Monday, December 25, 2006
>Can you predict the movement in stock if the CEO of the company gave you inside info for coming quarter results...! ?
The image proves beyond doubt that having access to fundamental results of coming quarters well in advance did not help you at all..!
Then how would you trade the markets in short term?
Thursday, December 21, 2006
We warned of this in yesterday's Financial Intelligence and see serious problems ahead.
The U.S. government now has the very tough job of explaining to the U.S. Congress and citizens that, with some $700 billion in liquid dollar assets that it could liquidate, China holds the trump cards in trade negotiations with America.
Worse still, as we warned in Financial Intelligence (Nov. 9, 2006), China can now effectively dictate terms to the U.S. government and even exert undue influence over U.S. internal affairs, such as the Federal Reserve target interest rate.
Despite the growing evidence, this calamity still goes largely unreported in the main stream American news media.
The awful yet largely hidden reality is that China already holds the cards in the massive international currency battle looming over the U.S. dollar and, through it, over U.S. interest rates. But many appear to stick their heads in the ground and ignore it.
Winston Churchill once observed that those with their heads to the ground place their bottoms in a most vulnerable position.
Bloomberg also reports today that Swiss political science professors, Simon Evenett and Michael Meier found that six Senate seats and 16 seats of Representatives were lost to candidates supporting trade sanctions against China.
An yet, China has only to hint of an intention to liquidate even a small percentage of its dollar holding to send the dollar tumbling even from its present depressed levels.
Bloomberg also quotes the comments of some leading Americans on the issue of U.S.—China trade. To some observers, they will sound as if they have come from a different planet of make-believe nostalgia for the "good old days of American dominance."
The AFL-CIO is reported to have contributed some $40 million to help the Democrats win control of Congress. Speaking of China, their executive director, Robert Baugh, said, "They (the Chinese) are going to get exactly what they deserve from Congress." How money talks when an un-elected person can speak on behalf of the American Legislature!
Democrat, Sander Levin, (Mich.) alleged that Paulson's policy towards China, "confirms the fact that China has been controlling their currency to gain a major unfair advantage in its trading relationship." Of course, he is absolutely correct. But, he appears to have forgotten the old adage that, "Nothing's fair in love or war." What few realize is that, as far as China is concerned, this is "war."
Even Republican Representative Donald Manzulle (Ill.) is reported to have said, "The Democratic Congress is going to be a lot more fueled to do something dramatic against China." If the U.S. Congress does get "fueled" against China, to where does he think the U.S dollar will fall or that interest rates will have to rise, or what the effect of such tightening will be upon an already uncertain economy?
One has to wonder what such important people think about before they make such statements. Worse still, if they are not posturing, but actually believe what they say, one has to wonder how much they even remotely understand of the true nature of world affairs.
It is all very worrying and goes to show just how difficult a job our government and particularly Treasury Secretary Paulson and Fed Chairman Bernanke will face in 2007.
In short, they will have the daunting task of facing the U.S. Congress, the American people and even the millions of foreign holders of U.S. dollars (Eurodollars) with the awful reality that, within reason, China already effectively controls U.S interest rates!
Such a revelation, as yet unreported in the mainline media, will come as a great shock to many people and nations.
We believe this awe-inspiring realty will dawn early in 2007. Hence our consistent advice to our financially conservative readers/investors, that they accumulate gold and to keep bond investments short.
We feel sure that almost all our readers will sincerely wish both Paulson and Bernanke a happy New Year.
"Inflation should be below 5% and toward 4%. We will take more measures as and when necessary to moderate inflation."
Finance Minister on 11th Dec 2006 after CRR hike
"India's interest rates are not directly linked to moves made by US Federal Reserve. Every central bank has to take its policy decisions.
"Rakesh Mohan - RBI Deputy Governor on 12th Dec 2006
"We have to be ahead of developments and take pre-emptive action rather than fall behind and take corrective action. It is too early to say that inflationary expectations have come down. Credit growth and money supply are still too high."
