Thursday, November 13, 2008

911 Point Swing

Quite a roller coaster ride today. Well, eventually atleast some final gains in the last hour. (in contrast to the losing streak since the last 3 days)

Engery stocks were quite strong today. Oil finished at $59 today. WalMart continues to be the leader of retail sales...

I wonder why is it that the last hour of trading session has the maximum drama?

Sunday, October 26, 2008

Hedge Fund Manager

Andrew Lahde, manager of a small California hedge fund, Lahde Capital, burst into the spotlight last year after his one-year-old fund returned 866 percent betting against the subprime collapse.

Last month, he did the unthinkable -- he shut things down, claiming dealing with his bank counter parties had become too risky. Today, Lahde passed along his "goodbye" letter, a rollicking missive on everything from greed to economic philosophy.

Click on the CNBC link to read more.

Friday, October 24, 2008

Why we buy?

Marketing Delight

In a world of too many options and too little time, our obvious choice is to just ignore the ordinary stuff. Marketing guru Seth Godin spells out why, when it comes to getting our attention, bad or bizarre ideas are more successful than boring ones.

(Seth Godin is an entrepreneur and prolific business-book author who specializes in marketing in the digital age.)

Wednesday, October 22, 2008

Oil Prices

Just had a look at the current oil prices. Wow! It is $67 per barrel! Yes, $67 per barrel, according to the Nasdaq Stock Market and New York Mercantile Exchange.

The crude oil prices were trading at highs of $147 earlier this year.

The lower consumer demand, the sell-off of commodities by cash-strapped investment houses and banks, and recession concerns are prompting the drop.

Friday, October 17, 2008

Words of Wisdom

My Dad often says: "Fear and greed are the two most important factors in the stock market."

Warren Buffett reiterated his long-standing philosophy: "Be fearful when others are greedy, and be greedy when others are fearful."

I firmly believe these are the tenets of successful investing in the stock market (most applicable in the current economy). Buffett became the richest man in the world by investing while others were fearful, which in turn has allowed him to be one the greatest philanthropists of his time. He said, "You might think it would have been impossible for an investor to lose money during a century marked by such an extraordinary gain. But some investors did. The hapless ones bought stocks only when they felt comfort in doing so and then proceeded to sell when the headlines made them queasy."

Read the advice/opinion in NYT Editorial by Warren Buffett.

Today, confidence among U.S. consumers fell by the most on record and single-family housing starts hit a 26- year low, posing an increasing threat to household spending that accounts for more than two-thirds of the economy. Even the stock market is super-volatile right now, consider just this week for starters. The Dow Jones gained 976 points on Monday; fell 76 points on Tuesday; dropped 733 points on Wednesday; gained 401 points Thursday and then again dropped 127 points today. Yet, the net gain for the week is about 400 points!! Is this a good time to invest?

Ohh, yeah! Yet, it's imminent that there in no quick recovery for the economy and it should ideally be back on track by the end of next year. I'm not sure if we're at a bottom in equities, but valuations sure do look good from a historical perspective.
I would advise everyone to be a more pro-active investor than the buy-hold-forget and then expect profits strategy! You should be more involved and actively aware of economic trends and make necessary adjustments to your portfolio/assets.

Take it for what it's worth...

Thursday, October 9, 2008

Market Update - Financial Crisis

An update on the last couple of deadly weeks.

I think the Freddie and Fannie mac news provided the much needed jolt to everyone unaware of the financial turmoil. The Government did step in with a bailout.

The signboard "Lehman for Sale" was already put up on Wall St. but unfortunately there were no buyers which started the stocks free fall. Unfortunately, Lehman could not raise capital and did not make it as even Bernanke and Paulson kept there hands off. In the meanwhile, Merrill Lynch was sold to Bank of America, Wachovia to Wells Fargo and WaMu to JP Morgan Chase. With the big investment giants + banks going down under the panic kept on escalating.

The crisis grew bigger as AIG was kicked out of the Dow. It got an infusion of cash from the Fed for a 80% stake to stay afloat and avoid the catastrophic collapse. However, this raised substantial fears of the financial sector leading to massive sell off.

In the midst of all this the foreclosures continue to climb while new home construction falls. The $700 billion big bailout plan failed to clear the House initially but cleared the hurdle during a second chance. Berkshire Hathaway and Warren Buffet showed confidence in Goldman Sachs and GE and poured in $5 billion and $3 billion respectively which I think helped tremendously. The endorsement helped both companies to raise more capital.

