Invest Wise N Profit

Timing the Sensex - Invest or Hold?

noreply@blogger.com (Raghu) — Thu, 15 Jan 2015 23:47:00 +0530

Sensex

28075.55

728.73

(2.66%)

Jan 15, 16:00

Every investor invariably spends time thinking if this is the right time to invest, the only differentiator being the theories basis which the final conclusion is arrived. Some investors look at value, technical charts, political trend, business sentiment or even resort to astrological advise! While there is no conclusive evidence that one theory overpowers the other in terms of success of predictions, it is my belief that any explanation basis some historical data or evidence holds some ground in the world of uncertainty. For believers in historical data, this write-up may well turn to be an interesting and conclusive story.

Most value investors look at PE ratios closely to see if the PE corresponds to growth and value proposition. Looking at Sensex PE ratio for the last 10 years shows that the peak has been between 20-22. The India growth story in terms of GDP has hovered between 5-8% over the decade and this may well have been factored the way Sensex hit the peak and troughs.

Most predictions for GDP for the current year seem to be pegged between 6-6.5%, which presents an optimistic environment. However, looking at the current Sensex PE of 19.2, we may well believe that the upside is capped to 10%. Post the repo rate cut of 25 basis points by RBI, Sensex rose by 700+ points to close at 28K. Given the positive environment (weakening oil prices, stable political situation and positive earnings growth), Sensex may well hit an all time high this year. Purely, going by all time high PE trends, Sensex at 30K looks possible at the moment given the macro economic environment. While we seem closer to the top, every crash has followed a boom story. So, my suggestion for readers would be - Invest for now, Hold for the future and stay put till 30K!

Sensex Historical Ratios

Year	P / E	P / B	Dividend Yield
2012-2013	17.19	2.95	1.57
2011-2012	17.85	3.46	1.47
2010-2011	20.04	3.46	1.13
2009-2010	21.05	3.85	1.12
2008-2009	12.68	2.47	1.92
2007-2008	20.18	5.19	1.07
2006-2007	19.84	4.95	1.28
2005-2006	20.05	4.92	1.29
2004-2005	16.05	3.82	1.69
2003-2004	18.55	3.5	1.81
2002-2003	13.74	2.14	2.28
2001-2002	17.55	2.57	1.85
2000-2001	19.72	2.82	1.56
1999-2000	22.69	3.71	1.08

*Source - bseindia.com

Uncommon Sense - Dhoni as India Cements VP

noreply@blogger.com (Raghu) — Sun, 3 Feb 2013 19:05:00 +0530

India Cements

BSE

Feb 01, 17:00

87.85

1.60 (+1.86%)

VOLUME 56,649

PREV. CLOSE

86.25

OPEN PRICE

86.20

OFFER PRICE (QTY.)

87.85 (5)

Well, if you go back to yesteryear's especially when India won the first Cricket world cup in 1983, no one ever thought on aggressively using cricketers brand image to promote company brands. Media and Entertainment has progressed so much that managements are constantly thinking to innovate. This one decision announced by the BCCI chief and India Cements Vice Chairman took me aback!!

Dhoni, arguably one of most successful captains India has seen, is crowned as Vice President of a cement company with great south Indian presence! Its hard to say if this is in better interests of the org or maybe vested interests of the individual. But just the idea of getting one of the most expensive brand ambassador at a lower price amuses me!!!

What would be Dhoni's role in a cement company? He probably does not even understand the business, but he can be a great brand ambassador of a company which has so far been seen as a sluggish performer in comparison to some of the large caps in Cement industry. This apart, I somehow find it strange with marketers willing to bet their money on the 'popular' individuals! Would someone buy a product because Dhoni is endorsing it? Would you ever buy cement bags from India cements just because Dhoni is employed there? People would probably buy a "Lux" soap because its marketed by leading actresses in the country. This is probably the first time a cement company is banking on popular brand ambassadors. But the mere idea of getting an expensive brand at a cheaper price looks extremely innovative. Just going by the thought, BCCI and India cements Vice Chairman Mr. N Srinivasan has played a master stroke. My sense is that this move may actually not do any good for the company in the long run...

Will Dhoni play the next world cup - well, I don't want to comment if this move is actually with vested interest. But, ultimately at the end of the day, performance counts!!!! Finally, should you buy India cements because Dhoni is in? Answer is no, buy a company for its fundamentals and not for the news it is making! With interest rates going down, cement companies also would trigger a fresh demand cycle. India cements may well be part of this and will be a good bet for the short term. Buy at lower levels with a target of Rs 100 within a years time. Fundamentals indicate a clear buy - PE of 11.6, BV of 132, Dividend yield of 2.2% and a sales growth of 20% YOY.