Finance Minister on 19th Dec 2006
However, over the medium term we expect inflation risks to moderate driven by falling food and fuel prices and hence don't expect a sustained and rising interest rate scenario; such a hike could be near to the end of a tightening cycle.
While the tightening will temporarily hurt the sentiment for banking stocks, there will not a sustained P&L impact. The hike will not significantly impact government bonds as there is a huge demand for SLR and hence bond losses for banks will be restricted. However it will impact deposit rates (both bulk and retail) and will pave the way for the PSU banks to push through a PLR hike. Although there may be temporary pressures on bank's NIMs due to lag effects is passing on the higher costs, sustained margin pressure is unlikely. In this environment, we would continue to favour banks that have either strong pricing power in lending market or have a high quality liability profile and sensible growth strategy. ICICI bank, Centurion bank, SBI, PNB and Andhra Bank remain our top picks in the sector.
Tuesday, December 19, 2006
Friday, December 15, 2006
The practice is known as the carry trade: Investors borrow money in a country in which interest rates are near zero, such as , and invest it in a country like , where interest rates hover above 7%. The trade works best when currencies involved remain relatively stable -- sharp currency moves can wipe out gains from the difference in interest rates.
There are a lot of people who still have these trades on," says Paresh Upadhyaya, a portfolio manager at Putnam Investments in . At the same time, he says, "Things are lining up that could unwind them any day now."
Saturday, December 09, 2006
By Mark Trumbull, The Christian Science Monitor
Friday, December 08, 2006
The only exception would be in sports where size is a factor in athletic achievement. Ericcson interviewed 78 German pianists and violinists and his research revealed that by age 20 those who reached mastery had practiced approximately 10,000 hours or 5,000 more hours than a less accomplished group. He argues that unless you are dealing with someone like Mozart or Einstein, it's the hard work that makes all the difference in the world.
==>What he found was when Grandmasters play chess they access areas for long term memory and higher level processing is activated.
==>When amateurs play they only use short term memory.
==>What he discovered was Grandmasters have committed anywhere from 20,000 to 100,000 patterns to memory. These people have a gigantic hard drive of information they can retrieve automatically to come up with the right play.
His research suggests chess titans may be born with a tendency to process thoughts through their frontal and parietal cortices, the part of the brain responsible for longer term memory.
What his research does not reveal is whether anyone can develop this tendency as his research on older players suggests they haven't developed their frontal lobes to the same degree. But how many people are actually permitted to develop the way Laszlo Polgar raised his children? Amidzic's research also suggests that when amateurs take in information, many times they are only relearning the same things over and over without improvement.
Lazslo saw to it that he attacked areas that needed improvement to make his children into the champions they are.
What I'm getting out this article is that mastery is something we can learn. We must be willing to put long hours into any discipline. I don't care if it's karate, piano, chess, accounting, engineering, acting, dancing or trading. I'm not talking about going on a roll of hard work for a few days, weeks or months. You have to dedicate years.
What disturbs me most about the trading game is the late night infomercials that claim they can turn you into a winning trader after a weekend seminar. At the show in Las Vegas there were any number of black box software program proprietors which claimed that all you had to do was press a button and you'd be successful. Sorry, folks, I'm not buying that nonsense.
When we give up habits like smoking those wires in the brain shrivel up and die.
So it's not out of the realm of reason to think that with the proper tools and environment certain areas of the brain can become more developed over time.
But really, how many people are willing to devote 10,000 hours of intense study to a new skill? Not only do you have to dedicate years to the process, whenever you hit a snag in your development you have to work on it to the point where you actually figure out what you did wrong so you can advance to the next level. If you aren't doing that, you've got the definition of insanity.
In conclusion, I believe that success in financial markets has a direct correlation to your commitment level, the amount of time you put into it as well as the time you spend fixing attacking your weakest link. If you are already doing it and getting the results, great! Keep doing it. If not, if you are honest with yourself, you'll know why you aren't getting the results you desire and you know what you need to do about it.