The coordinated rate cuts yesterday didn't help much as the credit markets still remained tight. Fed chief Bernanke has offered a dismal outlook on the economy. The Dow and Nasdaq continue to sink and companies forecast a tough next quarter and issue warnings.

Imagine this. The DOW was at its all time high exactly one year back in October 2007. It has dropped 4000 points just in the last 4 months. It was hovering around 11,000 about 2 weeks back to close at 8,579.19 today.

Hopefully the economic downturn gets reversed soon.

Debt Increase

Well, seems like the debt clock can't keep up with the recent times.

The National Debt Clock in Times Square in New York has run out of digits to record the growing figure. As a temporary fix, the dollar sign has been switched to a figure--the "1" in $10 trillion. The clock is marking the current national debt at about $10.2 trillion.
Think of that.

The clock’s owners say a new model — with space for two extra digits — will be in place early next year. Now the debt clock will be able to reach the quadrillions. Hopefully, that’s not a level that will be breached any time soon.

Sunday, August 17, 2008

India Titans Index

Rupert Murdoch-owned Dow Jones Indexes - which owns the widely tracked Dow Jones Industrial Average index that covers 30 large US companies listed on the New York Stock Exchange — has unveiled a blue chip index for India. The Dow Jones India Titans 30 Index will measure the performance of the 30 largest and most liquid stocks listed on the Bombay Stock Exchange (BSE) and the National Stock Exchange (NSE).

The selection to the index will be based on rankings by float-adjusted market capitalisation and 12 month average daily trading volume.

Murdoch said: “The world is changing and how we measure that change economically and financially is clearly a challenge and an opportunity. We have seen a reweighting of risk, but the world itself is being economically rerated and so we need an index that allows investors to take advantage of these changes.” According to Murdoch, Indian companies will obviously have a place in The Global Dow “as will companies from other emerging countries where we have seen an unprecedented economic emancipation over the past two decades”.

Robert Thomson, managing editor, The Wall Street Journal said, “While we must reflect the global stock market as it is, we must also recognise the rapid rise of companies in countries such as India.” The Global Dow will track the share prices of existing and future global leaders in every industry.

Thursday, August 14, 2008


How to recruit the right person for the job?

"Put about 100 bricks in some particular order in a closed room with an open window."
Then send 2 or 3 candidates in the room and close the door.


Leave them alone and come back after 6 hours and then analyze the situation.


If they are counting the bricks. Put them in the Accounts Department.

If they are recounting them.Put them in auditing.

If they have messed up the whole place with the bricks. Put them in engineering.

If they are arranging the bricks in some strange order. Put them in planning.

If they are throwing the bricks at each other. Put them in operations.

If they are sleeping. Put them in security.

If they have broken the bricks into pieces. Put them in information technology.

If they are sitting idle. Put them in human resources.

If they say they have tried different combination's, yet not a brick has been moved. Put them in sales.

If they have already left for the day. Put them in marketing.

If they are staring out of the window. Put them on strategic planning.


And then last but not least. If they are talking to each other and not a single brick has been moved. Congratulate them and put them in top management.

Thursday, August 7, 2008

Leading Indian Companies

I was pleasantly shocked to see these numbers on Wikipedia today. Look at the net assets of SBI, the market value of RIL, the revenue of IOC, etc. Wow!

All the numbers are in billions of dollars.

Market Value

Reliance Industries
26.07 2.79 30.67 89.29

18.90 4.11 33.79 54.11

State Bank of India
15.77 1.47 188.56 33.29

Indian Oil Corporation
42.68 1.82 25.39 16.36

9.84 0.64 91.07 29.85

7.84 1.60 20.34 41.57

Steel Authority of India Limited
7.88 1.45 8.05 26.37

Tata Steel
5.83 0.97 11.48 14.63

Bharti Airtel
4.26 0.94 6.61 39.16

Reliance Communications
3.13 0.65 13.08 29.63

Thursday, July 24, 2008


Recently came across 'Innocentive' covered in NYTimes.

InnoCentive is an online open innovation marketplace - a "problem solving" web site - that rewards smart people for good ideas. Companies and organizations (seekers) post problems (challenges) that they are unable to solve within their organization to people all over the world (solvers) who win cash prizes for resolving them. It is free to join and if your solution is chosen - you win. Awards range from $5,000 to $1,000,000.

You can use your knowledge and expertise to make a real difference and get paid for solving these problems too. Considering the vast pool of brilliant and creative people with varied expertise available to passionately solve real life problems in the world the success rate is bound to be good. I heard in the Business Week podcast that 40% of the problems are solved which is an exceptional number for the cost and resources.

