The Greater Fools Theory - MUST READ FOR SHORT TERM INVESTORS

PLEASE READ EACH LINE OF THIS POSTING............. IT IS A MUST READ FOR ALL INVESTORS........

The universal truth question of stock market:

What is the real worth of your stock?

Perfect Answer:

Whatever someone else is willing to pay for it at a particular moment of time in market!

The bigger fool theory or greater fool theory (also called survivor investing), is the belief held by one who makes a questionable investment, with the assumption that they will be able to sell it later to "a bigger fool.” In other words, buying something not because you believe that it is worth the price, but rather because you believe that you will be able to sell it to some one else for an even higher price.

Actually, this theory states that all peoples investing in stock market are fools. Every fool that is purchasing stocks always thinks that there is still a bigger fool present in the market who will pay more amount on his already over valued stocks. These assumptions of fools drive the market and make the cycles, cycles continue and market attains new heights. Always, a greater fool keeps purchasing in the high market and in booming era. When a big and bigger fool enters in market continuously then market usually comes to saturation. That saturation point is a point beyond which no fool in market is present. Precisely there are no investors left to purchase stocks.

No need to be a market pundit to predict the saturation of market, just keep your eyes and ears open and you will identify. Just observer market fully with your ears opens all the time, when you listen from anybody (who was not at all interested in stock market earlier) their intentions in entering markets, BEWARE…………….

In my views this theory is not at all wrong, just correlate with the market mayhem happened in the BSE and NSA in last 6 months.

I can give Many Classical Examples :

Example First:

Rise of RPL

When RPL was at Rs300, peoples were still entering in that stock. RPL rose without any fundamental, still there is no production there. According to this theory those peoples were biggest fools of the market who purchased RPL at 300.

The Fall of GMR Infra

The so called great pundits were giving the calls to purchase GMR at 260. Biggest fools got into market by purchasing it at 265/-

pls note: no doubt GMR infra is a long term bet, but entering at 260 was fullishness....

These are two of many stocks that bought the biggest fools in the market at its saturation point.

My Dear Friends, my idea is not demoralize you all … I wanna just say that you must understand when to enter the market and not to trade short…. Be a long term investor always… don’t be the biggest fool…………………

Thanks much for reading this…

Comments are welcome……

DEMYSTFYING STOCK MARKET MYTHS..........

Myth 1 - High Market CAP Stock will give highest returns

If this is true then Stocks of Reliance and NTPC should be at highest CMP and Rohit Ferro should be at 150 levels.

Market CAP of GMR Infra – 18,000 Cr, CMP=110

Market CAP of Rohit Ferro – 350 Cr, CMP=150

Don’t get trapped in Brokers so called TIPS. Do your own analyses on each stock its vision, economy and sector relation, government involvement in that stock etc?

Myth 2 – Investing in Share Market is just like Gambling

Nothing could be more untrue than this myth, yet it's a big reason why many people shy away from the stock market. To understand why investing in shares is inherently different from gambling, we need to review what it means to buy a share.

A share is ownership in a company. It entitles the holder to a claim on assets as well as a fraction of the profits that the company generates. Too often, people think of shares as a way to test their luck, and they forget that stock represents the ownership of a company. In the stock market, investors are constantly trying to assess the profit that will be left over for the shareholders. This is why stock prices fluctuate. The outlook for business conditions is always changing, and thus so are the future earnings of a company. Assessing the value of a company isn't an easy practice.

Gambling, contrary to investing, is a zero-sum game. It merely takes money from a loser and gives it to a winner. No value is ever created. In contrast, by investing we increase the potential to increase the overall wealth of society. As companies compete, they increase productivity and develop products that make our lives better. Don't confuse investing for wealth creation with gambling's zero-sum game. In investing the seller could be selling because they have made substantial returns with the share; this does not stop the buyer from making additional returns if it is a share from a well-grounded company. The cardinal rule then becomes ascertaining the solidity of the company before investing in it as opposed to testing ones luck.

