Category: Observations

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Observations

Stocks that go up 100%

When Charlie Munger started out his career, he was on the lookout for stocks which will go up 100% in the next one year.

That thought somehow stuck in my mind and I always like to analyze stocks which had an incredible run.

The list of NSE stocks that have gone up by 100% in the last year (Nov 09 2011-Nov 09 2012) are around 41:

HOTELRUGBY
PONNIERODE
ONELIFECAP
RSSOFTWARE
VAIBHAVGEM
RAJTV
JKLAKSHMI
STOREONE
JKCEMENT
GRANULES
AGCNET
AKSHOPTFBR
20MICRONS
DEN
HERITGFOOD
KSCL
VGUARD
DENORA
SEINV
PRAENG
AARTIDRUGS
ATUL
DCW
DISHMAN
HELIOSMATH
SHASUNPHAR
GEOMETRIC
SHREECEM
SANWARIA
KOLTEPATIL
SANGAMIND
WHEELS
ZICOM
RELAXO
STAR
SOMANYCERA
THINKSOFT
TIPSINDLTD
ASTRAL
HATHWAY
AARTIIND

As per academic research, these stocks should continue to rise in the next 12 months as well.It would be interesting to revisit these stocks again next year to see if that really happens.

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Observations

Investor behavior has not changed since 1688 !!

Joseph De La Vega wrote a book on the Amsterdam Stock Exchange in 1688 called Confusion de Confusiones.

Some of the behavioral insights written in his book are still valid hundreds of years later.Sample this investor behavior

Some people are always unhappy. If they have bought and the prices fall,they are unhappy because they bought; if the prices rise, they are unhappy because they did not buy more. If they have sold they are unhappy because they sold for less than they could have; if they did not buy or sell, they are unhappy because they did not do anything; if they receive a tip and they did not follow it, they are also unhappy. Everything produces unhappiness”

 

 

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Observations

Adi Shankaracharya and Raheja

I had blogged earlier about the nasty fight between the patriarch Gopal Raheja of the 11000 Crore Raheja group and his only son Sandeep.The matters have become worse with both making damning statements about each other in court.

Adi Shankaracharya (788–820 CE) in his immortal Bhaja Govindam wrote

arthamanarthaM bhaavaya nityaM
naastitataH sukhaleshaH satyam.h .
putraadapi dhana bhaajaaM bhiitiH
sarvatraishhaa vihiaa riitiH

 

Wealth is not welfare

Truly there is no joy in it.Reflect on this at all times

A rich man fears his own son

This is the way of wealth everywhere

 

Isn’t it amazing how human behavior hasn’t changed over the ages?

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Observations

Would Rajat Gupta have been punished in India?

The short answer is No.

Raj Ratnam said this in an interview

“In Sri Lanka I would have given the judge 50,000 rupees and he’d be sitting having dinner at my house. ”

 

If you look at the letters of support given to Rajat Gupta by the likes of Pramod Bhasin,Adi Godrej, Mukesh Ambani etc , it is clear that India Inc thinks Rajat did no wrong and deserves no punishment.

It is fairly scary for a retail Indian investor to know that our corporate captains and even the Indian media thinks insider trading is a victimless crime.

I think the average Indian investor feels that the Indian markets are rigged and they are better off investing their hard earned savings in FDs, gold and realty.

Do you blame them?

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Nifty Observations

Sensex Vs Nifty-The generation gap

There was an interesting discussion at Atma about which index better represents the Indian market-the Nifty or the Sensex.

I find that the answer often depends on the age of the person. For old timers (above 40), the answer is the Sensex.They have spent the better part of their trading lives talking,dreaming and thinking about the Sensex.

For the young ‘uns, it is the Nifty.They trade F&O on the Nifty and can tell you its movement tick by tick.They will be hard pressed to even know what the Sensex levels are.

So when somebody asks you where the market is, the index you quote tells something about you as much as it does about the market !