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Graphite India Limited (GRAPHITE) is the largest manufacturer of graphite electrodes (90% of the revenue). It also provides impervious graphite equipments and GRP/ERP pipes and tanks (10% of revenue). It end customers, and applications are in metallurgical (ferrous & nonferrous), chemical and process, and aerospace industry.
This is small cap which has potential in my long term buy and hold because it operates in niche market with high entry barriers. I want to understand its financial management and whether it meets my buying criteria. (more…)
Voltamp Transformers Limited (VOLTAMP) is one of the leading player in customized transformers for industrial applications. It has a niche in 132kV market segment and now looking to expand upto 220kV market segment. The key aspect that I like about Voltamp Transformers is its focus on niche market. It has created a space for itself in industrial segments, has zero debt, and focus of controlled growth.
Trend Analysis
The whole reason for any business to exist is to generate sales revenue and make more profits. At a minimum, the parameters listed below should have continuously increasing trends. All the data below is based on last 8 years i.e. from 2001 to 2009. (more…)
Hyderabad Industries Ltd (BSE:HYDIND) sells products in the building and construction industry. Its product range include Fibre Cement roofing sheets in the name of CHARMINAR, Autoclaved Aerated Concrete Blocks and Panels called AEROCON, Calcium Silicate insulation product called HYSIL, joining material for Gaskets, Plant and machinery for these products.
HYDIND is a part of C.K.Birla group of Companies. This group of Birla’s also owns the waning Hindustan Motors (i.e. Ambassador brand). My objective in this analysis to see if HYDIND is a good fit for my portfolio.
Trend Analysis
The whole reason for any business to exist is to generate sales revenue and make more profits. At a minimum, the parameters listed below should have continuously increasing trends. All the data below is based on last 10 years i.e. from 2000 to 2009.
In my posts some months back had discussed about the possibility of the rising wedge being similar to the one formed in January. CLICK LINK TO CHECK IT
If the current breakout above 16500 the rising wedge line then this move should not last above 16500 for another 2 weeks as generally a false move does not last long above the breakout line.
SENSEX Technical View : Technically a new high signifies a continuation of trend. On the upside 17200 and 17700 are resistances to watchout for.
Moves above 17k do seem a little stretched and speculative in nature although it can even go to 17.7k-18k in a very optimistic scenario for extreme near term. But at this point of time the upsides do seem to be capped and not a great place to go for longs as risk-reward is no more favorable.
Market Observations and Thoughts :
OPTIMISM , SPECULATION, QUICK MONEY , BUY long term , 6k on Nifty, NEW HIGHS nOW , INVEST soon etc etc and many such words to describe the current mood of investors/traders.
The market sentiment has not been so bullish since Jan 2008. At the same time in Feb/March 09 or even in May 09 the sentiment was still very cautious with people asking for Nifty puts/Shorts etc as hedge to portfolio or should i sell of everything !!!!
I don’t know about you but for the past couple of weeks I have been having a sense of Déjà vu. A thought that something similar had happened earlier, has been gnawing at my bones. Though my head tells me that something as extreme as 2007 may not happen but then why take a chance? So I went about investigating further.
Index Valuation
The Nifty is currently at a PE of 22.41 with 74% of the Nifty constituents (by weight) trading above this mark i.e 31 stocks by count. The balance 19 companies are from the cement, metals, BFSI and PSU Oil& Gas spaces - all historically low double digit or single digit PE sectors. Suffice it to say that the index is trading close to the danger mark. Have a look at the graphic given below. Notice the PE 20 line.
Just jaw-key-ing. There, that’s how you’d say it. An expression of comfort that reflects your change of urge to be crazy, uninhibited, carefree, un-posey, cheeky even. We’re all for it. Go ahead, easier said than done.
A “BRIEF” ABOUT THE COMPANY
Just jockeying Sounds and feels familiar na? Well yes, I’m talking about one of India’s very popular brand for Innerwear/Leisurewear for Men and Women. The company behind getting the world renowned brand “JOCKEY®” to India, Page Industries Ltd. was set up in 1994 by Genomal family.
The family had then been associated with JOCKEY International Inc. for 44 years as their sole licensee in the Philippines. Page Industries became a public company in March 2007 and is quoted in the Bombay Stock Exchange and the National Stock Exchange of India.
Understanding Demat and Trading account relationship
Some of the beginners to online stock trading do not understand relationship between Share Trading account and Demat Account . In this short article lets see the relationship between Demat account , Trading Account and your Bank Account . We will also see how many trading or Demat account you can have in total .
