 35
Buy 3 times more
RNRL – 300 (Q) 90 (C) CMP 84.90
Stay with it for a while. In fact, you may switch from JP Hydro
Awaiting your valuable guidance/advice.
Thanks & Best regards,
Ragav
Chennai
Kalidas Says …. Thursday, October 08, 2009
Normally, I do not provide this kind of consultancy. I invite your attention to my previous detailed article – Rebalancing of Portfolio in Depressed Market – that gives you complete strategy.
It is simply not possible to provide solution to practically every reader. It takes too much of time. However, as special case, I will reply tomorrow.
Kalidas Says …. Friday, October 09, 2009
My reply against each stock.
Ragav
8 Oct 09 at 6:24 AM
Dear Sir,
Spicejet has surpassed your target(CMP 40.10).
I am holding this scrip with 40% returns.(Avg.Price – 27.60,No.of shares – 1800)
Your guidance is highly appreciated on the exit price of this scrip.
Regards,
Hariharan.
Hongkong.
Kalidas Says …. Thursday, October 08, 2009
The stock has just witnessed the rise in volume and momentum is gaining on upside. Almost 17 Mln shares traded yesterday and today over 8 millions. This means that strategic positions are taken by some large operators. You may see rapid gains on low volume in coming days. When you see the gain over 20% to 35% in next few days from today’s level (that is stock at Rs 48 to Rs 53), book the profit. The company made almost Rs 1 per share during last quarter. If they repeat the performance, the EPS may rise to Rs 4 per share annually, that may rise even further due to rise in rupee (that reduces the Airline fuel cost).
Always study a Price Histroy numbers on Economic Times Stock quote page. It will give you idea about the upward or downward momentum of the stock.
Further, the stock may come down by Rs 2 or so from today’s level for a day. This will be the first sign of its going higher next week in rapid actions.
The stock is all set to overtake Kingfisher Airlines. SJ will gain and KFA will come down – they may shake hands in the middle.
Hariharan
8 Oct 09 at 3:01 AM
Kalidas,
I am invested in Quantum Gold ETF in India. Despite rapid rise in Gold Future in international market Indian Gold market is not reflecting the same. I understand that this is mainly due to strength of Rupee & selling of old ornament in domestic market.
Also liquidity in Quantum Gold ETF is very low compare to other GOLD ETF listed in India.
Should I add more Gold through Quantum Gold ETF (CMP Rs.780) at this level? I also have one personal query pending with you. (send through email)
Parag
Surat
Kalidas Says …. Thursday, October 08, 2009
if you feel that quantum Gold ETF is less liquid (or popular), then switch to other Gold ETF. Please note that I have not studied other Gold ETF
Buy Physical gold from Gold dealers in Mumbai with 0.9999 purity. Do not buy ornamental gold under any circumstances, if you want to use gold as investment, not savings.
Parag, Surat
8 Oct 09 at 1:44 AM
Dear Kalidasjee
In answer to one of the queries , you have quoted “Selling ETF at Rs 2500 – It may not happen even if the gold trebles. Often derivatives lag behind the spot prices when the spot rallied too much too fast.”
This answer raises few questions in my mind.
1. If gold trebles, the GOLD ETF should also follow similar trend. 2-3 % here and there may be the difference in gold value and ETF price. CMP of 1600 and the rate of Rs. 2500 doesnt really reflect trebling of the prices. Isnt it ?
2. Supposing if the dollar goes down and gold still trebles in prices, the benefit to Indians is going to much more. Isnt it ?
Thanks n Regards
Aditya – Mumbai – India
Kalidas Says …. Thursday, October 08, 2009
Often people do not understand the difference between the physicals and related derivatives. Just as some closed end mutual funds trade at premium or discount, the gold ETF may also follow similar pattern.
This is the reason I have been advocating buying of physical metals in preference to paper products such as Gold ETF, which is nothing but a paper derivative. We are right now in the initial cusp of rise in gold prices, so the ETF may follow the gold prices on same pattern. However, when the gold rises very fast, the ETF may not be able to catch up with the physicals, and in fact it may trade at some discount. If the Gold ETF is 100% exchangeable into physical gold, then it will reflect the gold price rise accurately. If it does not, the Gold ETF may be trading at discount.
