Archive for March, 2008

Wall Street firms’ woes continue!!

Posted on March 31, 2008. Filed under: Markets |

Lehman Brothers has lost close to USD350million in a loan default on account of fraud by a medical consulting company, LTT Bio-pharma. Lehman Brothers claim that the loans were secured by Japan’s trading giant, Marubeni Corp but has been denied by Marubeni Corp.

It is very very sad to see how huge ticket loans are distributed by these popular wall street firms without even knowing who has secured the loans. Probably these are the excesses committed by the Investment Banking firms over the last 3-4 years on the back of secular growth story in the investment banking world.

Not good time for Wall Street firms. Click here to read the story.

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Wall Street firms’ woes continue!!

Posted on March 31, 2008. Filed under: Markets |

Lehman Brothers has lost close to USD350million in a loan default on account of fraud by a medical consulting company, LTT Bio-pharma. Lehman Brothers claim that the loans were secured by Japan’s trading giant, Marubeni Corp but has been denied by Marubeni Corp.

It is very very sad to see how huge ticket loans are distributed by these popular wall street firms without even knowing who has secured the loans. Probably these are the excesses committed by the Investment Banking firms over the last 3-4 years on the back of secular growth story in the investment banking world.

Not good time for Wall Street firms. Click here to read the story.

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A disappointing day of cricket by Indian team!

Posted on March 29, 2008. Filed under: Cricket |

I was waiting eagerly to see Sehwag score more runs today morning. But Sehwag disappointed me as well as the huge crowd which had gathered at Chepauk to be a witness to probably the greatest moment of Cricket. Anyway we cant ask Sehwag for more. Sehwag was out caught in the slip for a handsome, dominating 319 runs, making him the highest Indian score in a test match.

The highlight of the day was Rahul Dravid crossing 10000 runs. It is a wonderful achievement from a very talented cricketer who has helped India salvage pride on number of occasions. Hats off to Rahul Dravid.

Moving on, after Sehwag’s dismissal I would have expected the Indian Captain to adopt an aggressive attitude by sending in Dhoni or Harbhajan to accelerate the run rate. But he opted for Sachin Tendulkar, Sourav Ganguly and VVS Laxman in the same age-old batting order. It was boring to see the same set of old players playing poorly against an ordinary bowling line-up. Sachin failed without disturbing the scorer, Sourav was not in his elements.

The worst part was VVS Laxman. I cant understand why Laxman has been playing like this when he plays with the tail-enders. I noticed this during the Australian tour as well and today he was not even trying to keep the strike but left it for the tail-enders to manage Dale Steyn, who was in full flow. He was happily watching the tail-enders tottering. Laxman, I didnt expect this from you!

Overall, the India batting lacked aggressiveness which was hugely evident during yesterday’s play. I don’t think India played for a win. I went to sleep after the Indian batting wound up in the afternoon knowing Indian bowling is not going to be any different. I was proved right when I saw the final score for the day, South Africa at 131/1 in 33 overs.

India should have pressed the advantage in the morning by scoring runs fast. They failed miserably and the test is meandering to a draw. When will the Indian cricket change? We need a refreshing change in attitude.

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Sehwag scores a triple hundred!

Posted on March 29, 2008. Filed under: Cricket |

I saw the highlights of the third day’s play in the first test against South Africa. The day belonged to Virender Sehwag!! He ended the day at 309 not out equaling his previous best against Pakistan at Multan.

The Chepauk pitch looked very flat and offered no help to the bowlers. The South African bowlers also struggled with the heat and were spraying all over the place. Paul Harris, the spinner was bowling a very negative line for which Sehwag replied with number of reverse sweeps.

The poor South African bowling should not take away the credit from Sehwag. What a range of strokes he played yesterday? He scored runs all over the ground and the crowd enjoyed every minute of his innings. Sehwag become little emotional when he crossed his 200. Probably the happenings in the last 18 months would have crossed him mind and he is now back true and square in the Indian team. Yuvaraj would be now under tremendous pressure to perform if he wants to retain his Vice-Captaincy in the Indian ODI team.

Briefly after completing his 250 runs, Sehwag looked very tired and he went about his shots with great disdain, as if he wanted to get out. But yesterday was his day and South Africa could do nothing with him. Coming closer to 300, he showed some restraint and completed his second 300 runs in an innings. It is a great achievement considering that he has done it twice in his career. In addition he has crossed double hundred on more than 4 occasions and has also scored 12 or so test centuries.

I am waiting eagerly to see if Sehwag could cross his 400 today and make a world record.

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Gone are the days!!!

Posted on March 27, 2008. Filed under: General |

I enjoyed reading the long poem(!) below. Hope you also enjoy it.

