Jayant Manglik of Religare Securities recently wrote an article where he predicts that Nifty will cross 6600 by Dec this year.In the article, he states “our valuations are reasonable. Nifty price to book is at multi-year lows,”
I thought it would be interesting to see how the Nifty P/B fared over the years:
The current P/B of 3.07 is is certainly higher than the 5 year low hit on 27 Oct, 2008 when it was 2.12.The current P/B is however is slightly lower than the 5 Year average of 3.28 and 5 Year Median of 3.3
I came across this article where a brokerage firm does a “Realty Stock Check”-which realty stocks to buy/hold.Found it fairly amusing that there was no “sell” in the title.
Brokerages tend to treat the realty business like any other business.But do they seriously believe that the balance sheet/p&l statements of a realtor reflect the true state of affairs?
Cold hard cash is the mother’s milk which runs the realty business in India.You need cash to buy the land (no land owner will settle for 100% white), you need cash to pay off the contractors,you need cash to manage the politicians, you need cash to manage the officials etc
In Mumbai, builders routinely pay a couple of crores even before construction starts.
When such a large part of the realty business is done off the books,then does looking at the balance sheet etc make any sense?
Realty stocks can be a good medium for speculation/punting.But if you want to make real money from realty, forget the stock and research the hard asset.
Yesterday, RBI paused its rate cut cycle citing inflation worries.
Apparently, everything in India is prone to inflation except stock prices !
Out of around 1354 stocks which are regularly traded on NSE, around 1090 stocks (a whopping 80%) are trading below their 200 day averages and only 264 stocks are trading above their 200 day averages.
This is when the Nifty is trading flat for the year to date and is slightly above its own 200 Day average.
One wonders what will happen if the Nifty were to crack 15%-20% from here.This is not an unrealistic possibility considering the following:
Global liquidity is tightening, sending the $ higher and emerging markets crashing
RBI has little/no room to raise interest rates
Elections round the corner ensure that domestic liquidity is tight and investment climate subdued
Absolutely no chance of any reformist policies being passed
High chance of budget busting policies (Food Security Bill etc) being passed
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.
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.
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
