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April 2016

A Dose of Rakesh Jhunjhunwala

Rakesh Jhunjhunwala on Future of Equity Market

Methinks every Indian Equity Investor needs a dose of Rakesh Jhunjhunwala (RJ) every few years! ~ any sooner it could be an Overdose !¬† ūüėÜ ~ just kidding !

I like the guy ! ~ right since I interacted with him when I invited him around 15 years ago at the turn of this century for interacting in an evening  Q & A session with my packed class of @ 90 participants in my Equity Portfolio Structuring and Stock Analysis Workshop at the BSE Training Institute as I thought he would add practical value & he did

“Boss ! I’m a¬†Sadak Chaap¬†! ” ¬†he had told us then as also how he had reconstructed his equity portfolio to concentrate only in a few stocks after the 2000 ICE debacle…so in a sense most of his Wealth has grown only in this Millennium in the past 15 years ~ and to his credit in Selections that were not really Blue Chip or Core

Yesterday had gone for an ¬†IMC interactive meet in Mumbai to check out if RJ has sobered & matured in his ‘manner of speak’ over the years ~ I rarely watch Stock Channels ~ don’t even have a TV in office~ ¬†so was not really conversant with how & what he delivered in his appearances though knew of his initiating big stakes in companies

I am delighted to blog he has not changed ! ~ shot straight from the hip & mouth again as he always does ” I’m a¬†satodia(translated to mean speculator)¬†¬†& investor & not an economist” ~ his investment portfolio has spread into the Alternatives of ¬†Bollywood Movie Production too with Kareena & Arjun starrer ‘Ki & Ka’ being his latest co production~ is into horse racing too and owns a few horses ~ passions perhaps where return on investments need not be measured in monies !?

Many perceive him as¬†Dehati¬†or Crude Dude for his rustic loud boorish way of speech~ but don’t let it fool you ! & he does not make any pretenses ~ he’s a CA by training & wears a fairly sharp mind

Money Talks & Crowd Laps it up all !~ many vigorously & ‘knowledgeably’ nodding in agreement

These RJ’s views & responses to questions posed should interest you :

On The Future of Equity Markets ~ Reiterates this is only the Trailer & we are going to witness a Mother of all Bull Runs.India is a thriving young Democracy with US $ 600 b in Savings every year.Equity Markets receive just US $ 50 b from this.This has to improve and it will ~ anyone ,any  doubt!?   

On Returns from Equity  ~ Ironically while his riches have been through multibagger 1000% + equity gains in concentrated high weightage stocks like Titan & Crisil he asserts that one should be happy with 18% CAGR gains and if it goes to 24% one should be really happy read more

Keep the Faith ! ~ My sister-in-law did ! ~Meaningful Coincidences ! ~ Synchronicity !

Keep the Faith ! ~ My sister-in-law did !

Meaningful Coincidences ! ~ Synchronicity !

Here’s what just happened this morning !

My sister-in-law ( Wife’s elder sister) ¬†left ¬†day before on Tuesday evening to return to Dubai ~ She forgot her laptop after it had cleared Baggage Scanner in the Security Check ~ Two days of Frantic Follow up with the Mumbai Airport was all in vain ~ Till this Morning !

She got back her Laptop in Dubai this morning !

Here’s what had happened !

After clearing security ¬†at Mumbai Airport she had proceeded to board unmindful that she had forgotten her laptop at security ~ an acquaintance from Dubai,travelling on another flight to Dubai and who had cleared security after her overheard the Security Personnel mentioning my sister-in-law’s name as labelled on the laptop.She asked them why and they told her about the laptop.She requested them to give it to her for returning it to my sister-in-law as she knew her ¬†and on being asked for surety she showed my sister-in-law’s name and number on her mobile phone to them .They trusted her instantly and gave her the laptop to carry to Dubai !

Keep the Faith & be Positive is what my sister-in-law had expressed just last night that her laptop would return to her

Wow !

Brought to my mind what I had blogged in 2011 on a personal experience too on meaningful coincidences and Synchronicity,a term coined first by Carl Jung & brilliantly expressed as the first of nine insights ¬†by Author James Redfield in his Book ‘ The Celestine Prophecy’

Here’s the May 2011 blogpost

‚ÄėSynchronicity‚Äô‚Ķ.Carl Jung coined it to stand for ‚ÄėMeaningful Coincidences‚Äô‚Ķ.James Redfield used it to introduce his ‚ÄėFirst Insight‚Äô as being aware of ‚ÄėChance Coincidences‚Äô‚Ķ..and I keep experiencing it !

Tuesday, May 10th, 2011

Keep the Faith !