Mathematics of Valuation - Is it time to Invest

noreply@blogger.com (Raghu) — Mon, 21 Jan 2013 02:00:00 +0530

Its really interesting to predict markets for most analysts. I find them strange, because most of these TV analysts aren't really accountable for what they say. But I must say, this time on, they seem to be right in their view that the markets seem bullish. Here's why I think so!

Look at the below table showing PE, P/BV and Dividend yield for Sensex over the years. Every time Sensex has reached a PE of 20+, there has been a correction(logically so!). What surprised me and got me wrong was that Sensex did reasonably well in 2012 though indicators weren't bullish. At this point, I see a good story emerging for the short term(1-2 years). One, Dividend yield for Sensex stocks is at one of the best we are seeing for the last 7 years at 1.53. Secondly, PE is just around the levels we saw in 2005. As most analysts, I would say PE is not the sole indicator of bullishness. However, for now, this looks attractive for a 15% return.

Manufacturing and some of the banks which haven't done well over the past year interest me at this point. Stay off IT stocks though they may run with market sentiment. I for one, don't want to participate in their fiscal management story which are seemingly less bullish. Look at the top line of top IT companies over the years, we are no where near to what we saw during the IT boom. Why should these companies command a PE of 15+? Is there any logic?

I will separately post some of the stock ideas for the year shortly.

Indices :SENSEX

Period : Year 2000 to Year 2013

Year	Open	High	Low	Close	Price/ Earnings	Price/ Bookvalue	Dividend Yield
2000	5,209.54	6,150.69	3,491.55	3,972.12	24.48	3.81	1.14
2001	3,990.65	4,462.11	2,594.87	3,262.33	17.60	2.51	1.83
2002	3,262.01	3,758.27	2,828.48	3,377.28	15.22	2.30	2.14
2003	3,383.85	5,920.76	2,904.44	5,838.96	15.02	2.49	2.14
2004	5,872.48	6,617.15	4,227.50	6,602.69	17.26	3.28	2.01
2005	6,626.49	9,442.98	6,069.33	9,397.93	16.21	3.94	1.58
2006	9,422.49	14,035.30	8,799.01	13,786.91	20.18	4.75	1.35
2007	13,827.77	20,498.11	12,316.10	20,286.99	22.25	5.32	1.10
2008	20,325.27	21,206.77	7,697.39	9,647.31	18.22	4.20	1.29
2009	9,720.55	17,530.94	8,047.17	17,464.81	18.08	3.42	1.43
2010	17,473.45	21,108.64	15,651.99	20,509.09	21.71	3.67	1.12
2011	20,621.61	20,664.80	15,135.86	15,454.92	19.21	3.43	1.32
2012	15,534.67	19,612.18	15,358.02	19,426.71	17.14	3.08	1.63
2013	19,513.45	20,126.55	19,508.93	20,039.04	17.91	3.04	1.53

Year gone by - 2012

noreply@blogger.com (Raghu) — Sat, 29 Dec 2012 23:22:00 +0530

SENSEX 19444.84 121.04 (0.63%)NIFTY 5908.35 38.25 (0.65%)

I for one chose not blog or do anything substantial with the markets during the year. For one, the markets started of on an expensive note with sideways movement in most months. The year brought in a mix of political events with not so bullish sentiments. For someone who intended to make a fortune this year, it would have been outright disappointment!

Returns - BSE Sensex
YTD :	25.82%	1 Week	1.10%	1 Month:	1.40%	3 Months:	3.60%
6 Months:	14.40%	1 Year :	23.60%	2 Year :	-2.90%	3 Year :	11.70%

However said, Sensex did well to clock 26% returns this year with traditional heavyweight stocks like RIL hardly doing much. Telecom went through a serious of turmoil and uncertainties. Fundamentals aren't compelling even now for a long term investment. Markets are still not ripe for a 40% return scenario, for someone with a 10-15% return expectation, this would probably be a good market in medium term.

