GDP and the Estimates

World GDP (Gross Domestic Product)
Country	2010 GDP	2010	2010 GDP	2010	2011	2012	2013	2014
	(million)	Growth	per capita	estimate	estimate	estimate	estimate	estimate
United States	1,46,60,000	2.8	47,184	1,46,57,800	1,52,27,074	72,09,418	1,65,22,059	1,72,23,523
China	58,78,000	10.3	4,393	58,78,257	65,15,861	59,20,556	80,57,406	90,16,232
Japan	54,59,000	3.9	43,137	54,58,872	58,21,945	35,99,981	60,58,059	62,18,156
Germany	33,16,000	3.5	40,509	33,15,643	35,18,592	28,34,353	36,91,071	37,79,927
France	25,83,000	1.5	39,460	25,82,527	27,50,708	26,02,487	29,23,269	30,16,950
United Kingdom	22,47,000	1.3	36,100	22,47,455	24,71,883	25,76,244	27,43,352	28,90,993
Brazil	20,90,000	7.5	10,710	20,90,314	24,21,637	22,45,905	27,35,302	29,13,970
Italy	20,55,000	1.3	33,917	20,55,114	21,81,362	18,09,315	23,04,311	23,63,085
Canada	15,74,000	3.1	46,148	15,74,051	17,37,268	18,58,969	18,75,142	19,38,041
India	15,38,000	11.1	1,477	15,37,966	17,04,063	21,97,710	20,61,138	22,79,734
Russia	14,65,000	4	10,440	14,65,079	18,94,473	15,24,063	24,03,031	26,54,093
Spain	14,10,000	-0.1	30,542	14,09,946	14,84,708	14,70,027	15,63,633	16,07,659
Australia	12,36,000	2.7	42,131	12,35,539	14,48,154	12,31,642	15,73,996	15,52,456
Mexico	10,39,000	5.5	9,166	10,39,121	11,67,124	8,52,482	12,93,304	13,55,863
Netherlands	7,83,300	1.7	47,159	7,83,293	8,32,160	8,76,583	8,71,575	8,90,799
Turkey	7,41,900	8.2	10,106	7,41,853	7,97,605	9,08,125	9,43,429	10,11,625
Indonesia	7,06,700	6.1	2,946	7,06,735	8,22,631	6,02,593	9,97,944	11,00,013
Switzerland	5,23,800	2.6	66,934	5,23,772	5,94,223	5,35,270	6,10,349	6,18,320
Poland	4,68,500	3.8	12,271	4,68,539	4,97,976	5,18,073	5,76,448	6,11,036
Belgium	4,65,700	2	42,969	4,65,676	4,99,397	5,91,544	5,34,400	5,50,301
Sweden	4,55,800	5.5	48,832	4,55,848	5,44,716	6,06,016	6,29,953	6,63,710
Saudi Arabia	4,43,700	3.7	15,836	4,43,691	5,78,566	5,45,458	6,28,122	6,69,184
Taiwan	4,30,600	10.8	18,700	4,30,580	5,03,941	4,94,242	5,90,777	6,39,563
Norway	4,14,500	0.4	84,840	4,14,462	4,78,964	4,19,913	5,04,897	5,16,789
Austria	3,76,800	2	44,863	3,76,841	4,05,681	5,26,299	4,33,501	4,47,440
Argentina	3,70,300	9.2	9,124	3,70,269	4,56,817	4,02,493	5,78,482	6,18,811
South Africa	3,57,300	2.8	7,275	3,57,259	3,83,124	4,50,945	4,23,775	4,47,480
Iran	3,57,200	1	4,526	3,57,221	4,20,894	3,67,875	4,72,694	4,97,799
Thailand	3,18,900	7.8	4,613	3,18,850	3,32,470	3,50,359	3,97,986	4,27,331
Denmark	3,10,800	2.1	55,988	3,10,760	3,37,811	3,13,514	3,61,516	3,72,416
Greece	3,05,400	-5.1	26,934	3,05,415	3,10,365	3,84,196	3,20,232	3,28,150
United Arab Emirates	3,01,900	3.2	33,183	3,01,880	3,63,815	2,99,932	4,02,606	4,25,936
Venezuela	2,90,700	-1.9	13,451	2,90,678	2,94,271	3,25,368	3,04,259	3,11,357
Colombia	2,85,500	4.3	6,225	2,85,511	3,07,845	2,71,477	3,44,057	3,63,041
Finland	2,39,200	3.1	44,522	2,39,232	2,60,382	2,67,753	2,80,962	2,90,200
Malaysia	2,38,000	7.2	8,373	2,37,959	2,47,781	2,37,472	2,88,978	3,11,886
Portugal	2,29,300	1.4	21,473	2,29,336	2,36,146	2,65,154	2,41,691	2,46,077
Hong Kong	2,25,000	6.8	31,758	2,25,003	2,44,531	2,66,157	2,82,830	3,01,338
Singapore	2,22,700	14.4	43,867	2,22,699	2,53,736	2,88,822	2,78,768	2,91,645
Nigeria	2,16,800	8.4	1,222	2,16,803	2,67,779	2,48,991	3,09,671	3,35,808
Israel	2,13,100	4.6	28,504	2,13,147	2,34,908	2,17,442	2,62,032	2,76,541
Ireland	2,04,300	-1	45,497	2,04,261	2,12,792	2,44,272	2,24,299	2,32,796
Chile	2,03,300	5.3	11,888	2,03,323	2,31,302	2,38,605	2,53,754	2,61,817
Czech Republic	1,92,200	2.3	18,257	1,92,152	2,18,363	2,17,580	2,60,284	2,83,519
Philippines	1,88,700	7.6	2,140	1,88,719	2,02,865	2,13,874	2,33,397	2,50,569
Pakistan	1,74,900	4.8	1,007	1,74,866	2,02,831	1,90,388	2,27,941	2,44,639
Romania	1,61,600	-1.3	7,538	1,61,629	1,74,429	2,00,863	2,09,620	2,31,153
Algeria	1,60,300	3.3	4,495	1,60,270	1,92,384	1,71,371	2,07,051	2,14,871
Ukraine	1,36,400	4.2	3,007	1,36,416	1,57,611	1,40,051	1,75,542	1,79,302
Hungary	1,29,000	1.2	13,031	1,28,960	1,33,677	1,40,051	1,47,298	1,55,255
Source: CIA "The World Factbook".