Finally! ~ TAP GAP gauravblog Winner Hampers enroute to Bhanu Kiran Polanki & Pushkar Singh Rana

Finally! ~ TAP GAP Winner Hampers enroute this evening to Bhanu Kiran Polanki in Hyderabad & Pushkar Singh Rana in Dehradhun

Will not reveal what’s in these right now …Let them be surprised….what I will reveal is they weigh over 7 kgs each and are loaded with @ 20 Brands & 35 items !~ @ twice more than last year ! ( perhaps a way of apologising for the delay in announcing 2016 winner and therefore the delay in despatch ~ come on guys there were 100+ entries to study !)

Bhanu Kiran Polanki won retro for 2015 ¬†for recommending Vidhi Dyestuff beginning 2015 at Rs 17 and which rocketed a brilliant 347% to Rs 76.65 ¬†at December year end 2015 and even today holds at Rs 70 levels…It zoomed higher than Intellect Design which too did brilliantly in 2015 & which I had selected beginning 2015 as the TAP GAP 2015 Winner…Spicejet & Intrasoft (late entry beyond deadline) which too did well in 2015 ¬†had missed out

Pushkar Singh Rana wins it for recommending Kaveri Seeds at Rs 325 beginning of 2016.It’s my TAP GAP choice from a record of over 100 Entries

Just as Bhanu Kiran Polanki won retro for 2015 even at 2016 Year end we will see another hamper being awarded to the participant whose entry from the over 100 entries recommended ¬†for 2016 has gained the highest as long as it’s not Kaveri Seeds!

It’s not been a Happy Sensex 2016 thus far with Sensex beginning the year at 26100 levels and dropping 12% to 23000 levels before recovering.Today it’s battling to stay over 24600….yet down 5.75% from 2016 opening…and then recovered to gain 25000 again…needs another 4.2 % to regain 2016 opening levels

Hope you guys Bhanu & Pushkar enjoy the Hamper !

Cheers !

Update on Monday,April 18,2016

Both Bhanu & Pushkar have expressed delight…am truly happy their families and they are enjoying the contents as below…maybe we should have another TAP GAP Contest mid year 2016 ¬†with more winners & more hampers !…Cheers ! ūüėÜ

Pushkar Singh Rana Hamper Contents

 

An Investment Case for Silver !?

Gold & Silver Price History Last 10 Years

 

Gold Silver Price Ratio

How do you read the above two graphs sourced from Seeking Alpha ?

An Investment Case for Silver Perhaps !?

From one graph that shows the Price trends over last 10 years you can observe that  the Prices of both the bullion,Gold & Silver are directly co-related,albeit with some varying intensity

The second graph shows the Gold to Silver Ratio over the last 25 years and drives home a point that the varying intensity of price movements between the two offers opportunities

Currently as on April 11,2016 ,per oz Gold rules at @ US $ 1250 levels and Silver at @ US $ 15 => 83% G/S ratio….you observe that this 21st Century in the past 15 years the 80% mark has been just about reached just thrice,including now in 2016 with gaps of several years…over most periods it has remained in the 50% to 60% range and only once a few years ago dropped to @ 30% …over 90% was way back in the 1990-95 period

So what are the scenarios for Silver in the next three years?

  1. Very Bullish ~  Silver rises faster than Gold does to bridge this 83% ratio
  2. Moderately Bullish ~ Silver rises as Gold remains stable to bridge this 83% ratio
  3. Mildly Bullish ~ Silver rises but Gold  rises faster  and the G/S ratio moves over 90%+ like in 1990-95
  4. Mildly Bullish ~ Silver rises but Gold falls to bridge the 83% ratio
  5. Bearish ~ Gold falls and thus does silver
  6. Status Quo ~ Both Silver & Gold remain at current levels and maintain 80%+ ratio

Higher than normal 83% ratio strengthens probability of Bullish scenarios  1 & 2 for Silver

First Quarter of 2016 has seen Stocks & Sensex move ¬†lower….but as they say there’s a Silver Lining !

Now when will these Jewelers call of their Strike ! ?…or is there a Silver ETF you can play?

What’s your call on Silver?

Kotak Group again enters beleaguered Diamond Power Infra at Rs 23.65 ~ Why?

Kotak Group enters beleaguered Diamond Power Infra at Rs 23.65 ~ Why? ~ their Mutual Fund  had been selling since August 2015 !

