RIL touches 2201.5 mark

I had bought RIL at 2200. Now it has come back to that level. I will sell it as soon as it touches 2250 mark & overcome my liquidity problem.

Geodesic sold at 143! 40%/yr RATE OF PROFIT ! :)

I had bought Geodesic at Rs.126.8 on 26May, 2009. & I have sold it today, i.e. 9 Sept.,09 at 143.35. i.e. Held for 106 days. Total approx. brokerage given 0.5(126.8+143.35)=1.350.
Total profit=15.2
Investment=126.8
time=0.3 yr
rate of return=39.9% i.e. approx. 40%
I just hope RIL to touch 2250 mark so that I can get my stuck money out.
These days market is booming. Esp. Infosys is on roll. With no drastic change in fundamentals, it is right time to cash on. Market will definitely correct tomorrow, because advance/decline ration is suggesting that market is on large moving towards correction. NIFTY anyway is in red, while Sensex is still green, but overall indication is towards correction.

Geodesic & RIL update

Geodesic declared dividend of 40% on face value of Rs.2 on 29 August,2009.
Geodesic to acquire a communication & social networking company. Share reaches Rs. 125.
SC issues notice to RIL in duty evasion case. Share plummets by 66 points to Rs. 2004.

Scenario 26 Aug 09: 1987 Black Monday Crash

http://www.stock-market-crash.net/1987.htm
http://en.wikipedia.org/wiki/Black_Monday_(1987)#Causes

Interest Rate futures from Monday

NSE has allowed trading of interest rate futures from Monday.

Geodesic closed at 126.75 on 21 August,09

On Friday, 21 August,09, Geodesic [provider of mobile and desktop solutions for instant messaging, VoIP and Internet radio] reached high of 134 & closed at 126.75. I had bought this share at Rs. 126.8 on 26th May,09. It was down throughout this intermeddiate period, but it is up again.
Reasons might be-
1) overall economic outlook is positive again.
2) News of board meeting of geodesic on August 28, 2009. Dividend policy of company will also be decided in meeting.
3) National ID Project, National Rural Employment Guarantee Act increasing demand of its Simputers.
http://www.medianama.com/2009/08/223-q1-10-geodesic-call-plans-retail-voip-with-spokn-simputer-resurrection/

scenario 19Aug09

If mining is not allowed at some places by central government, prices of that metal will go up, whereas prices of stock of mining company for that metal will go down.

Hindalco plummetted today

It was good decision to sell Hindalco after it reached 110. It plummetted today, appearantly for no reason. It reached 100 mark today. Sensex plummetted by 627 points & it is 14785 today.

Profit on Hindalco

I had bought hindalco at rs.103 & sold it today for 110.65. Overall gain of Rs. 6.44 after brokerage & taxes are deducted in 2months. I had purchased stock on 12June,09 & sold on 14August,2009. So return of 6.44 on investment of 103 in 2months. i.e. ROI of 37.5%
Market got boost due to increased IIP numbers (Index of Industrial Production numbers) & release of draft of DTC (Direct Tax Code) & Germany, France registering 0.3% GDP growth.

I thought that this is right time to sell, because this is just positive queue & no measure improvement as such. One negative news... or even .... fear of bad monsoon affecting agri-production getting stronger; the market goes down again. So, it was profitable move ... overall.

RIL is trying to turn the tide towards itself, using its political contacts.... as I had expected & Anil Ambani is pulling his hair over it. I believe that RIL will bounce back soon. If not that... it will certainly not fall below this level. Geodesic needs to perform well quarter-on-quarter basis. I need to be more patient with Geodesic. It is investment, not trading.
Airtel has hit rockbottom. Currently trading at around Rs.450. I had sold it at Rs.894. It was good decision to sell at that time. :)
I AM HAPPY! :)

scenario 7aug,09

Markets fell a little over 2% when it was rumoured that an Australian institution initiated short positions in Nifty futures worth over Rs. 100 Crore after 2pm.
Bank union strike->thin volume in bond market

Exit Load abolished from Aug 1,2009

Hi,
it feels good to be back. :) I should keep writing more regularly. I shud keep learning regularly. Anyways.... this is to record on my blog that
1) Entry Loads will be abolished from Aug 1,2009 onwards. Hence, many funds have started new schemes with significant entry load in June09 before deadline & some r awaiting approval by SEBI. Investors shud not get carried away by low NAVs of them.
2) Cap on Exit Loads will also be put by SEBI.
I DID NOT UNDERSTAND: How staying invested for long time (3-5 yrs) will save exit loads?

NCDEX Knowledge Beareau Link

This link on NCDEX site gives the research reports of most of the important commodities in India & worldwide. Also take a look at the other links given in "Knowledge Beareau" tab.

