Category: Observations

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Observations

Is it a bird?Is it a plane?No its NRN Murthy !!

Was fairly amused to read reports about Narayan Murthy joining Infosys as an Executive Chariman.

This incident gives a good illustration of how Infosys really operates.It is a company whose founders are loath to let go of control/management.

First, you had the charade of every promoter getting a shot to being CEO by turns.Spare a tear for Mohandas Pai who actually thought that merit was a consideration for the CEO position.

Then we had the charade of NRN Murthy piously claiming that no founder would have an executive position by 60 and non executive position by 65.

This resulted in the curious spectacle of having a great leader like K V Kamath as a Non-executive Chairman !Since they couldn’t trust a non-promoter completely, we had NRN Murthy being appointed as Chairman Emiritus and Kris GopalaKrishnan as Co-Chairman.

I think KV Kamath saw the writing on the wall when Cognizant overtook Infy to be the second largest Indian IT company.He realized that Infy was fast going downhill under Shibulal . While replacing him would not go well with the promoter group, he did the next best thing- he stepped down himself and got NRN to be the Executive Chairman

This is yet another example of the true leadership skills of KV Kamath.

However, NRN Murthy getting his son Rohan Murthy on board shows another kind of skills-nepotism.Earlier, NRN used to piously (and in hindsight, hypocritically) claim that no children of Infosys founders would work with Infosys.Of course, this rule would not apply to his own children !

Considering the track record of promoters, what is likely to happen is that NRN would hang around Infy long enough to groom Rohan.At the right time, the CEO baton would be handed over to Rohan and the show would go on.

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Observations

Geodesic Investors Go To War

Fed up by the Geodesic management,retail shareholders of Geodesic have decided to launch an online campaign to muster enough votes to oust the current Board/management.

According to Geoinvestors Blog,

Like all long term Geodesic investors, I am anguished at the sheer incompetence and possible fraud by the existing management.

A Company that has a book value of Rs.188 being traded around Rs.8 is something that is truly unbelievable.

It is clear that if the stock price has to be near its book value, the existing management has to go and be replaced by a new professional management.

Investors based out of Mumbai/Pune are planning steps in this regard and want to reach out to other investors of Geodesic.

For investors who are interested in ousting this management and replacing it with a professional board/management may write to me with the following details:
Name:
# of shares:
DP ID:
Client ID:
Folio No:
Phone No:
Email Address:

My email address is iamshilpamane@gmail.com

 

This is probably the first time in India that ordinary retail investors are trying to get rid of an existing management.

Am reminded of this great AC/DC number…This Means War !!

 

I just love the lyrics of this number

AC/DC – This Means War from the Blow Up Your Video album.

(You get your head down, will you)
I
I want you
I want you to
I want you to march

Eyes go right, shoulder arms
Left wheel turn, show your charms
Change your clothes, cut your hair
Ain’t no joke, ain’t no place for kids
When the flags are high, hear the battle cry
Treaty gone, see the bandit fly
Dig that trench, watch the blast
Shell shock come, coming fast

Name and rank on parade
Might get laid by a hand grenade
Do you know what this means?
Do you know what this means?
This – means – war

This means war, this means war
I said this means war, this means war
This means war

(Run for cover, hit the deck, call for your mother)

I
I need you
I need you to
I need you to fire

Cock your gun, wet your sights
Get the bull dead to rights
Volunteers, one pace back
On the beach ain’t no place for kids
When the flack is high on a bomber run
You don’t talk back to an ack-ack gun
Fire range, and you’re in the blitz
Keep your head or you’re blown to bits

Name and rank on parade
Might get laid by a hand grenade
Do you know what it means?
Do you know what it means?
This – means – war

Who’s going there, is it a friend or foe?
Propaganda time on the radio
Top brass shout as they clown around
Peace talks die in Geneva town

Do you know what it means? (This means war)
Do you know what it means? (This means war)
Do you know what it means? (This means war)
Do you know what it means? (This means)
This – means – war

This means war
I said this means war, this means war
This means war

(Where’s the second gun?)
This means war,
I told you before, this means war
You know the score, said this means war
This means war
This-means-war

You’re all dead

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Observations

List of 696 Stocks Below 2008 lows

Data Courtesy MoneyControl

[gview file=”https://alphaideas.in/wp-content/uploads/2013/04/Stocksbelow2008lows.xls”]

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Observations

My predictions get a 4/5 !

I normally refrain from making predictions.As regular readers of the blog would know, I even started a series called forecasting folly to highlight the follies of making predictions and setting target prices.

In a moment of temporary insanity, I had written a post about the implications of Chidambaram becoming the Finance Minister.In that post, I had predicted the following:

1.He will focus on raising revenues via spectrum sale.Most telcos are already bleeding, these auctions will increase their debt burden further.Negative for telcos like Bharti etc

 

2.He will kickstart the disinvestment process by selling stakes in state owned enterprises such as SAIL,NMDC,Coal India,MMTC.If past history is any indicator, expect these stocks to underperform the market.

 

3.He will push for RBI to cut rates.Positive for NBFCs and private banks

 

4.He will announce interest waivers for farmers and weaker sections of society.Negative for PSU banks.

 

5.He will target business groups aligned with opposing political parties.Negative for Adani,Torrent,Aurobindo Pharma etc

These predictions were made on Aug 10,2012 and around 8 months later, the first four have come true.There has been no adverse impact on the business groups who seem to be close to the opposition parties.

Memo to myself:Stop making predictions now that you are ahead !

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Observations This is India !

Banks have been exposed…and the market has yawned

Today there was a press conference by Cobrapost where they alleged that HDFC Bank,ICICI Bank and Axis Bank indulged in money laundering.

The markets saw this breaking news conference and yawned.At the time of writing this,

Axis Bank (-0.82%)

HDFC Bank (-0.33%)

ICICI Bank (-0.47%)

These declines are par for the course when Nifty is down by 0.18% and Bank Nifty is down by 0.13%

Does this mean that the markets already knew this “news” or does it mean that markets know that these banks will not face any material fines/penalties?

This is India !