On March 30,2016 Kotak Mahindra (International) Ltd a FPI & a subsidiary of Kotak Mahindra Bank picked up 3868606 (6.787%) stake in Diamond Power Infrastructure at Rs 23.65 from Macquarie Bank.Deal Size thus was Rs 9.14 cr with Macquarie exiting fully

Why did Kotak buy in ! ~¬†as just a month ago the Trustee of Kotak Growth Fund II & PAC had notified the Exchanges that from August 2015 to March 2016 the Fund had sold 1215382 shares ( 2.13% stake) from the 3002946 shares held (5.27% stake).Over 2% had changed hands on March 2,2016¬†…unless these were inter scheme or within group transfers by the Mutual Fund

The above Notifications already were on the Exchanges websites but only today has the Counter seen a smart rise by over 15% to register a days’s high till now of Rs 27.95.At 12.40 pm it’s trading higher at 12% at Rs 26.60. Trading Volumes have been below One lakh most days in the Year but till now they have crossed 4 lakh on BSE and 18 lakhs on NSE

Diamond Power Infra is an interesting & intriguing case study.It’s been a rapid Wealth Destroyer of 75% ¬†inside five months from Rs 143 levels in November 2014 to Rs 37 in March 2015 …it never was a 24 Carat Diamond ! but you can say it had all but lost whatever Carats it was !¬†

Over 10 years ago ¬†in 2005 Diamond Cables (IPO at Rs 10 par way back in August 1993),the earlier name of Diamond Power Infra, was trading low at @ Rs 17 and I spotted a turnaround when it ¬†notified the BSE that they had the second largest cable capacity after Sterlite but were functioning at just @ 15 % capacity due to a working capital crunch.It was negotiating to receive both loan & equity support from Clearwater Capital Partners.The Deal for Zero Interest FCDs & Warrants was announced a year later in August 2006 when Price levels had shot up to Rs 60 and CCP would be getting the shares at Rs 95 on conversion…Then the Share Price simply went into 10 Bagger space inside two years recording highs of Rs 589 in 2007 & Rs 599 in 2008…. I had not waited for these record highs…….¬†so the real wealth Destruction has been immense at the extreme of 96% from Rs 599 to Rs 22 !….even adjusting for 1: 3 Bonus in August 2013,the destruction is 95%!….CCP brought some more at fallen levels of Rs 160 levels 2010.It exited at a Loss in ¬†June 2014 at Rs 90 ¬†& just a few months ago at a bigger Loss in December 2015 at Rs 42.68 read more

L & T Finance Holdings recovers to Rs 70 & up 44% from Low inside Two Months

L & T Finance Holdings recovers to Rs 70 & up 44% from Low of Rs 48.30 on February 12,2016….that’s inside Two Months…it also trades in the F & O Segment

It opened 2016 at Rs 65  when Sensex levels were at 27500 +  and closed January 2016 at Rs 58 only to drop sharply below Rs 50 to Rs 48.30 on February 12,2016 and in fact closed February 2016 at Rs 52

Today it’s up to Rs 70 on a day when RBI has dropped Repo Rate to 6.50% ~ cut of 0.25% as expected by the markets & therefore priced in earlier.The Sensex post Noon ¬†& announcement of repo rate cut has corrected over 330 points and is below 25100 currently ¬†but L & T Finance is up 7.4% to Rs 70 !

Have always had a soft corner for L & T Group even when they’re in soft times ¬†& in midst of controversies like just ¬†two years ago in mid ¬†March 2014 when it was introduced for trading in the F & O Segment in mid month just when parent Larsen & Toubro offered a stake through OFS on the Stock Exchange Window at a Floor Price of just Rs 70 on SEBI allowing this route even though they had sold shares in the prior six months.The F & O trading pattern a day or two before showed insiders ( who must have known lower floor price before hand) short selling at Rs 85 levels ¬†& SEBI investigation revealed parties who had never before ever done F & O having indulged in it to make several Crores of Profit

Had been disappointed with L & T Finance Holding’s inability to leverage strongly on the parent L & T Brand in their Finance Foray….This Listed Company should have been over Rs 200 by now inside 5 years ¬†after it’s IPO at Rs 52 in mid 2011….Had recommended it strongly in 2011 & saw it’s price move smartly to Rs 95+ Highs in 2012 & 2013 only to slide back….then had recommended exit as was not enamored with top management who always wore a bored & disinterested look at analyst meets

Then came in Bain Capital in September 2015 to stir the shareholding in the company by picking a preferential post issue ¬†stake of 5.27% through an aggregate of 95.66 m shares & warrants ( to be exercised from six to eighteen months from allotment) ¬†@ Rs 74.This would infuse over Rs 700 crs into the Company.It ¬†also created another Rs 600 cr exposure through a 4.95 % post issue stake by buying 85.2 m shares from parent Larsen & Toubro in market deals at @ Rs 70…the Sensex at the time was @ 26200 levels with the Share Price of L & T Finance Holdings in the Rs 67 to Rs 70 range read more

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