Ashish Chugh & Ashwani Gujral

On CNBC-TV18,
on last 2 days, Chugh has recommended following stocks:
Nucleus software Atul Ltd Uflex Gulf Oil India & replaced 3 of them by:
Gwalior Chemicals Ahluwalia contracts Sunil Hightech
He had also recommended SRF.

Ashwani recommended:
Kalindee Rail Voltas Mphasis Patni & replaced 3 of them by:
Titagarh Wagons BEML Texmaco

Ashwani is very keen on rail stocks.

Hindalco & RIL

I bought Hindalco on the suggestion of Sudarshan Sukhani. Though, I felt like I did a mistake, he is bullish abt it even now. He has revised target from 115 to 105 now. S P Tulsian feels that demand for non-ferrous metals is on rise & Hindalco has reached its bottom. For ferrous metal companies margin is on decline.
So it wasn't a bad step really.

As it was expected; NTPC has issued a statement that it is ready to buy gas at $4.2 per mmBtu from non-controversial plants and this has led to increase in RIL share prices.

useful link explaining standalone vs consolidated

This link explains in detail, the difference between standalone & consolidated financial results.
I have left comment appreciating the effort.
Minority Interest is explained very well on investopedia.

hindalco

I bought hindalco at Rs.103 after one of the analysts on cnbc tv18 said that it is expected to touch 115 soon. I shouldn't have done that just because some1 said that & the market was dominated by bull.
I expect a rally before the budget when I will sell the stock.
Keeping an eye on Cu & Al futures will also help predict the movement of this stock.

RIL & RNRL case

A division bench of the Bombay High Court today asked Mukesh Ambani-promoted Reliance Industries (RIL) to sell natural gas to Reliance Natural Resources (RNRL), an Anil Ambani group company, at $2.34 per million British thermal units (mBtu), which is 44 per cent lower than the price fixed by the government.
Price of RIL tumbled down by 7.48% to Rs. 2180.45, while I had bought it at Rs.2201. I thought that as sensex is down by 2.38%, which is much smaller than drop in RIL shares; the markets might have over-reacted. RIL is too big to fall due to such kind of events and it will gather momentum by the time budget is presented (6th July tentatively). One analyst said that the drop in share price is just too big as compared to the dent the actual implementation will cause to company. Another article opined that there is no way that RNRL could sell the gas to other companies & its own power projects (esp. 7000 megawatt Dadri project) are still on the drawing board. So, RIL can just deny selling to RNRL for the moment. Other thing, RIL could move to company court or supreme court; thus delaying the implementation.
On the other hand, the case on deal of RIL with NTPC is highly likely to go against RIL after the verdict against RNRL is known.
JP Morgan has recommended 'overweight' on RIL.
I intend to sell RIL after it crosses 2230 mark.

sesa goa acquires dempo mining

Sesa Goa, a Vedanta group company, has acquired the Goa-based Iron ore mining company, Dempo Mining, in an all-cash deal of Rs 1,750 crore (including working Capital of Rs 145 crore). The company expects to fund the acquisition cost of Rs 1,750 crore entirely through the cash in its books. Notably, Sesa had substantial cash and equivalents of Rs 4,143 crore at the end of FY2009.
I bought share for Rs.203 & sold for Rs.210 on same day and earnt profit of approx. Rs. 5.5 after deduction of charges.

Demand & supply of steel

http://en.wikipedia.org/wiki/List_of_steel_producers
http://en.wikipedia.org/wiki/Steel_production_by_country
http://www.worldsteel.org/index.php?action=publicationdetail&id=81
give information about the supply side of steel production. Above 2 links on wikipedia provide information from references on worldsteel.
A lot of information is available on sites of worldsteel & AISI especially on Bookshop>Publication List link on worldsteel.
China's steel production is supposed to get consolidated. China is already net exported of steel. India is expected to reach 124 million tons by 2012 and 275 million tons by 2020 which could make her second largest steel maker.
South Korea has stabilised at around 46-48 mil. tonnes, and Brazil at around 30+ million tonnes.

NCDEX for finding spot price

I have searched the link of NCDEX where the spot prices of various commodities sold in India could be found. It will be interesting to see how the stocks of companies selling the mentioned commodity and of those which use the given commodity as raw material move vis-a-vis change in price of commodity.
Right now, I am a little confused how I should go about gathering more and relevant investment specific knowledge. Soon, I will come up with something.

More about Geodesic from DNA money

Geodesic is focussed on information, communication & entertainment for mobile phones & desktops under brand name "Mundu".  Key points:

1)owner of Chandamama, the liabrary of 15000 stories

2) Global presence

India: Mumbai, Bengalore US: Silicon Valley Europe:Sweden, Germany, UK & in Hong Koing

It is also present in South American & African markets through acquisitions.

3) Products:

Mundu IM- used by more than 7% iPhone users.