This year would probably see me blogging much more frequently with fruitful ideas. I hope you may have benefited from my recommendations in the past. The sell call on Orchid Chemicals at Rs 302, buy call on Power Grid at Rs 100, Repro at 128 etc. Having said this, this year is personally upsetting looking at the way we are ending it. Look at the events marking India this year: FII confidence moved southwards after 2G spectrum scam(if one may call it so). What happens to investments done by some of the new telecom operators like Uninor, MTS etc is yet to be known. Anna Hazare moved an independent motion on anti-corruption. But what made things worse is the gang rape of a 23 year old girl in national capital. Anger, tears, emotions flowed across Indian families post the demise of the victim.

India needs serious branding and makeover with stronger policies and actions across issues of importance. And this should start with a stronger primary and secondary education system. I hope government and the people at large wake up and unite to build a new India of prosperity where people get a sense of security, safety, improved standards of living and a cleaner today free of systemic rot!

Sell NIFTY

noreply@blogger.com (Raghu) — Sun, 11 Dec 2011 15:56:00 +0530

NIFTY

04:00 PM | 09 Dec 2011

4,866.7

Change:-76.95Change%:-1.56%

Open:4,870.75Prv. Close:4,943.65

Today: 4,841.75

52-Wk: 4,639.10

4,918.35

6,181.05

I mentioned in my post on Oct 2, 2010 on an impending crash and expensive valuations. I also stated that this would probably be the longest of the downturns, with no clear indications of up move. I also predicted that the last leg of bear run is yet to come and probably will not be anytime sooner. Looking at the Sensex charts, this would well be the last leg of fall and this is not going to end anytime sooner. With global economy showing no indications of bullishness, weakening rupee and rising interest rates aren't the best of the facilitating factors for bull run to start.

A weak rupee though may aid the results of companies focused on exports(IT, Pharma majorly), in my view, one needs to look at business fundamentals of these companies. With global clients wearing a cautious outlook, there is barely any growth in spending. Margins are thriving on currency or external factors than core business fundamentals. Given this, it would take a while before the next bull run begins. Governmental control in de-controlling currency fluctuations may not help in the long run.

Lets wait for the last leg of fall - this would be as much irritating with range bound movements as is now.

Saying Goodbye!

noreply@blogger.com (Raghu) — Sat, 8 Oct 2011 23:44:00 +0530

The world lost one of the great tech guys in history - Steve Jobs, someone who took the world by storm through his innovations. Just some time back, I was listening to his 2005 speech at Stanford - this was absolutely brilliant lessons taught in just over 15 min!!!

One of the best ways of saying "Goodbye" to the world - well, I would borrow a leaf of learning and say "Live like its your last day and do all that you would as though there is no tomorrow"!

noreply@blogger.com (Raghu) — Fri, 15 Apr 2011 23:13:00 +0530

Infosys (NSE) 2989.50 -316.70 (-9.58%)

What a day in history - two key people who have managed to do what no one else can dream have decided to make way for the younger generation. K Dinesh and Mohandas Pai move on after having built a legacy. While the markets gave a thumbs down to the stock, its important to note that this move has more to do with internal emotions and very little to do with business.

When individuals of this nature are associated with a company which has managed to have a dream run delivering consistent growth year after year, its a proud feeling of achievement which ticks along. Next in line would be the founder NRN, who would retire by August '11. The business remains unaffected by such changes - my own experience validates the quote "Org is always greater than the individual". I personally believe IT is a mature business now and hence you can not expect a 100% YOY returns out of a stock like Infosys. Infosys would continue to deliver 15-20% growth YOY in line with FMCG businesses. As it enters the big league to compete with global majors like IBM and Accenture, its important to be logical and conservative in terms of return expectations out of a stock like Infosys. Enter the stock if the expectation is 10-15% returns and if the view is long term.

Buy Power Grid

noreply@blogger.com (Raghu) — Sun, 31 Oct 2010 12:14:00 +0530

Power Grid Corporation of India 100.40 0.45 (0.45%)

PSU's historically have never been aggressive in the past and hence, the valuation they command compared to their private peers have always been on the lower side. Powergrid at current valuations is reasonable to accumulate. With a PE of 17.4 and dividend yield of 1.5%, its certainly a stock to accumulate in your portfolio.

Hold for long term with an expectation of 20-30% YOY growth.

Sell Orchid Chemicals

noreply@blogger.com (Raghu) — Tue, 19 Oct 2010 23:57:00 +0530

Orchid Chemicals 302.800.45 (0.15%)

Pharma stocks have given decent return in this run up. However, most of them look expensive at this point. Technically, stocks like Orchid chemicals, Wockhardt and Biocon look strong on the chart. However, it is prudent to exercise caution and sell part of your holdings in these stocks. Long term investors can however continue to hold their positions in Biocon.