Physical is physical – period. Today’s troubles in USA is mainly due to paper derivatives such as CDO, CDS etc. The future market is nothing but speculative paper derivatives – the days of hedging are gone. They are replaced by speculators, hedge funds etc.
Indian rupee will rise but not to the extent as you fear right now. Our government is happy to have weak child – that is – rupee. In any case, if the gold trebles, the Indian rupee is not going to rise by 60% to annul the higher price in gold.
Even if the gold prices in India do not rise to the extent of prices in USD, it will still give above average return than stocks. Higher gold price indicate higher rates in future, so the stock market may look more vulnerable.
While suggesting gold to Indians in India, I have clearly mentioned the Rupee factors and that if Rupee was allowed to rise freely, the Indians will have relatively less return on gold. Highr rupee will also cause oil cost to come down which is beneficial to Indian economy.
Aditya
7 Oct 09 at 10:39 PM
Dear Sir,
You had previously suggested Dish TV and Rcom.
Are they still likely to do well, specially Rcom with all the telecom players now required to do per second billing
thanks,
Varghese,Pune
Kalidas Says …. Thursday, October 08, 2009
The telecom and entertainment sectors are only sectors which are recession resistant. Telecom has become a necessity, rather than a status symbol.
I would therefore hold them.
varghese
7 Oct 09 at 8:53 PM
Kalidas ji,
A small correction in the previous post. My Purchase price of FirstSource is around 66 where as the CMP is 35
Regards,
KeeYes, Japan
KeeYes
7 Oct 09 at 6:55 PM
Kalidas ji,
Yes u are right. I am the person, who sent an inquiry to your email address regarding Gold purchase. I appreciate if you could respond to my query and guide me properly.
I agree with your call on L&T.
But Firstsource solutions, I am in huge loss. My CMP is around 66 whereas the CMP is 35. Is it a good idea to average it out? Your prediction that Rupee may strengthen against dollar worries me a bit since FirstSource earns most of its money by BPO and Call centre operations.
I bought a small quantity of SATYAM and am now sitting in the sidelines for it to come below 100 mark. All the IT stocks are bit weak and the sentiment is not in favour after Rupee strengthened this week.
Regards,
KeeYes
Japan
Kalidas Says …. Friday, October 09, 2009
Do not tell me it is a huge loss. How much did you buy? You have to just double the money. Either retain that patience, or switch to Spice Jet
KeeYes
7 Oct 09 at 6:54 PM
Sir,
You have mentioned sell signal for Hindalco and Essar Shipping.
Sold my Hindalco 450shares (average cost 88) @ 117 on Monday, but metals seem to be on the rise and hindalco moved to 128.50 should I buy back?
Also Holding Essar Shipping 1210 shares at an Average of Rs.38 CMP 65.95 Should I hold back or sell at 69 levels.
Regards
Muthu Saravanan, Chennai, 071009 -11.00p.m
Kalidas Says …. Thursday, October 08, 2009
When you trade, you buy back when the stock corrects. Normally, people sell when the stock drops – very few sell in rally. I have already mentioned at the first time of recommending that my target was Rs 160 with overshoot level of Rs 210. When it came to Rs 120 or about, it was a trading sell.
Since the dollar is weakening, and metal prices are rising again, the metal stocks will begin to perform well again. If you want to buy back, do it by all means. However, please note that I am not very active trader. I just buy and hold, and begin to think of selling only when the stock is within my 20% range of intended target.
Essar Shipping is relatively expensive. Its earnings have not gained momentum in spite of oil refinery in full production. Further, shipping business is in doldrum. As recently as 15 days back, I was told while in Mumbai that the goods were being transported to Dubai “free of cost” and Hong Kong/Mumbai fare has dropped to $ 80 from $ 900 earlier.
As such, I am not in favour of shipping stocks, especially chor group such as Essar. When I decide to sell, I do not care what the price is. I just sell.
Muthu Saravanan
7 Oct 09 at 11:31 AM
Kalidasji, we are waiting for the most awaited correction in the market but it seems that investors are taking correct + action to stop that.