Myth 3 – Fallen Shares will eventually go up

Nothing is more destructive to a new investor thinking that a stock trading near its bottom is a good pick always.

Example:

Suppose you are looking at Two Stocks, Stock A which rose to Rs50 in last Year and now come at Rs8 and Stock B (a smaller company with good potential) has risen from Rs5 to rs10. Which Stock will you buy????? It is interesting to note that a major chunk of investor will choose to invest in stock A without thinking about the future potential power of Stock B. Thinking this was is a cardinal mistake in investing

If you are an investor, price should only be one part of the investing equation. The goal is to buy good companies at a reasonable price. Don't confuse value investing with buying companies solely because their market price has fallen; value investing is about buying high quality companies that are undervalued by the market.

Myth 4 – Having just a little Knowledge, because it is better than none, is enough to invest in the stock market.

For investing in Stock market you must understand the economy, the political factors related to that stock and future prospects of that company in detail. Invest in business rather then in a company.

Because the future of your investment is tied to the future of the company, you should think like an owner. Ask yourself: What kind of a company would I want to own and what kind of a management would I like to have working for me?

Myth 5 – P/E Ratio Tell you whether stock is Cheap or Expensive

Any investor can find P/E Ratio of company on any financial website. So P/E must be the great way to compare stocks. Right?? I Say WRONG… absolutely WRONG

P/E ratios don’t say anything about a stock’s value!. One of the most important things you’d like to know is the worth of each stock based upon its earnings, profitability and other key financial data. In other words, you’d like to have a sense of the stock’s intrinsic value.

Youth Financial Planning – Reach For the Stars

Boom in Indian economy, growing industry has filled the pockets of youth. As far as the income is concerned, given the boom in economy and its ever improving aspects, opportunities have never been better!

From Last 3 Years the disposable income has grown substantially, so the spending habit. It’s definitely a happy situation to be in! But youth ignore a great habit – SAVING MONEY. The rationale is simple – every youth is assuming that future is looking great here then what is the need to set aside money for future? but I think that as surplus money is growing it is the right time to save money for future needs like for your child 1^st birthday party, his/her education etc. Instead of spending money in a thing or service that you don’t need in actual SAVE that money and see the power of compound interest over your money in coming years.

Here I will try to explore as many possibilities to guide you how to save money and have good financial portfolio. I am certain that you will like my article.

Start Early

If you start earning from age 21, then start saving immediately. Please don’t wait till age 25. Rs 1000 investment per month for 20 years will become 17 lakhs (assuming 18% interest as offered by some good Mutual Funds)

Why you invest

Factor 1 - INFLATION

If one thing cost you Rs 100 per day then the same thing will cost you Rs134 after 5 years (assuming 6% inflation/annum). So to maintain the same living standard you have to spent more money.

Factor 2 – The Standard of Living

In near future, you want to have an excellent standard of living but that would cost you much more than that of now. You wish you have your own car instead of going by bus or public vehicle. As the time goes, you will have dependents and you will be the one who will take care of his/her financial needs.

Things to be focused in early stages

POINT 1 – Maximize the surplus by cutting unnecessary wasteful expenditure.

POINT 2- invest the surplus in instruments which are best suited to your needs, your profile and your risk appetite.

Set a objectives

Before investing, set a clear objective. There should not be any lack of clarity in your future needs. Set your risk appetite. Set the goals.

Example: If you want to be a Crorepati after 15 years?

The solution is not always a 100% low-risk portfolio or a 100% high-risk portfolio. In fact for most of us a blended asset allocation will work best. But even then equities will and should account for the largest chunk of your portfolio.

Equities

Some people call it SATTA MARKET, KAALA BAZAAR, but the truth is that they have lost their money based on fool theory (one fool purchase overpriced rate stock and then sell that stock to a bigger fool). Over the long term equities are the best instrument for maximum returns.

