Trading Tip For A Profitable Life

Are you looking for a short cut in Indian Stock Markets but were unable to find one.....

Your wait is over. No Technical Analysis , Stock Tips, Rumors. Its open out there and warrants your attention. Just five seconds before the market starts and you know how Nifty/Sensex would behave today. No speculation, its hard reality which forms the basis of what I say.

Check my post FII's - The Open Secrets You Would Like To Know on my blog Nifty Live Charts which has all the secrets which were never communicated to you before.

You will miss this post at your own risk.

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REAL-TIME MARKET REPORTS

Intraday Stock Screener

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NEWS, RESEARCH& ANALYSIS

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Stock Search/Screener
Search Builder

The malaise of "Stock Advisors"

I was surfing one of my favorite sites Valuenotes.com and spilled over to the new forum which was started a few days back. A common question doing rounds was "Market Crash" . I am quite surprised at the fickle mindedness of the people who are glued on to TV channels to get some "Tips" by the "Advisors". I am damn sure that these very people might have been banking on the "advisors" who were shouting on all business channels about how soon Sensex will be touching that 25000 mark. I still remember how quick people were in giving their own judgement on how Sensex would touch 20000 in 2-3 days after it touched 19000.

As in my previous article I enumerated the anomalies doing rounds in the market, I feel a desire to prick the bubbles created by the "advisors" on business channels . I would like to remind that I am not averse to such advisors but I take their advice with a pinch of salt. I'll tell you why. First things first, the "advisors" business is thriving only because the market is doing good.This point is very important and has the hidden message why you should not believe these "advisors" 100%. Have you seen any advisor who was not advocating for further investment when everything was hunky dory? I have not seen any one. This because they know that their business happens only when the market is on an upward rally. Any break in that would mean people being apprehensive and a downfall in their business. This is why all "advisors" like rallies and even when they know in their heart that something is wrong, they would still suggest investment. Today only I saw a question put up by an investor on future course of action on investment of 500 shares of Reliance Energy @ 1850's in the current market. Do you sense something wrong here? That poor investor got himself in the market at a time when the scrip was running amok. Now he is in mess because he is not clear what to do now. Who are the people who are driving such innocent people into the D-street? The "advisors" offcourse. The investor is also not so innocent because its your hard earned money and you should have given a thought when you invested at such high levels.

A piece of advice for all new gurus of stock market. Think before you invest.

A sensible take is to wait for 3 important triggers in a very short term
1. SEBI decision on P notes on Oct 25
2. RBI’s mid term review of annual policy due on 30 October 2007
3. US Fed take on interests

Any definite course of action can only be determined after these near term triggers.

Till then ... Peace Ho!

Wobbly Wednesday - Sensex,Nifty in Turmoil - October 17 2007

The last few weeks have seen what the experienced hands had not seen in their lifetime - Equity markets at all time high, Gold at 28 year high and Oil at unprecendented heights. This is an anomaly in the flow of money from one markets and other. Traditionally money moves from one market to another with the results visible from gaining and losing markets. However this time the markets had behaved as if there was no logic and only exuberance had a say on sentiments.

Time to be cautious is old gents say when such times are prevalent. Market were trading at P/E of 26 which rose from P/E of 22-23 just a few weeks back. Do fundmentals change so quickly? This creates doubts and rightly so our FM said which was taken lightly by the bulls. The bulls didn't notice that the bubble which arose from the easy liquidity comng from the Fed cut since September 18 was as hot as water on a hot pan. It can vanish as quickly as it appears on the scene.

The other side of the story was that the friendly FII's were not sentimentally attached with the stock markets and they were simply minting money where it is possible. Recent Fed cut coupled with strong rupee transaled into a money spinner for the FII's who cannot manage such returns in the recessionary US and European markets. This resulted into a slosh of hot liquidity which chases strong returns. The concerns on such liquidity was evident when all concerned with the Indian economy viz SEBI,RBI and Finance Ministry collabrated to come out with a way to control such liquidity. Todays clamp on the Participatory notes was just the kind of trigger which can prick buubles and take air out of them.

Talking about PN's or P notes action taken by SEBI is not unwarranted as some would say. SEBI has actually tried to control the quality of funds and not the inflow of funds. FII's who are still bullish on the India Story will still be interested. It's just that the regulator initated at the wrong time for the raging bulls.

However things should not be gloomy and markets are still fundamentally strong when you compare with other bubbles in the past. Japan stocks traded at an unrealistic P/E of 100
at the high of the Japanese bubble. So, we are still miles away from that kind of bubble but it is good be cautious because Precaution is better than cure.

