Sunday, October 10, 2010

Anniversary notes

Dear Readers,

The blog and associated Portfolio Advisory Service is completing 3rd successful year by October 2010. I would like to sincerely thank you all for the active and coherent support extended during the period.

The service

It was a challenging experience of preserving portfolios in the midst of uncertain or highly volatile market conditions. We have witnessed the peak levels of market and craziest falls in the history during these three years. When looking back, it seems I have successfully managed to preserve the funds of clients, moreover channeled them to have superior returns keeping the best level of transparency. Anyhow, I am not the person to evaluate the success rate or decency level of this service; instead clients can cite their experiences in the comment session. Further, I am getting contented reactions from readers who have enjoyed fabulous returns from the stocks suggested through this blog (multibagger series) by time to time. (Kitex , Om Metals, Hanung, Manjushree, Parekh Aluminex etc..)

Now, the market is once again parked near the crest. Benchmark indices are close to their previous heights and the investor community is at optimum buoyancy on breaking previous heights. Every one of us seriously concerned on market indices and these numbers are playing a crucial role in our investment decisions. Today, I would like to place few personal notions on the topic considering the current Indian scenario or the mounting energy level of our economy.

Ignore Indices!

I think, we can simply shut our senses towards these index figures (Sensex, Nifty etc) in view of the current Indian milieu. I am seriously thinking to adopt this practice with a full heart and hope its the strategy of time. Bothering these jumbling numbers are quiet futile as it may soar few more thousands up or can be down few in the days to come. I don’t believe, these figures have much importance, especially in a country like India at its ongoing status.

You may feel odd on the above statement as, how we can neglect the so called benchmark indices? Most of us did or doing everything considering these figures, resistance levels etc. Is it possible to invest in Indian stocks with out considering this level of mercury? A number of questions are there to rise. But I think we can!, especially at the current phase. All the above are genuine queries at their respective levels and I will not argue on. But I wish to affirm that, we can invest now, not considering any of these benchmark indices but with sheer logics., further we can limit the importance of these figures to have better entry points.

India, our beloved motherland is undergoing the highest economical growth pace in its history. It is expected that our trillion dollar economy will accomplish a two fold growth in next 5-6 years. The unavoidable transformation of this great nation to a super economical power is already ignited. Try to understand the long term growth prospects of this sleeping lion, smell the strong economical fundamentals, unbeaten outlook and the conquering emotion of this community to grow despite of upsetting negatives. You can feel it from your surroundings if watch closely.

My reasons to affirm this point are numerous. A stable Government leading by a band of visionary professionals(no politics), increasing infrastructural spending in billions, steadily growing economical platforms, strengthening rupee between international currencies, strongest banking sector both private and public players, skilled and low cost work force, powerful & transparent financial bodies/regulatory mechanisms, escalating number of youths, rising focus on agricultural developments, strengthening village bases, growing communication developments, solid state reserves, band of honest and visionary entrepreneurs etc.. etc..

Try to find out good companies, intellectual entrepreneurs, evaluate their visions which can make miracles for us instead of hanging around the indices. The share market of such a growing economy must give incredible returns to the investors, if we plant our money in a genuine and cautious manner. The recent economic symptoms are assuring this fact that we are moving at a fastest pace ever to our inevitable destination. Its estimated that our growth will be around 8.5% in current FY. We are one of the very few economies recovered from the ever worst slowdowns in the history, moreover, it is expected that we will switch to double digits within next 2-3 years. I strongly believe, we never had a real recession but just hangovers imposed on us. Any way, we have almost recovered, moreover immunized upto an extent unlike the rest.

You must have selective on stocks with high degree of logics considering the business model and the management efficiency. My point is, an alluring horizon is developing around us to make money in legitimate way by investing in good Indian companies. What we underwent is the past. The scenario has totally changed and its the time we have to realize and be proud on the power of this great nation. Every one of us must have to develop a fool proof strategy to exploit this rare opportunity positively. I hope the next decade is ours, will transform this great nation to unreachable heights, and its sure the age will be carved in golden letters in the history of India.

We, few Indians are the only people underestimating ourselves. The entire world is so positive or bit scared on our growth prospectus. Check details of Barrack Obama’s speeches whenever he spells on India. I feel, he is the only US president who iswell convinced or so disturbed on the apparent Indian growth story and mechanical in expressing his views unlike his cautious predecessors. The entire world is stunned on our growth as how we manage all these. We are growing between bundles of negatives. The blood shed and horrific terrorism activities supported by neighbors, internal security issues including naxelism spread over more than half of the states, growth blocking trade union practices, substandard education/literacy level in the mainstream, largely corrupted politicians, heavy number of unemployed and poor, heavy numbers of polluted bureaucrats, unbeaten underworld dawns, casts/religions/ethnic groups ready to fight on simple issues, unsolved national and international issues, lack of roads, rails & airways and other infrastructural requirements etc.. But still we are growing!