Mundu speak- VoIP

Mundu Radio technology- used by Idea radio

Geodesic also has technology for Live TV on mobile phones.

4) Take over of Picopeta has been used to develop product called Geo Amida, which is marketed to government & private sector. Revenue from it will start accrueing this year.

Geodesic ratio analysis using Excel Macro

Finally, I created Excel macro using VBA coding for ratio analysis of company's financials. I am going to add some ratios very soon. Though my current knowledge of macro VBA programming is sufficient, it is still preliminary. I need to build up upon what I already know.
I used the macro for analysis of Geodesic stock & compared my results with those given in DNA Money dated 25 May,09. All results are matching with the exception of Net Worth. I should take a look at it again, I think. Here are some observations:

Sales, EBITDA & PAT growth rates are 103%, 93% & 90% respectively which are very good taking into account the current slowdown in major economies around the world.
Net Profit Margin is 44%. It is good, because it means almost half of what you are selling is your PAT. & that is expected to grow at the rate as high as mentioned above.

P/E ratio is 3.88.
Market price to book value ratio is 2.31.
So, stock is undervalued.

Only ratio that makes me worry is debt/equity ratio. It is as high as 1.06 .
But, PAT of 282 Cr & debt of 506 Cr. makes me feel that if the business flourishes the debt will be taken care of.
Other thing is that I bought equity at comparitively high price of Rs. 126. It then touched a low of Rs.111 & currently howering around Rs. 126. I hope that it will perform good in long term.

QIP, ADR, ADS, FCCB, P-notes, warrants

I have found information about above security classes from investopedia.

ADR is negotiable certificate issued by a U.S. bank representing a specified number of shares (or one share) in a foreign stock that is traded on a U.S. exchange. ADRs are denominated in U.S. dollars, with the underlying security held by a U.S. financial institution overseas. ADRs help to reduce administration and duty costs that would otherwise be levied on each transaction.

When you own an ADR, you have the right to obtain the foreign equity it represents, although most U.S. investors find it easier to own the ADR.

An American depositary share (ADS), on the other hand, is the actual underlying share that the ADR represents. In other words, the ADS is the actual share trading, while the ADR represents a bundle of ADSs.

An IDR is the non-U.S. equivalent of an American Depositary Receipt (ADR).
A GDR is very similar to an American Depositary Receipt.

P-notes are similar to ADRs. It is investment vehicle for foreign investors which are not registered with SEBI. India based brokerages buy on behalf of foreign
investors. Indian regulators are not comfortable with anonymity of p-notes.

QIP
A designation of a securities issue given by the Securities and Exchange Board of India (SEBI) that allows an Indian-listed company to raise capital from its domestic markets without the need to submit any pre-issue filings to market regulators. The SEBI instituted the guidelines for this relatively new Indian financing avenue on May 8, 2006. This was created to stop undesirable export of domestic equity market due to preference of ADR amongst Indian companies.

A warrant, like an option, gives the holder the right but not the obligation to buy an underlying security at a certain price, quantity and future time. However, unlike an option, an instrument of the stock exchange, a warrant is issued by a company. The security represented in the warrant (usually share equity) is delivered by the issuing company instead of an investor holding the shares.

FCCB means foreign currency convertible bond
Issuer has advantage of lower coupon rate due to convertibility.
Buyer has advantage of stock appreciation.

Tatacomm, ratio analysis & study of financials

I went through some stock recommendations on net. Both the recommendations are negative to Tatacomm. One had downgraded it to 'SELL' from 'NEUTRAL'. Other had made it 'UNDERPERFORM'. It was said that Tatacomm has high debt-to-equity ratio. It is such a debt-ridden company that even when sensex is jumping by 500 points, it continues to tumble down. It was wrong decison to do intraday trading in such a risky stock. This signifies the importance of ratio analysis & reading through annual report. I think I should learn these skills first before doing further trades. My study of Tatacomm equity was insufficient, when I decided to do day trading in Tatacomm.

No BUY on 'Nevis Networks' ESOPs

Good investment decison is not only about buying a good stock, but it is also about not buying a bad stock. After resisting temptation to leave Nevis after being eligible for ESOP of Nevis was, now I think, a good decison.

ADR: Useful for predicting short term stock movements

ADR means American depository receipt. I always wondered until now, why ADRs are flashed on CNBC-TV18 & how they can be useful. I found a little about ADRs on investopedia.

ADRs trade just like stocks but represent shares of a foreign company trading on a foreign stock exchange. After they are listed, demand & supply determine their prices.

How ADRs can be useful to me?
Price of ADR is affected by the speculation about the future performance of company, stability of economy of home country & its currency. If political & currency scenario remains unchanged, ADR movement may help to determine the movement of market price of stock in our market as large portion of trade volume in India is contributed by FIIs. ADRs can be a good barometer of global perception of our stocks. In fact, the useful tool will be the calculation of opening price of stock by using ADR price & dollar-rupee conversion ratio. Calculated price & actual market price should be in unison; because as long as they do not move together, there is scope for arbitrage.

