Wednesday, August 21, 2013
Tuesday, August 20, 2013
10 Stocks-- MANY LOSERS NOT LISTED.....!!!
10 stocks that destroyed Rs 6,86,559 crore
By Babar Zaidi & Sameer Bhardwaj, ET Bureau | 19 Aug, 2013, 08.00AM IST
If you are fretting that your stocks have not yielded any gains since the 2008 crash, here's some cold comfort. A study by ET Wealth shows that the 10 biggest wealth destroyers have lost 75-98% of their value since January 2008. Their combined marketcapitalisation, or the value of the total number of shares, dropped 87% from Rs7,89,597 crore on 8 January 2008 to Rs1,03,038 crore on 8 August 2013.These 10 stocks are not obscure, smallcap scrips, but widely held large- and midcap companies. At least three of them—DLF, Bhel and JP Associates—are constituents of the 50-share benchmark, Nifty. Others find a place in broader market indices or sectoral benchmarks. The losses have been mindboggling. After the dotcom bubble burst, the market capitalisation of all the companies listed on the BSE declined by Rs 5,88,402 crore, dropping from Rs 10,45,965 crore in February 2000 to Rs 4,57,563 crore in September 2001. However, these 10 stocks alone have exceeded that figure, losing Rs 6,86,559 crore since January 2008.
The usual suspectsMost of these wealth destroyers are from the real estate, infrastructure and capital goods sectors. All three sectors have been battered in the past five years. The CNX Real Estate index fell 85%, while the CNX Infrastructure index dropped 66% between 8 January 2008 and 8 August 2013.
Real estate developer DLFBSE 3.67 % has been the biggest wealth destroyer, with a drop of Rs 1,71,590 crore in its market capitalisation. This loss is more than the total market capitalisation of software giant, InfosysBSE 0.05 %. The drop in the value of Reliance CommunicationsBSE 0.63 % surpasses the total market capitalisation of its biggest rival,Bharti AirtelBSE 0.43 %. The combined losses of Bhel and UnitechBSE 8.64 % are big enough to buy the five biggest PSU banks, including the SBIBSE 1.51 %, Bank of BarodaBSE 0.30 %, PNBBSE -0.36 %, Canara BankBSE 3.26 % and Bank of India.
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However, many investors have not reacted to this wealth erosion because it has happened gradually over five painful years. In the interim, shares must have changed hands, and very few of the investors who owned these shares in January 2008 would still be holding them. For some, there was an opportunity to exit in 2010, when the markets were upbeat, and again, early this year.
Given this massive decline, should you buy these stocks? As our cover story argues, just because a stock is trading at a historical low does not make it a good buy.
Promoters the biggest losersTo be fair, individual investors did not bear the brunt of this huge erosion in value. The company promoters, who controlled the largest chunk of the equity, were the biggest losers. Tata Communications, for instance, saw its capitalisation drop by Rs 15,235 crore, but the loss to individual investors was only Rs 341 crore. However, in the case of some other companies, such as IVRCL, which is not in the top 10 wealth destroyers, the promoters held less than 10% of the total equity.
The company lost Rs 6,658 crore of market capitalisation, but the bulk of this loss (Rs 5,516 crore) was borne by institutional investors, including FIIs, mutual funds, insurance companies and banks. They accounted for 22% of the total loss of market capitalisation, while individual investors lost around 5.5%. However, some of the losses of institutional investors are actually those of small investors in mutual funds, Ulips and pension plans.
Avoiding lossesCould these losses have been avoided? While the promoters had little option, individual investors could have taken steps to minimise them. For one, it is always advisable to set a limit to the loss you are willing to take. Small investors tend to sell their winners too early, but hold on to losers for far too long. This is what happened in case of realty stocks, where investors clung on to their investments in the vain hope that they would recoup their losses some day. However, the real estate stocks just kept plunging to new depths and the losses kept piling. The lesson for investors is not to get emotionally attached to a certain price level. Learn to cut your losses and exit if the tide has turned.