Buy Repro India

noreply@blogger.com (Raghu) — Tue, 12 Oct 2010 16:05:00 +0530

Repro India 128.70 -0.65(-0.50%) NSE

Repro India is clearly showing bullish signs on charts and is a great buy at this point. Buy and hold for 3 months.

Fundamentally, it makes sense to accumulate stocks with good dividend yield and high book value. Repro with a P/B of 1.09 and dividend yield of 2.34% is a great pick at this point.

However, stay invested for a capped upside of 5-10% more on Sensex post which we should see another leg of fall.

Next crash in waiting!

noreply@blogger.com (Raghu) — Sat, 2 Oct 2010 00:16:00 +0530

Sensex 20445.04 +375.92

Nifty 6143.4 +113.45

Looking at historical PE charts, one can safely conclude that Nifty or Sensex is nearing its peak. It may take another year before a crash, but its bound to happen.

Current PE of Nifty is around 25.48 and the highest PE Nifty has ever commanded from 1999 is 28.47. It is to be noted that Nifty touched a PE of 27.3 on Jan 15, 2008 around the same time when I first predicted a crash. Current levels are more or less near to the peak. Will we see a downside anytime soon? Well, my sense is that Investors will continue to buy for some time before selling actually begins. However, current levels are certainly not conduisive for long term investment.

Invest for short term(3-6 months) and watch for critical levels explained.

Sensex Overvalued

noreply@blogger.com (Raghu) — Wed, 21 Apr 2010 22:56:00 +0530

Sensex 17472.56 +11.98

This is probably not the best of the times! With Sensex ruling at over 21 PE, this is certainly not the best time to invest. While one cannot rule out a 10-15% rise based on historical PE highs, BSE 100 stocks would certainly be under pressure.

Having said this, this is possibly one of the longest recessions. I've said earlier in my posts before that Sensex still has another leg of fall before the bull run begins. So, we should see the start of the last leg anytime soon.

Invest selectively in stocks at this point.

Market Update

noreply@blogger.com (Raghu) — Wed, 25 Mar 2009 22:52:00 +0530

S&P CNX Nifty 2984.35 +45.65(1.55%)
RIL 1532.20 +79.75(5.49%)

I mentioned earlier that Reliance Industries(RIL) which commands a significant weightage in Sensex/Nifty would drive/drag the markets further. Todays trade was interesting in this standpoint as Reliance closed 5.49% higher on the Nifty. This means a break of short term resistance of 1401 and 1451. Having broken the critical resistance levels, RIL would contribute to the rise of Sensex and Nifty. For Nifty, I suppose we may well break the resistance level of 3100 in the absense of any negative news.

Though it may sound bullish, I remain cautiously bearsish on both the Nifty and Sensex. Traders can certainly make use of market movements and capitalize on absence of global negatives. For investors, part-invest at these levels and choose your stocks with caution.

Picking a gem

noreply@blogger.com (Raghu) — Wed, 18 Mar 2009 16:28:00 +0530

A lot of people follow the markets more closely than most of us do. They are probably financial gurus in their own right looking for gold by reading between financial statements. But yet, some fail to understand that the best pick is not all about finances and balance sheets! They are all about people who run the business.

Back in 1994, I dont think any financial guru saw enormous value in Infosys unless he did a people analysis and evaluated the management strength which was less hyped those days! Who would have seen value in investing with Dhirubai Ambani in the late 70's. I think to a large extent, the internal stakeholders and the people who know the key people are the best ones to pick a successful story. Financial statements always carry the tag better read as - "Statements are mere indicators of past and present performance and represent no promise on future performance"!

If you were to pick a gold mine, remember - its people first, and then the processes and systems build within. For novices, there is no easy way to judge management talent. But, the current media to a large extent is more helpful in this respect(only in comparison with the past). My journey in investing, I hope would move to the next level of idetifying future gems than just plain investing. Happy investing -:)

Realigning investments

noreply@blogger.com (Raghu) — Wed, 11 Mar 2009 18:59:00 +0530

Given the current economic scenario, equity as an asset class has taken a severe beating and would continue to remain weak for some time. What other options does one have to generate consistent returns?

