A load of crap from an idle brain

The stock markets have been on a free fall for some time now ever since the Greek debt crisis blew up.  The Euro has been going down vis-a-vis the US dollar.  The dollar has been gaining in strength even against gold. Does that mean all is hunky dory and that all the problems are over with the US dollar and the American economy?  No.  Whenever there is a crisis in the world economy, the money takes a flight to the US dollar.  And that’s what we are seeing now.  It doesnt mean that all the weaknesses inherent to the dollar have vanished

The situation now is mirroring the famous words said by some great soul “In the land of the blind, the one-eyed is the king“.

So, what does this crisis mean to people who want to invest for the long term?  Its the ripe time to buy.  Dont pump in all your money at once.  Buy good companies in small quantities.  The market might go down further from here. Buy some now and some more when the markets go down further.  Never try to time to market.  The markets might not go down further from here, and if you buy now, you would have still got some great stocks for cheap.

Am a big follower of Warren Buffett when he says “Buy when there is blood on the streets“.  It might not be complete mayhem now, but there are some great companies available for cheap.

I have bought a few more shares of the following companies

Alok Industries

Bharti Airtel

MIC Electronics

Punj Lloyd

I really hope that the markets fall further so that i can pick up some more good stocks at some great prices.

Important Note: Please dont follow my buy/sell advise blindly.  Do your own research or follow the advise of a certified financial planner before investing.  Iam not responsible for any profits or losses you make by following my investment strategy.

Above price charts courtesy:  Yahoo Finance

+++

Godrej Consumer Products (GCPL) said that it had entered into an agreement to buy Argentina-based Issue Group for an undisclosed amount. The latter has a strong leadership position in the Argentine hair-colour market with a market share in excess of 20% and had revenues of over $33 million in 2009.

Apart from Argentina, the Issue Group enjoys market leadership position in hair colours in Peru, Uruguay and Paraguay including a presence in Brazil.

The deal estimated to be around Rs.230 crore provides a self-sustaining platform for GCPL’s ambitions in haircare and household insecticides segments in Latin America, GCPL said.

Full article here

Jindal Steel and Power (JSPL) on Thursday announced the acquisition of the Oman-based Shadeed Iron & Steel for $464 million.

Its project at Sohar in the sultanate is setting up capacity to produce 1.5 million tonnes of hot briquetted iron a year.

The Indian company’s director, Sushil Maroo, told media the acquisition was part of plans to expand operations overseas. “The Sohar plant is a gas-based unit. We are also setting up some gas-based steel units. It is a strategic fit for us,” he added. The acquisition was made through JSPL’s subsidiary, Jindal Steel & Power Mauritius.

Full article here

+++

Almost a year ago, i wrote a post, End of the American dream? The bad news continues. With the Obama administration tightening the screws against the immigrants and the financial collapse of the American economy, it seems the jobs are drying up and so is the much needed funding for the education system.

“There is a drop both in the number and the quality of Ph.D. applications, more noticeably in the last two years.” says Anand Sivasubramaniam, professor of computer science and engineering, Pennsylvania State University (Penn State). “This year, of the more than 700 applications we received from prospective graduate students worldwide, the number of applications from top Indian institutes such as the IITs and IISc was in the single digit. Less than three years ago, this number was in the double digits,” he says. An article this February in The Chronicle of Higher Education reported a 50 percent decline in the number of new Indian graduate students this Autumn at the University of Georgia. The computer science department at California State University (Long Beach) saw a spate of prospective master’s students from India abandoning their application process midway.

“It’s the beginning of a trend, an indicator that something is happening and that Indian students are not coming here like they did in the past,” laments Dr. Nathan Bell, director of research at the Council.
You don’t have to look far to find the reasons for this. With the US economy in a shambles, there are severe budget cuts at state-funded universities. The prospects of obtaining a full waiver of tuition fees are slim. Dwindling grant money also means that local students stand a better chance of getting a research fellowship than foreign students. So, many Indian students end up working for free. Last semester, Atulya Prasad, a master’s and Ph.D. candidate in biomedical engineering at New York’s Stony Brook University, worked as a research assistant sans the stipend.

The situation doesn’t improve upon graduation. The growing political backlash against the loss of American jobs, and the rising anti-immigrant sentiment means that getting a work visa — let alone getting a job — is as tough as it can get. So much so that now, even the lure of a US-located son-in-law is starting to fade. “The classic America-educated son-in-law syndrome is almost nonexistent as students, especially from tier 2 schools, hardly get jobs in the US after they graduate,” says Satyavrata Samavedi, a Ph.D. candidate in tissue engineering at the Virginia Institute of Technology (Virginia Tech).