SO LONG WAIT ???? OR VISUALISE THE FUTURE.....

IN CONTUNUATION TO MY EARLIER POSTING, A GOOD REPORT FOR US.....


Today the solar industry is just how IT was in the early 1980s


It is peak hour traffic in Mumbai and your car stops at a signal. A bunch of kids run to your window. Guess what they are selling? Not selling newspapers or toys. They are selling solar panels.



This picture, envisioned by a solar company head, is a hyperbole, but it underlines the fact that today the solar industry is just how IT was in the early 1980s or telecom in the early 1990s.

In less than a decade, solar panels on your rooftop will be powering your television, refrigerator and lights in your house. Your rooftop will be producing more electricity than what you need, you will be putting in the surplus power into the grid and when you do that, your meters will be spinning backwards, reducing your current bill. Why, even the glass panes that make up the exterior of the upcoming office complex in the neighbourhood could be generating current.



It is elementary physics that when light falls on certain semiconducting materials like silicon, its energy knocks off electrons off the atoms, which can be made to flow and the flow is electricity. There is nothing new or cutting-edge here. After all, solar panels have been powering instruments on board satellites for 60 years. Why, several of us have had solar water heaters in our houses for years and solar cookers are not uncommon. So, what is happening now, that we believe that we are at the head of a megatrend?



