Alpha Ideas

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 !