holdyourthoughts

Why do people write blogs? Does anyone actually read others blogs? These are questions whose answers I have not been able to cook up!! I don't know of anyone who actually goes and reads someone else's blog without getting a mail or hearing about it from some other source. Is it because blogs usually don't feature in the usual search engine results? Some people are working on technologies that will help people get connected to blogs on similar subjects based on the tags & keywords that are used. Maybe then it will more interesting and rewarding for bloggers.

"In the long run we are all dead". "Time in the market is more important than timing the market". Two absolutely divergent views on investing, based on individual perspectives - long term and short term. I was reading,thinking about the two diverging approaches to investing, namely fundamental and technical analysis. Fundamental analysis is the study of companies based on the its balance sheet, profit & loss account and cash flow statement. It also looks at other factors of the company to assess whether one should invest in it. It focuses on the business of the company and the profits its generates. The people who practice this tends to have a longer term view. The greatest example of this is Warren Buffet and Peter Lynch - two of my all time favorite investors. Technical analysis on the other hand is a study of the market dynamics. It presumes that the market reflects all the information about a company's valuation. As any market, it focuses on supply and d...

I just came back from a three day campus interview tour. The campus was really beautiful and the placement cell people showed great hospitality to our team. The students were average in terms of academic quality but most of them had good spoken English. What was appalling though was that the majority had awful writing skills. We had an essay that the students had to write and most of them wrote pieces that were not comprehensible. Some observations… The students were very focussed on the salary package, as if salary was the end of the world Not a single student had any in-depth knowledge of their subjects they were studying. In fact, at other times, most of them would find it tough to get a job at all. A college official told me that the average cost (all-inclusive) that a student needs to spend in 4 years is around 11~12 lakhs. That means there are a lot of parents who would spent a lot of money to educate their children. Our company does a very poor ...

I just started reading “Reminiscences of a Stock Operator” by Jesse Livermore. It is another of the investment/stock market classics and tracks the trading life and fortune of Jesse Livermore, arguably one of the most famous stock operators in the world. Its interesting times in the stock markets worldwide. They are very volatile. The Indian markets witnessed a sharp fall in the last one month. The finance minister did not help matters as his endeavor to control inflation was seen in some quarters as a move back to the price-control days. One definite area of concern is the inflation in both WPI and CPI. This has resulted in RBI (Indian Central Bank) to increase CRR and reduce liquidity in the system. This in turn has pushed interest rates upwards. So, now Indian businesses are faced with a double problem. One, of increasing cost of capital and two, of reducing earnings growth. Unless the interest rate stabilizes I think we may be in for a period of under-performance for the Indian mar...

I have been reading Freakonomics and Intelligent Investor together. Those who invest in stocks and have not read the Intelligent Investor should do so immediately. Started reading Freakonomics as it was very highly recommended by a few of my friends. But, somehow I did not find it greatly interesting. Its just a collection of research papers distilled for people with non-economics background.

India is having a raging debate about reservations in education institutions. The government has proposed a 27% quota for OBC (Other Backward Classes) in all educational institutions including the haloed IITs , IIMs and AIIMS and all other engineering and medical colleges. This has caused a great deal of tension, anger and resentment amongst the “urban” upper castes with a lot of engineering and medical students resorting to hunger strikes outside their colleges. Let us take a dispassionate look at the issue at hand. There are 3 main reason why the quotas have come in. Reason #1: Arjun Singh, a former Congress heavyweight leader gets shunted to the HR ministry in the new UPA led government. He needs to assert his importance to the country butmore importantly to the Congress top-brass. He really needs to emphasize the fact that he is still relevant in Indian politics. Reason #2: Reservation creates a vote bank for the minister and his party. Or for those who can shout...

The BSE Sensex – the default benchmark for the Indian equity market – touched 12,000 on Friday last week. There is a sense of euphoria, disbelief and caution in people depending on which group they belong to. There are people who have been waiting for a correction from 6000 and are amazed to see the sensex at double that. There are others who are perennial optimists and expect the market to continue giving them the returns in the way it has in the last 3 years. Milestones like 12000 are a nice point to just stand back and access the overall situation. So, what is the reality of the day? Today, the price of oil is hovering around $70 with the political situation in Iran not getting a whole lot better. Don’t think its going to come down in a while. Interest rates are showing signs of hardening. Prices of gold, silver, steel, aluminium, copper, zinc and sugar are in multi year highs. Real estate prices are going through the roof. So, in a way all asset classes are seeing handsome app...