At this point, the SIP way of investing makes perfect sense for investments in equity or equity focussed mutual funds. However, one needs to keep in mind that the returns from equity will not be immediate and will take longer to recover. Given this, one can consider churning(selling) a part of the MF/equity portfolio and investing in fixed instruments like company fixed deposits or government securities. Of the two, I would prefer company fixed deposits as these offer attractive returns on investment. On an average(at the time of writing), company FD's offer about 8-11% returns on a YOY basis. However, one should be careful in investing in company FD's and must not be lured just by returns. As a thumb rule, it is safer to look at companies offering less than 13%(looking at the current interest rate scenario). Secondly, look at the ratings and liabilities the company is sitting on. It may not be advisable to invest in companies with huge liabilities.

Recommended portfolio structure:

Fixed instruments 40%
Equity and equity related instruments 20% [Recommend phased accumulation for long term]
Liquid instruments 30%
Debt instruments 10%

I have reduced the weightage of debt instruments as I expect them to yield on par/below fixed instrument returns. At this point, I would prefer avoiding other asset classes like Gold and real estate. Its a great idea to accumulate gold systematically. However, it shouldn't be looked as a short or medium term investment. It is my view that Gold should be looked from a comsumption perspective. Buy as much as you can consume.

For more information on company fixed deposits, click here

Tracing Back

noreply@blogger.com (Raghu) — Tue, 3 Mar 2009 20:58:00 +0530

S&P CNX Nifty 2622.40 -52.20 (-1.95%)

On Jan 28 2009, I posted a technical update indicating a break of support (2524) within a month. Though, we may be a few days away before the support breaks convincingly, the statement didn’t completely hold. Subsequent posts on Nifty triggering a fall to 2678 once 2848 breaks held pretty well.

For traders, today’s close is extremely important and given the environment(in the absence of any positive indicators), the market should break 2553 soon. It is advisable to exit positions and wait for the next bottom.

The merger of RPL with RIL is pretty much a non-event and an expected one. I wouldn’t be surprised if the ADAG group comes up with a merger of its power subsidiary Reliance Power with Reliance Infra soon. This however, is not going to impact markets in any way.

Alarming signs!

noreply@blogger.com (Raghu) — Fri, 27 Feb 2009 16:18:00 +0530

S&P CNX Nifty 2763.65 -22.00 (-0.79%)

How could one explain a perfect U-shaped recovery on the back of dissappointing Q3 GDP numbers? Well, global markets didnt expect the worst even when the sub-prime news was beginning to scare early Jan '08 and talks on India de-coupling from the West were taking shape!

Frankly speaking, there's more to worry than just GDP numbers. The Ruppee(INR) is at a new low versus the US dollar. Its not so great news when exports are under pressure and imports don't seem to slowdown. This would only add to India's alarming fiscal deficit. This is time for action from RBI which is expected to review the rates soon. With inflation at under 4%, I don't think a rate cut is necessary. Its time for RBI to step in and control the ruppee fall, if not the INR can go beyond 55 a dollar!

There's another way of looking at it. A strong dollar would encourage more inflows and make outflows less attractive. From the FII data, I dont see any change in sentiment - they have been net sellers to the tune of 2,420 crores(equity) for the month of Feb '09(as on date). However, there's a positive sign in that the debt investments have seen a constant increase. The months of July, Aug, Sept and Nov '08 saw huge inflows to debt from equity.

Ignoring alarming signals and not bottoming out now is only going to slow down the pace of recovery. Investors might need to wait a bit longer for the next bull to start and happen. Traders can trade within the narrow range keeping 2678 as stop loss on Nifty.

Reading the fineprint

noreply@blogger.com (Raghu) — Tue, 24 Feb 2009 19:36:00 +0530

The past few days have been full of important developments, both positive and negative. One, US government prompt clarified their stance on nationalization after Citi fell massively in Europe and Dow. Its a positive signal from the government indicating minimum government control in privately run banks. It might sound great at the face of it, but I don't think its going to be easy sitting outside the table especially when you have pumped in such a lot of money into the banking system.

The government should certainly have its representatives on board to establish governance mechanism and regulatory framework. Some banks had recently announced huge bonuses, though in absolute terms, they were much less than the previous year. It will be hard to imagine US banks like Citi doing this, as they are accountable for every penny they spend. Having government representatives on board will help stem such acts. It is going to take couple of years to weigh the impact on IT companies like Infy, TCS and Wipro. It will take a few years until these companies show performance on their balance sheet. The action plan before the new government is to first restore normalcy, create a balanced economic environment through stimulus and create jobs. Outsourcing cannot happen at the expense of these three. You cannot create IT jobs at a remote location when the core-jobs and business is dissappearing! Clearly for IT, its too early to expect a big turnaround.

