The Business Cycles – be OPTIMISTIC

1) The average stock is down more than 60% over the past thirteen months

2) The housing market is still reeling and foreclosure activity is rising.

3) The price of gas is skyrocketing.

And yes, this too will pass, and the economy and stock market will begin a new expansion and sustainable bull market, as all business cycles have.

I believe the market has more than discounted all the bad news out there and is putting the finishing touches on the bottoming process for stocks.

Yes, a significant advance is set to begin that will take stocks much higher in the year ahead.

FOUR KEY REASONS TO BE OPTIMISTIC TODAY

1. Low Consumer Confidence = Profits Ahead

2. Bull Markets Always Follow Bear Markets

3. Lower Oil Prices Ahead

4. Record Cash Levels on Sidelines

I would like to throw the light on each point in brief.

Reason #1: Low Consumer Confidence = Profits Ahead

This may at first sound a bit counterintuitive, but the good news is Indian consumers’ level of confidence has reached a 28-year low. How can that possibly be good news? In the history of gauging consumer confidence, whenever attitudes tumble to this pessimistic extreme, stocks have already greatly digested and discounted the bad news.

BULL MARKETS START WHEN CONFIDENCE IS LOW!

Reason #2: Bull Markets Always Follow Bear Markets

To add perspective to current market conditions, I have seen that past bull and bear market cycles since 1960. Since then, there have been 11 bear markets with each followed by new long term bull markets.

There are two key points about bear markets I would like to highlight: First, investors are always faced with intensely negative news and many times a “crisis atmosphere” which pushes stock prices temporarily lower; second, bull markets begin in the middle of all the bad news. Historically the bull markets rewarded investors with gains on average exceeding 90%.

Reason #3: Lower Oil Prices Ahead

A major factor influencing consumer pessimism is oil prices have doubled in the last year. At every level of spending, consumers are feeling pain of higher energy costs, whether it is filling the car up with gas or buying groceries. Any relief from spiraling energy costs would be a major step toward improving investor psychology. Looking at our chart of the 120-year history of oil prices, clearly the recent price gains are at unsustainable levels. The chart depicts oil prices and our long-term momentum tool (6 year rate of change) showing only two other times in history oil prices have been this

stretched. Each time was followed by a significant price decline. While others are projecting $200 oil, our tools and research suggest an important turning point forecasting lower prices. We think the most likely outcome will be a significant decline in oil to $100 or lower before the year is over. This positive surprise for investors will be a major catalyst for the next bull market lift-off.

Reason #4: Record Cash Levels on Sidelines

Another positive sign is the enormous cash pile investors have sitting in money market funds. This record amount of cash is fuel for the next bull market advance. A little improvement in the news, an end to the oil price spike, and a shift in investor attitudes toward optimism will open the floodgates of money fund assets flowing back into stocks. A virtuous cycle can begin once again.

These are my observations about the next bull run. Invest stock-wise only.... Time to add some value stocks in your portfolio in small chunks, not a bulk deal.. small small purchase only....

I will resume writing on 26th july

My Dear friends... Hope you all are doing fine... actually i am on a business trip to south korea for some days.. will be back india on 25th july...

i will start reposting my articles from 26th july onwards...

this time i will come up with lots of fundamental stuff... I am recieving so many queries regarding target prices on some stocks, my sincere apologies for not answering them on time....

Water opportunities in India – I will play it for long term……

Think outside the Common Frame…. Don’t go on the brokerage calls and tips… do your own analysis.. Try to find out the stars of futures…. I am trying the same…. Thanks, Deepak….

In this article I will emphasis the importance of WATER BUSINESS in coming years… The companies who are planning to play with water OR already playing are going to be a sure winner…..

A catastrophic water shortage could prove an even bigger threat to mankind this century than soaring food prices and the relentless exhaustion of energy reserves. "Demand for water will continue to escalate at unsustainable rates (even beyond our imagination)

No Doubt Crude Oil played a substantial role in world’s financial charts and political charts as well. What if WATER will play same role in 21st Century?