We had lost our patience upto 30% of our capacity. Rest would also not hold good if this rally continues for another 1 month because we are earning good amount from this bull type market. Please give some danger signs to change our mentality.
Thanks.
Sunny Singh, Bhopal
Kalidas Says …. Thursday, October 08, 2009
The correction comes when no one expects it. If everyone expects or wait for the correction, then who will buy at the moment?
No one can change his mentality or mental approach. It is long built character. Deal with the market as it is.
With regard to danger signs, there are hundreds of them – but the market is supported by varioud governments who have been printing money as if there is no tomorrow.
The first danger sign will come when the Investors shun the Treasury auctions in USA and the interest rates rise. Bank of America/Merril Lynch is another company to watch for failure. The US government is merrily printing more money because it feels that the world can not live without United States. Once it realizes that the outsiders no longer wants dollar without substantial return in the form of double digit interest rates, then the severest form of correction, not seen even two years earlier, will set in. I would not live long enough to see the recovery from the expected correction which will make one forget 1930s, World War I and 2 and other crashes.
sunny singh
7 Oct 09 at 9:45 AM
Respected sir,
Petronet is on my top priority but do you think it may correct to 50 or so. I want to make a low entry inspite of your very high target for the same.
Ekta, orai
Kalidas Says …. Thursday, October 08, 2009
Anything is possible in the stock market. However, when the market crashes, and stocks like Petronet do come down to Rs 38 or so, the people do not buy and lower the target price.
At the moment, there is nothing to suggest that the Petronet will come down to Rs 50 level – it is far too low compared to earning potential. The gas consumption in India is on tremendous rise. The supply is also on rise, with RIL’s Kaveri basin gas discovery close to production. As such usage of gas carriers like Petronet and GSPL will have only greater business than ever before.
If you are patient enough to wait that long, better wait. I consider the present prices offering very good value. The stock has not advanced that much to wait for the desired correction level. Otherwise, buy some now and then wait for more correction to build up the position.
ekta
7 Oct 09 at 9:38 AM
Dear Sir, I want to buy some telecom stock. Please tell the best option amongst BHARTI AIRTEL, TTML, MTNL and RCOM.
I think recent correction in telecom sector is temporarily factor and we should see this as opportunity to accumulate any of the above. Your views please.
Kanhaiya, Lucknow
Kalidas Says …. Thursday, October 08, 2009
Rcom followed by MTNL
kanhaiya
7 Oct 09 at 9:34 AM
Just read this article about Gold at CNN and I thought of bringing it to your attention.
http://money.cnn.com/2009/10/06/pf/gold_investing_bubble.fortune/index.htm?postversion=2009100704
Harish
San Diego, US
Harish
7 Oct 09 at 8:28 AM
Dear Sir,
Whatever you said in one of the earlier post, “Although they are publicly listed companies, they behave as if they are family owned enterprises” is perfectly valid on Reliance.
http://economictimes.indiatimes.com/Features/RIL-RNRL/Gas-MoU-not-binding-on-company-says-RIL/articleshow/5095608.cms
http://economictimes.indiatimes.com/News/News-By-Industry/Energy/Oil-Gas/Board-did-not-approve-Ambani-family-MoU-RIL-Directors-tell-SC/articleshow/5094681.cms
Even in a small company, the MD of the company represents the Board and signs and inform on all business transactions and agreements relating to the company. How this happens in such a professionally managed company called Reliance.
Also, all this time, when company dealing with High Court, all these directors are silent and now they started revealing such crucial “internal” information. Based on these, don’t you think Mukesh should be penalised based on breach of trust.
Now do you think Supreme Court can act differently based on these two reports, if they prove as correct.
Sruthi
Bangalore.
Kalidas Says …. Wednesday, October 07, 2009
Supreme Court will ignore this argument. If the agreement is signed by the Chairman of the company, it is presumed that he would have obtained necessary permission from the board. It is not necessary for Anil to verify whether the Chairman of RIL complied with the internal requirements.
Other Directors are puppets of Mukesh Ambani. They will sing the song as rehearsed by Mukesh. It will not have any effect on the Supreme Court.