The answer, in a word, is ‘cost'. Earlier, we did not use solar much because it was frightfully costly. However, in the last decade, as the fear of climate change began gripping the world, some of the developed countries in their enlightened self interest, began looking for alternatives. With incentives for generation and obligation for purchase, ‘solar' moved from labs into homes.

 Prices of panels to fall


Sensing an explosion in demand, various countries began creating factories for producing solar panels and components. Alongside, research intensified to make panels that could convert more of sun's energy into electricity. A combination of large production capacities and improved efficiency caused the prices of solar panels to fall. About four years ago, to put up 1 MW of solar plant, it cost Rs.21 crore. Today it costs less than Rs.10 crore. Still, solar power remained significantly higher than conventional power. Fostering domestic solar industry, comprising both units that generated power and those that produce the equipment for doing so, still needed a policy push.


Although there were a few schemes that incentivised solar power plants here and there, the first major policy driver came in the form of the Jawaharlal Nehru National Solar Mission, which was one of the eight missions under the National Action Plan for Climate Change. The Mission envisions creation of a capacity of 20,000 MW from grid-connected solar plants and an additional 2,000 MW from plants not hooked up to the grid, such as small plants that supply only to the nearby villages, and the rooftop micro plants for powering homes. There are two ways of producing electricity from solar power — the panel way and the mirror way, where sun rays are reflected onto a trough of oil to gather heat, make steam which turns the turbines and generates electricity. The solar mission's idea is to engender creation of both — 10,000 MW each. The programme is being implemented in three phases. Under the first, the idea is to get entrepreneurs to set up plants with a total capacity of 1,000 MW. This again has been split into two batches and the process of award of projects under the second batch has just begun.


Here is where it gets interesting. When the first batch was opened last year, bidders offered to sell power at shockingly low tariffs, some as low as Rs.11.50. Early this month, under Batch-II, tariffs fell even lower. A French company, called Solairedirect, has offered to put up a 5 MW plant and sell power at Rs.7.49, setting a new benchmark. The average tariff moved from Rs.12 in the first batch to Rs.8.80 in the second. Solar power is getting within the reach of the common man. This was possible because due to slack demand from the economically-troubled Europe, prices of solar modules have been dropping exponentially. Module prices have fallen to less than a dollar a watt — a fifth of what they were in 2006. It is expected that prices will further fall, and solar power will sell for Rs.5 a unit in just a few years.


With projects coming up both under the National Solar Mission as well as under the schemes offered by various States, India's solar capacity will grow to at least 1,300 MW in 2013, from 186 MW now.


But the real story of solar is not in grid-connected plants — after all, what is a few thousand megawatts in the country's total installed capacity of 200,000 MW? The real story is in the mini grids in villages and rooftops in cities. The former will have tremendous social impact, as has been seen in the few hundred villages that have been provided lighting with solar power — something a savvy politician will not fail to take note of.


The flipside


While ‘solar power' has taken off smoothly, there are some concerns too. The global fall in module prices that helped bring down tariffs in India is also crippling the domestic manufacturing industry, thereby, defeating one of the key objectives of the solar mission. Companies such as Tata BP Solar, unable to compete against what appears to be distress sales by overseas manufacturers, particularly the Chinese, have had to shut down operations.


Thus, the solar industry is also delicately poised. Will the government impose a customs duty to protect and develop the local solar equipment industry? Or will it allow cheap imports in order to bring down costs and therefore tariffs? The coming budget will have an answer.


In addition, there is the issue of perfecting the grid so as to handle solar power. The problem with solar power is, if a cloud passes over, the generation will drop and when the sun shines again, it will pick up.


The grid will need to be smart enough to handle these vagaries, so that the entire solar programme does not trip over it.
-------------------------THANKS TO "THE HINDU" - AND TO RAMESH GARU............


--------------


THE OPPORTUNITY FOR THE EXISTING STOCKS TO RISE IS LIMITED BUT NOT RULED OUT.

So is the potential….

