Returned late night from Bengaluru at 1 am in the morning as Flight was delayed after delivering a two day Equity Workshop at the weekend…the eight in a series for a Broking House…It was pouring as we drove to the New Airport,50 + kms away from the City…but we had a Mad Max Driver who drove as if his life,and ours !, depended on it ! weaving at 100 kmph through stranded cars in the fast flooding roads ! and despite incessant rain whipping the windscreen…paid a ridiculous Rs 260 User Fee to access the Airport
Had gone earlier on Thursday,to spend two days at a friend’s 75 acre farm, 20 kms outside Bengaluru,on the fringe of the Bannnerghata Wildlife Park…what a great break !…could hear the silence !…had friend’s three dogs ( Small Datschund and Large Dalmatians!) all over me…Elephants and Monkeys destroy crops and so commercial farming becomes a tedious affair …tried to spot a Gharial in one of his four water harvested ponds on the farm…it had probably slipped in from the forest through the canals….relaxed company , great organic food,fresh vegetables,fresh mangoes,fresh coconut water,fresh jackfruit and fresh rains !…too short a break,though !
Then switched to workshop mode on Saturday Morning….It was truly satisfying…When I threw the House open for any questions on Sunday ,prompt came the first one “When will you come back to Bengaluru for your next workshop !?….Thanks! Karnataka and Andhra Pradesh ! for some great participation
We had some fun discussing Valuations of Reliance Industries,Satyam and Reliance Power and even Jaiprakash Hydro among others companies…and am glad you’ll were genuine in your reactions when we played the Integrity,Insider Trading and Irrational Behaviour Scenarios
Now you know how Mumbai,Vadodora and Rajkot got excited on Reliance Ind Valuations in March and April 2009 at Rs 1100 to Rs 1300 !…maybe I should have come to Bengaluru first !
So all of you know what is the appropriate Valuation Basis to use for Satyam…and how you can make some money on it ,based on an event based risk in June 2009 !
You are now acquainted with the Valuation Risks of Reliance Power at Rs 180 and Jai Prakash Hydro at Rs 70 !
Shanteeth,I hope we do get to 23000 + on the Sensex in 2009 itself, as you aggressively suggested at the outset of the workshop based on Technicals…though I showed you why it looks highly improbable on Fundamentals !…glad you loved the Book I gave you “Screw it ! Just Do it! ” by Richard Branson…now pass it on so someone else enjoys it too !
And Shiv Prasad,I hope you can now scale up your business by some rational thinking and by trusting more !…and not succumb to Improper Framing when applying Investment funds
And Vincent,you’re a good thinker…very few have sensed the reason why ,that when one’s business is not doing well and the product is not selling , you raise the price and the product starts selling !….Economics would have dictated otherwise.
And Prabhu,you’re smart…not many would have guessed why one particular Slot Machine in the Las Vegas Casino gave higher revenues to the Casino Owner
And Nagendra,as you touch 60,the need for protection of wealth needs to be re-emphasised when growing it !…actually to ‘Protect’ and to ‘Grow’ Wealth is the Prime Function of Asset Allocation and Optimal Portfolio
We played out Investor Mistakes and the Reinvestment Risk…we discussed Investor Icons,Warren Buffett and Peter Lynch and their Investment philosophies and whether we can apply these in India
We discussed Concepts of Value v/s Price,Beta and it’s role in Hedging,Valuation and Investment Strategies…..Global and US Economic Crisis and it’s Impact on India…are we decoupled enough ?…our Fiscal Deficit Problems and our Extraordinary High Government Borrowings to fund Non Plan Expenditure,especially Defence and Subsidies
We saw the Market Dynamics impacting the Sensex…it’s macro valuations in the past and levels projected based on Earnings and Multiples…the Sensex CAGR over 5,8 and 18 years
We saw the impact of FII Inflows and Outflows from 2005 to date in 2009….How FII’s have reversed outflows and May 2009 itself saw an inflow of US $ 4.14 Billion !…and if US $ 10 Billion more comes in,as expected this year,how it will continue to fuel the Sensex
I’m sure I’ll be back in Bengaluru !…maybe we can all have the workshop in Mauritius as we discussed when computing the Interest Cost on the EMI Scheme of ‘Fly Now,Pay Later’ covered during the ‘Time Value of Money’ session !