A common problem associated with stock investment is the method of selection. I am continuously trying to develop your skills to select the MULTIBAGGERS out of dirt. Often investors rely on “tips” of brokers/friend to decide which company to buy into. Before investing into a particular stock he must have an understanding of economy, interest rates, political and legal environment and lot of other things.

As a young investor EQUITY IS A MUST IN YOUR PORTFOLIO.

Fixed Income instruments- PPF, NSC etc

Offers assured fixed returns, normally 8% per annum. Safety of Capital is the major difference between equities and fixed income investments. However, the stability in fixed income comes at a price. If there is any subsequent hike in interest rates you will not be able to gain due to locked-in period. PPF runs over 15 year time frame and investors are required to make a minimum investment of Rs500 to keep their account active and at max you can deposit 70000 in a financial year.

This instrument is best suited for investors with a low to moderate risk profile

As a young investor, a small portion of your portfolio should be invested in fixed income instruments to impart a degree of stability to the portfolio.

Mutual Funds

You directly invest in aforementioned avenues when you invest in equities and fixed income instruments. Mutual fund put a virtual layer between you and your investment. Mutual fund managers collect money from a large number of investors and then invest that amount in various instruments according to their policy and guidelines. These are expert MF Managers.

ULIPS

Unit Linked Insurance Plans. Insurance products like endowment plans are tools for taking care of future expenses and therefore combine long term savings and insurance. By these plans you can have a life shield which assures a corpus to your family in case of unfortunate death of policyholder. One should not let tax saving or just returns influence your decision of buying and insurance plan. This scheme provides insurance with investments and it is proved that over long period ULIPs are best instruments after equity. ULIP manager invest your money in debt and equity both, hence their performance is market linked.

WANT TO SEARCH FOR NEXT MULTIBAGGER? READ THIS………

1. Checkout Promoter Holdings

Check out the promoter holding in a stock. Ideally it should be more than 55% OR should be increasing by each fiscal year. If the promoter holding are above 70% then grab the stock. The factor that usually works in favor of companies with large promoter holdings is the fair amount of confidence in the promoters. The reason is that promoters are holding a significant chunk of their stock and low free float always helps the stock rally up.

As a rule of thumb, high promoter shareholding represents monetary interest of the promoter group in the company. It demonstrates the commitment of the management in running the business. The promoter holding could also provide indications about willingness of the promoters to put in considerable time and efforts in developing the business

2. Which Sector Company Belongs to??

Check out the booming sector of the year. Consider the view long-term. Always try to find out the undervalued OR underestimated sector. I can bet on the Industrial gas and chemical sector considering a term of 2 years. Industrial gas sector will boom shortly as there will be plethora of demands for these gases. Although there is no Large Cap company in this sector, but a smallcap when turn into large cap called multibagger

3. Is there any underestimated stock??

People always talk about the stocks which are favorites of the brokers, which are heavily traded. But I think that nobody should rely on the broker tips, always do whatever you think is right. There are so many stocks that are still underestimated by peoples only you need to remove cloud of dirt from them.

4. Book Value(BV)???

If you are searching for multibaggers then go for a stock whose CMP is less then it’s BV. Many times I have bought stocks who’s BV was greater then their CMP. BV also plays an important role while buying a stock

5. Don’t look at the Management

How many people know the GM or CMD of Satyam Computers?? Only few. My dear friends, don’t look at the directors of a rock solid company. On 31^st December 1995 Price of Satyam Computers was only 7Rs (yes, seven rupees) and it was 737Rs on January 02, 2008 with CAGR of 59.05. So find out the Next Satyam Computer……….

6. Prefer Small CAP over Large CAP if you hunting for Multibagger

The market cap of a company is inversely proportional to whether that company could be a multibagger or not. In other words companies with small market caps are more prone to going up a number of times compared to companies with large market caps.

Company Market cap on 31^st Dec 1995(in crores) Market cap today

Infosys 708 81221

Satyam 228 23641

HDFC 135 29766

I think above data is enough to prove my point.

