Indian Stocks Mania – May 31, 2009

Welcome to Indian Stocks Mania 4rd edition. It may seem that there are post that are not representative of the Indian Equity Markets. However, the concepts presented by authors can very well be applicable to Indian Investors.

This edition of the carnival received a total of 34 articles of which 18 have been included. Although I enjoyed reading all 34 articles, I did not include all of them because (a) they were outside the subject domain of this carnival; and (b) they would have not been relevant to the readers of this blog. Thank you to all of them who submitted their articles to this carnival.

While you are here on my blog, I encourage you to read few posts to get a feel of India’s Investing scene. For your ease of navigation, the popular posts are listed on side bar on left hand side. I am sure you will enjoy reading!

General Investing

Four Pillars presents 397 Ways To Save Money – Squawkfox Book Review posted at Quest For Four Pillars, saying, “397 Ways To Save Money – Book review on’s new release!”

Silicon Valley Blogger presents myFICO Score Watch: Equifax Credit Score Monitoring posted at The Digerati Life.

The Smarter Wallet presents Investing In Stocks and Bonds: Some Investment Basics posted at The Smarter Wallet.

Continue reading rest of this article…

My Secret Asset for Building Wealth

Year 1997, I was freshly minted engineering graduate, secured well paid job in my first month of final year, and thinking I was smarter than the rest. My final year was what we call “bindass, with damn care attitude”. I was young, naïve, and believed being above few hundred odds in my class is being equal to best. Reflecting back, I couldn’t have been more wrong.

This continued in my early years of investing which can be characterized as impatience, that extra energy to do something, and continuous urge to make an immediate impact or getting results. Like everybody else, I wanted to earn quick bucks and what better way than investing (or trading?) in stock market. You see, I was under the impression that making those few hundreds (or thousands) in small trades and repeating that often will increase my wealth. In other words, it will make me rich. How can that be wrong? After all, I am increasing my cash flow with small profits, isn’t it? Again, I couldn’t have been more wrong. Continue reading rest of this article…

Do Not Enter “The Channels” Otherwise….

moneymaze11Otherwise you will keep hitting resistances, or keeping rotating around the pivots, or you may slip on downtrends, or you may find it hard to climb in upwards, or you may find yourself squeezed into closing triangles. In the end, you just end up waiting for somebody to throw you out of it, only to fall with loud thud.

I buy stocks with an objective to hold it forever. This, for most people, is very difficult to grasp. I started investing about nine years ago (eight of which are being buy-and-hold investor). In these eight years, I can count on my fingers how many times I have sold a given stock. Conversely, I will have to check my records to determine how many times I have purchased a stock.

My friends and acquaintances keep telling me if you never sell a stock how you will make money. You need to buy low and sell high to make money and increase your wealth. I politely ask them only one question, “You have been buying low and selling high for xx number of years. What is your wealth?” Almost every time the voice starts stammering.

To some of them, who are close and good friends, I put a proposition to them. I tell them, since your “first investment” to “as of today”, tell me honestly what has been the real percentage appreciation to your “wealth” (chuckle!). If it is more than my “wealth” appreciation (again more chuckle!), then I will transfer my entire portfolio to you. If not, then vice-a-versa. What is surprising to me is many start mental calculations; hmmm, not including tax, and transaction, ignoring commissions, not considering my subscription fees, blah blah blah…. I end my conversation there itself. Beyond that it’s a waste of time because they do not understand the meaning of total return or wealth. Discussing these two aspects is a topic in itself so I will leave this for future post. Continue reading rest of this article…

Eight Companies Confident to Raise Dividends for Shareholders

There are quite a few companies that are confident in their cash flow and profitability that they are sharing increased dividends with their shareholders. I believe this shows management’s confidence in their business prospects going into next financial year. There are many companies, but for now, below is the shortlist of eight companies for this week.

  • Visaka Industries Ltd. [2009, Rs 4.00, +33%] [2008, Rs 3.00]
  • ADF Foods Ltd. [2009, Rs 1.50 +50%] [2008, Rs 1.00]
  • Tilak Nagar Industries. [2009, Rs 2.50, +19%] [2008, Rs 2.10]
  • Keltech Energies Ltd. [2009, Rs 2.50, +100%] [2008, Rs 0.00]
  • J. K. Paper Ltd. [2009, Rs 1.75, +16%] [2008, Rs 1.50]
  • Joyti Structures Ltd. [2009, Rs 0.90, +12%] [2008, Rs 0.80]
  • Triton Valves Ltd. [2009, Rs 15.00, +20%] [2008, Rs 12.50]
  • ICI India [2009, Rs 16.00, +100%] [2008 Rs 8.00]

Below is the shortlist of companies that continue to keep their dividends flat (i.e. they have neither increased nor decreased compared to last year).