Work Flow
Below is a short chart where I have tried to give the flow when you buy a share . click to Enlarge
Demat Account : Account where your Shares are stored in electronic form .
Trading Account : An account which is used to place orders for Buying and Selling of shares .
So Trading account is an interface between your Bank account and your Demat account , when you buy something , Trading account takes money from your Bank Account (Its already taken from your Bank account and saved in Trading account) and buys shares and stores it in your Demat account . When you Sell something , Your trading account takes back the shares from your Demat account and Sells them in Stock Market and get back the money and that goes back to your Bank account (actually you manually transfer it to Bank account from Trading account most of the times .
Question : Does any one know maximum how many demat account can one open ?
The current rally has added 98% to the SENSEX relative to March 2009 low of 8160 points. The rally is going on for last 5 months, the question is, what is fueling this rally? This rebound will make us believe it is start of next Bull Run. Any prudent investor will try to figure out what has happened since March 2009 that justifies this rally. As always, at hindsight everything makes sense.
With the unprecedented level of stimulus from many different countries, the global economy is showing signs of stabilization. In addition, the rebound of Oil prices in international market seems to give boost to many countries. Accordingly, I believe Indian economy is also showing signs of stability. I think the biggest boost for Indian business sentiment and environment has been the continuity of the pro-reform government at its helm.
I am not a fan of IPOs. I do not consider them an attractive opportunity for my investment objectives. In general, companies or organization come to the market with IPOs to generate capital. Their objectives are to generate as much capital as possible with minimum possible dilution. Companies usually choose opportune time frame to offer it to open public so that sufficient premium can be added to fair value (or book value). I do not find fault with the company. They are doing what they are supposed to do. They are attempting to meet their objective to get maximum possible value from the market.
Everybody will have an opinion which is perfectly acceptable. The broking world says “buy it for long term”. Retail market sentiment says buy, buy, and buy. However, I am not buying it. I am giving it a pass. The key question here is what is in there for me as an investor?
First, I am already exposed to oil and gas sector in my portfolio. Buying Oil India will over expose me to one sector. While believe Oil India is a good company and worth investing, but over allocation in a given sector never a good idea. If oil and gas sector performance improves for whatever reason (such as pricing regime change, market pricing of oil, etc), then I will get the benefit because of my current allocation to ONGC.
Second, I believe the shares are a tad higher than I would initiate a buy. My rough estimate based on earnings, dividends, and book value would be in the range of Rs 800 to Rs. 900. This is the fair value price range for me to buy (assuming I am interested). The shares are being priced in the range of Rs 950 to Rs 1050 which is higher than I would be willing to pay. The IPO offered price has 10 to 12 PE ratio, 2.0 to 2.3 of book value, and has close to 3% dividend yield. This would tend to suggest that it is priced to buy.
Third, assuming if this generates interest for me, I will have to sell my partial winning position in ONGC to buy Oil India. It may be a good reallocation strategy to diversify my positions, i.e. to take something out of winning position and buy something else. However, selling winning position and buying at fair value is not justification enough to make the move. If Oil India shares were in my fair value buy range or below, then reallocation would make sense.
Now you know why I am giving it a pass. Although it is approximately one tenth of the size of ONGC, I believe Oil India is a very good company. It has good profitability, good financial management, good operative history, good future prospects, and pays good dividends. Long term investors who are not exposed or lack oil and gas shares in their portfolio can think of initiating a small starter type of position.
The above chart is pure wishful thinking or trying to predict a possibility. Though i believe the best way to trade now is react then to predict till then stay with the trend which still remains up. (more…)
I am a believer that our environment, surroundings, and our education shape our thought process. Knowingly or unknowingly our thinking will demonstrate what we have been through in past. It is applicable to every living being including us humans and present Indian population. Still there are very few who think and visualize beyond their surroundings. And it is these few who evolve and succeed over long term.
Our present 20s and 30s generation, of which I am part of, is very vibrant, inquisitive, and very progressive and has a desire to succeed in one way or the other. As they say, life is very fast in today’s India! The IT generation is very impatient which reflects the IT domain’s continuous changes in short one year. What is new today is considered to be obsolete in 2 years. Unfortunately, we fail to understand it is not same in investing. Here are few interesting tidbits: (more…)
Sensex has given the first indication of weakness with a dip today and a quick dip might be an indication of possible weakness to come but in this market its better not to make a quick conclusion after a day or two.
Major trend change level is below 14750 on closing basis. 2-4 sessions closing below 15450 would give indication of momentum being reduced. Continue to be stock specifc and above all dont be leveraged or on margin. With many trading stops being triggered today the amount of cash in portfolio should increase and if not then look to reduce exposures by booking profits or small losses in new trades.