A word of advise for the retails investors. When your doodhwala and panwalla starts investing in stock markets, its time that you make exit.

Monday Blues

Good news : Bounce in US markets.Dow up on Friday

Bad news : Left Right problems over nuclear deal.

Surprise factors: Some more news on Subprime crashes from the US. Bank of Japan meet on Aug 23.


Nifty Intraday support & resistance:

S 2 3924.80
S 1 4016.40
Pivot 4093.75
R 1 4185.30
R 2 4262.65

Masters don't gamble

The masters don't gamble. \"They invest deliberately and purposefully, and they outperform the average investor as a result.\"

Markets have been going down and up. If that makes you feel queasy, here is help. \"You can achieve success in the stock market if you follow a set of well-defined investment principles and refuse to abandon them when the market acts irrationally,\"

First check if you belong to the majority in the world of investment that comprises those who want hot stock tips. \"Unwilling to learn the rudiments of investing, they invest in companies because `they\'ve been going up.\' The thrill of the action is as important to them as the profits they make.\" To them, investing is not about maximising the returns over time.

The minority are the few who study the art of investing \"in a constant effort to increase their knowledge and improve their skills.\" Kays points out that these people take time to learn what matters when buying the stocks. \"They don\'t gamble; they invest deliberately and purposefully, and they outperform the average investor as a result.\"

Stocks in news: M&M, Tata Steel, NTPC, HUL, UTV Software

· Ex-dividend:
Varun Shipping (Rs 1.50/sh), Apar Industries (Rs 2/sh), Atul (Rs 3/sh), Heritage Foods (Rs 3/sh), Parsvnath (Rs 2.50/sh) and Cyber Media (Re 1/sh)

· Results Today:
M&M, Tata Steel, HDFC, NTPC, HPCL, BEML, BHEL, Glenmark, IOC, Jet Airways, OBC, AV Birla Nuvo, Cairn India, GMR Ind, Sun TV, NALCO, India Cement, GE Shipping, DCB, Divis Labs, TTML, India Bulls Real Estate, India Infoline, I-Flex Solution, Akruti Nirman, Andhra Bank, Syndicate Bank, Torrent Power, TV Today Network, Vijaya Bank, Sical Logistics, Ajanta Pharma, Archies, Asian Paints, Jindal Steel & Power, JK Tyre, JM Financial, Nova Petro, Advanta India, Asian Electronics, Atlanta, BL Kashyap, Cambridge Sol, Crest Animations, Dishman Pharma, Easun Reyroll, Hanung Toys, Harrison Malayalam, Helios & Matheson, Inox, Maharastra Seamless, Mangalam Drugs, Mercator lines, Sical Logistic, Syndicate Bank, Voltamp, Wyeth, Balkrishna Ind, Bharti Shipyard, Classic Diamond, DCM, Dredging Corp, Gitanjali Gems, Heritage Foods, Hinduja TMT Hotel Leela, D-link Jindal Drilling ,Khaitan Nission Copper ,Nitin Spinners, Northgate, TFCI, Vijaya Bank, Eastern Silk,GMDC,ICSA India and JMC Projects

· Hindustan Unilever board approves share buyback at maximum price of Rs 230/sh up to 25% of capital

· UTV Software board approves GDR/ADR/FCCB issue up to USD 100 mn

· Binani Cement board approves investment in JV in China for manufacture of clinker/cement

· Peninsula Land board approves 1:5 stock split

· Godrej Industries board approves raising long-term resources up to USD 150 mn

· JBM Auto board approves 1:2 bonus issue

· Praj Industries board approves raising funds up to USD 125 mn for expansion, including strategic acquisition abroad; Rakesh

· Jhunjhunwala resigns as director of board

· Lloyd Electric board approves QIB issue up to Rs 200 cr

· Grasim board approves transfer of textile units at Haryana to subsidiary co

· GMR Infrastructure board approves FCCB/GDR/ADR issue up to Rs 5,000 cr

· Eicher promoters may sell majority holding along with management control to Daimler Chrysler - HT

· Renault confirmed holding talks with Bajaj Auto for small car project

· Tata Tele tower biz valued at Rs 13000 cr – TOI

· Govt has decided not to offer CDMA players 3G spectrum - ET

· IDFC buys 6.6% in Andhra Cement for Rs 25 cr - ET

· RIL may drop USD 5.2 bn gas project on pricing delays - FE

· Dish TV to roll out DTH service in cars, trains; in talks with FIIs to raise funds- BS/BL

· MTNL is losing Rs 2 cr each month as ITI failed to put up new broadband capacity in Mumbai - BS

· Baring makes 20% open offer for JRG Securities at Rs 49/sh

· Balasore Alloys board approves expansion plans with investment of Rs 1215 cr

· Paramount Communications board approves increasing FII investment limit 49%

· Petron Engineering bags Rs 49 cr order from Samsung Engineering

SWOT analysis of Indian Share market

Strengths: Senex and Nifty scrips are top made up of top performing scrips that should capture much of India's growth ove the next 10 years. Companies that stand to gain the most as Indian economy gallops at 8-9% pa.

