So should farmers invest like Adi Godrej ?

In an earlier post, I had written about the hypocrisy of Adi Godrej wherein Adi had told that farmers should give up their land for compensation which should then be invested in mutual funds.

Well, funnily enough,Adi Godrej does not invest in mutual funds himself.In an interview to Outlook Business, he mentions:

“By and large we don’t invest outside of our group, except for a couple of family members who may have bought shares in some other companies. We have never relied on professional wealth managers for advice and we know that the best investment for us is our own group.”Godrej invests in jewellery and homes for personal use. But that apart, he’s not a big fan of either bullion or real estate, perhaps because the group itself owns vast tracts of land (3,500 acres) at Vikhroli in suburban Mumbai and also has a realty development arm. “While equities in the short-term may not have delivered, over the long-term they definitely have outperformed other asset classes, including real estate,” says Godrej. He explains with an example. In 1963, Godrej paid Rs 1 lakh to buy his first house, a 2,916-sq ft apartment at Usha Kiran, Carmichael Road, in tony South Mumbai; early last year, he sold it for Rs 25 crore. “On the face of it, it looks like a stupendous gain but the fact is, the appreciation is just around 20% CAGR,” he points out. “Now, after we demerged Godrej Consumer from Godrej Industries in 2001, in just 11 years, the CAGR in the share prices of Godrej Consumer and Godrej Industries has been upwards of 40% and 50%.”

 

So should farmers now give up their land and buy Godrej group stocks?

Forecasting Folly:Tulip Telecom

This post in in continuation of my Forecasting Folly series.

I have been asked by some of my readers why I am writing these kind of posts when most people know that sell side recommendations are shit anyways.Well, the answer is for my own personal amusement !!

The stock I am covering today is Tulip Telecom.

On Nov 8, 2011, Emkay Global Services put out a buy on Tulip Telecom.

Then the prevailing price was around Rs.150/share. Emkay Global in its wisdom put out a price target of Rs.218/share…an expected return of 45%

Instead, the stock crashed over the next months to close at 36.65 today…a whopping loss of around 76%.

A recent article in ET explains the travails of this beleaguered company which is struggling to pay the salaries of its employees.

Forecasting Folly, anyone ?

Linkfest:Nov 29, 2012

Some stuff I am reading today morning:

Goldman Sachs upgrades India to overweight (Reuters)

India to launch world’s biggest cash to poor program (WSJ)

Maruti pleads inability to pay 1200 Crores (ET)

Indian companies second worse in fraud (FE)

An anti India coup in Male (Mint)

Health Insurance:How to make a claim (Ramadvice)

Indian family fights for justice (Bloomberg)

The investor is fleeing and other market myths (BusinessWeek)

Assholes: A theory (Macleans)

Remembering legendary investor John Templeton (BusinessInsider)

The soaring Jet Airways

Jet airways has shot up from Rs.400 on 19th Nov, 2012 to Rs.542 on 27th Nov, 2012…a whopping gain of 35% in just one week.

The price movement has been attributed to talks being held between Jet Airways and Eithad Airlines for the latter to pick up a stake/enter a partnership with Jet.

We have seen this happen time and again with various deals …the latest instance being the United Spirits deal.

Now, in any country, such rampant rigging up of stock would invite regulatory scrutiny.But in India, such sharp price spikes are par for the course.Our regulator SEBI is fast asleep and has no inclination of ever waking up.

Methinks SAC’s Cohen should open an office here !