A bigger learning is to stay away from momentum stocks. At the height of the irrational exuberance of 2007, infrastructure was a buzzword for mega gains. Investors were blindly putting money in infrastructure stocks without assessing the sector's potential or checking valuations. This herd mentality should be avoided at all cost. Don't buy a stock just because everyone else is doing so. Invest only after careful research and evaluation of the company's financials. The real estate sector is a prime example of how valuations can be easily inflated.
Diversify your investments, not only across sectors and stocks, but also across time. Equity mutual funds are a readymade solution for such diversification. They invest in a basket of 25-30 stocks across 7-8 sectors, cushioning the investment against a possible downturn in a stock or sector. The SIP is a diversification across time and should be used to bring down the average purchase price.
http://economictimes.indiatimes.com/markets/stocks/stocks-in-news/10-stocks-that-destroyed-rs-686559-crore/articleshow/21877464.cms?curpg=2
Sunday, August 18, 2013
ENJOY THE MARKET FALL...!!!!!!!!!
THE
NIFTY IS DIVED FROM 6080 TO 5485 LEVEL, BUT COULD CREEP TO 5750 LEVEL. YETERDAY
NOSE DIVED TO 5490 LEVEL. THE EROSION OF NIFTY LEVEL IS MASSIVE FOR A DAY
TRADER WHERE AS THE OVER ALL PRAGMATIC VIEW PROVIDES A BUYING OPPORTUNITY TO
LONG TERM INVESTORS. THE NIFTY HAS EXCELLENT SUPPORT AT 5250-5285 LEVEL. SO I
PERSONALLY CONSIDER THET THE NIFTY FLOATING ABOVE 5335 LEVEL IS FAVING BULLS TO
ACCUMULATE.
THE
NIFTY HAS CORRECTED ONLY BECAUSE OF CAD AND BANKS FUTURE NPA PROBLEMS. THE
INSTITUTIONAL INVESTORS WITH A GOOD LONG TERM VIEW CANNOT AFFORD TO SELL
RELIANCE BELOW 809 LEVEL BECAUSE THE PRICE REVISION FOR THE GAS HAS DOBLED AND
THE PROFITS SOAR FROM APRIL-2014. THE TCS AND INFY ARE FOR THAT MATTER THE
TECHS WILL ENJOY THE WINDFALL GAINS AND THE LONGTERM CONTRACTS OF SOFTWARE
SERVICES DUE TO RUPEE DEPRECIATION. SO IS THE CASE WITHEMERGING PHARMA LOTS.
THE MINING EXPORTERS AND STEEL EXPORTERS ALSO ENJOY THE RUPEE FALL.
BY
THE WAY….WHO IS BUYING INFOSYS, TCS AND TECHMAHINDRA, ANY WAY…???. THE DEEP
POCKETED HNI AND INSTITUTIONAL INVESTORS WHO ARE MORE CONCERNED ABOUT THE
SUSTAINED GROWTH AND DEVIDEND. THE CAPITAL SAFETY AND INREMENTAL GROWTH ARE
ASSURED TO THOSE INVESTORS.
THE
TATAMOTORS HAS NOW BECOME AN EXPORT ORIENTED COMPANY DUE TO JLR SALES. THE
MAHINDRA CASE IS FAVOUABLE DUE TO TRACTOR SALES AND THEIR NEW PRODUCT
LAUNCEHES. THE OTHER AUTO STOCKS LIKE HERO AND BAJAJ ARE FAVOURED DUE TO THEIR
EXPORT PERFORMANCE AND NEW LAUNCHES.THE ONGC ENJOYS PRICE AT THE IMPORT PRICE
OF OIL IN DOLLAR TERMS. THE OTHER STOCKS ARE NUETRAL.
