Category: Observations

Categories
Observations

The real lesson of the Indian grandmother & Indian Stocks

There was an interesting post in the WSJ about an Indian grandmother Ashalata Maheshwari.

Apparently, this lady has been investing in Indian stocks since 1954 and now her portfolio consists of around 1500 stocks worth around 4 Crore Rupees.

The author then draws the conclusion that Indian equities are a great investment and one should learn a thing or two about equity investing from the Indian granny.

What I found interesting in the article was not Ms.Maheshwari’s stock picking prowess (1500 stocks-thats the entire market) nor her holding period (apparently forever).

What was interesting was this nugget-Ms.Maheshwari bought a flat in Santacruz (a Mumbai Suburb) for Rs.80,000 in 1972 and now its worth around 5 Crores.This translates into an effective return of 17% pa-beating equity returns.

So I guess the real lesson of the Indian grandmother is that Indian realty will probably give you much better returns than Indian equities over the very long term(30-40 years).It will also save you time from reading annual reports and attending AGMs and give you more time for your grandkids !

On another note,I had the occasion to actually hear this lady’s poems in one of the AGMs.The poem was fairly memorable…because it was unforgettably atrocious !

 

Categories
Observations

Why land is more dangerous than sea for Sheth brothers of GE Shipping

The Sheth brothers-Bharat Sheth and Ravi Sheth-are the promoters of GE Shipping.

Collectively, they own around 38 Lakh shares of Financial Technologies -around 8.24% of the company.

Today, Financial Tech crashed by an astounding 66%, a loss of Rs.356 per share due to rumours of a payment crisis at NSEL

This resulted in the Sheth brothers losing 135 Crores in a single day’s trading session.

Perhaps the oceans of the world are less stormy than India’s financial markets !

 

Categories
Observations

Remember this the next time you watch CNBC TV 18

While researching for Investor Wisdom newsletter, I came across this interesting factoid: The TV18 group which runs the CNBC TV-18 channel owns around 1.78% of a company called Refex Refrigerants.

Apparently,this stake was bought way back in Jan 2008 (when markets were at its peak).The purchase price?A princely Rs.200 per share.

At that time, B. Sai Kumar, Group COO of TV18 Group said:“We are very happy with this partnership since we believe that Refex’s aggressive growth plans combined with our ability to reach them in an engaging way and the reach of our multi-platform media vehicle will ensure that Refex is a significant player in the fast-growing environmental friendly refrigeration market”

Fast forward, five years later, Refex is quoting at 3 Rs/share..a colossal wealth destruction of 98% of its purchase price!!And TV18 is still clinging on its shares.

So running a 24 hour news channel is no guarantee that you will make money on your investments.

Remember this the next time you watch CNBC TV18 !

Categories
Movie Observations

Why BCCI reminds me of Casablanca

BCCI conducted an investigation into the various shenanigans of its IPL and gave a clean chit to all the owners and powerful bosses who run it.

It’s difficult not be cynical about the whole exercise and the sheer chutzpah reminds me of this great scene “Round up the usual suspects” from Casablanca.

 

 

Categories
Observations

Expect Private Bank Stocks to get hit today

I had earlier blogged about how private bank stocks have been hammered over the last one week.

Well, yesterday,RBI went one step further-it added two more tightening measures:

  • The overall limit for access to LAF by each individual bank is set at 0.5 per cent of its own NDTL outstanding as on the last Friday of the second preceding fortnight. This measure will come into effect immediately, i.e., from July 24, 2013 and will remain in force until further notice.
  • Currently, banks are allowed to maintain their Cash Reserve Ratio (CRR) prescribed by the RBI on an average daily basis during a reporting fortnight, with a minimum of 70 per cent of the required CRR on a daily basis. Effective from the first day of the next reporting fortnight i.e., from July 27, 2013, banks will be required to maintain a minimum daily CRR balance of 99 per cent of the requirement.

Expect private bank stocks to get hit today