7. EPS

There is no such standard EPS value. Check if EPS is increasing year by year then grab the stock. More the EPS more value will stock gain.

8. Hold (The Biggest factor in wealth creation)

Hold the stock for a long term, at least for 3 years. You can see your money increasing in multiples.

I biggest mistake was to sell my Allied Digital Stocks in rs300 in December 2007 now its hovering around 900 after touching 52k high of 1200Rs.

9. Small Value Stock

Try to get a stock which is lower than Rs80 or Rs100. Only they can turn to be a Unitech. There is only a few chances that a stock of Rs500 will become multibagger.

10. Listen to Your Heart – How is your sentiments with Stock?

When you want to invest, then do research on 10 stocks and listen to your heart in which stock you want to invest.

11. Invest in Business you know better

Always invest in business not in stock. Don’t invest in a company who’s business you don’t know.

Dear Investors, I would love to have your comments on my this posting

Your Queries? Pls contact me at my email ID.

Dear Investors,

although i am posting regular updates about my findings, and soon i will share with you the POTENTIAL MULTIBAGGERS.

If you have any stock related doubts then please email me at

bsensediamonds@gmail.com

I would love to resolve your queries over your specific stocks.

Regards,
Deepak

SENSEX - THE BAROMETER OF INDIAN CAPITAL MARKETS, Source www.bseindia.com

Note: Dear Investors, Please note that this article is not written by me. I have taken this from Bombay Exchange Website www.bseindia.com . This is only for informational purpose of investors and nothing else.

Introduction

For the premier Stock Exchange that pioneered the stock broking activity in India, 128 years of experience seems to be a proud milestone. A lot has changed since 1875 when 318 persons became members of what today is called "The Stock Exchange, Mumbai" by paying a princely amount of Re1.

Since then, the country's capital markets have passed through both good and bad periods. The journey in the 20th century has not been an easy one. Till the decade of eighties, there was no scale to measure the ups and downs in the Indian stock market. The Stock Exchange, Mumbai (BSE) in 1986 came out with a stock index that subsequently became the barometer of the Indian stock market.

SENSEX is not only scientifically designed but also based on globally accepted construction and review methodology. First compiled in 1986, SENSEX is a basket of 30 constituent stocks representing a sample of large, liquid and representative companies. The base year of SENSEX is 1978-79 and the base value is 100. The index is widely reported in both domestic and international markets through print as well as electronic media.

The Index was initially calculated based on the "Full Market Capitalization" methodology but was shifted to the free-float methodology with effect from September 1, 2003. The "Free-float Market Capitalization" methodology of index construction is regarded as an industry best practice globally. All major index providers like MSCI, FTSE, STOXX, S&P and Dow Jones use the Free-float methodology.

Due to is wide acceptance amongst the Indian investors; SENSEX is regarded to be the pulse of the Indian stock market. As the oldest index in the country, it provides the time series data over a fairly long period of time (From 1979 onwards). Small wonder, the SENSEX has over the years become one of the most prominent brands in the country.

The growth of equity markets in India has been phenomenal in the decade gone by. Right from early nineties the stock market witnessed heightened activity in terms of various bull and bear runs. The SENSEX captured all these events in the most judicial manner. One can identify the booms and busts of the Indian stock market through SENSEX.


SENSEX Calculation Methodology

SENSEX is calculated using the "Free-float Market Capitalization" methodology. As per this methodology, the level of index at any point of time reflects the Free-float market value of 30 component stocks relative to a base period. The market capitalization of a company is determined by multiplying the price of its stock by the number of shares issued by the company. This market capitalization is further multiplied by the free-float factor to determine the free-float market capitalization.

The base period of SENSEX is 1978-79 and the base value is 100 index points. This is often indicated by the notation 1978-79=100. The calculation of SENSEX involves dividing the Free-float market capitalization of 30 companies in the Index by a number called the Index Divisor. The Divisor is the only link to the original base period value of the SENSEX. It keeps the Index comparable over time and is the adjustment point for all Index adjustments arising out of corporate actions, replacement of scrips etc. During market hours, prices of the index scrips, at which latest trades are executed, are used by the trading system to calculate SENSEX every 15 seconds and disseminated in real time.


