The best and worst sectors of 2011-2012

As the Indian fiscal year has come to an end (April 2011-March 2012), its time to take stock of sector performance over the last one year.

The best performing sector has been Cigarettes :

1.ITC (Up 24%)

2.Godfry Philips (Up 66%)

3.VST Industries (Up 129%)

The worst performing sector has been Telecom Tower infrastructure:

1.GTL Infra (-74%)

2.Sujana Tower (-70%)

3.TN Tele (-55%)


A mega trend

The Dept of Economic and Social Affairs, United Nations has prepared a great study on  world urban populations (see here)

Increasing urbanization is a huge mega trend with huge implications for all of us (especially Indians).

The chart below shows the projected increase in urban populations in India till 2050

If these projections come to pass, then our Indian cities will add around 500 million people to the existing urban populations in the next 40 years !

Considering our choking infrastructure, water scarcity, high food inflation,pathetic sewage systems- a doubling of urban populations can lead to severe social and economic stress.

On the other hand, increasing urbanization can also lead to investment opportunities especially in real estate and agro commodities.



There is always a bull market somewhere

One of the oldest sayings in Wall Street is “There is always a bull market somewhere”

Apparently, now the biggest bull market is in industrial sand. There is a huge – and growing – shortage on the high-quality silica sand required in the fracking industry in the US.

According to Thomas Dolley, a mineral commodity specialist for the U.S. Geological Survey, best described what is going on in the industry… “It’s a gold rush. Demand for frac sand is jumping through the roof.” (see article here and here)





Here comes another Tech Bubble




A Rip Van Winkle trade

In an earlier post, we had discussed Rip Van Winkle trades wherein you put on a trade and forget about it for the next 20 years.

While stocks,realty  etc may be some of the investment classes for such trades, even currencies can be a fertile area for Rip Van Winkle trades.

Take for instance, the historical data of USD and the Pakistani Rupee (PKR) for the last twenty years

One would have made 4x just holding onto this trade .Considering the huge leverage one could employ in the forex markets, the returns could have been much much higher

Does this trade still hold?Considering the country’s dire economic straits, radicalization of its people,the immense incompetence of its political leadership  the imminent withdrawal of US from Afghanistan and drying up of western aid, it is fairly clear that the Pakistani Rupee will head lower with time.

So the right thing to do is to sell PKR and buy USD and keep rolling the positions for the next twenty years.