S&P rating brought some basis to my sell recommendations! S&P is right in pointing out the huge fiscal deficit, but more than anything, the next government needs to act with restraint. The present government has already done all that it could. The next government should focus more on reducing expenses, inviting investment(FDI or otherwise), provide sops for new businesses and not just provide tax relief. I'm sure the next goverment would be tempted to announce tax concessions, sops and so on. A clear restraint and focussed policy on distribution of money from the rich to the needy would alone solve problems. You need to encourage spending across all categories and classes and policies must clearly move in that direction. Lets wait and watch!

Markets on Monday

noreply@blogger.com (Raghu) — Fri, 20 Feb 2009 22:57:00 +0530

Citigroup Inc (C) 1.97 -0.54 (-21.51%) 12:36 PM ET
C Quote (NYSE Echange)

European markets were the first to sense the danger of nationalization of US banks early in trade today. Citigroup was hammered in European as well as US markets in trade today. At this point, Citigroup lost 54 cents to trade at $1.97, a drop of 21.51%. Will Indian markets feel the jitters on Monday? Well, I dont see any impact on Indian banks per say. But, IT is going to have a jittery start for sure. TCS which bought over Citi's backoffice for Rs 2,400 crore should be in deep pressure. Nationalization of banks would directly impact outsourcing as critical processes cannot be lawfully outsourced. Given this, the deal is currently under question and the terms of the contract need to be read out. Infy and Wipro might follow suit and contribute to the fall as they derive considerable amount of revenues from BFSI. Lets wait and watch!

Satyam - Questions unanswered

noreply@blogger.com (Raghu) — Thu, 19 Feb 2009 19:39:00 +0530

Sometimes, its hard to believe how the very best of companies fall like pins! Satyam has been India's success story - no one can dispute its top 5 status even now given its talent base, clientele, geographical presence and offerings. Yet, one man who built from scratch was responsible for its fall overnight!

While legal agencies may establish truth and the board may establish credibility and impose the ethical way, it still baffles me as to why the entire thing happened in the first place. Is it greed on part of the individual promoter or is it pressure from sons/family which led the exercise? Maytas for sure had its green days because of Satyam, its capital which was fraudulently transferred(if media reports are to be believed). But, why would a promoter of a multi-billion dollar company use such fraudulent means to invest in a company which is not even half its size? There are many more questions to be answered, but these would probably never be as the matter is sub-judice.

For one, I would strongly recommend Satyam promoters to take up a teaching role in a B-school. I am sure many would learn from their mistakes and realize the importance of ethics in business. B-schools can teach a number of case studies, but none can teach ethics per say. As I write, there is a sense of displeasure on what transpired. What was once a top-notch truly global IT company is today looking at potential acquirers! This is certainly the worst thing to have happened to Indian IT.

Support Quality Rankings of MFs

noreply@blogger.com (Raghu) — Thu, 19 Feb 2009 17:37:00 +0530

Over the past few months, I have been in constant interaction with the support groups of some well known mutual funds. Here, I decided to summarise my experience and rank them based on their quality of response, timely resolution and turnaround time taken to resolve the problem.

1. Franklin Templeton Mutual Fund: I like the funds timely response and structured way of answering to customer queries. Their response time is generally 24 hours through email and they make an effort to call the customer in case of any discrepencies. I was pleasantly suprised to see a status note sent to my address stating "We're working on your issue and will get back".
On the cons, they seem to miss out reading some finer details in the form like request for online access etc which most of the popular mutual funds do!

Overall, I would rate the experience as positive.

2. Kotak Mutual Fund: I rate the fund higher based on their response times through email. They are the only fund to send a stamped receipt within 48 hours of receipt of your investment application. In terms of support, they generally respond within 24 hours through email.

3. Sundaram BNP Paribas Mutual Fund: Their response time through email is very low. They take 4 business days to respond via email! Inspite of the pitfalls, they seem to have minimal issues with regard to form processing. They dont provide an online investment access and advice to be registered with some brokers like ICICIdirect, HDFCsec etc if at all online access is required.