Dollex-30

BSE also calculates a dollar-linked version of SENSEX and historical values of this index are available since its inception. (For more details click ‘Dollex series of BSE indices’)


Understanding Free-float Methodology

Concept:

Free-float Methodology refers to an index construction methodology that takes into consideration only the free-float market capitalization of a company for the purpose of index calculation and assigning weight to stocks in Index. Free-float market capitalization is defined as that proportion of total shares issued by the company that are readily available for trading in the market. It generally excludes promoters' holding, government holding, strategic holding and other locked-in shares that will not come to the market for trading in the normal course. In other words, the market capitalization of each company in a Free-float index is reduced to the extent of its readily available shares in the market.

In India, BSE pioneered the concept of Free-float by launching BSE TECk in July 2001 and BANKEX in June 2003. While BSE TECk Index is a TMT benchmark, BANKEX is positioned as a benchmark for the banking sector stocks. SENSEX becomes the third index in India to be based on the globally accepted Free-float Methodology.


Major advantages of Free-float Methodology:

· A Free-float index reflects the market trends more rationally as it takes into consideration only those shares that are available for trading in the market.

· Free-float Methodology makes the index more broad-based by reducing the concentration of top few companies in Index. For example, the concentration of top five companies in SENSEX has fallen under the free-float scenario thereby making the SENSEX more diversified and broad-based.

· A Free-float index aids both active and passive investing styles. It aids active managers by enabling them to benchmark their fund returns vis-à-vis an investable index. This enables an apple-to-apple comparison thereby facilitating better evaluation of performance of active managers. Being a perfectly replicable portfolio of stocks, a Free-float adjusted index is best suited for the passive managers as it enables them to track the index with the least tracking error.

· Free-float Methodology improves index flexibility in terms of including any stock from the universe of listed stocks. This improves market coverage and sector coverage of the index. For example, under a Full-market capitalization methodology, companies with large market capitalization and low free-float cannot generally be included in the Index because they tend to distort the index by having an undue influence on the index movement. However, under the Free-float Methodology, since only the free-float market capitalization of each company is considered for index calculation, it becomes possible to include such closely held companies in the index while at the same time preventing their undue influence on the index movement.

· Globally, the Free-float Methodology of index construction is considered to be an industry best practice and all major index providers like MSCI, FTSE, S&P and STOXX have adopted the same. MSCI, a leading global index provider, shifted all its indices to the Free-float Methodology in 2002. The MSCI India Standard Index, which is followed by Foreign Institutional Investors (FIIs) to track Indian equities, is also based on the Free-float Methodology. NASDAQ-100, the underlying index to the famous Exchange Traded Fund (ETF) - QQQ is based on the Free-float Methodology.

Definition of Free-float:

Share holdings held by investors that would not, in the normal course come into the open market for trading are treated as 'Controlling/ Strategic Holdings' and hence not included in free-float. In specific, the following categories of holding are generally excluded from the definition of Free-float:

• Holdings by founders/directors/ acquirers which has control element
• Holdings by persons/ bodies with "Controlling Interest"
• Government holding as promoter/acquirer
• Holdings through the FDI Route
• Strategic stakes by private corporate bodies/ individuals
• Equity held by associate/group companies (cross-holdings)
• Equity held by Employee Welfare Trusts
• Locked-in shares and shares which would not be sold in the open market in normal course.

The remaining shareholders would fall under the Free-float category.


Determining Free-float factors of companies:

BSE has designed a Free-float format, which is filled and submitted by all index companies on a quarterly basis with the Exchange. (Format available on www.bseindia.com) The Exchange determines the Free-float factor for each company based on the detailed information submitted by the companies in the prescribed format. Free-float factor is a multiple with which the total market capitalization of a company is adjusted to arrive at the Free-float market capitalization. Once the Free-float of a company is determined, it is rounded-off to the higher multiple of 5 and each company is categorized into one of the 20 bands given below. A Free-float factor of say 0.55 means that only 55% of the market capitalization of the company will be considered for index calculation.