The growth story of India is intact but the markets under current situation are impatient to go up. The retail investors always try to find his/her place in the current trend. Where as the market makers build the portfolio. It is very difficult to identify a multi-bagger stock in a given scenarios or a given situation. I personally find it difficult to identify at a given moment but they emerge after a long period of continuous follow-up over the company performance and in relation to price. Most of the times, even after through study, minor changes in the policy decisions and the overall market conditions, tend to keep me waiting; normally they take more than 3-5 years.

Some classic examples like Moserbaer which has every good reason to get appreciation from the market now become an absolute over the change in the technology. The life to CDs has burnt, so is the un-build brand to it’s electronics like TV’s, LCD’s and ect. This put a check on the dreams of Deepak Puri to make his company on the global map. The future for the solar power is emerging but for now it is in the nascent stage. The company chalked out a strategy well in advance to the rest making the situation unviable for the operations, bleeding every day more than a crore at the net profit level.

The similar story is building with Suzlon. Like Moserbaer, it enjoyed the early advantage to Tulsi Tanti in the wind energy generation, founded in 1995. The ride in the stock market has given a boost to raise money from all-around with huge expansion plans. The same enthusiasm put the management to take early calls and hasty decisions in buying assets across the globe. The jubilance at one time has now become a heavy baggage on back. The need for reconstruction of the organization forced them to dilute their stake at the current prices. The FCCB conversion at current rupee value is making even more difficult to hold the price.

The story of SPIC is more pathetic. They are the oldest group in the South India, but failed to visualize the future. The rampant imports of Pencillin_G made the units sick in India. They could establish LAB with TN perochemicals but Reliance entry spoiled the growth and aspirations of Muthias. The story with series of failures dragged down to a level where SPIC could knock the doors of BIFR for survival. The feedstock issues for fertilizer units in India is common but for SPIC more painful as RIL KG basin out put is shrinking and the cost is escalating to SPIC. But the future looks good over a period of time as the management is pumping money and the GOI is also prioritizing the allocation of gas to fertilizer companies. 

MARKET OPERATION......

In continuation to my earlier posting, we got an article from Business Standard, pls read and try to extrapolate the market operation…..

Number of illiquid stocks rises sharply

Deepak Korgaonkar & Abhishek Vasudev / Mumbai/new Delhi December 13, 2011, 0:54 IST

Consequence of ongoing bear market, with low volume and lack of investor interest; exchanges advise caution, patience.Macroeconomic headwinds on the global and domestic front and concerns over policy reforms are some factors that have resulted in volatile and uncertain market conditions through 2011. This has prompted investors to look for alternative sources of investment and, at times, remain fence-sitters on the equity markets.

A fallout has been a sharp decline in trading volume at the bourses, resulting in a rise in the number of illiquid stocks. Average combined monthly turnover of foreign institutional investors and domestic institutional investors in cash markets declined by a third, to Rs 6,804 crore from Rs 10,370 crore a year before. The average cash market turnover on the National Stock Exchange and the Bombay Stock Exchange is at five-year and six-year lows, respectively, the data suggests.

A sharp fall in mid-cap and small-cap stocks, as compared to large-cap ones, led the increase in number of illiquid stocks. The benchmark Sensex has fallen 20 per cent since its November 2010 highs, but the smaller indices have fallen more. The BSE mid-cap index has fallen 34 per cent during the same time, while the BSE small-cap index has declined 44 per cent.

“Investor interest in the mid-cap and small-cap stocks is on a decline, as they prefer their large-cap peers in these uncertain times. As a result, the liquidity and volumes are falling in these spaces,” says Ravi Shenoy, AVP (mid-cap research), Motilal Oswal Securities.The classification exercise was jointly carried out by members from BSE, NSE and the Securities and Exchange Board of India (Sebi). One out of two actively traded stocks on the BSE is illiquid, according to a list disclosed by the exchange on its website. Out of 3,344 actively traded stocks, a total of 1,717 remained illiquid in November.