Excess media freedom is another issue. Our media is more interested on unwanted surgeries than positive findings. It seems India has surplus number of media stuff and everyone needs negative news to promote themselves. I never noticed any Indian media educating all those positive developments around us with real patriotism rather they are people born to criticize each and everything.

Let me conclude. All the above statements does not means, you can invest in any stock considering India is growing and every stock will provide you extra ordinary returns. The impacts of heavy fluctuations on indices will definitely reflect on stock prices, but genuine stocks will recover promptly and the rest will cornered to their respective levels. Heavy storms can make only slight jolts on brawny trees or leans them a bit.

Try to understand our strengths rather constraints of this great nation and it’s economy. All those limitations are there but we are growing rapidly. The final result will be gorgeous like a handicapped contestant wins the medals between wholesome racers. I wish to place few interesting news threads at following links, a must read for every one of us.

India’s GDP to touch 205 Trillion Rupees by 2020: Edelweiss Report

India to develop its own futuristic computer operating system

Learn to live like they do in Dharavi: Prince Charles to UK

In praise of India .. what they see..

India's September Domestic Motor Vehicle Sales

Share market is a place where we can grab unbelievable gains as well unaffordable loses, both adequate to change our lives for ever. If you are proficient to observe the pulses of stocks/business/company/industry, you can avoid loses up to an extent. Still, making better returns are away. You have to develop skills to analyze those pulses logically.

I would like to invite all kind of investors to the Indian market, because it’s the final destination you are searching for. I would like to repeat the same words to freshers. “If you are not yet started investing in equities, you will soon be, its sure everyone of you must do that, if not now, later with the crowd, be a part of this impressive growth fusion developing around us and don’t miss it”.

"India is, the cradle of the human race, the birthplace of human speech, the mother of history, the grandmother of legend, and the great grand mother of tradition. our most valuable and most instructive materials in the history of man are treasured up in India only."

Mark Twain,

Comment please ...


Shabu Thachat (


  1. Hi Shabu,

    Excellent article........
    Your blog has been an outstanding platform for equities knowledge.

    But i really feel sorry for lot of Indian retail investors who has not looked upto equities has an investment class.Only 2% of the total population are investing into Indian equities.

    I really feel this market is being pumped up too much by FII.....and the US Fed is really pushing and targeting emerging economies by creating an asset bubble.This too has really affected our inflation and all the commodities have moved northwards.Now looking at this mkt which is running on the mercy of Foreigners who are making lots of money in lieu of Indian investor/people by pumping money which is available to them at Zero rate interest into it.

    Anyways i have started tracking US interest rates more rather than the Indian growth story ( which i feel will remain more intact for a loner duration) for another MKT crash. And i feel US Fed will some day push the interest rate northwards ( to protect their economy) and that too it will push it very fast and make it very high which india won't be able to match it. That day this MKT is bound to crash in a very big way even though the Indian growth story is intact and strong.

    To avoid this crash India investors have to come forward and pick up equities as an investment class and grow their wealth, which people like you through your blog is promoting.

    Please comment.....

    Vikas Karunakaran

  2. Dear Vikas,

    Thanks for the power packed comment. There is a probability of such negatives ahead. But I think we are gradually developing immunity against all these off-putting factors as well the increasing number of retail investors are also promising.

  3. Dear Mr Shabu ,
    First of all acsept my Heartiest Congratulations on 3rd anniversary.
    An eye opener article for all dear investors , as every is so busy watching index level they loose out on some bery good scrips.
    I am very glad to be associated with you and the way you want to hepl investor with your sound and fundamentally strong recomendation not only to your esstemed clients but also publish on the web for others.
    May Goddess LAKSHMIJI always bless you .


  4. Dear Mr Shabu ,
    First of all my heartiest Congratulation on 3rd anniversary of Blog & PAS.
    Your article is an eye opener , as most of us are busy tracking index levels and loose opprtunities of investing or earning great profits if invested.
    Thanks for showing us path to achieve our financial goals . I am sure that all of your esteemed clients must have made decent money in last year rally with your MULTIBAGGER scrips.
    It is very inspiring the way you share your thoughts on the blog and I am sure many of them read and follow it on regular basis though not your clients.
    Your comment - We are growing between bundles of negatives.
    INDIA is taken care by 33 crore gods and goddess and everything falls in place.

    May MAA LAKSHMIJI bless you.

  5. Few general points why india will prosper in comming decades:

    1. We know indian is the largest demography.

    2. Ageing population(from other coutries) needs workers while young country(india) has workers.

    3. The proportion of Indian's aged who are under 15 / over 64 age has declined from the 69% in 1995 to 56% this year.

    4. Working-age population in india will increase by 136m by the year 2020.

    5. Pvt firms are encouraged to compete with global players and it WORKED that's why export have shootup like any thing.

    6. China's growth is state-directed but in india,by contrast, is driven by vibrant potential 45m entrepreneurs.

    7. We have top class research institute IIT and IISC, who created $35 laptop. (could you imagaine, amazing).

    8. Global players are adapting indian taste by reducing their product price and increasing sales.

    9. illiterate parents are working hard to give better education to thier childern (incredible) instead of pulling childern out of school to work in the

    fields, that leads to more educated people in india in the comming years.