Many Wars have been fought due to this Crude Oil only; several major political changes we have seen in past due to power of oil and many countries have changed their perspective about crude oil (like Brazil, a country which is no more dependent on the import of crude)

"Water's unique characteristics mean that no other industry has a more compelling -- or more sustainable -- business model. Water remains virtually immune to business cycles. Economists say that demand for water is virtually inelastic-as prices rise, consumption does not decrease. Nor does water have a substitute.

"Investment in adequate water and sanitation facilities may be the safest and the most profitable way to play the rise of India. Indeed, India has more than 18% of the world's population and only 8% of its water. "If we think we can see a lot of opportunities for WATER BUSINESS in India, across the board, whether it's water, energy, public transportation, or waste treatment -- and can expect its business there to grow by 20% to 25% per annum as far as the eye can see.

Big Question:

Who is biggest player in WATER BUSINESS in world?
Answer is: VEOLIA
"Veolia, the largest provider of water and wastewater services in the world, supplies drinking water and wastewater treatment services to nearly 117 million around the world in 59 countries.
"Veolia signs long-term contracts with its customers, some as long as 50 years. The contracts start generating positive cash flow after six or seven years. With contract-renewal rates hovering at 93%, the business is a model of stability that provides Veolia with reliable cash flows even in troubled times.


The per capita availability of water in India has declined to ~1,150 m3 /year, which makes India a water stressed country.

As of now there are only few companies that you can count on your finger who are player of WATER BUSINESS….Water industry in india is in nascent stage so right now only few investors know the great power of water industry in future. Investor confidence is likely to increase once the charts of water business comes in front.

The best option is to spread investments across a basket of "potential takeout candidates" such as
1. Hindustan Dorr Oliver
2. Thermax
3. Patel Engineering
4. Himalaya International
5. Ion Exchange (india)
6. Larsen and Toubro
7. Degremont
8. Aquatech
9. Fontus Water


Top 5 Water Consumers in India
1. Thermal Power plants
2. Engineering
3. Pulp and Paper
4. Textiles
5. Steel
6. Sugar

As water has become scarce, agricultural, industrial, and domestic demand is competing more for a limited supply. The agriculture sector continues to dominate water use owing to its importance in the Indian economy, while industrial demands are increasing as the sector continues to grow.


I believe the water sector story in India is a long drawn one and while the potential for the same is immense given the factors explained above, the current exposure to water industry in the listed space is rather limited.

My Dear Friends, I request you to please look at the future gem WATER BUSINESS……..


YOUR COMMENTS ARE WELCOME....... IF I AM WRONG ANYWHERE I WILL CORRECT MYSELF.... THANKS

Crude ka Khel..... Is there any alternative to Crude… Let’s Discuss!!!!

Crude ka Khel..... Is there any alternative to Crude… Let’s Discuss!!!!

BIO-FUEL COMPANIES CAN BE BIG BIG MULTIBAGGER IN LONG TERM


Crude prices has been playing an important role in the world economy, no doubt it can sink the economy of a development country.

I have written this article not to just discuss the high prices of crude in international market… JUST FORGET ABOUT THE PRICE HIKE OF CRUDE…. There are several other concerns which are forcing us to think in an unconventional way… I mean to say that unconventional energy resources will take great part in world economy in coming future.

With near record oil prices, the future of biofuel—made from plant material—is of keen interest worldwide. Global biofuel production has tripled from 4.8 billion gallons in 2000 to about 16.0 billion in 2007, but still accounts for less than 3 percent of the global transportation fuel supply. About 90 percent of production is concentrated in the United States, Brazil, and the European Union (EU).