4. SBI Mutual Fund: Their response time is usually 2-3 business days. They work like a PSU in certain aspects, so you would have to face inconveniences if you need things like online access, unit transfer etc. You would need a legal transcript even to request online access! Well, I dont blame them - its just that they want to play it safe in case of any problems, but then its a hassle and additional expense at the hands of the investor.

5. Reliance Mutual Fund: Their response times through email is great. But then, there is little sync between the front office and back office. If you have scratched or corrected inputs in your form, then you could be in for trouble as the back office people often tend to take default inputs in such cases. They are not so prompt as others in terms of issuing acknowledgements, physical statements etc. But, then they do follow up with the usual sms or email if the facility is opted.

I have not reviewed other funds outside the ones discussed above. As and when I review them. I'll post them for the benefit of readers. Hope you find this useful.

Selling spree

noreply@blogger.com (Raghu) — Tue, 17 Feb 2009 20:28:00 +0530

S&P CNX Nifty 2770.50 -78.00 (-2.74%)

Almost every market internationally was in the red signalling a selling spree. All sectoral indices were in red today - its a great time to build a watch list and start value investing. I'll be posting my watch list soon once critical levels break.

On the charts, we're close to breaking support as discussed earlier. The short term bull-pattern discussed here didnt hold. So, we're clearly headed down further.

Market Technicals

noreply@blogger.com (Raghu) — Mon, 16 Feb 2009 17:34:00 +0530

S&P CNX Nifty 2848.50 -99.85 (-3.39%)

Structurally, there’s nothing to conclude from the fall today though it was encouraging to see some good volumes in many stocks today. For the short term, today’s close would be the support. If the market breaches today’s close tomorrow, then we could well be headed to 2678, which is the next important level to watch.

Until the market breaks the pattern shown in the chart, we can safely conclude the following.

1. The Nifty top of 3121 would not be broken in the next couple of months and upside is limited to 3050-3075 levels.
2. Nifty might well be ranged between 2848 and 3050 for the next 6-8 weeks. The range would get narrower and eventually trigger a fall.
3. The previous analysis holds. The bull within the bear cycle would come to an end as mentioned here.

Dow and Nifty: Key Takeaways

noreply@blogger.com (Raghu) — Wed, 11 Feb 2009 23:36:00 +0530

S&P CNX Nifty 2925.70 -8.80 (-0.3%)
Dow 7915.24 +26.36 (0.33%)

It’s encouraging to see the out performance S&P CNX Nifty has had over Dow. While Dow is just a few hundred points away from its 10-year support, S&P CNX Nifty hasn’t yet broken its 3-year support! For Nifty, I see another leg of fall dragging down to the 5-year support level. So far, Nifty has been defying every bearish analyst and has outperformed the Dow and some global markets during the last couple of weeks. While there is so much uncertainty in the US, the exuberant bailout package should be more than a respite. News reports suggest the size of global bailout package to be greater than the size of Indian economy! Indian GDP which derives more than 50% from services would slow down as global economies pump in money locally. Its not the best of the times for export driven economies and in specific export driven companies. We are certainly going to see some more pain in sectors like IT, autos and auto components and metals. For now, I see PSU banks and FMCG as defensive bets in the current scenario. Its encouraging to see some stellar performances from defensive's like McDonald's Corp in the US. While the Dow took a severe beating over the year, McDonald's has shelved only 15% from its 52-week high!

The first growth signals and the strongest should emerge from the US and Europe. The first rise and probably the most rewarding ones would come from sectors which are heavily beaten down in the turmoil. It’s probably one of the better times(if not the best) to part-invest in US equities. Finally a note - "When investing, always keep the return constant and not the time frame of investment".

Market Technicals

noreply@blogger.com (Raghu) — Wed, 28 Jan 2009 22:51:00 +0530

S&P CNX Nifty 2849.50 +78.15(2.82%)

I had a good look at the Nifty charts today with a view to predict the next fall. As mentioned earlier, 2524 remains the level to watch and if this breaks, Nifty would head for the next big correction. If you look at the short term(3-months) charts, Nifty made a previous low of 3816 on 16th July 2008 and then entered a bull run within the bear cycle. The critical level of 3816 was breached on 6th Oct 2008. The next low of 2524 was made on 27th Oct 2008. Nifty made an attempt to breach this low on 20th Nov 2008 and closed at 2553.

I see a similarity in patterns between the two cycles, the one between 16th July - 6th Oct and 20th Nov - present. Going by this logic, the next fall(breaking support of 2524) should come within a month.