Edited By Jeff Greenblatt
Tuesday, December 05, 2006
The world over, especially in developed countries, growth has slowed down, so the companies are moving to developing economies to tap the growing market. Cement being a bulk commodity, cannot be transported over long distances and hence there has been a scramble among global giants to acquire capacities in the country.
|Net Sales||(US$ m)||715||20,676||14,774|
|Sales CAGR - (FY03-05)||(%)||6.7%||13.4%||27.4%|
|Debt to equity||(x)||0.90||0.15||0.89|
|Price to earnings||(x)||22.7||17.2||16.2|
|Enterprise value per tonne||(US$)||256||212||192|
Monday, December 04, 2006
In a rare interview with the worlds second richest person, Warren Buffet, CNBC anchor Liz Claman takes an inside look into his surprisingly simple life in WARREN BUFFETT:
THE BILLIONAIRE NEXT DOOR, a CNBC one-hour special that aired on CNBC on
Sunday, December 03, 2006
|My Poor Dad Says||My Rich Dad Says|
|"My house is an asset."||"My house is a liability."|
|Rich dad says, "If you stop working today, an asset puts money in your pocket and a liability takes money from your pocket. Too often people call liabilities assets. It's important to know the difference between the two.|
|"I can't afford it."||"How can I afford it?"|
|The statement "I can't afford it" shuts down your thinking. By asking the right question, you mind opens up and looks for answers.|
|"The reason I'm not rich is because I have you kids."||"The reason I must be rich is because I have you kids."|
|"I'm not interested in money."||"Money is power."|
|"When it comes to money, play it safe - don't take risks."||"Learn how to manage risk."|
|"Pay myself last."||"Paid myself first."|
|Rich Dad always took a percentage off the top of any income he earned. He put this money into an investment account that went toward purchasing his assets. Poor Dad spent all his money first and never had any remaining for investments.|
|Believed that the company you worked for or the government should take care of your financial needs.||Believed in financial self-reliance and financial responsibility.|
|Focused only on academic literacy.||Focused on financial literacy as well as academic literacy.|
|Learned only the vocabulary of academia.||Learned the vocabulary of finance – "Your words are the most valuable tools you have."|
|"I work for my money."||"My money works for me."|
|Thought that making more money would solve his financial problem.||Knew that financial education was the answer to his financial problems: "It's not how much money you make that's important – it's how much money you keep and how long you keep it."|
Wednesday, November 29, 2006
- For the month of October 2006, all India cement despatch figure has improved by 8% on YOY basis to 12.55 million tonne.
- Around 12-15 TPA additions in demand is expected due to approvals of more than 130 SEZs and NHB’s project of ‘A’ house for Rs 1 lakh on massive scale.
- The proposed capacity expansion of about 70 million tonne is expected to come on stream over the next 2-3 years, which may create surplus of supply, but it is believed that most of the capacities will start from the second half of FY08 and beyond.
- So for the next one-year cement sector will experience deficit, which will give positive outlook for cement industry.
Most of the plants are operating at the optimum level and the capacity utilization has gone up to 93 % in October month and it is expected to go up further. Most of the companies are investing heavily in installing the captive power plant in order to reduce the power and fuel cost, which accounts for about 28%-30% of total production cost. Any reduction in this cost has direct impact on the operating margins of the companies.
In Mn. Tonnes
| ||Net Sales|| ||PAT|| |
|Name||Q2FY07||Q2FY06||% Change||Q2FY07||Q2FY06||% Change|
|Amb. Cem. East.||147||120||22||33||19||77|
|Guj. Ambuja Cem||984||773||27||245||88||178|
|Guj. Sidhee Cem.||89||71||26||9||5||76|
|J K Cements Ltd||268||222||21||34||8||336|
|J K Udaipur Udyo||27||27||2||-10||-7||35|
|K C P||58||35||68||10||3||240|