As many as 325 stocks were ascertained by the National Stock Exchange (NSE) as illiquid ones last month, as compared to 148 a year before, when the markets peaked. Of these, 173 stocks have market capitalisation of more than Rs 100 crore each.Aventis Pharma, Wyeth, Hind National Glass and Responsive Industries from the mid-cap and Sutlej Textiles, Suashish Diamonds, Warren Tea, Kanoria Chemicals, Borosil Glass Works and Bhansali Engineering Polymers from the small-cap index are among the illiquid stocks named by the exchanges. Some stocks such as Scooters India, Jolly Boards, Marathon Next Realty, Chettinad Cement and Exedy India are illiquid due to low free-float. The promoters hold 88 per cent stake each in these companies.

“Illiquid stocks tend to increase in a bear market. Liquidity will come in once the markets enter a bull phase. More, the impact cost on illiquid stocks is high, compared to liquid counterparts,” states Alex Mathew, head of research at Geojit BNP Paribas Securities.

LYING LOW
	Turnover*		Price on BSE in Rs		% change
	Nov 2010	Nov 2011	Nov 30, 2010	Dec 12, 2011
Sampada Chem	196.2	1.4	415.4	11.9	-97.1
Gandhinagar Hotels	159.6	0.9	229.3	17.0	-92.6
Bheema Cements	157.4	1.6	91.8	14.9	-83.8
Murli Ind	1472.6	1.5	86.4	19.3	-77.7
AK Capital Service	170.0	1.8	718.9	190.0	-73.6
Jumbo Bag	242.5	1.0	48.7	14.0	-71.4
Rossell India	178.4	2.8	118.2	34.6	-70.7
Parenteral Drugs	412.6	2.9	320.8	112.1	-65.1
IMFAL	106.3	2.6	620.8	230.1	-62.9
JK Agri Genetic	154.9	2.2	721.4	290.0	-59.8
*Average monthly turnover in Rs lakh Source: BS Research Bureau

Advice
Sebi has cautioned investors before investing in these stocks. “The trading members are advised to exercise additional due diligence while trading in these, either on own account or on behalf of their clients,” the stock exchanges said in a recent note to members.

“In the current market conditions, even large-cap stocks are finding it tough to attract investors. One can do nothing much about these stocks right now,” states Jagannadham Thunuguntla, strategist and head of research at SMC Global Securities. However, all is not lost. “Stocks like Aventis Pharma and Wyeth have not seen much activity recently. From a long-term perspective, these companies are on a stable financial platform and one can hold on to these scrips,” says Shenoy of Motilal Oswal Securities.

----------------------------------------------------
PLS build your portfolio with out fear and greed. Be systamatic, select with care. The future is for bright for India....

The cross roads??? or Consolidation!!!……

The markets are really in desperate conditions to move south wards. The current up move has really built some hope in the bulls failed to keep alive. But…there is always a chance to trap the bears now so that the Nifty could touch 5450 level with out any resistance. The tomorrow and next week market shall float above 4950 level.

The markets fail float will sink deeply .The Nifty will touch 4450 level with out any support. It will be like a free fall. In that case the bottoms are built only when M&M touch Rs 605 level. The Reliance will touch Rs640 level, even Rs590 level is not ruled out. The TataSteel will touch 320 level.

The market are bottomed out for a long-term investor.. because the quantity one would like to acquire will get honored once some deep-pocketed investor starts buying at this level. The mid cap and small cap acquisition has started now. There is a classic example: Take for example Cable Corporation of India. For the last two trading session, the counter is highly active. Earlier it used to trade 5000-8000 range in a day. Now on Thursday the counter traded 3.68 lakhs. The beauty part is, Friday also traded 3.5 lakhs. So what is surprise?. The real secret is up to 1.45pm, the quantity traded is ZERO, in the last two hours the quantity traded is 3.5 lakh that to the range H-21.5-21.0-L on Thursday and H-21.5- 20.90-L on Friday. So what is cooking???. One can say it is a stray example?. NO issue, but that is how things happen in stock market.

