"Arise! Awake! and stop
not until the goal is reached."
—Swami Vivekanand (Indian,
1863-1902))
Word for the day
Vatic (adj)
Of, relating to, or
characteristic of a prophet
Malice towards none
What did change post
Nirbhaya?
First random thought this morning
Some "sensational" media research suggested that in past
two decades, some very "sensitive" cases have been assigned to
"Junior" judges in the Supreme Court. The report was trying to
highlight that something is amiss at the apex judicial forum in the country.
The report implies that someone who has experience of 25-30yrs of
judicial experience before being appointed a judge of SC, will still be junior
judge, if he is 5yr younger to the Chief Justice. A judge who has served as
Chief Justice of a High Court, and delivered judgments of far reaching
consequences, will still be junior and incompetent to hear appeals of similar
matters.
Cook your own meal
Have you ever been to vegetable market after 9:30PM? The market at
9:30PM is very different from the market at 5:30PM.
At 5:30PM, the market is less crowded. The produce being sold is
good and fresh. The customer has larger variety to choose from. The customer is
also at a liberty to choose the best from the available stock. The vendors are
patient and polite, and willing to negotiate the prices.
As the day progresses, the crowd increases. The best of the stuff
is already sold. Prices begin to come down slowly. The vendors now become
little impatient and less polite and mostly in "take it or leave it"
mode.
By 9:30PM, most of the stuff is already sold, and poor quality
residue is left. The vendors are in a hurry to wind up the shops and go back
home. The prices are slashed. There is big discount on buying large quantities.
Vendors are aggressive and very persuasive.
Customers now are mostly bargain hunters, usually the small &
mid-sized restaurant, caterers and food stall owners. They buy the residue at
bargain price, cook it using enticing spices and oils, and serve it to the
people who prefer to eat out instead of cooking themselves, charging much
higher prices.
The cycle is repeated every day, without fail, without much
change. Everyone complains, but no one tries to break the cycle. Implying, all
participants are mostly satisfied.
A very similar cycle is repeated in the stock markets.
In early cycle, good companies are under-owned and available at
reasonable prices. Market is less volatile. No one is in a hurry. Smart
investors go out shopping and accumulate all the good stuff.
Mid cycle, with all top class stuff already cornered by smart
investors, traders and investors compete with each other to buy the average
stuff at non-negotiable prices. Tempers and volatility run high.
End cycle, the smartest operators go for bargain hunting. Strike
deals with the vendors (mostly promoters and large owners) to buy the
sub-standard stuff at bargain prices. Build a mouth watering spicy story around
it. Package it in attractive color and sell it to the late comers and lethargic
at fancy prices.
The cycle is repeated every day, without fail, without much
change. Everyone complains, but no one tries to break the cycle. Implying, all
participants are mostly satisfied.
If my message box is reflecting the market trend near correctly,
we are in the end cycle phase of the current market cycle. I daily get very
persuasively written research reports and messages projecting great returns
from stocks which no one would have touched early cycle or mid cycle.
The stories are so persuasive and the packaging so attractive that
I am tempted to feel "it's different this time." But in my heart I
know for sure, it is not!
If you are tempted to say that I am saying this crap for almost
5months now, I agree unashamedly with no regrets whatsoever.
Have a look at top 50 price gainers at BSE in past one year.
Earnings of most of these companies is not congruent with the rise in market
price. In some cases it has been even lower. The stories are truly enticing and
even inspiring in some cases.
Out of 8516 BSE listed companies for which data is available, 5095
reported negative EBIDTA in last results. Another 1348 enjoy enterprise value
(EV) which is more than 15x. More than 600 companies had EV between 10 and 15.
In early cycle more companies trade at better PE ratios.
Make your own assessment of what I am trying to say
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