Gone are the days!!!
When The school reopened in June, and we settled in our new desks and benches!
When we queued up in book depot, and got our new books and notes!
When we wanted two Sundays and no Mondays, yet managed to line up daily for the morning prayers.
We learnt writing with slates and pencils, and progressed to fountain pens and ball pens and then Micro tips!
When we began drawing with crayons and evolved to Color pencils and finally sketch pens!
When we started calculating, first with tables and then with clarke’s tables and advanced to calculators and computers!
When we chased one another in the corridors in Intervals, and returned to the classrooms drenched in sweat!
When we had lunch in classrooms, corridors, playgrounds, under the trees and even in cycle sheds!
When all the colors in the world, decorated the campus on the Second Saturdays!
When a single P.T. period in the week’s Time Table, was awaited more eagerly than the monsoons!
When cricket was played with writing pads as bats, and Neckties and socks rolled into balls!
When few played “kabadi” and “Kho-Kho” in scorching sun,
While others simply played “book cricket” in the confines of classroom! Of fights but no conspiracies, of Competitions but seldom jealousy!
When we used to watch Live Cricket telecast, in the opposite house in Intervals and Lunch breaks!
When few rushed at 3:45 to “Conquer” window seats in our School bus!
While few others had “Big Fun”, “peppermint”, “kulfi”, ” milk ice !” and “sharbat !” at 4’o Clock!
Gone are the days of Sports Day, and the annual School Day ,
And the one-month long preparations for them.
Gone are the days of the stressful Quarterly, Half Yearly and Annual Exams, and the most enjoyed holidays after them!
Gone are the days of tenth and twelfth standards, when we Spent almost the whole year writing revision tests!
We learnt, We enjoyed, We played, We won, We lost, We laughed, We cried, We fought, We thought.
With so much fun in them, so many friends, so much experience, all this and more!
Gone are the days when we used to talk for hours with our friends!
Now we don’t have time to say a `Hi’!
Gone are the days when we played games on the road!
Now we Code on the road with laptop!
Gone are the days when we saw stars Shining at Night!
Now we see stars when our code doesn’t Work!
Gone are the days when we sat to chat with Friends on grounds!
Now we chat in chat rooms…..!
Gone are the days where we studied just to pass!
Now we study to save our job!
Gone are the days where we had no money in our pockets and still fun filled on our hearts!!
Now we have the ATM as well as credit card but with an empty heart!!
Gone are the days where we shouted on the road!
Now we don’t shout even at home
Gone are the days where we got lectures from all!
Now we give lectures to all… like the one I’m doing now….!!
Gone are the days
But not the memories, which will be Lingering in our hearts for ever and ever and ever and ever and ever …..

Gone are the Days…. But still there are lot more Days to come in our Life!!
NO MATTER HOW BUSY YOU ARE, DONT FORGET TO LIVE THE LIFE THAT STILL EXISTS……….

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Poll results – A strong no to invest now!!

Posted on March 26, 2008. Filed under: Poll |

The poll results strongly suggest that it is not the right time to invest in stock markets. There were 8 who said it is not the right time whereas only 3 people said it is good time to invest.

When I started the poll, the market was trading at least 1000 points lower than where it closed yesterday. My personal opinion is that it is better to start buying in staggered manner rather than investing in one single lot. The past history and the market wisdom says that you can never catch the bottom nor you can exit at the top.

Identify stocks with strong fundamentals, good growth prospects and keep buying in small quantities. Happy Investing!!!

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Everything you desire – Harshdeep Jolly

Posted on March 25, 2008. Filed under: Books |

Everything you desire“is a book written by Harshdeep Jolly, an IIM Bangalore Alumni on the 21 months he spent there studying for his MBA. This books vividly chronicles the events, culture, expectations, peer pressure, internal equations, staff attitude and all in IIM Bangalore. This is a honest description of the events.

The first 45 pages of “Everything you desire” are a drag and I was in two minds to continue or not. It looks like a student diary in the initial pages. I persisted with it and the pace started getting better. The important thing about the book it makes you understand the difficult life in a IIM without the author overtly talking about the difficulties. The author makes you imagine how each student undergoes these gruelling 21 months. While reading the book you get used to various IIM acronyms like MAP, CC, CGPA.

For those who think there is no time for romance in IIM’s, I guess it is not true. Inspite of hardpressed for time, our guys and girls go about this. I also understood the pressure these IIM guys go through during the campus recruitments. We are all fancied by the huge salaries IIM graduates get but there are guys who dont land up in a job either day 0,1 or even 2. The agony they undergo, the peer pressure as a part of the campus recruitment process has been brought out well.

I didnt study in IIM but this book provided an opportunity to live the life of a student in IIM. There are various spelling mistakes throughout the book and I don’t know it was ever proof-read!? The book is a good read if you manage to hold on to the first 45 pages!! Well done, Harshdeep!!

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Anugraha Satellite Township closer to Pondicherry!!