Now the upper side, the whole market gets the energy when RelInfra trades above 470 level. Don’t for get that it is one of the favoured scrip in many FIIs list. The other counter is Relcap which touched Rs 250-260 range in 7 years back now reached that level for a retest. There are some small and midcap scrips are available for through away price, can be acquired with out any doubt. There some turned around stories are making in the large caps for a secured multi-bagger returns. Now the market is strongly building the bottom for a big run in coming years. The daily or swing traders can see no big difference but those who can do a KOI-Keep On Investing, principle can start accumulating!!!!!.

FIRST TO COIN- ENA

I AM PROUD TO ANNOUNCE THAT I COINED ENA-EMOTIONAL NEURO ANALYSIS.


I AM WRITING MY SECOND YEAR EXAM IN PSYCHOLOGY. I PLAN TO DO ENA BASED STUDY FOR MY DOCTORATE.


IT IS ALSO TRUE THAT HAVING MASTER'S DEGREE IN PSYCHOLOGY, I SHALL EXCEL IN MARKET THAN OTHER PERSON CARRYING SIMILAR EXPERIENCE IN STOCK MARKET.


I HAVE TO INTEGRATE THE KNOWLEDGE TO APPLICATION WHILE I AM TAKING POSITIONS.

Diwali Dhamaka- stocks .....

LAST YEAR WAS A CLEAR WINNER FOR ME, AS MY BOTTOM FISHINNING APPROACH GAVE VERY DECENT MONEY.  BLOWING ONCE OWN TRUMPET is very common in stock market and I am doing the same to recapitulate the sweet memories….. 

People close to me who received my recommendations orally got benefited immensely as the rises in the stocks are very astonishing. The Diwali Dhamaka- stocks  are still available even in current grim scenario, despite global turmoil, rising inflation and lack of policy decisions favouring the markets... search, invest and reap the "Money from Markets"...

Normally I don’t offer stock specific recommendation in my blog but do consider reviewing the economic situation and overall Nifty direction. In my earlier publish, I suggested not to go short as the Nifty will take its’ up turn to 5280. Now yesterday it touched 5257 with 55 points premium.

I suggested my friends to buy Arvind at 52 and with a target of 93. It surpassed the level after touching 93 fell and bounced with vengeance to float at 110. It was my best pick and suggested to buy at 42 and the low is at 38. The stock rallied from 40 to 110 with in this year.

I also suggested to buy spic at 17-18 range and recommended after it crossed 21, went to 33 now languishing at 27 level. This stock has very good potential.

The best large cap stocks are all in the selling side. The best selling was Rel Infra at 1220-30 level came down to 400 level with out a threat.

The next best is the selling is Tata Motors identified at 1240 level to short but went to 1300 level and the journey started for the recommended target to touch 725. In the middle we did some “extra intelligent move and bought it and paid the penalty”.

The third best was SBIN when it was ruling at 3200 identified that it will touch 1900 level. The Bank Nifty fall was identified simultaneously. The other stock was TataSteel below 680 it will touch 420 level and the same was honoured.

The market was extremely bullish at 6280-6300 level and every body was talking about 6700-7000 level, suggested not to venture as there was a flaw in the stock movement. Then I was proved right carried till 4700 level. As a matter of fact it is only an intermediatary support. The rest of the time to time levels were published in my posts regularly.

The worst misfire was Moserbaer which was recommended at 68 level enjoyed some profits above 72-75 level but equally suggested to cut the exposure by 50% below 63 and exit below 58 level now came to 22-26 level without any respite. The other miss out was Suzlon, recommended to buy at 60 level but still bullish on the stock.