REPO RATE HIKE – Fundamentals

IN ITS war against inflation, Reserve Bank of India (RBI) has used its another tool, the policy rates of repo (the rate at which RBI lends to banks). With immediate effect, the RBI has hiked repo rate by 25 basis points to eight per cent from 7.75 per cent under Liquidity Adjustment Facility (LAF). Repo rate is the rate at which our banks borrow rupees from RBI

The last repo rate hike by 25 basis points was on March 31, 2008, when war against inflation (6.46 per cent at that time) forced RBI to hike the policy rates. The reverse repo rate is at which Banks Park short term funds to RBI is maintained at six per cent. So there is a huge gap of 200 basis points (ie two per cent) between repo rate (eight per cent) and reverse repo rate (six per cent).

What does this 25 basis point hike in repo rate mean to commercial banks?

1. RBI charges two per cent extra interest to banks when it lends to banks compare to banks (who gets two per cent less) what they earn when they park their funds with RBI. So spread between RBI and commercial banks is in favour of RBI by 200 basis points.

2. For commercial banks taking short term finances from RBI will be costlier by 25 basis points. Cost of funds to banks will increase correspondingly.

3. By increasing the gap between repo and reverse repo rate, RBI is indicating the commercial banks to make the lending in the market less attractive.

4. Net Interest Margin pressure will mount on banks as they have to pay more to RBI, while managing their asset liability of banking business.

5. To maintain its net interest margin, banks will be forced to hike their prime lending rates and consequently all other interest rates on its advances and loans.

What does this 25 basis point hike in repo rate mean to public?

1. Immediate repercussions will be hike in the interest rate on various loans and advances of the banks. This means you have to pay more if you have taken loan from the banks.

2. Your housing loan EMI is going to be hiked with immediate effect as burden of 25 basis points and additional interest to RBI is certainly going to be passed on to the consumers. This hike may be somewhere in the range of 0.5-1.00 per cent.

3. Increase in Public Lending Right (PLR) means banks will increase the interest on the loan what it gives to its customers. While the similar hike in the deposit rates what banks pays to its customer may not necessarily be there. This means that what you pay to banks will increase but what you get from the banks will remain the same.

4. If banks decides to hike its PLR (which they are certainly going to do), the effect of hike in interest rate would be on all existing loan accounts and any fresh loan accounts. So if you are planning to take fresh housing loan it will be dearer and if you already have taken loan your repayment of loan will be costlier.

By hiking the repo rate under its Liquidity Adjustment Facility, RBI is trying to control liquidity in market as increased repo rate will make the credit availability more costly. Increased repo rate will force slowdown in credit off take from commercial banks. Slow off take of credit means less funds will be available in the market for purchases and businesses etc and ultimately, the money supply in the market will be restricted. Low level of money supply helps government and RBI to tackle inflation as inflation means lot of money chasing to a few goods. Now RBI wants that a few of money to chase a whole lot of goods (which government tries to ensure by removing supply restrictions in the market) so that prices of goods will cool down which have a cozy effect on mounting inflation touching as high as 8.24 per cent. To what extent does RBI's measure to tame the inflation would help remains to be seen in the coming weeks only.

YES BANK Target 230 in One Year

Thursday, June 12, 2008

YES BANK, BSE: 532648 NSE: YESBANK ISIN: INE528G01019

YES BANK is financially owned by Mr. Rana Kapoor and Mr. Ashok Kapur, who have a collective financial stake of 38.62%

Yes Bank reported strong set of numbers for 4QFY08, partially allaying the concerns on its exposure to Forex derivatives. The bank has reported Rs645mn of net profit for Q4 FY08. The robust performance has been driven by strong growth in net interest income (supported by higher NIM’s for the quarter) and moderate growth in the operating cost. The share of non interest income to total income continues to remain strong at 50%. As a result the operating profit has grown by A WHOPPING 102.4% yoy to Rs1209mn.

