Nov 27, 2010

About Market Correction and more

About correction and more-

We were enticed to write this article, by the feeling of amazement the investors were experiencing when they see several stocks making yearly and new lows without making any noise!
They were amazed to see their many of the hi-performer stocks that were analyst favorites and giving them a kick n ride while the hay period of the markets and when it was anything but green on the stock screens.
Correction is a word that is known by all in the market.
You will see any ‘averagely intelligent’ investor saying ‘he will buy in correction’ and that ‘he is waiting’.
But that never happens. Either he jumps at the last movement out of impatience or steers clear by fear of further correction and aversion and pain of notional loss.
Basically, most investors want their stock only to go up from their buy price. Otherwise they will not invest! Or the market is not perfect then!
Why this does happens?
The fact is that they are ignorant and un-knowledgeable. This might sound harsh. But we are not here to please anybody!
Investors simply do not understand when to stay in, when to wait for correction and when to jump in. We will also emphasize the importance of ‘what’ in all these along with ‘how’. Because ‘what’ is what the bottom-line come in the market.
Some of them may know that correction is an opportunity (it is an all-together different subject how to tell a transient correction and a beginning of bear phase. I said ‘beginning’, because as such the bear phase in its form is a boon to investors for a 3 year horizon. We will discuss about it in other article.
So, I believe there are there always a bear phase and correction going on in market! How?
Let’s understand it this way, there are 3 types of correction or bear phases. Any one or more of them is always going on.
  1. For the whole market, which most of us are aware such corrections
The following two might sound unfamiliar to you,
  1. Correction for a particular sector, and
  2. Correction in a particular stock

Nov 18, 2010

SKS Microfinance debacle- Some contemplations and comprehensions

What happened with sks microfinance stock debacle and investors losing money is nothing new in stock markets.
The basis of such disasters lies in the craze of investors for their constant striving of ‘new’ and ‘fancy’ (so-called) investment ideas.
Always remember, investors who simply jump to grab every ‘new thing’ on markets, WITHOUT UNDERSTANDING THE ECONOMICS OF THE BUSINESS AND LONG-TERM SUSTAINABILITY OF ITS MODEL are bound to lose money. Long term sustainability is very crucial; even for short term performance of the stocks. Because you never know when a smart investor start exiting and a smart trader start shorting. Its just a matter of time. And you can never figure out when.
This has happened with dot coms companies. You can take example of praj which made short term wealth for investors but since has eroded more than similar amount of wealth. We have many similar examples.
“In fact I would go forward and say common investors (including HNIs), to leave this area of investment to ‘hi-fi’ speculators/investors like the VC funds, PE funds, FIIs and such other sophisticated hard-core professional investors and traders.”

Nov 14, 2010

Article on Sugar Sector

Sugar is an informal term for a class of edible crystalline carbohydrates, mainly sucrose, lactose, and fructose characterized by a sweet flavor. In food, sugar almost exclusively refers to sucrose, which primarily comes from sugar cane and sugar beet.
Other sugars are used in industrial food preparation, but are usually known by more specific names—glucose, fructose or fruit sugar, high fructose corn syrup, etc.

Sugar cane is a hot weather plant, which is why the largest growing areas are in South Asia, Brazil, the Caribbean Basin and the southern United States. Sugar beets are grown in cool temperate zones such as the northern Great Plains, Germany and France. Both cane and beets must be processed into raw sugar very soon after the plants are harvested or else their sugar content will drop precipitously.