Sen. John McCain of Arizona, the Republican nominee for president, has proposed that the government offer $300 million to whoever invents a battery compact enough, powerful enough and cheap enough to replace fossil fuels. (something similar to Innocentive)

To see the details of available Challenges and register with InnoCentive click here:
Join Innocentive

If you have the world's brightest minds solving your problem what more do you want?
Concepts like these will definitely help the world become a better place for all of us to live.

Monday, June 23, 2008

A Two-part Rule for Naming Your Startup

Use a compound name, with 2 components: one word that relates to the product and a second word that represents a metaphorical adjective that evokes the characteristic of the company's product. Some examples, PayPal, IronPort or Brightmail.

Read more about it here.

Tuesday, May 13, 2008

Cash is King

What do you do if you have several billion dollars burning a hole in your pocket? Read the wonderful article on Cnn Money.

Click here to read the entire article.

Monday, May 5, 2008

Market Update

Oil has been flirting with $120/barrel and in fact has surpassed that as of today. Based on the Goldman Sachs' report which says that by 2009 it could be upwards of $150/barrel I think it is better to use public transport and go biking! It is definitely going to be in the forefront since a lot depends on the price of oil.

The Microsoft (MSFT) - Yahoo (YHOO) deal did raise many eyebrows but eventually it did not go through and Yahoo(YHOO) is facing the consequences. It fell by 15% yest.

Boeing (the 787 Dreamliner delays continue though), ExxonMobil (the profits has attracted attention from all the politicians while the gas rebate has become an issue), American Express (reassuring the state of consumer credit), AT&T (the Cingular acquisition and the Iphone were two crucial turning points for the company), Merck, Eli Lily, Google (slumping economy didn't make any difference for the internet ad revenue) all posted impressive results which helped the Dow increasing on those respective days.

Mars the chocolate maker successfully bid for Wrigley with some financial backing from Berkshire Hathaway's Warren Buffet. The Fed policy makers cut the rates again by a quarter point to boost the economy.

More later...

Lookout for Deutsche Telecom's bid for Sprint which if goes through I think becomes the largest telecom company in the country.

Sunday, April 6, 2008

Seven things to remember in bear run

The year 2008 has been unkind to investors so far. Many have suffered huge losses. Who knows, there could be more pain ahead. It’s worth reminding ourselves of basic lessons that every retail investor ought to keep in mind to avoid, or at least minimize, losses in one’s portfolio.

1. High rewards don’t come without taking high risk.
Remember, if you chase high returns, high risk will follow you.

2. Understand what you own — don’t always rely on the latest tip or prediction.
In today’s wired world, it is possible even for retail investors to understand, even if in basic ways, what is it that you are about to invest in — what does the company do, who its customers are, is the company profitable and so on.

3. Leverage is a double-edged sword that can destroy you in falling markets.
The recent collapse of various hedge funds and banks has shown that living on borrowed money can be dangerous.

4. Keep some of your powder dry — you don’t always need to be fully invested.
Keep some cash available to take advantage of falling prices. Professionals think of a correction in stock prices as a sale in stocks.

5. Build portfolio on a strong foundation.
Your stock portfolio also needs to be built on the back of strong companies and predictable stability. The more junk you have and poor quality stocks you own, the quicker your portfolio will also collapse during a correction.

6. Keep a wishlist of companies.
Smart investors keep a wishlist of companies whose shares they want to buy when the opportunity and price are right.

7. Invest for the long-term.
Serious investors put money to work for the long-term.You will also avoid the tax liability associated with short-term trading that can add more complexity to your finances.

Click here to read the entire article in Economic Times.

Saturday, April 5, 2008

India then and now: Kalam's Mantra

Some views from the great man Abdul Kalam:

The Vision

"I climbed and climbed
Where is the peak, my Lord?
I ploughed and ploughed,
Where is the knowledge treasure, my Lord?
I sailed and sailed,
Where is the island of peace, my Lord?
Almighty, bless my nation
With vision and sweat resulting into happiness."

"In 1991, we were in a precarious foreign exchange reserve condition. We had to pledge our gold to maintain the minimum balance required for our imports. Inflation was high. Land lines were few and mobile phones were a luxury. The people had to wait for telephone connections for months after booking. We had to wait in long queues for the railway reservation. We had very few automobile companies and there was a large waiting list for getting the allotment for a car or scooter. The export performance from software, pharma and other industries were negligible. This was the scene in 1991.

