What are they smoking?

When foreign brokerage houses entered India, many investors felt that finally they would get an opportunity to have world class research reports. But the experience has been a painful one.

On June 29, 2011, Nomura Securites came out with a buy call on KS Oils with a target of Rs.45.KS Oils was trading around Rs.22 then.So the price target was a whopping 100% above the then prevailing price.Subsequently, the scandal about KS Oils broke and now it is trading at around Rs. 5 per share !

Now, you have the good people of Macquarie have put an Outperform rating on DLF with a price target of Rs.250. DLF is known for its opaque accounting practices and poor corporate governance issues.Veritas in it’s detailed report has put a price value of Rs.100 on the stock.What is interesting is that Macquarie had slammed HDFC for its accounting practices, but at the same time has given a clean chit to DLF for the same.

Can DLF hit 250 in the short term?Sure, in the Indian stock markets, anything is possible.But is it the kind of stock that one expects a reputed brokerage house to recommend for “investing”?Hell, no !!

Makes one wonder, what are these analysts smoking?

What was that again?

I have seen very, very few people enjoy what they have. Money, fame, success, time with children, time with family – all these are precious. Just to save some money do not trouble the people around you. Your child’s 4th birthday will come only ONCE. If it is hot you need a fan or airconditioning. If it is cold you need heating. If your family likes to watch a movie, you need to go and take them along.There is no point that at 59 you say…I have accumulated a lot of money, but my family members hate me because I did not spend any TIME or any MONEY along with them.  Remember if your car journey was from a Maruti 800 to a Merc, you should have enjoyed all your cars. Your M 800 would have had the experience of you as a learner, trying to drive up the gradient, learning parallel parking, etc. Your Esteem would have memories of your marriage and perhaps bringing your newborn from the hospital….THESE ARE IMPORTANT, not the car. You pay money and buy a car. You spend time and accumulate memories-blogged Subramanyam

Why CB Bhave did not get an extension at SEBI

C B Bhave is one of the finest technocrats in India in the capital markets space.Yet he did not get an extension as the Chief of SEBI.Outlook magazine has an explanation why:

More recently, there’s the case of the appointment of the current chief of the Securities and Exchange Board of India (SEBI), U.K. Sinha—Omita Paul (close confidante-cum-aide-cum-advisor to Pranab Mukherjee) has been accused of having cancelled an extension of the former head C.B. Bhave to accommodate Sinha, who was heading UTI Mutual Fund.

Once Sinha got the job, she is said to have delayed the appointment of the UTI MF chief to enable her brother Jitesh Khosla, a 1979 batch IAS officer, to have a shot at the post (he wasn’t even in the initial shortlist). Omita has denied any hand in this, saying Khosla had applied of his own accord. His candidature was reportedly protested by the fund’s largest shareholder, the investment firm T. Rowe Price. Khosla later withdrew from the race.


Oh the games people play !!

The devil you know

Retail investors have fled India’s stock markets and it seems that they are not likely to come back in a hurry.

One big reason is the common perception on Main Street “Sab Promoter Chor Hai” i.e. all promoters are crooks.

The newsflow has also been supporting this viewpoint.

Today Veritas came out with a report indicating that the promoters of Indiabulls Group have swindled large amounts from their companies.

Earlier, the newsreport was how the Deccan Chronicle promoters moved money away from their print media business into aviation.

Next was Arvind Rao of Onmobile passing fake bills from his company.

The less said about the shenanigans of Anil Ambani, Gautam Adani the better.

What is distressing is also the behavior of companies like HDFC. HDFC Life Insurance paid group entities like HDFC Bank and HDFC Securities, excess money in the name of “marketing expenses”. They were paid Rs. 428 cr. and 133 cr. respectively, which was more than 2.5 times the money actually spent.

No wonder the Indian public is turning away from the devils in the stock market to the devils they know best-their local jeweller and the local real estate agent .

That’s assuming they still have money left after paying the bills in an era of low growth and double digit inflation.