ADR prices are available on:
http://www.equitymaster.com/stockquotes/adr.asp

NOTE: Please check the date on the page before actually using the data.

ADR prices must also be available on the exchanges where they are traded e.g. Nasdaq, NYSE etc. Finding the link where market prices are given, on sites of these stock exchanges, remains to be done.
I cannot wait to implement my hypothesis.

Beta of stocks: Useful for traders, Not for investors!

Beta of stock is used in measuring the volatility of stock. Beta of index is 1. Beta higher than 1 means stock will give higher returns than index during bull run, but also will loose more value during downturn vis-a-vis index. Beta less than 1 indicates exactly opposite.

Beta is calculated using the historical data. It does not incorporate the risk of new news. So, fundamental analysts would find it of no use. Other thing, beta does not capture the long time change in the value of stock and fundamental analysts & value investors are generally interested in long term.
But traders who get into and out of the market quickly find it useful. Because, they need the change in their investment to be high in short time to earn good returns.

Typically, FMCG & pharma stocks have lesser beta as these businesses do not get affected by market movements much. But real estate, IT, telecommunication stocks have higher beta. I have just experienced this after watching how the market price of Bhartiartl tumbled after the announcement of merger with MTN and how it had shot up too sharply on the Golden Monday.
Realty stocks also nosedived during subprime crisis & are now up again after the announcement of FM of boosting infrastructure.

http://www.bseindia.com/about/abindices/betavalues.asp shows the betas of sensex stocks.

Other source is "yahoo india finance". After finding particulars of stock there, one should look in 'Key Statistics' and then under 'stock price history' for beta.

I found on net that "business standard" gives beta values of stocks in their Saturday edition. I will keep an eye on it, though I am going to Dapoli that day and hence might be busy.

Currently only trading, not investing!

While trading in Suzlon no analysis was done. I happened to buy it for 83.5 at the start of market,
when prices r very volatile & sold it for 90 after some days. For last few days, it is hovering around
90 mark. So, I think it was right decison to sell it early.
I know holding a stock for long enough time pays better returns, but that is not at time like this when
economic environment is not good for growth of any company. In such scenario, trading is better than investing.
Main reason for holding the stock for long time is the benefit of compounding due to successive yrs of growth.
Right now, I can see hardly any company compounding the returns of previous year. Even equalling performance of
previous yr, is achievement in current scenario. So right now, value investing does not make sense to me.
Other thing is that I want to book profits before I get into my b-school. Because after I start going to classes,
I won't be able to trade. Getting into b-school after knowing that I have booked profits, gives a better philip rather than
sitting on the stocks for long time.
But after incurring losses today, I have become skeptical about intraday-trading. I would do short/medium term trading rather than intraday trading.

Geodesic

I have also bought Geodesic after reading abt it in DNA money.
I took it for 126 & it's currently trading at 112.
I intend to hold it for long time.

27 May 2009

I traded in Tata communications stocks assuming it will rise, because it reported Q4FY09 profit(302.37) 5 times
that of Q4FY08 (56.03cr).
FY09 net profit 515.95 cr FY08 net profit 304.9 cr
Revenue, net profit & consolodated revenue all grew vis-a-vis FY08.
Company declared dividend of Rs. 4.5 per Rs. 10
Global mood was upbeat because US consumer price index was the highest since Sept08 & sharpest ever rise in 6 yrs.
Asian markets were green & sensex rose by more than 300 pts.
NSE rise to decline ratio was 11:1
On previous day, Tatacomm had plummetted from 585 to 542 i.e. by 43 pts without ne negative news & Q4FY09 results
were declared after market was closed.
I expected stock to rise in short term & hence decided to do intra-day trading in spite of the fact that net profit
was quintupled due to sale of stake in tata teleservices by tatacomm.
I did a few profit booking day trades, but stock breached the support of 538 & reached Rs.526 just after press
conference by Pranab Mukherjee; though there was no bad news for telecomm sector.
NIIT on the other hand, rallied 5% in spite of 15% dip in net profit of Q4FY09 vis-a-vis Q4FY08.
I minimised the loss by selling stock at market price. I was right in doing so becos afterwards the market price
of share reached 516.
It seems that market does not view sale of stock to Japan's DoCoMo positively.
Market did not view MTN-Airtel merger as positive development either.
I had bought BHartiartl at 866 & sold it at 894 on announcement of merger b/w bharti & MTN.
After I sold it,bharti nose dived to 810 the same day & currently trading at around 770. This is level
at which Bharti was trading before the Golden Monday. I think bhartiartl has support at this level.
I was right in timing the sale of Bharti.