Yes, the buzz is back and testing markets and testing mettle of individual investors. Three power sector companies, viz. Adani Power, Indianbulls Power, and NHPC, are in fray to get investors money. I had expressed my thoughts about Reliance Power IPO. Let us revisit some of the few tidbits in the context of this latest buzz.
Adani Power was priced in the range of Rs. 90 to Rs. 100 per share. It completed the subscription period and based on the NSE data; it was over subscribed by 20 times. My viewpoint is, its the herd mentality and craze continues. We individual investors never learn our lessons. (more…)
Before we get into technicals would like people to read this article which was posted last week about the possible options which people would start talking about. Inverted HnS , Bullish Flag and Cup and Handle ( new ) on Sensex.
The Great Eastern Shipping Company Limited (GESHIP) through its subsidiaries, engages in the shipping business in India. The company’s shipping business involves in the transportation of crude oil, petroleum products, gas, and dry bulk commodities. It operates with a fleet of 31 tankers. Most recently, it divested the exploration and offshore services business. My objective in this analysis to see if GESHIP is a good fit for my long term portfolio
Trend Analysis
The whole reason for any business to exist is to generate sales revenue and make more profits. At a minimum, the parameters listed below should have continuously increasing trends. All the data below is based on last 8 years i.e. from 2000 to 2008.
Today we will discuss a Model of learning developed by me for new comers in stock markets . Its very logical and obvious way of learning .There are 5 things a new comer has to do , I will call it CLOPS model of starting in Markets .
Calm Down
Learn
Observe
Practise
Start Small
This model of learning is totally obvious and logical and applies to all the areas of life. Stock Markets are no different . Lets see each of them separately and what they mean in Stock markets .
Calm Down
The first thing a newcomer has to do is calm down and not rush . Just be where you are . Most of the people come in stock markets and its totally a new place for them and every things looks like a great “get-quick-rich” opportunity to them and they want to make most of that once-in-a-lifetime opportunity . They don’t know its every-day thing in stock markets. Markets are like a wonderland for them. Markets are no going anywhere and its more true for the opportunities they provide . When you calm down first and don’t get excited, you are doing an important thing , which is not jumping in without thinking and making yourself ready for another important things which are discussed below. (more…)
Standard & Poor’s is a US based provider of financial market intelligence which includes ratings, investment research, risk evaluation and data, and various types of indices. Among multiple different indices with different focus areas, one index is the dividend aristocrat index.
The Dividend Aristocrats is an index which consists of S&P500 companies that have been raising dividends continuously for 25 years or more. That is, every year, the dividend per share keeps on increasing. If any company that reduces or cuts the dividend in any given year, it is removed from the index. Now this is the characteristics that can be viewed in multiple ways, but TIPBlog is about Indian investments. Therefore, I will not go into detailed discussion. But it gives the context for this posts further discussion.
In markets of Asia or other parts of the world, it has been difficult to find a single company that has consistently raised their dividends year after year. Outside United States, there has been lack of consistency in the way the corporate’s managed dividend strategy, or the way the government policies taxed dividends to companies and common shareholders.
In the previous article of this series we had discussed the Price Earning Ratio and how to use it to filter stocks. I got a few very searching questions in the comments section. So I would request readers to go through those too.
We now take the second step forward and one which could be a major stumbling stock for many an aspiring portfolio picks. If a stock fails this test, I would need towering logic to overrule it. All business is margin and it is the bottom line - the profit margin. The last word in the financial statement analysis and hence a major filter for us. Profit margins are of three types.
Why do I say this? Markets “Calls” are least important things in Stock markets (i believe) , and you only get that least important information from TV experts . What you don’t get is vital things like psychology to trade , Money management rules, Discipline to follow every time you take the trade . Those calls are in isolation , They are not generated by a consistent rule , you can get calls from here and there and all of them will be kind of random to you . Other problem can be that you don’t know the time frame of the call . If you don’t understand all this what I just told , the easy way to understand is to answer this
“If listening to TV experts was really worth , Why am I not making money”
“How many people do you know who make living or earn exceptional returns by trading what experts tell them”
At last , the point is not that there calls and advice works or not ? They may work , but not for you. There is lot more than getting calls and acting on them . Another important thing why you should stay way or listen less to them is because most of their calls are for “forcing you to trade more” , which will eventually generate more brokerage and commissions for trading companies , Read this article from ShyamPattabi to understand more on this.