If other Directors are correct, they should pursue the course against their Chairman and prosecute him for breach of trust and for not following the internal procedure of the company. Will they have guts to do that – certainly not. Because they are puppets.
Sruthi
7 Oct 09 at 7:18 AM
Respected Sir..
Reliance Industries has announced the bonus of 1 share per share and dividend of Rs 13/-per share
all the financial channels recommend it a very positive news for RIL and Indian Market.
I wana to know your views. as i have 30 shares @ 1500 and CMP around 2150
Kuldeep
Punjab
Kuldeep
7 Oct 09 at 7:06 AM
Kalidasji,
Your rebalancing portfolio helped me a lot when I was in deep troubled waters. I swapped the then portfolio into Gold on your first call before election results. My plan is to sell ETF around Rs.2500 and switch to EQ. Can that price be realized? Would you suggest in accumulating UCO bank at CMP and PETRONET for long term. Infact any stock that can be accumulated in bulk 3 years horizon to make them 3 to 4 times. Again read your gem series of “How to invest into anything” and planning to do FDs in SBI (10L). I am privileged to get your signed book and gone through it. I and my wife follow this website everyday and always glad to visualize you as father figure.
600 UTI Gold ETF (BP:1490 CMP:1574)
500(200 India + 300 Tokyo) Ph. GOLD (BP:1450)
700 spicejet (BP:24 CMP:39)
1300 UCO Bank (BP:45 CMP:56)
Kumar, Tokyo, Japan.
Kalidas Says …. Wednesday, October 07, 2009
Selling ETF at Rs 2500 – It may not happen even if the gold trebles. Often derivatives lag behind the spot prices when the spot rallied too much too fast. In short they tend to trade at 2% to 5% discount. This is why I always preferred physical metals than its derivatives. In the early stage, such ETF may even trade at premium, in anticipation of rise.
Spicejet – Hold it for a while. I expect repeat performance of first quarter. If the stock does not move up in next 3 to 4 days, better be a seller because the earnings may not be that good in that case.
UCO Bank – Hold it on long term basis. May be you can have trading sale at Rs 63, retaining some always.
Kumar
7 Oct 09 at 6:51 AM
Stuck at Satyam 2000 at 90
rnrl 3000 at 85
petronet 2000 at 74
What is your suggestion sir? I contacted more than a month back with same number of shares. Now the return is negative but index has increased by more than 1000 points
Kalidas Says …. Wednesday, October 07, 2009
Reminder: To get reply, please append City and Country name to your signature invariably.
Do not compare the Index with the stocks you just mentioned. These are not Index stocks. How come you have negative return when Satyam cost you Rs 90 and now at Rs 112 or up by 25%, ignoring even higher price earlier?
RNRL and Petronet are marginally sideways – no major damage so far.
Petronet is a long term strategic buy. You take a view to invest. This may or may not work on daily trading basis.
Sandy
7 Oct 09 at 5:47 AM
Dear Kalidasji:
Can you please give your views on the stock RELIANCE CAPITAL (RELCAP), which is trading at 903 CMP;
Kalidas Says …. Wednesday, October 07, 2009
It is in the stable of Anil Ambani. Wait until Supreme Court judgement for Anil’s case. Finance stocks are not in great demand as crisis is not coming to an end, but worsening every day. You may postpone the purchase for the time being.
Sreeram, UK
7 Oct 09 at 5:44 AM
Dear Sir,
Satyam is very weak these days at 112/-. Does it make sense to start collecting Satyam now as you have suggested 240/- price target for it? I am planning to buy 100 shares for every 1 Rs fall in this stock.
Thanks
Suraj, NY
Kalidas Says …. Wednesday, October 07, 2009
It is worth accumulating from Rs 108 onwards down to 92. Rs 1 fall is too small to accumulate. Make it to buy every 5% of fall.
Suraj
7 Oct 09 at 3:04 AM
Hi Anil Ji,
I have invested on Praj industries few months back.
PRAJ Industries
580(Q) , Rs112(C), Rs99.10(CMP)
Should i hold it or sell it at this rate to buy other shares suggested by you.