Weakness: Illiquidity outside the scrips in futures and options may lead to large scale price manipulation in illiquid scrips and lower price realisations in such counters.
Poor Indian Accounting disclosures may lead to large scale manipulation of figures by publicly traded companies.

Opportunites: A large domestic market that is still into traditional fixed income and other government savings is all buy bound to enter the market sooner if not later.

Threats: Global Economic slowdown, Currency mismangement, High global commoditiy prices, Over valuation in Index scrips, Non liquidity in non derravatives related scrips, Change in governement focus on controlling inflation, the attitude of government relating to FII's taxation etc

Brief about SWOT Analys

A tool that identifies the strengths, weaknesses, opportunities and threats of an organization. Specifically, SWOT is a basic, straightforward model that assesses what an organization can and cannot do as well as its potential opportunities and threats. The method of SWOT analysis is to take the information from an environmental analysis and separate it into internal (strengths and weaknesses) and external issues (opportunities and threats). Once this is completed, SWOT analysis determines what may assist the firm in accomplishing its objectives, and what obstacles must be overcome or minimized to achieve desired results.


When using SWOT analysis, be realistic about the strengths and weaknesses of your organization. Distinguish between where your organization is today, and where it could be in the future. Also remember to be specific by avoiding gray areas and always analyze in relation to the competition (i.e. are you better or worse than competition?). Finally, keep your SWOT analysis short and simple, and avoid complexity and over-analysis since much of the information is subjective. Thus, use it as a guide and not a prescription.

Indian equity market - Marc Faber

An interview with Marc Faber
**
*How do you read the current correction and pull back in the Indian equity
markets?*
**
The market had risen from less than 3,000 points in 2003 to nearly 15,000
points recently. We had a 26 per cent correction in 2004, a 13 per cent
correction in 2005, and a 30 per cent correction in May-June 2006.


So far we have declined by 13 per cent from the February 11 peak (as on
March 5) and the question is obviously whether this is just a correction or
the beginning of something more serious.


Based on the position of overseas markets and international liquidity, I am
leaning toward the view that we are faced with something more serious.


*There are a lot of worries on inflation and rising interest rates in India.
These could have a negative impact on the equity as well as corporate
profits. In this scenario what is your outlook for calendar year 2007?*


It looks as if most asset markets around the world, including the Indian
stock market made a high between November 2006 and February 2007. And
whereas since 2002 the right strategy was to buy the dips, from now on
investors should sell the rebounds.


Once the Dow is down by 10 per cent, I expect the US Federal Reserve to
begin cutting interest rates and that this may lead to a sharp rebound in
stock prices around the world.


However, I doubt that we shall make new highs. So, my expectation is for the
present downturn to last for between one and three months.


This will be followed by a strong rebound, which will then give way to
renewed weakness in the second half of the year. I may add that India, while
having a great potential, is certainly not problem-free with inflation
accelerating and a not particularly investor-friendly Budget!


*Would you agree that India is witnessing a secular bull run, which could
last for many years or will it deflate?*


It is possible that India and also other emerging markets are in a secular
bull market. However, we should keep in mind that India rose from the lows
in 2003 to its recent high by almost five times.


Valuations are not compelling when compared to other markets and when
compared to local interest rates. Moreover, even if the secular bull market
story is correct, which I somehow doubt, big intermediate corrections or
even bear markets can interrupt this glowing scenario.


*How do you see global liquidity going forward?*


Global liquidity, coming principally from the US current account deficit, is
still there. But it is no longer expanding at an accelerating rate.


Moreover, we have some illiquidity that developed in the US sub-prime
lending sector. This means, in my opinion, across the board tighter lending
standards - leading to less liquidity. It is not the Fed that tightened
liquidity, but the market place.


*What will be its impact on global stock markets in general and India in
particular?*


When liquidity expansion slows down usually some problems occur in asset
markets. Moreover, nothing boosts liquidity as much as rising asset prices.
It is when asset prices decline that liquidity can vanish very quickly.


*What is your advice for the retail investor in India?*


My advice is to sell at any rebound.