Full article here

Above picture courtesy: Associated Content

+++

A commendable performance by Force India & Bangalore Royal Challengers and now this milestone of United Spirits clocking a sales volume of 100 million cases for the year.  Vijay Mallya and his companies are on a roll.  The only bleeding part being the airlines business.

United Spirits’ brands include

Dalmore
Jura
Whyte & Mackay
Black Dog
Antiquity
Signature
Royal Challenge
McDowell’s No.1
Celebration Rum
Bouvet Ladubay
Pinky
Romanov
White Mischief
Kingfisher

United Spirits Limited (USL), the flagship company of The UB Group, today announced that it has crossed the milestone of clocking a sales volume of 100 million cases for the fiscal year ended March 31, 2010. This achievement makes United Spirits the world’s second-largest spirits company by volumes, dislodging Paris-headquartered Pernod Ricard.

Key Highlights:

• The retail sales value of the spirits portfolio sales of United Spirits for the 100 million cases sold is Rs. 30,000 Crores

• USL’s 100 million cases contributed Government revenue of Rs. 18,000 Crores through excise and other levies

• USL has dominant market share and the fastest growing brands in most key segments

• USL has outperformed global competitors with USL brands growing 14% while the world’s top 100 spirits brands collectively grew only 1% and this when 18 of the top 25 global premium brands lost ground

• In the last 25 years, USL has sold a total of 740 million cases

• United Spirits launched Black Dog 18 YO in the super premium Bottled — In-India (BII) scotch category to further ramp up its market share

• The company upped the ante in the premium IMFL segment with the introduction of 100% pure grain-based McDowell’s Platinum whisky.

Full article here

+++

The next 7 years (2010 – 2017) of infrastructure investments in India would see an investment of almost a trillion dollars (approx 50 lakh crore rupees). Lots of money to be made for all the corrupt fellas as well as for the ones who want to earn legally.

And the infrastructure push just for the next one year is $140 billion (approx 7 lakh crores). Once in the lifetime of the growth of a country you can see such an explosive growth.  If you can identify the correct companies and make investments, it will give you the kind of returns which you would have never imagined.

India is roaring towards an infrastructure boom and plenty of jobs will be created like never before as capital expenditure in the next financial year is expected to surge up to a whopping Rs 700,000 crore or about 10 per cent of the expected gross domestic product of about Rs 70,00,000 crore. Companies in auto, power, railways, irrigation, airports and ports sectors are on a major expansion spree and Indian banks and financial institutions are pooling in massive resources.

But this may not be enough and some bankers expect companies to access other financing avenues such as capital market and overseas borrowing. Yet others feel that financial closure of many projects might have already been achieved and the implementation might not lead to fresh sanctions.

There is an overall economic recovery, thanks to improving operating profits and favourable equity market conditions this year. Almost every infrastructure sector is witnessing investments driven largely due to government support.

Both Crisil and the Centre for Monitoring Indian Economy (CMIE) have nearly doubled their capital expenditure (capex) estimates for the next fiscal year to a whopping Rs 6,60,000 crore and Rs 7,00,000 crore, respectively.

“Every capacity addition activity leads to job creation, it cannot be a jobless growth. I cannot put a number on how many jobs would be created from the projected Rs 7,00,000 crore capex spending during 2010-11, but for every industrial job created, the multiplier effect in form of other jobs like contracts, etc, is 1:4,” says Ajit Ranade, chief economist of Aditya Birla group.

Some of these investments include

NTPC – 16,400 crore investment to expand coal based electricity production by 4100 MW
Mahindra & Mahindra – 2500 crores at Chakan near Pune to make 3 lakh vehicles annually
Tata Motors – 1500 crores at Sanand in Gujarat to make the Nano car
Renault Nissan – $990 million (approx 4500 crores) in Chennai to make 4 lakh cars annually
Maruti Suzuki – 2500 crores investment in Rohtak, Haryana
JSW Energy – 4200 crores
GVK Power – 3200 crores
Tata realty – 1370 for highways
IRB – 1824 crores for highways
Jindal – 47,000 crores for coal to liquid fuel plant & thermal power plant in Orissa
Tata -  21,000 crores project in Kalinganagar, Orissa

“There would be huge money coming as foreign direct investment in the next fiscal while the external commercial borrowing norms are expected to be relaxed further. Besides, India’s savings rate is 34-35 per cent of GDP, which translates into huge savings at the projected Rs 70,00,000 crore GDP for fiscal 2010-11. Hence I think, despite having high borrowing plans from the India Inc, capex spending by private and public sectors could be easily absorbed,” says Ranade of Aditya Birla.

Read the full articles here and here

Above picture courtesy: Abhijitkar

+++