There are other short-term buys’ recommended are in M&M, recently when it was at 720 level recommended, even it came to 680 level also suggested to buy. The stock touched 820 and fell back to 770 levels. I once again recommended buying for a target of 860 level and the target achieved, yesterday 860, still got potential to touch 940 level. They are dozen penny stocks gave returns over 300-500 times in this season, especially last 6 months.

Anyway, the history is rosy and colorful to every market participant in dreams with"HAD IT BEEN SO"... It is very difficult to stick to the basic principle “sailing with the trend” to make decent money from the stock markets. The best way is simple but we make it complicated with our so called experience and extra intelligence, get trapped and book losses. Every participant can make money from the market, by studying the industry growth prospects and booking the profit when your call was reasonably honoured. The current market is in the consolidation period. People close to me know that I kept on saying and again saying for some more years it will be in consolidation phase. So select some out performing stocks and stick to the principle that 100% appreciation is very good in 6-9 months.

HAPPY DEWALI...

HAPPY DEEPAWALI TO READERS...

THE FESTIVAL OF LIGHTS SHALL BRING YOU PROSPERITY AND PEACE IN LIFE.

THE STOCKS WILL CHEER YOU NEVER BEFORE...

THE WAVE OF BULL RUN IS UNFOLDING.....

ENJOY PROSPERITY FROM STOCK MARKETS FROM MY RECOMMENDATIONS...

MARKET OPPORTUNITIES!!!!!!

24 OCT, 2011, 06.38AM IST, NIKHIL WALAVALKAR,ET BUREAU 

Diwali 2011: Don't trust PMS companies with your Diwali bonus

 

The festival of lights also means hard cash for some individuals. Sure, the Diwali bonus may not be that high this year because of the depressed economic scenario. Still, there is no denying that some people would see extra cash coming into their bank accounts. 

Of course, festival expenses may claim a part of it. But the wise folks would always look for ways to deploy the cash in avenues that would fetch them good returns. And portfolio management services (PMS), typically trying to corner the Diwali bonus, would tell you that the best way to deploy the money in the stock market is through them, especially at a time when stocks are available at attractive prices. 

Really? Does that mean you should bid adieu to your good old mutual fund distributor and opt for a new upmarket PMS manager? 

How they compare 

The similarity between an equity mutual fund and a portfolio management service is that both invest in stocks and related instruments on behalf of their clients or investors. 

But that is where the similarity ends. Take, for example, the minimum investment amount required for a mutual fund and a PMS scheme. You should have a minimum investment corpus of 5 lakh to get the service of a PMS. On the other hand, you can invest as little as a few thousand rupees in an equity mutual fund. Another big difference between a mutual fund and a portfolio management service is the nature of their holdings. You hold units in a mutual fund, whereas you hold securities in PMS. This may not look a big difference, but that is not the case. When a large investor redeems his mutual fund units, the fund manager is forced to sell the holdings, which may affect the net asset value (NAV) of the scheme adversely. 

"In a PMS, since all the accounts are independent, an investor's exit does not impact others adversely," says Jayant Pai, vice-president, Parag Parikh Financial Advisory Services. 

If you are a large investor, you can get a PMS offering customised to your needs. In fact, this is one important reason why many well-heeled prefer PMS over mutual funds. You can put conditions to the portfolio manager. For example, you can tell the manager that you don't want him to invest your money in tobacco and liquor manufacturing companies. 

"But do not expect customisation with 5 lakh investment. Each service provider will have its own threshold for offering customisation," says a portfolio manager registered with Sebi. 

The fee that is charged is another point of distinction. An equity mutual fund investor typically pays 2.5% of the money invested as fund management fee every year. However, most PMS providers give you the option to choose a fixed fee or a fixed and variable fee. You will pay around 2% of assets every quarter as fixed fee. The portfolio manager charges approximately 1% of assets per annum and further takes 10% to 25% of the profits taken above a hurdle rate of around 10% in the fixed and variable fee model. Moreover, brokerage and other transaction charges will also be charged to your account. In short, PMS is a costly affair. 