Question : Why do experts give more of BUY calls and very less of “SELL” callsMy Answer : When some one “SELLS” , he is out of trap , he is out of stock market , he pays commission once . But when Someone “BUYS” , he is trapped in markets , He already paid once and has to pay one more time to get out , so SELL = Commission 1 time and BUY = Commission twice for sure , Ohh.. Did I discover something here
I presented a long term view about expected return for SENSEX. I mentioned that the compounded expected return was 12.1%, while the arithmetic average was 16% per year.
Today, I am discussing the short term perspective using a NIFTY index. Similar calculations can also be done using SENSEX, but I believe NIFTY is a better representation. I calculated daily returns, weekly returns, and monthly returns for NIFTY from August 2002 to May 2009. In all three cases I have used average closing value on a given day, given week, and given month. The table below shows the summary for these results.
The volatility in the index has definitely left a lot of us confused and that would continue in weeks to come with lot many external triggers namely expiry this week followed by Budget in July 1st week.
Technically some things are more clear now.
Index if stays above the momentum line which is roughly around 14k on closing basis there could be a bounce back in the short term which can also be termed a pre-budget rally.
Index if stays below 14k on closing basis opens up to the gap area of 13500 -12900 which can also be a post-budget correction or global meltdown.
So investors can accordingly position themselves and do keep a decent amount of cash in portfolio as suggested at 15.5k.
Traders need to keep trading volumes low as there could be more stop hits with high volatility so good risk management may help.
Stocks to watchout for :
NTPC
The stock has its 200 dema around 185 levels and the stock has heavily from 230 levels. Investors/traders can buy with a stop of 185 on closing basis and a target of 202/212.
Reliance Inds
The chart was earlier posted about how a move below 2145-2160 would turn the tide for the index. Reliance is now arnd 1950. The next important support is around 1850. The 38 % retracement of the entire upmove comes to 1900. So one can expect the stock to manage a pullback from the ones of 1850-1900. Any move below 1850 would take the stock to 1680-1750.
HDFC Bank
The stock has seen no meaning ful correction since October and the trend still remains strong. Currently in the range of 1500-1580. Move below 1490 or 1600 could give a quick 40-80 bucks move to traders on either side.
As anticipated, equities retraced some of their gains last week. However, Nifty and S&P 500 started showing some signs of renewed strength in Friday’s trading session. Let’s look at the possibilities going into this week.
First - let’s take a look at S&P 500 (spot) 60 Minutes chart:
S&P500 June 21, 2009
In case a continuation of Friday’s move occurs this week - the best resistances for S&P 500 (spot) should be in areas of 936 and 944 - based purely on standard Fibonacci retracements. However, looking at the price patterns made by the index on its way down and subsequent movement - I would consider 944 as having higher possibility of working as a good resistance based on the fact that 916-917 (23.6 retracement) worked as a good resistance initially - indicating that 76.4 retracement could be significant as well. (more…)
TV Channels blaring that India’s inflation rate slipped into the negative for the first time in 30 odd years. What does it really mean? It really means nothing to the common man!
Prices are still soaring or at least stable at their peak - and why is this not reflected in the Inflation numbers?
This is because India calculates Inflation differently than other countries
India uses something called the Wholesale Price Index (WPI) to calculate and then decide the inflation rate in the economy.
Most other developed and developing countries use the Consumer Price Index (CPI) to calculate inflation.
You must have heard lots of stories about people who got millionaire over night or in a short span of time from stock markets, there are two kind of people who make money from stock markets
- First kind are the people who make money because of luck. They buy some thing , it goes up and they think it was your skill . Next time they buy something again and wooo!! .. it makes money again , and now they are the king !! . Then comes one day when there “best time in the market” is over and they start loosing money , this time its “bad luck” as they say !! and they keep on trying and trying to prove that they are knowledgeable . At last they go bust and return from where they came from . Smart people in this category are those who make money once or twice because of luck and don’t come back , I appreciate their smartness .
- Second kind of people are those who are real game players , they have done their home work , failed lot of times , learned from their mistakes and worked hard to make money . They know the rules of stock markets and take it seriously . They are successful traders or investors .
People hear that lots of people make lots of money in short span of time from stock market and how easy it is to just open your trading account , choose some stock , buy or sell and magic !!, you make money . Far from truth !! .
This thinking that “Lots of money can be easily made from stock market without much hard work” is the main reason why stock markets attract lots of people .