Yes Bank’s NII has grown by 134.3% yoy for Q4FY08 to Rs1084mn. The strong performance has been driven by improved margins.


Valuation Table
Y/E March 31 Net Income Net Profit EPS ABV(Rs) PE (x)
FY2007 3,677 900 3.2 28 57.7
FY2008 6,912 2,000 6.8 44.2 24.4
FY2009 10,100 3,100 9.8 64.2 17.0
FY2010 14,498 4,977 15.9 76.9 10.5


Strong Management with a focus approach:
Yes Bank’s top management team is highly skilled and rich in experience gathered from few best banks in India. The bank’s intellectual capital has helped itself to have a strong foothold in the emerging Indian banking industry.


Capital Adequacy comfortable
The bank is comfortably capitalized with tier I CAR at 8.5 % as the bank’s raised Rs3.4bn (USD84mn) in FY08 through Preferential Equity Placement of 14.7 million to Orient Global. In addition, the bank is likely to raise more funds by way of issuance of up to 20 million equity shares in one or more tranches. The bank is firm on its plans to raise US$140-150mn through issuance of 20mn shares. Even then, the bank should be able to sustain current growth rates till September 2008.

Entry into new businesses – ARC, AMC and broking
The bank also plans to enter into three new businesses over next 18 months. The bank has already tied up with three state owned banks and a foreign bank for setting up an Asset Reconstruction Company. Yes Bank is likely to hold 29% stake in the venture. The bank is also looking at private banking as an extension to its knowledge banking proposition. The bank has launched two funds, one each in food and agri business and life science. The bank is also panning to set up and AMC in FY10. Yes Bank is also planning to start retail broking business in FY09. I believe that the retail broking business will not only help the bank to ramp up income from wealth management business but will also help it investment banking division in the IPO business as it will give it wider distribution arm for the IPO mandate that the investment banking division undertakes.




"I remain upbeat on Yes Bank’s business model of knowledge expertise and robust balance between fund and non-fund based services. The entry into new businesses which are relatively less capital intensive will add further value to the bank."

Considering the excellent exponential growth, strong reserves/book value and expected increased incremental cash flows, conservative investors can consider buying shares of YES BANK at the current price of around 133. The share price showed a 52 week high of about Rs.277. It is quite reasonable to expect a return of 35 to 40 percent in one year in this share.



Disclaimer: This report has been prepared solely for information purposes and the investment is the sole decision of the investor. Such information is impersonal and is not an inducement to invest. The information contained herein has been obtained from sources believed to be reliable and author, accepts no responsibility for the accuracy of its contents. Investors are advised to satisfy themselves fully before making any investments or committing themselves and should consult their own financial consultants whether and how to use such information in making any investment decision. The author accepts no liability arising out of use of the above information/ article.

Excerpts from CLSA Report 9th June, 2008 – A Truth

A look at regional & global technical trends

􀂉 US: Resuming the downtrend.
US markets ended the week dramatically with the S&P 500 (SPX – 1,360) staging a steep jobs and oil-related sell off, breaking below our cited 1,369 support level. NYSE volumes were the highest since late March (of which 92% was “down” volume) reinforcing the bearish nature of the move. Our long-standing target remains the 1,198- 1,220 range marking a 38% retracement of the 02-07 rally and the June 2006 lows.


􀂉 Crude oil: Surprise! New highs.
Crude oil’s (CL1 - $138) sharp recovery off $120 support to new highs over the past couple of sessions puts our view that we were at or close to a top around $135-138 under some pressure. A close above $143, while not our preferred view, would bring the next major pivot point at $185 into focus. We note that oil stocks actually fell in Friday’s US session.