NOW
THE CHALLENGE IS COMING FROM THE BANKING SECTOR. THE HDFC AND HDFC BANK ARE NOE
PARTICIPATING IN THE FALL. I BELIEVE THESE CAN ADD TO FALL BUT THE RECOVERY
WILL BE SHARP DUE TO THEIR HIGH LEVEL OF PATRONAGE FROM FIIs. THE ICICI IS A
NUTRAL CANDIDATE FAVOURS BOTH THE BULLS AND BEARS.
THE
REAL PROBLEM COMING FROM SBI, PNB, BANK BARODA AND OTHER PSU BANKING LOTS. WHERE
THE BLAME GAME ALREADY STARTED AMONG THE 3-SUBBARAO, CHIDAMABRAM AND PM-SING.
THIS WILL NOW ADD PRESSURE ON THE NEW RBI CHIEF, FORCE HIM TO DANCE TO THEIR
TUNES. THE FIIs ARE ALSO TAKING THE ADVANTAGE OF HAMMERING THE MARKETS TO GET
DUE FAVOURS AT AN ERALY DATE. THE PRESSURE GAME IS ON….AS A MATTER OF FACT IT
IS ALWAYS THERE AND WILL BE THERE.
SO
THE CONCLUSION IS SO LONG RELIANCE TRADES ABOVE 793 LEVEL THE MARKETS ARE IN
BULL GRIP. FOR AN INVESTOR IT IS AN OPPORTUNITY BUT FOR A TRADER ANYTHING IS OK…ENJOY THE MARKET FALL WITH A VIEW LIKE AN INVESTOR AND AS A TRADER BY STAYING WITH THE TREND…..
...GOING IS BAD...!!! BLAME ON.....??????????
Prime Minister Manmohan Singh, D Subbarao spar over RBI's policies
By TNN & Agencies | 18 Aug, 2013, 02.59AM IST
NEW DELHI: Tensions between the government and outgoing RBI governor D Subbarao came out in the open on Saturday as Prime Minister Manmohan Singh called for "fresh thinking" on macroeconomic policy and suggested the central bank narrow its focus. The PM on Saturday seemed to throw his weight behind finance minister P Chidambaram who has been insisting that RBI must not interpret its mandate solely in terms of inflation control and needs to be more attentive to the government's growth priorities. "I would venture to think the time has come when we should revisit the possibilities and limitations of monetary policy in a globalized economy, in a fiscally constrained economy," Singh said at a function to release a history of the RBI, where the governor was in audience. Interestingly, Subbarao used the occasion to stoutly rebut criticism of being insensitive to growth, saying it is "inaccurate and unfair" to contend RBI was "obsessed with inflation, oblivious to growth concerns". TAMING INFLATION Subbarao argued that the RBI was focused on taming inflation precisely because it was bothered about growth. "There is any amount of evidence to show an environment of low and stable inflation is a necessary precondition for sustainable growth," he said. While Subbarao called the growth versus inflation debate an "over simplification", Singh drew on his own experience as RBI governor to stress monetary policy needed to evolve, saying a redefinition of policy goals he initiated in the 80s had proved to be relevant. Elaborating his thoughts, the PM said, "... macro-economic policy-making, targets and instruments, I think, is another area, where I feel fresh thinking is called for, and I sincerely hope governors of the future, particularly Dr Raghuram Rajan, will attempt to revisit some of these difficult areas." As slipping growth accentuated the government's political problems over the last year, thefinance ministry and the RBI have found themselves increasingly at odds as the ruling coalition looked to the central bank to reduce interest rates to provide a fillip to investment. Subbarao, who demits office on September 4, said the view that governments are for growth and central banks are for price stability is a simplification and while he has said so earlier as well, it was significant that he chose to make the point again in the presence of the PM at Saturday's function.http://economictimes.indiatimes.com/news/economy/policy/prime-minister-manmohan-singh-d-subbarao-spar-over-rbis-policies/articleshow/21888275.cms
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