Yaqoob
Australia
Yaqoob
7 Oct 09 at 2:13 AM
Guru,
As gold has reached it’s all time high, it should trigger short squeeze, and we know there are substantial number of shorts in market, so there must be a huge spike in Gold price. Will this happen, if so, when can we can expect this.
-Venkat
Chennai
Kalidas Says …. Wednesday, October 07, 2009
Gold is traded at various exchanges in the world. It is almost impossible to gauge the overall short position. Let us avoid day to day commentary in this regard. It is enough it will go much higher.
Venkat
7 Oct 09 at 1:08 AM
sir,
please advise me, which will be preferable for 2 – 3 years investment Dena Bank or Uco Bank.
Kalidas Says …. Wednesday, October 07, 2009
Both on equal footing. However, from EPS point of view, Dena may have edge over UCO, but UCO has more followings and is almost twice the size of Dena with international presence.
Dena is more localized in Gujarat and Maharashtra, whereas UCO is having balanced spread. Both are historically not so exciting stocks, performing at the end of bull cycle.
I prefer UCO to Dena.
dainy
7 Oct 09 at 12:31 AM
Dear Sir,
L&T is going to offload their 6.9% share in Mahindra Satyam after the lock in period which expires next week.
What will be your view on this market action. Will it be affected in the share prices just like in the case of treasury stock sale of some comapnies (JPASSOCIATES) recently ?
Rajan
Kannur, India
Kalidas Says …. Wednesday, October 07, 2009
already replied earlier in this column.
Rajan
6 Oct 09 at 11:53 PM
Dear Sir,
I sent a personal query couple of months back. And also responded further to your questions.
Could you please respond to it when you can?
Regards,
Shankar
Atlanta USA
Kalidas Says …. Wednesday, October 07, 2009
Sorry, I missed it. I will try to reply by this weekend.
Shankar
6 Oct 09 at 1:27 PM
Sir,
I’m holding the following:
IFCI 30(C), 1500(Q), CMP(54)
I couldn’t sell IFCI at 60/-. May I expect it to go upside from now in the coming days or should I sell it off at 54?
Kalidas Says …. Wednesday, October 07, 2009
Never keep “round number” as your target price, either for buying or selling. “ROUND NUMBERS AND BEAUTIFUL GIRLS NEVER COMES TO ANYONE’S HAND” is my idiom. Everyone wants Aishwarya Rai as his girl friend but only Abhishek could get her. Similarly, everyone has round number as his target; there are hundreds of buyers or sellers at that number, so difficult to get it.
Follow 35:85 rule. When you feel like selling at Rs 60, better be a seller at 59.35 or 59.85. Similarly, when you feel like buying a stock say at Rs 45, better be a buyer at Rs 45.35 rather than having Rs 45 as buying target price. Look at the daily movement of any stock; their daily high or low is around 35:85 level. Only broad minded investors make decent money by following this policy.
Coming to your specific question, you may wait until the stock comes to Rs 58.85 or 59.35 to sell, because the market is good at the moment, though it is having weakening bias. If the stock does not hold above Rs 53.50, and closes at below that level on any day, sell at the market immediately.
SUMIT AGARWAL
6 Oct 09 at 10:54 AM
Kalidas Ji,
Today Rupee touched 1 year high of 46.88/89 against USD.
Is it good or bad for Indian economy? What is the impact to stock markets..!?
From the past 2 years the currency rate fluctuation is wild and I (and many of my friends) am very confused on this.
Request you to publish an article, in layman’s terms, w.r.t stock markets, regarding USD vs Rupee fluctuation.
Thanks in advance.
Srinivas, Hyderabad
Kalidas Says …. Tuesday, October 06, 2009
Rupee should have been somewhere around 33 to $ if stupid RBI did not intervene. My long term target for Rupee vs Dollar is Rs 26/$.
If rupee is allowed to appreciate by not intervening or sterlizing, 80% of problems of India would be resolved as under:
1. Oil will become cheaper that will benefit almost all, including Airlines
2. Lower oil means lower gas, electric and transport prices
3. Stronger rupee means lower $ debt to that extent and lower interest servicing cost.
4. Stronger rupee means lower interest rates (stronger currency leads to lower interest rates) that will benefit almost all home borrowers. Stronger property market too.
