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Author: Raoji
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Icahn said to have amassed a stake in Dell
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Infographics:Bollywood Vs Hollywood
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Linkfest:March 07,2013
Some stuff I am reading today morning:
Tata Motors unveils car buyback plan (BusinessLine)
Collateral covers less than half of Deccan Chronicle’s loans (Mint)
Lord Venkateshwara of Tirupathi earns 1/4 th of income from interest (BS)
Deprival Super Reaction Syndrome (SafalNiveshak)
You are being conned by the personal finance guys (Subramoney)
Ray Dalio is very bullish on stocks and all things risky (Reuters)
Prediction:Tomorrow Bill Ackman will announce Dell is a pyramid scheme (Dealbreaker)
When central planning fails (DailyReckoning)
Traders flee Asia hedge funds (Bloomberg)
Winston Churchill for traders and analysts (TRB)
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Forecasting Folly:Spanco
This post is in continuation of my forecasting folly series (see here)
I had blogged earlier about Crisil’s forecasting accomplishments (see here).
But this example is quite outrageous in its own right.
On July 28, 2011, Crisil maintained a valuation grade of 5/5 on Spanco and gave it a fair value of Rs.289 per share.Then the prevailing price of Spanco was around 130 Rs.
One year later, on June 04, 2012 , Crisil continued to maintain its valuation grade of 5/5 on Spanco and retained its fair value of Rs.289 per share.Then the prevailing price was Rs.66 per share.
Any investor could have been forgiven for thinking that this is a deal of a lifetime.You have the brilliant minds at Crisil valuing the fair price of a stock around 5x times the market price.
What followed in the next months was a complete collapse in the stock price.Now the stock is trading at 16 Rs !!
Forecasting folly, anyone ?