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Modi is hitting EPS growth

We have not seen meaningful growth in Sensex EPS for six quarters. This quarter is no different. It is not the global slowdown which is holding back Sensex EPS growth; if anything, by crunching commodity prices, the global slowdown is helping Sensex EPS show a little bit of growth. What is hitting EPS growth in India is Prime Minister (Narendra) Modi’s resets around black money, crony capitalism and Aadhar. Modi is changing the way consumption and capex takes place in India and corporate India is finding it hard to come to terms with these changes.-said Saurabh Mukherjea

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Rakesh Jhunjhunwala on Indigo

Air India’s market share is shrinking every year. There are not many planes on order. Indigo is the lowest cost airline.Can you imagine he invested Rs 300 crore, he has taken away Rs 3,500 crore as dividend. The Return on Capital (RoC) is 300 percent.
And if you just make his first quarter’s earnings into four he will earn about just 640 multiplied by 4 is Rs 2,600 crore which is about Rs 80 per share. Rs 80 per share what price is it coming. At 765 it is coming at 10 times earnings and I am very bearish on oil prices. I don’t see them going anywhere in 3-5 years.
So, it is a leader, the industry – one large player is shrinking, others don’t have money, he has got the largest planes on order, he is the lowest cost operator. It is a no brainer–said Rakesh Jhunjhunwala

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Pay Less

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Scott Bessent on Stock Picking

Source:Ivanhoff

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Investing:Skill or Luck?

I’ll take one trader, one of the most amazing ones, Ed Thorp…He was the guy who changed the way casinos operate. His first fund ran nineteen years, gross returns 19% per year and that’s good, but that’s not the amazing part. The amazing part is nineteen years he had three losing months, all of them were less than one percent. If you had twelve tosses of a coin, nineteen times, you only get three tails, what are the odds of that? And that’s conservative because his wins were larger than his losses, so the odds are smaller. But I did the probability calculation and the odds of his track record being luck are one million times less than the odds of picking a random atom in the entire mass of the earth, and then picking that same atom a second time. In other words, it’s impossible. It’s true that you will get some successful track records by luck, but these ones are beyond luck, that’s impossible if the markets were efficient.”-said Jack Schwager