"Today, India is in an ascending economic trajectory, with continuously rising foreign exchange reserves, moderate rate of inflation, global recognition of our technological competence, energy of 540 million youth, umbilical connectivities of 23 million people of Indian origin in various parts of the planet. India as the largest democracy in the world has the reputation for providing leadership to one billion people with multi-cultural, multi-language and multi-religious backgrounds. India has become a trillion dollar economy."

Societal needs

Kalam visualised the following distinctive profile of India to emerge by the year 2020:

1. A nation where the rural and urban divide has reduced to a thin line.
2. A nation where there is an equitable distribution and adequate access to energy and quality water.
3. A nation where agriculture, industry and service sector work together in symphony.
4. A nation where education with value system is not denied to any meritorious candidates because of societal or economic discrimination.
5. A nation which is the best destination for the most talented scholars, scientists, and investors.
6. A nation where the best of health care is available to all.
7. A nation where the governance is responsive and transparent.
8. A nation where poverty has been totally eradicated, illiteracy removed and crimes against women and children are absent and none in the society feels alienated.
9. A nation that is prosperous, healthy, secure, peaceful and happy and continues with a sustainable growth path.
10. A nation that is one of the best places to live in and is proud of its leadership.

Integrated Action for developed India

"To achieve the distinctive profile of India, we have the mission of transforming India into a developed nation. We have identified five areas where India has a core competence for integrated action:

1. Agriculture and food processing
2. Reliable electric power, transport and infrastructure for all parts of the country.
3. Education and healthcare
4. Information and communication technology
5. Self reliance in critical technologies.

"These five areas are closely inter-related and if progressed in a coordinated way, will lead to food, economic and national security."

"Our story is still unfolding. The global environment, however, needs protection and India's freedom won by suffering and sacrifice has to be alertly guarded, strengthened and expanded. Freedom and independence must be our continuing quest, and in such a manner as to accelerate our evolution as a free nation through a bold and swift development."

"The time has now arrived for India to emerge with a new vision and leadership to make our nation not only enlightened, rich and prosperous, but above all, a safe nation, invulnerable forever to invasion and infiltration across its borders and bring unity of minds."

"Economic prosperity is possible only if we adopt and practice the value system in a society, which is derived out of our civilizational heritage. For all these actions, righteousness in the heart is very essential.

"Knowledge society will emerge only by the enlightened citizens of the nation. Our challenge today, is to bring the societal transformation with value system leading to a prosperous, happy and peaceful nation. It is the responsibility of the developed and developing nations to create peaceful neighbors with inclusive growth devoid of societal imbalance."

"Make it a reality by your attitude of give, give and give of the knowledge and experience you have gained over the years. This will be the singular contribution for which our motherland will be proud of you."

Saturday, March 29, 2008

Uneasy Calm

To summarize the current market and the sentiment:

Mergers, Fed cuts, subprime worries, mortgage woes, credit crunch, inflation, housing slump, unemployment reports, financials fall, tech stocks battered, blue chips slide, more selling rocks wall street, earnings mixed, oil climbs, dollar declines, hegde fund dissolves, foreclosures jump, outlook dissapoints... and yet some people deny recession. I love the optimism but I think it would be more beneficial to reevaluate and reconsider a lot of things related to your assets to reduce the financial pinch.

Wednesday, March 26, 2008

Stock Market

It's been sometime since I wrote on the blog but plan to be post more regularly henceforth.

The last couple of weeks in the market had a lot happening on all fronts.

The JP Morgan and Fed bailout of Bear Sterns was a relief of sorts for (BSC) since it's cash position had significantly deteriorated however the events rattled many investors. The skepticism and anticipation of what happens to the other investment banks and financial institutions led to the falling markets. Lehman Brothers and Goldman Sachs reported better results than expected which led to the big rally early last week.

The Fed are definitely taking a lot of measures to curtail the recession and has pumped billions into the economy. It cut the discount rate again which matters a lot since that's the rate at which security firms borrow money.

It was good to see that JP Morgan upped the bid to $10 from $2 per share of BSC. (I can't imagine that company which was trading a year back for $170 per share going for $2 per share)
The Dept. of Justice approved the Satellite radio merger between Sirius and Xm Radio.

The combined effect of all this besides the manufacturing/factory report, rise of home sales data, tech stocks rally and the new Bear bid boost the market which finished higher end of last week.

More later..

Tuesday, February 26, 2008

Talk about Compound Interest

"During the 20th century, the Dow advanced from 66 to 11,497. This gain, though it appears huge, shrinks to 5.3% when compounded annually ... For investors to merely match that 5.3% market-value gain, the Dow--recently below 13,000--would need to close at about 2,000,000 on Dec. 31, 2099." - Warren Buffet