Posted on March 21, 2008. Filed under: Real Estate |

Couple of months back when I was seriously looking for a real estate investment, I came across an advertisement of Satellite Township near Pondichery named Anugraha Satellite Township, near Pondicherry, promoted by Navasakthi Promoters. This satellite township is located 9 kms before Pondicherry but on the Tamilnadu side.

I was interested to have a look at it because:

1. they offer independent homes of decent sizes
2. the location was attractive as it is just 9 kms from Pondicherry
3. they are building a township of around 1000 houses which itself creates a community.
4. they were quoting a rate of around Rs1200/- per sq.ft. Where do you get a piece of real estate at Rs1200/- sq.ft?

The township consists of more than 1000 houses in three categories named Economy, Elegant and Elite. Each one of these houses are built up on a land area of 2400 sq.ft and has built up area measuring according to the type of the house you are buying. The township comes with host of amenities like Vinayagar temple, gym, tar Roads, street lights, children play area, shopping complex and security systems. Visit the website of Navasakthi Promoters by clicking here.

I was looking at it positively because it is closer to Pondicherry and when I spoke to the promoters they informed that the township is surrounded by engineering colleges and a medical college as well. There is a perennial rental demand in this area due to the presence of high number of colleges. The students and staff members of these colleges prefers these houses around their college. For a 2000 sq.ft house, you can get a minimum rent of Rs10000.

I worked out the arithmetic and the total cost would be be around Rs25 lakhs. If I am able to contribute 20% as my initial contribution, the rest of the money would come as a loan. With a rental value of around Rs10k a month, the net liability towards loan servicing at ongoing rates would be around 10k per month, which I thought could manage. Thought about it for a long time but decided to let go since I didn’t want to commit for a new loan. A new housing loan at this stage for another 10-15 years would perennially challenge my desire to break free from a job.

If the rental value as claimed by the promoter turns out to be true and with Pondicherry developing over the next few years, it would be an ideal investment /retirement property. Please check out with the promoters what is the current rate quoted by them.

I am still waiting for my retirement property, though!!

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A new poll!

Posted on March 19, 2008. Filed under: Poll |

A new poll has been commissioned in this blog to find out if it is a right time to invest in Indian stocks. The Indian stocks have corrected from 6300 levels on the Nifty to the present level of around 4500. This is a correction of 1800 points on the index.

The poll is to find out what you think about Indian stocks and you still believe in the Indian growth story. Vote on the poll and share your views as comments.

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Orchid Chemicals & Pharmaceuticals – what is happening in the scrip?

Posted on March 18, 2008. Filed under: Stock Ideas - Long term |

Orchid Chemicals & Pharmaceuticals scrip has fallen more than 50% in the last two days. On Friday, 14 March, it closed at Rs206 and today on 18 March it has closed at Rs113.60. At today’s closing price, the scrip is quoting at a PE of 4.16. Incidentally, the Business Line carried a detailed buy recommendation of Orchid Chemicals at Rs206 only last Sunday. Click here to view the report.

What would have triggered the steep fall in the scrip in the last couple of days?

1. Bear Stearns sold a huge chunk of Orchid Chemicals stock on Monday due to its liquidity related problems. Bear Sterns has sold the scrip at 195 range on Monday.

2. Macquaire Bank which holds a sizeable chunk of Orchid Chemicals is rumoured to have sold their stake in the market.

3. There is a sale of more than 20 lakh shares by the promoters family members on Monday at Rs135 range.

4. Orchid Chemicals is supposed to carry forex derivative contracts in their books which due to the recent currency movements in Yen and CHF may have a negative impact on the profit and loss for this quarter.

Answers to the questions above:

1. The entire lot sold by Bear Stearns has been picked up by another FII. Also we should note that the sale by Bear Stearns is nothing related to the fundamentals of Orchid Chemicals but due to its own liquidity position.

2. Macquaire Bank sale is still a rumour and no bulk deals reported.

3. The promoters have clarified that the sale of more than 20 lakh shares has been triggered due to margin call on their individual share trading accounts and it was not an intentional sale.

4. The company has clarified that their exposure in forex derivatives is negligible to their balance sheet size.

Technical view:

Don’t think I am a qualified technical expert but when I had one look at the graph it has broken all supports and quoting below 100 DMA and 200 DMA. On pure technicals, it is not a buying signal!!

I think there is no justification for the steep correction of over 50% in the last two days in the scrip. The fundamentals merit a closer look at the scrip with large scale expansion planned by Orchid Chemicals, launch of new products in the coming year in US market etc., If at all somebody is going to buy Orchid, it is better to stagger your purchase. Remember the famous quotation, when the whole world is fearful, you can be greedy.

Disclaimer:
I don’t currently own Orchid Chemicals but may own it in the future. Please check the fundamentals and take your own personal decision.

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