    10. Indian population ready to learn any other world language. IT guys learning german or other language to get onsite opportunity (look @ it, to

    self-grow, our indian ppl are flexible to learn and compete).

    11. Poverty rate is expected to decline from 51% to 24% by 2015 in india.

    Out of world's top 20 pension fund, 15 are investing in india. Pension funds are sticky and stay for long term. What we see inflow/outflow of FII

    money is actually Portfolio money, comming to india, who trade frequently to show better Quarter result in thier respective country. Due to this trade

    we may see some glitches in the market. Even if FII sell, we have monster LIC who have more then 1lk crore to invest in Equity. What else we need

    ? :)

    12. Govt. is trying hard to reduce its ficial deficit. Govt spending will propel more jobs. Govt norm of min 25% public holding will create more liquidity.

    Corporate sector of indian has less effected by global down turn due to less global participation and stimulus package provided by govt.


    Rating agency (like S&P), keep on changing thier rate on india based on external borrowing and repaying capacity, but India has never defaulted on

    the oversea debt obligation. RBI is the only central bank in the world who try to normalize between : inflation, growth, currency fluctuations by

    buying/selling dollars in the market, interest rate, govt borrowing program etc.


    There is immense scope of retail participation in Equity, retail money is sticky. During April-June Quarter (2010), only 31 lack investors traded on NSE

    cash market (look @ the figure, only 31lk, or assume it 1 crore if so only 1% of 110 crore population participation). Ok we will filter down to : not

    intersted to participate, illitracy in finance etc. Consider only 5-10% of indian ppl participation in indian stock market, it will be humoungous.

    Korean LG Electronics Boss, said that still large number of indian population not yet bought electronics goods(something potential inside this



    The Dharavi, for eg, in Mumbai Slum has every other doorway have small business (i watched in discovery channel, incredible to see). Everybody

    want to own thier biz. Its just mumbai, the same case is there is in different part india. Thats India :).

    Be a part of it. :).

    Thank you.

  6. Dear Shabu,
    Yet another excellent analysis on Indian equities. I whole-heartedly concur with your view on media freedom. And this is where i admire you and your portfolio advisory services, which is a real eye-opener and impeccable guidance for the younger generation and economic ignorant indivduals.

    Hearty congratulations to you on this anniversay . Keep up your noble work.

    Kind Regards

  7. Dear all

    Thanks for the inspiring comments, wishes and support for the service/blog. I will try my best to keep this effort high.


    Thanking you again for providing supportive threads on the great Indian growth story in a comprehensive manner.


  8. Dear Shabu,

    Nice article.. keep it up!

  9. I find your analysis and comments very genuine, I have been searching on the net and following few websites., where in you are the last person to know the news....Your site is very informative and also the service is top notch. I would have never invested (may be I would have noticed them after the jump but not early) in the companies you suggested on my own as I do not even know about those companies until you recommended. Association with you has changed my perception of investing and what to look for in companies than just numbers...I am really looking forward for a long association with you.....

    My only compaint (actually not a complaint but a wish) is to see frequent posting from you both on scripts and as well education series, so that people like me can gain more insights into investing. Thanks a lot and keep it up....

  10. Sir..Yet another Superb Post!! Congratulations for the 3rd anniversary .

    Yes, India's growth story looks strong..recent held CWG were so successful after all the media bashing before the games..Even though Games event like this looks a different entity altogether with economy, but it has given a strong msg to world that India can adjust, accommodate and deliver the things in a niche area(Games event handling i think is new to India) with ease...

    I feel, we as a Indian's are strong because we can adjust in any situations...we learn other languages when we need to get jobs, we share the cab's when we travel if situation demands, we sit on friends lap when we go on college bus :)..So these ingredients Coupled with growth make us stronger than rest of the world.


  11. Sir,

    According to me, we should give more importance to valuation and business of stocks in our portfolio than to indices. Stocks in indices changes many times every year. Also returns from individual stocks in indices are different from each other. Some stocks like hero honda gave +ve returns in last bear market. But I think we should not fully ignore indices because sentiments can make small changes in fundamentals.

    Happy anniversary. You started this service during last phase of last bull run. Many analysts who started service during that time vanished during last bear market or at-least gave bearish advices when sensex went below 8K.


  12. Dear all,

    Thanks for the inspiring comments and everyone of you encouraging me in a great way...


  13. Hello Sir,

    Could you throw some light on temptation foods, i find it attractive at current levels... thanks in advance

  14. Dear Jack,

    Doubt on management.

    Valuation is not the only point in choosing stocks. You need to think why its cheap also.

    Thank you



The blog is associated with information on Indian stock market and author’s investment view points on various emerging stocks/sectors. The contents discussed in this blog are purely my own personal opinion and in no case weigh it as any kind of recommendation for stock market investment. The sheer purpose of this blog is to educate the interested community on market related subjects based on my experience and I am, in no way, responsible for investment decisions based on the contents described in this blog.

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