This by far the most sensible statement I have read. And before someone yells at me let me clarify I am not berating Indicators or Oscillators. I myself use them extensively but after what I read today, I will try and use them more sensibly. Here is a brief note on the article I read. As we all know that our biggest enemy in trading (at least mine!) is the Emotional Behavior. Yet another culprit is, the misuse of indicators and oscillators (yes I am guilty on this front too!). We must understand that the movement in price, in any and all free markets, is a function of, the pure laws and principles of supply (resistance) and demand (support). Opportunity exists when this simple and straightforward relationship is out of balance, period. Let’s now explore reality through the eyes of objective logic. When prices are trading sideways, supply and demand are in balance. The only thing that can cause a price rally from an area of “balance” is when the supply and demand equation becomes “out of balance.” In other words, there were many more willing and able buyers than there were sellers. Simple economics at work!!!
Tata Investment Corporation Limited (TATAINVEST) operates as an non-banking financial company. Its primary activity is to invest in long-term equity shares and other securities of companies in a range of industries. It is also engaged in management and distribution of mutual funds. TATAINVEST operates as a subsidiary of Tata Sons Limited.
One notable aspect that I personally like about TATAINVEST is its business model. This revenue and profitability comes from dividend income and profits from selling investments. Majority of its long term investments are in blue chip companies that have good cash flow and profitable businesses.
Trend Analysis
The whole reason for any business to exist is to generate sales revenue and make more profits. At a minimum, the parameters listed below should have continuously increasing trends. All the data below is based on last 8 years i.e. from 2001 to 2008.
Wondering about the title? Don’t confuse it with Sameer (Salman Khan from Hum Dil De Chuke Sanam) who is referred to as Hawa ka Jhoka in a scene where he remained static the whole night in one position and releases the gas early morning when Aishwarya Rai ends the game.
Well this is not about any movie scene or hawa ka jhoka. It’s about Suzlon, a company which is involved in manufacturing wind turbines. Well hawa (wind) does come into the picture; just that here it’s not a jhoka but an entire typhoon of green energy.And the company is about a lot more than just wind turbines! It aims to be a company that serves society with sustainable wind-power on a commercial scale. It was started in 1995 with just 20 people, and now it’s a leading wind power company with –
The Pivot for nifty today is around 4535 . SGX Nifty is trading about those levels and India Markets are also expected to go lower today as other Asian markets are also trading lower .
Nifty seems to be tired now and it would be a healthy for it , if it corrects itself now , otherwise it will become more vulnerable for a big and sudden fall later .
If you see 9 months chart , ADX seems to be falling now from many days indicating that its tired now and the momentum is declining .
If you are looking for buying , wait for short term . If you want to short , do it on pullback on intra-day .
Just jaw-key-ing. There, that’s how you’d say it. An expression of comfort that reflects your change of urge to be crazy, uninhibited, carefree, un-posey, cheeky even. We’re all for it. Go ahead, easier said than done. 
Sounds and feels familiar na? Well yes, I’m talking about one of India’s very popular brand for Innerwear/Leisurewear for Men and Women. The company behind getting the world renowned brand “JOCKEY®” to India, Page Industries Ltd. was set up in 1994 by Genomal family. 
The current rally has added 98% to the SENSEX relative to March 2009 low of 8160 points. The rally is going on for last 5 months, the question is, what is fueling this rally? This rebound will make us believe it is start of next Bull Run. Any prudent investor will try to figure out what has happened since March 2009 that justifies this rally. As always, at hindsight everything makes sense.
I am not a fan of IPOs. I do not consider them an attractive opportunity for my investment objectives. In general, companies or organization come to the market with IPOs to generate capital. Their objectives are to generate as much capital as possible with minimum possible dilution. Companies usually choose opportune time frame to offer it to open public so that sufficient premium can be added to fair value (or 
…. Let markets show u the way.
This by far the most sensible statement I have read. And before someone yells at me let me clarify I am not berating Indicators or Oscillators. I myself use them extensively but after what I read today, I will try and use them more sensibly. Here is a brief note on the article I read. As we all know that our biggest enemy in trading (at least mine!) is the Emotional Behavior. Yet another culprit is, the misuse of indicators and oscillators (yes I am guilty on this front too!). We must understand that the movement in price, in any and all free markets, is a function of, the pure laws and principles of supply (resistance) and demand (support). Opportunity exists when this simple and straightforward relationship is out of balance, period. Let’s now explore reality through the eyes of objective logic. When prices are trading sideways, supply and demand are in balance. The only thing that can cause a price rally from an area of “balance” is when the supply and demand equation becomes “out of balance.” In other words, there were many more willing and able buyers than there were sellers. Simple economics at work!!!
Tata Investment Corporation Limited (TATAINVEST) operates as an non-banking financial company. Its primary activity is to invest in long-term equity shares and other securities of companies in a range of industries. It is also engaged in management and distribution of mutual funds. 
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