"It is amazing how complete is
the delusion that beauty is goodness."
-
Leo Tolstoy (Russian, 1828-1910)
Word for the day
Urbane (adj)
Having the polish and
suavity regarded as characteristic of sophisticated social life in major
cities.
(Source: Dictionary.com)
Malice towards
none
Congress will
end up post Bihar elections as:
·
Phoenix
·
King maker
·
Loser
·
Pawn
·
Cipher
·
Other (pl specify)
Finding a suitable match for your child
Anil Agarwal led Vedanta group is reportedly
considering merger of its energy arm Cairn India with its metal flagship Vedanta
Limited. The objective of the exercise is speculated to be use of cash pile of
Cairn India to reduce ~US$10bn debt on Vedanta's balance sheet.
I am not sure how the minority shareholders of Cairn India will
react to this proposal and whether the proposal will finally be implemented.
However, regardless, this development highlights the intentions of the
management; which are prima facie not benevolent for the minority shareholders
of Cairn India.
The shareholders of the first incarnation of Sterlite Industries
would remember the delisting of the company from bourses in a rather
non-transparent manner. The shareholders of erstwhile Sesa Goa might also be
feeling somewhat shortchanged. And now Cairn India minority shareholders.
Extending the poor management argument of public sector
undertakings (see
here) to the private managements which have perhaps destroyed more minority
shareholders' value than they have added over a longer period of time, e.g.,
ADAG, Essar, JPA, Vedanta etc., it is advisable for non-institutional investors
to maintain a safe distance from these entities. The institutional investors
with their extensive analytical skills and research infrastructure, are much
better placed to play the business cycle and trade accordingly.
Luckily for me, I have always followed the simple three point
elimination criteria for selecting a company for investment, viz.,
1. Do I understand the
business of the investee company.
2. Given an opportunity
and adequate resources, would I like to own and manage the business of the
investee company.
3. Would I like my child
to marry the person at the helm in the investee company.
For a large majority of commodity companies in India, I get the
answer to 2&3 mostly in negative.
Every day, I am getting large number of inquisitions as to what
would be the appropriate Nifty level to increase equity exposure. Readers also
want to know what should they be buying at lower market levels.
I am not an investment advisor, and as such I do not advise on
individual stocks to invest.
However, technically speaking I have repeatedly stated that Indian
equities should be hitting a soft rock sometime in next 17-19 weeks. (See I, II
and III
and IV).
I continue to maintain that closer to 7850 Nifty level, attractive
buying opportunities may emerge. However, since I expect the rock to be soft,
the market may not bounce back sharply, and may slither a bit before regaining
its composure and stability.
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