*Where do you think the commodity cycle is headed, especially gold?*


Since all asset prices including real estate, equities, bonds, commodities,
art, and even the prices of mistresses increased in value since October
2002, I would expect in an environment of relative tighter liquidity all
asset prices to decline - even precious metals.


*Gold ETFs have recently been introduced in the Indian market. Could you
please share your experience and whether retail investors should look at
them?*


I am still positive about gold and silver in the long run. However, a better
buying opportunity should occur over the next three months.


*Do you see any particular investment themes, which can work over the next
two-three years in India?*


I think the key will be to avoid losing money. I like cash and possibly
bonds should do okay in India.


*Do you see Indian markets as over-valued compared to other emerging
markets?*


I am not sure the word "overvalued" is correct, but certainly the market is
"overstretched" and vulnerable to a 30 per cent or 40 per cent decline.


*In a rising interest rate scenario, how do you look at Indian real estate
prices? And investing in real estate companies?*


There has also been a lot of speculation in real estate and I would be
somewhat careful at this point. I would avoid real estate companies for now.


*Oil is no more boiling, but the opinion is still divided on its direction.
What are your expectations for this year?*


Since I expect the global economy to slow down, oil may correct down to
$45-55 per barrel. Long term, I am positive.


*And its impact on Indian economy?*


Declining prices are moderately favourable, but since I expect prices to
eventually rise significantly, I would think that it will add to the current
account deficit and to inflationary pressures.


*Indian metal companies have acquired companies abroad recently. What is
your view on the valuations and the synergies? How should investors look at
these deals?*


I am not sure that these acquisitions are timely and wise. I would not buy
these companies and focus on India, which has a higher growth potential.
http://groups.google.co.in/group/aiii/browse_thread/thread/e5ea698dac47246e/2ca8fc4effedadcb?lnk=st&q=real+estate+stock+india&rnum=3&hl=en#2ca8fc4effedadcb

Does investing in IPOs make sense ?

IPO's ... Investors another dilemna

For investors today, there are also more companies to consider than ever before. Every day it seems another batch of companies is going public.

In this highly competitive market, some of them need quick and large injections of capital just to survive. But sometimes this race to an IPO comes at the expense of laying the foundation for a viable, long-term company. As long as investors stay hungry for public offerings, there will be even more IPOs.

When a company goes public these days, the number of shares offered to the public often represents only a small percentage of the company's total shares. Now, simple economics tells us that with heightened demand and a limited supply, the price is going to climb. But when current demand is already at extraordinary levels, the price tends to skyrocket.
By limiting the number of shares that are offered to the public, however, the underwriters, venture capitalists, and other select participants have much to gain. They are the ones who own the rest of the stock that was not offered in the IPO. While the rest of us are scrambling for a few shares and driving up the price, these company `insiders' can sell their own shares down the road for a much higher price.

So the moot question is "Does investing in IPOs make sense?"

Anand rathi group has come out with an excellent report on answering the same question. Some excerpts from the report

"Highlight

Is the euphoria about IPOs justified?
􀂾 The last four financial years saw ~ Rs. 900 billion primary public equity mobilisation.
But the demand is clearly ahead of supply as reflected in large oversubscription of
many IPOs. The question is whether this euphoria is justified?
Do Indian book built IPOs really yield 'abnormal' return?
􀂾 We examine 159 book-built initial public offerings (IPOs) in India between 2000
and 2007 and find two-thirds of these issues resulted in listing gains. But it is disturbing
to note that such gains have eroded sharply in the recent years.
What makes an IPO hot?
􀂾 We explore relationships between listing gain or money left on the table with factors
such as the sector of IPO issuing company, market cap, issue size, valuation, standing
of the lead manager, post issue promoter holding, etc.
􀂾 In general, we find a kind of 'central tendency' whereby mid-cap companies, midsized
issues, middle-aged (7 - 10 years old) companies, issues managed by midsized
investment managers generally yield the best listing gain.
Do investors really gain from participating in IPOs?
􀂾 Due to large oversubscription, significant interest and opportunity cost of funds
blocked during listing period, absolute listing gain is a not a good measure for
realisable gains from participation in IPO.
􀂾 Our exercise on the realised listing gain of different classes of investors show that
such gains are generally much lower than absolute listing gain.
How long to hold an IPO scrip?
􀂾 Our exercise suggests that listing day and around 100 trading days after listing can
be two important exit points from IPO scrip. However, even after 100 trading
days, our IPO scrip index continued to outperform broad market index indicating
'abnormal' return for the buy and hold investors.
What next?
􀂾 Falling absolute listing gains and low realised listing gains are not in line with the
longer term interest of the primary equity market or the economy. We propose
certain measures, which could be explored to address this situation."