6. Stronger rupee means lower fertilizer input cost, to benefit the farmers, to lead to higher agro output.
7. The fear of IT losing market is misplaced. IT art is personal that can not be had from other countries so easily. India being English speaking country enjoys the best advantage.
If RBI does not let rupee rise, it should be disbanded.
Srinivas
6 Oct 09 at 9:42 AM
Genius is what genius does !!
Dear sir, I am in great reverence to you for your knack of understanding financial instruments and predicting their directions. When HP,BP,LICHF,Satyam moved up and IFCI cooled off after reaching 60, I was in awe with your abilities of foresighting, but today’s jump in the gold prices by 30USD an ounce have compelled me to write few words of regards and respect that you have earned from your anonymous readers on this blog. Hats off to you sir and to your dedication to keep our thoughts stirring with your valuable inputs. May god bless you with a long life and to us your guidance for ever.
NSri,Pune
Kalidas Says …. Tuesday, October 06, 2009
Compliments accepted with grace.
NSri
6 Oct 09 at 9:08 AM
Dear Anil ji,
You advised to invest 50% now and rest IF/WHEN the deep correction comes. Is that a risk management with an IF or do you infact expect a deeper correction in near future.
Different people have different views on what future might have in store for us.
http://www.cnbc.com/id/33179408
http://www.bloomberg.com/apps/news?pid=20601087&sid=aOKhQ3sa0H7w
Harish Vyas
San Diego , US
Kalidas Says …. Tuesday, October 06, 2009
If I were not to expect correction, I would not have suggested 50% now and balance later.
Harish
6 Oct 09 at 7:53 AM
Dear Kalidasji,
My apologies for not mentioning the CMP.
Please find below the details.
BARTRONICS IN – 200 (Q) 249 (C) CMP 170
HAVELL’S INDIA – 50 (Q) 650 (C) CMP 302
IDBI – 200 (Q) 177 (C) CMP 122
IFCI – 100 (Q) 90 (C) CMP 54
ISPAT INDUSTRIES – 400 (Q) 49 (C) CMP 23
J P HYDRO – 200 (Q) 91 (C) CMP 78
REL.PETROLEUM – 100 (Q) 230 (C) CMP 130
SPICEJET (ROYAL AIR) – 100(Q) 100 (C) CMP 35
RNRL – 300 (Q) 90 (C) CMP 84.90
Awaiting your valuable guidance/advice.
Thanks & Best regards,
Ragav
Chennai
Ragav
6 Oct 09 at 6:13 AM
Scrip Name :SRF Ltd
NSE Symbol : SRF
CMP: 190.15
EPS – Rs.15 Q1June2009.
The company will benefit from carbon credit units which may push its EPS substantially . SRF’s core business is picking up with huge expansion plans. Is it a value buy at this stage for 1-2 years period?
Shaikh/Kongsberg
Shaikh
6 Oct 09 at 5:54 AM
Do you think MTNL will be a good buy around 40 level if it drops to 40. Since it is a PSU govt will give preferred position for 3g spectrum.Also when BSNL lists mtnl will benefit when there is a proposed merger.Also its real estate holdings also add value.
Abu Dhabi
Kalidas Says …. Tuesday, October 06, 2009
MTNL is the only Debt free company amongst listed stocks. Its cash holding is over Rs 4800 crores against 63 crore shares outstanding, that is, Rs 30 per share. Its book value is over Rs 191 against CMP of Rs 83 only. The stock price is as if it is a bankrupt company when it is the most liquid company in the world with total assets over US$ 4 billions.
To think that the stock will come down to Rs 40 or so against this backdrop is a wishful thinking. Its book value is Rs When the company will show its real value, we do not know, because we are living in mobile world whereas MTNL is mainly a fixed line operator.
With two major metro – Mumbai and New Delhi – under its control, the real value of MTNL is astounding. However, its earnings are on continuos decline for over years – and there is no stopping. Its CEO is more like a “babu” who would never go out of traditional path.
It is an asset play. At little over 80 today, it is a very good value With so muc