holdyourthoughts

Well, about 6months back, I was really bullish on Aztec Software. It was a company that was really growing fast and had 2 consecutive years of 100% growth. I looked at the numbers and made forward projections based on past record. I also had at that point in time made reasonable trading profits from Aztec (bought at 75 and sold at 95, bought again at 90 and sold at 120). So, I guess I was biased in my point of view. And I made two fundamental errors. 1. I projected 100% growth based on only 2 years record. The problem with that is it becomes increasingly more difficult to grow as the growth increases because of the increasingly larger base effect. 2. I had assumed a PE expansion based on increased growth. The learning from this transaction is 2 years data is too less to make future projections on. Also, if growth is not as expected PE instead of expanding actually shrinks and creates a double whammy!! So, its better to be much much more conservative in projections and look for a margin...

Indians were treated to another episode of the great Indian circus - the great spectacle of managing the Indian cricket team by BCCI. BCCI, once again ascertained their position as the numero uno clowns of cricket management in the world. Greg Chappel's comment that we cannot run our cricket like the Zimbabweans and expect results like the Australians is spot on. Unfortunately, there are two many skeletons to hide and even more vested interests that prevent sane decision making. Let us take a look at what these clowns are upto. 1. Induct young blood in the Indian team. The selectors should be trying to get the best 11 players in India to represent the country, not creating reservations based on age!! But, I guess, as the BCCI is run more by politicians, this is what we have to live with. 2. Have Ravi Shastri as Team Manager This smacks of underhand dealing. Ravi Shastri's credentials are completely unknown as a manager. Moreover, during his playing days he was as unruly...

Indians were treated to another episode of the great Indian circus - the great spectacle of managing the Indian cricket team by BCCI. BCCI, once again ascertained their position as the numero uno clowns of cricket management in the world. Greg Chappel's comment that we cannot run our cricket like the Zimbabweans and expect results like the Australians is spot on. Unfortunately, there are two many skeletons to hide and even more vested interests that prevent sane decision making. Let us take a look at what these clowns are upto. 1. Induct young blood in the Indian team. The selectors should be trying to get the best 11 players in India to represent the country, not creating reservations based on age!! But, I guess, as the BCCI is run more by politicians, this is what we have to live with. 2. Have Ravi Shastri as Team Manager This smacks of underhand dealing. Ravi Shastri's credentials are completely unknown as a manager. Moreover, during his playing days he was as unruly...

After the 600 pt drop yesterday a lot of people are wondering what will happen to the Indian equity markets. In one of my previous blogs I had mentioned that this year it seems that the Sensex is going to oscillate between 11500 and 14500. That was before the RBI hiked the CRR and repo rates. With this in view, the future does not look all that bright right now. With a squeeze on liquidity and other inflation-fighting measures taken up the government, it is just a question of time when the growth of the economy slows down. Add to it back-door price controls being brought back in cement, steel and pharma (3 very very important sectors for the market), and the short term future for the equity market does not look good at all. Although the market may have some 100-200 point relief rallies from time to time, my personal feeling is that we are over with the bull market for now. This phase of correction (or bear market) may be deeper and last longer than most people are anticipating at this...