"Some portfolio managers also work as stock brokers and to earn higher brokerage income, churn the portfolio unnecessarily," says the portfolio manager quoted above. 

The investment styles and the way the portfolios are managed also differ in mutual funds and PMS. A portfolio manager has more freedom to create and protect wealth. A portfolio manager may, for example, sit on cash for a long period if he can't find suitable investment opportunities. But a fund manager may not do be able to do it for a prolonged period of time. 

Taxation 

Both PMS and equity mutual fund investors don't have to pay tax on long-term capital gains. If you hold on to mutual fund units for more than a year, you need not pay any tax on gains even though fund manager may have been executing short-term trades. But a portfolio manager keen on making short-term investments because of investment objective or to generate brokerage income may end up making higher short-term capital gains, resulting in high tax burden for investors. So, even if you are invested in PMS for years, you may end up paying higher tax than mutual fund investors. 

Also, tax authorities may treat a high-trading PMS account as a 'business and trading' activity and not 'investment' activity, making the source of income to be business and not investment, which would again push up the tax burden. 

Exit charges 

If you have landed in a wrong mutual fund scheme, you can leave it by paying a small exit load, mostly 1%. However, some institutional PMSs charge an exit fee of as high as 4% if you exit within a year. 

"Sometimes, PMS is marketed as third-party products and manufacturers have to introduce exit fees to retain clients as they incur high distribution costs," says Gajendra Kothari. 

The selection process 

Selecting a good performer in a mutual fund category is almost a child's play. You have a number of publications and various websites that offer information on mutual funds. Some independent websites even rank funds based on performance. 

However, things are not so easy when it comes to portfolio management services. There are no information aggregators to offer you all material information in one place. You may have to approach each of the service providers before you can decide on a scheme that would suit you. 

Lower level buying...

The markets are rejoiced with the bottom support at 4700 level despite of the sharp fall in the European markets in the early this weak. The regular readers might have noticed that the world markets are in bull grip except the Japan market-Nikkei. The best out performed and the recent barometer is the DAX. The Germany has given best returns to investors and it had even strong support at 5000 level. The DAX bounced from that level with vengeance and the bulls are confident of their returns over longer period of holding.

The US market though struggling to revive on the prospects of economy getting stimulated by the federal infusions. The banks few years back are worst scrips now quoting decent prices based on their asset quality. Now these banks even do better with the reviving of the real-estate and consumer demand. The down grade of Moody’s ratings is a caution but not necessarily an indication of crippling/sinking economy. The best barometer is the stock market. The S&P is still quoting close to 1180 still above the 1050 support level.

The Nifty is trading in the lower range of the 4700-5700 band, struggling to stay above 4930, has become a herculean task. The Nifty may touch 5280 level to trap both the short sellers at 4700 level and buyers above 5180 level is a likely scenario for NEXT 6 months. The Dollar appreciation (in my opinion a sponsored programme) helped the exporters to especially the soft ware service sector and to invite more FDI in to India, supported for the rise in the software stocks and likely to rise further. The Infy did not touch the 1900 level as anticipated when it started falling from 2700 level. Now in the changed economic environment, current move likely to touch 2700 level in future.

The Banking sector which was attracted all bad news in recent time likely to under performs and will see lower levels. The downgrade of SBI will add fuel to the fire. The temporary relief in the ICICI and Axis shall be used to short at higher level. The earning season starts from Infy to focus on scrip based performance in the bourses. The focused approach will provide opportunity to gain from the results based moves. The Govt is likely to announce following the lead provided by the UK stimulus move. The FMGC sector, the outperforming sector likely to join the draggers list due to the inflation based tightening of the liquidity. The future growth in the indices can be tracked once Nifty touches and bounces from 4400-4500 level. The commodity stocks will gain the buying support as the cycle likely to see a silver-lining. 

THE FUTURE IS GOOD....