Now a question of 1 billion…………..
What are those unconventional energy resources? Guys look around you and you will definitely find the answer. These unconventional energy resources are
1) Solar Energy
2) Bio-Fuels

In this write-up I would like to discuss BIO-FUELS ONLY……

BPCL in collaboration with construction major Shapoorji Pallonji and Nandan Biomatrix Ltd, is forming a joint venture, with an investment of Rs. 2,132 crore (US$ 533 million) over the next ten years, to cultivate, extract, and sell jatropha-based bio-diesel. India has plan to cultivate Jatropha in 11 million hectares within few next year. The Companies involved in the gold rush of Jatropha in India are D1 Oil(a UK Based Bio-fuel Leader), Godrej Agrovet Ltd, Tata Motors, Indian Oil Corporation, Kochi Refineries Ltd, Biohealthcare Pvt, The southern online Biotechnologies Ltd, Jain irrigation System Ltd, Natural Bioenergy Ltd and Reliance Energy.

Jatropa is going to be a big hit in india after few years. Mahindra & Mahindra has launched its first biofuel-powered vehicles for commercial use. Several banks are planning to finance jatropa cultivation in india, named to few are ICICI, yes Bank and SBI.

POSITIVE POINTS FAVOURING BIO-FUEL
Price: Rs 26 per litre (inclusive of all taxes) , as announced by major private sector oil firms

Bio-Diesel Credit Bank : Petroleum Conservation Research Association (PCRA), www.pcra.org, launched Bio-Diesel Credit Bank. It will co-ordinate activities relating to Carbon Credit.

Field Trials: Several Field Trials has been done commercially by some major motor companies in india.

BioFuel Policy: It is not being released yet by Indian government but this could be a turning point and deciding factor of biofuel future in india. There will be ZERO excise duty but will attract VAT. Andhra Pradesh State has Government Introduced Draft Industrial Policy

Portfolio part: Biofuels will likely be part of a portfolio of solutions to high energy prices, including conservation, more efficient energyuse, and use of other alternative fuels


PRODUCTION
Kochi Refineries Ltd (KRL) has setting up a pilot plant with a US firm to extract biodiesel from rubber seed oil

Renewable energy company Bhoruka Power Corporation Ltd, has received a grant of US$ 100,000 from the US government to conduct a detailed feasibility report for a bio-diesel project in State of Karnataka

TATA Motor , Reliance , Moser Baer are among the top shots are are ready to invest in bio fuel energy.

The Southern Online Biotechnologies Limited, has set up a bio-diesel project in Andhra Pradesh, has signed MoU with several government bodies and non-governmental organisations, for procuring raw material like Pongamia Pinnata (Karanja or Kanuga) and Jatropha seed


Some other facts..........
Cellulosic biofuels offer a chance to have an environmentally meaningful impact on petroleum use while benefiting farmers, entrepreneurs and consumers. We face an energy crisis, an environmental crisis and a terrorism crisis all related to oil. High-cost options to reduce consumption, such as hybrid and electric cars, sound good but are unlikely to materially reduce carbon emissions. To have a meaningful impact, at least half of the next billion cars manufactured on this planet must be low-carbon. The only cost-effective option likely to achieve broad market acceptance in the next 20 years is cellulosic-fuel cars.

If this happens then the companies doing production of so called bio fuels can be a big big hit.
There are some companies who are already playing in bio-fuel part
1) Nandan Biomatrix (May come with an IPO in 2009)
2) D1 oil plc
3) Southern Online bio tech
4) IKF Technologies
5) Moser Baer
6) There could be many other companies which could be existing…
India’s Warren Buffet Mr Rakesh jhunjhunwala has already bough a huge stake in Nandan Biomatrix and Mr Vinod Khosla is heavily investing in bio-fuels companies across the world.
This is purely an assumption of my mind not any BUY Call …. Just think about the future of alternative energy resources and you will know the truth. How many peoples have identified Infosys when it was of Only 100Rs Stock????????????????

Most of the times the Multibagger Doesnt VISIBLE by naked eyes... we have to think about them....... thinking is the only way to realise the potential of business of bio-fuel companies