􀂉 Intermarket confirmation.
Crude and forex are inextricably linked at present with crude’s surge being matched move for move by the Dollar Index (DXY – 72.4) and within that, the Euro (EUR – 1.574). The DXY’s price action since the 22 May lows at 71.8 still supports further upside to recover back to at least 75, the 27 Feb breakdown level. We note that the yen (JPY 105.4 ) has failed to break the downtrend at 106.5


􀂉 Japan: Reiterating - Buy the dip.
We are now looking for the index to retrace at a minimum to test the 12 May lows at 1,327, with 38% retracement at 1,323. The impulsive move from March still suggests that this will be a pullback in which to buy and this will be reinforced by the index continuing its out performance relative to the US.


􀂉 Asia: MSCI Asia ex Japan rolling over.
Friday’s sharp selloff in western markets increases the odds that the MSCI Asia ex Japan’s (MXASJ - 543) rally from the March low has peaked. We are looking for a decline towards the 500-517 range before recovering again. We highlight the key levels to monitor in Asian markets and feature the following countries China, Korea, Taiwan, Hong Kong and India. Notably, India looks set for new lows with Taiwan and Hong Kong targeting a re-test of long-term trend support.

I would recommend that please WAIT for some more time, let the NIFTY take a DEEP DIP... i believe that it will reach upto 4050 levels. You should consider that level for fresh positions....

Wait and Watch.......

Keep Reading.........................................

RAJESH EXPORTS@CMP70, Target 200 in 1 Year

Rajesh exports is investor friendly company.. haveing a rich record of dividends... it is the largest exporter of India and count about 1.2% of total world Gold Export....





I recommend this stock at CMP 70 with a target of 200Rs in One Year....

http://www.bseindia.com/qresann/results.asp?scripcd=531500&scripname=Rajesh%20Exports%20Ltd&type=56&quarter=DQ2007-2008&ResType=&checkcons=

High earnings momentum
Since 1990, Rajesh Exports has focused its strengths on increasing revenue. This objective has been successful, as it is now the largest established private gold buyer, accounting for 1.2% of the global gold trade. Having attained this scale of operation, the company is now shifting its focus to find ways of increasing its net profit margin.

I expect the company's EPS to (fully diluted equity of Rs97m) grow at a CAGR of 50% from FY07 to FY10 - Rs38.2 in FY08, Rs60.7 in FY09 and Rs92.3 in FY10. In addition, the company will be developing its four million sq.ft. properties, the NAV of which is Rs188 per share.

Multiple drivers of growth
In order to meet its objective of increasing its net profit margin, Rajesh Exports has identified three major divers of growth:
Jewellery retailing: increasing presence across value chain by catering to different segments of consumer needs
Diamond jewellery: expanding product range with higher margins
White labels: expanding its market by supplying white labels to retail chain stores across the world


Real estate
Rajesh Exports has about four million sq.ft. land in Bangalore and Kerala. It is now planning to develop these properties and acquire competence in property development by setting up a 100% subsidiary, Bangalore Infra. The company may look at property development as a separate business in future.


Investment Risk
Delay in execution could have a significant impact
The company has been planning to rollout Shubh stores since the last two years, but it has been delayed due to prioritizations of Laabh stores rollout. Going forward, any delay in the execution will have a negative impact on the company's financials.
Management bandwidth
Retail store operations are being managed by professionals who were in the past associated with Tanishq and Oyzterbay. With more players entering jewellery retailing, there can be a risk of management exodus. This can have a serious risk on its retail operations.
Business model risk
The associate model of the Shubh stores is a novel concept, as the company would be acquiring some jewelers’ and partnering with them as associates. The company's inventory would be lying at associates' stores against the security of property and other liens. However, cases of fraudulent practices could mar the success of this model.

Happy Investing

JK Lakshmi Cement

JK Lakshmi Cement

It is one of my favourite stock at this time. at CMP 90 it is looking cheap.

Based on its PE and EPS (forward/trailing) it can achieve a target of 200 within 1 year..to be continued

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