Linkfest:Feb 1, 2013

Some stuff I am reading today morning:

Is the current market optimism justified in the US? (ET)

RBI panel calls for stiffer provisioning norms (Mint)

Banks would rather lend to Govt than give you cheaper loan (Firstpost)

PE enthusiasm for real estate, infrastructure fading (MoneyControl)

Obama’s parting gift to Hillary Clinton (Businessweek)

Warren Buffett’s greatest fear (TRB)

Is Renaissance Technologies falling off the mark? (Alpha)

Bill Gross:Be very afraid of the markets (Buzz)

Ireland on sale (DailyReckoning)

Deutsche bank improved its balance sheet by losing lots of money (Dealbreaker)

Forecasting Folly: Shiv Vani Oil

This post is in continuation of my forecasting folly series (see here).

On Aug 19, 2011 Sharekhan put out a strong recommendation on Shiv Vani Oil stating


At the current market price, the stock is available at 3.1x its FY2013E earnings and an enterprise value (EV)/EBIDTA of 3.3x. We believe the moderation in order inflow has already been absorbed in the stock as the same has corrected by 60% in the last one year and by almost 36% in the last quarter. The stock is currently trading at attractive levels. Hence, we maintain our Buy recommendation on the stock with a price target of Rs340.



The then prevailing price was Rs.166.45.In less than 18 months, the stock has crashed to 62.6 i.e around 20% of the target price announced by Sharekhan !

Forecasting folly, anyone?