Category: Excerpts

Many of the commodity-based sectors see cyclical trends as can be seen in metals, oil, shipping, sugar, commercial vehicles, capital goods etc.

The point to remember while investing in these pockets is that there will be times when these companies will do very badly, which should be the ideal time to buy, and there will be times when these companies do very well, which are times to sell.

The key understanding here is the best time to buy a cyclical stock is when their share price is low and not when their earnings are high.

For example, when sugar prices are at their bottom, sugar stocks will be at the bottom, but their valuation in terms of price to earnings, will be very costly.

So it is important to buy cyclicals based on share prices rather than earnings.

–said S Naren,CIO,ICICI Prudential Asset Management

After all, while Silicon Valley is responsible for some truly astounding companies, its business dealings can also replicate one big confidence game in which entrepreneurs, venture capitalists, and the tech media pretend to vet one another while, in reality, functioning as cogs in a machine that is designed to not question anything—and buoy one another all along the way.

It generally works like this: the venture capitalists (who are mostly white men) don’t really know what they’re doing with any certainty—it’s impossible, after all, to truly predict the next big thing—so they bet a little bit on every company that they can with the hope that one of them hits it big.

The entrepreneurs (also mostly white men) often work on a lot of meaningless stuff, like using code to deliver frozen yogurt more expeditiously or apps that let you say “Yo!” (and only “Yo!”) to your friends.

The entrepreneurs generally glorify their efforts by saying that their innovation could change the world, which tends to appease the venture capitalists, because they can also pretend they’re not there only to make money.

And this also helps seduce the tech press (also largely comprised of white men), which is often ready to play a game of access in exchange for a few more page views of their story about the company that is trying to change the world by getting frozen yogurt to customers more expeditiously.

The financial rewards speak for themselves. Silicon Valley, which is 50 square miles, has created more wealth than any place in human history.

In the end, it isn’t in anyone’s interest to call bullshit-from Vanity Fair

Source: Kalpen Parekh

(Disclosure:I am market making in the shares of Catholic Syrian Bank)

Kerala-based Catholic Syrian Bank (CSB) is planning to raise money by way of preferential allotment of equity in favour of investors. They include Edelweiss Tokio Life Insurance, Reliance Capital, ICICI Pru, HDFC Standard Life, Bennet Coleman & Co, Bharati Axa and Bajaj Alliance.

While the management of the Bank was not available for comment immediately, notice to the investors stated that the Bank is planning to issue and allot upto 1,32,03,856 equity shares for cash at a price to be determined by the Board with the price band of Rs 100 to Rs 120 per share, including premium. The total consideration would be around Rs 132 crore to Rs 158 crore.-from BS

Corruption in the central government is gone. There is a tough message out from the Prime Minister’s Office that graft will not be tolerated.

There is an overall drive against black money with various schemes being tried to put a plug on it.

The same hard stand has been taken with bank loans and one place to start has been the process of selection of public sector bank chiefs.

A member of the committee who would interview candidates for public sector bank chairmen told me that after 2014, they stopped getting calls from the power centre on who to hire. The rate used to be fixed, he said, we were just told to pick the name told to us.

Who’d pay? Firms that would then benefit from easy loans and terms. Those calls have stopped.

The hardening stance of the state on black money shows up in the prices of real estate.

Real estate has been the sump of black money in India and the politician-builder-land mafia nexus had raised prices to a level that was beyond any economic logic.

People who bought their Rs.8 crore luxury floors in Gurgaon are unable to find a buyer at half the price.

The winter for real estate is going to last a long time—so if you are still holding on to an investment thinking it will recover, plan on bequests rather than profits in the near future-wrote Monika Halan