  • Everest Kanto Cylinder Ltd. [2009, Rs 1.20, flat] [2008, Rs 1.20]
  • Voltamp Transformers Ltd. [2009, Rs 12.50, flat] [2008, Rs 12.50]
  • Blue Star Ltd. [2009, Rs 7.00, flat] [2008, Rs 7.00]
  • Ajanta Pharma. [2009, Rs 2.50, flat] [2008, Rs 2.50]
  • Chambal Fertilizer. [2009, Rs 1.80, flat] [2008, Rs 1.80]
  • Zuari Industries. [2009, Rs 3.00, flat] [2008, Rs 3.00]
  • Diamines and Chemicals Ltd. [2009, Rs 1.00, flat] [2008, Rs 1.00]

Below is the list of companies that reduced their dividends. As a long term dividend (or income) investor, I would be concerned of these dividend cutters.

  • MRO Tek Ltd. [2009, Rs 1.00, -66%], [2008, Rs 3.00]
  • Bank of Maharashtra Ltd. [2009, Rs 1.50, -25%] [2008, Rs 2.00]
  • Oriental Hotels Ltd. [2009, Rs 9.00, -14%] [2008, Rs 10.50]
  • MM Forgings Ltd. [2009, Rs 1.50, -70%] [2008, Rs 5.00]
  • Ashok Leyland Ltd. [2009, Rs 1.00, -33%] [2008, Rs 1.50]

I will continue to provide similar updates every week. My end goal is to prepare a list of stocks that consistently grow dividends. We will see how this makes progress.

Asian Paints: Top Diviend Stock To Invest

ap-logoAsian Paints is India’s largest and Asia’s third largest paint company. It is a vertically integrated paint company with in-house manufacturing facility. It’s product portfolio includes wall paints, metal paints, wood finishes, primers and others. The company’s market segments include decorative and industrial coating segment. The industrial coating segment consists of automotive coating, powder coating and protective coating. Besides Asian Paints, the group operates around the world through its subsidiaries Berger International, Apco Coatings, and SCIB Chemicals.

One notable aspect that I personally like about Asian Paints is that, it has been able to expand globally without taking on too much debt. It is able to support its expansion plan from its internal sources.

Trend Analysis

The whole reason for any business to exist is to generate sales revenue and make more profits. At a minimum, the parameters listed below should have continuously increasing trends. All the data below is based on last 8 years i.e. from 2000 to 2008. Continue reading rest of this article…

It’s All About Perspectives

moneygrabber1I like reading about what well know business leaders have to say. I like to understand their thought process; I like to understand their philosophy on which they have built their business empires. However, I do not get inspired by each and everybody. I do know why? It is just that sometime I strike a chord with certain leader’s thought process.

Sometime back, I came across few words of wisdom from Azim Premji (CEO Wipro Technologies). He narrated a small donkey story which goes like this (quoting directly):

One day a farmer’s donkey fell down into a well. The animal cried piteously for hours as the farmer tried to figure out what to do. Finally he decided the animal was old and the well needed to be covered up anyway; it just wasn’t worth it to retrieve the donkey. He invited all his neighbors to come over and help him. They all grabbed a shovel and begin to shovel dirt into the well. At first, the donkey realized what was happening and cried horribly. Then, to everyone’s amazement he became quiet.

A few shovel loads later, the farmer finally looked down the well and was astonished at what he saw. With every shovel of dirt that fell on his back, the donkey was doing some thing amazing. He would shake it off and take a step up. As the farmer’s neighbors continued to shovel dirt on top of the animal, he would shake it off and take a step up. Pretty soon, everyone was amazed as the donkey stepped up over the edge of the well and trotted off!

Life is going to shovel dirt on you, all kinds of dirt. The trick is to not to get bogged down by it.

We can get out of the deepest wells by not stopping. And by never giving up! Shake it off and take a step up.

It is no wonder that when everybody is crying horse on outsourcing, this company is happily shaking of dirt and stepping up. He is not only employing thousands of workers, but also helps companies in developed world reduce their operational expenses. You clap with two hands! Outsourcing exists because somebody wants it!

It’s all about one’s perception and how an individual looks at various aspects. A glass can be half empty or half full. While most of us look at shovel of dirt as an insult, this donkey looked at as a life line.

In the same way, I look at dividends as small building blocks of my portfolio. I will continue to shake off the tag of non glamorous investor and tag of pennywise pound foolish investor. I plan on accumulating my dividends (dirt to financial engineers!) and someday I will also trot off the financial pit. Like all stocks traded on an exchange are not good, similarly, all dividend paying companies are not good.

India Votes for Strong Man of Action

Once again prediction pundits, pollsters, permutations and combinations have been proven wrong. It happens umpteen number of times and still we continue to give media space to predictologists.

On a personal note, I had a secret wish and desire that Congress should come to power. Not because I have Congressi political lineage, but because of Dr. Manmohan Singh. I don’t want to waste my time expressing my disgust with all political parties and so called political leadership. It’s a waste of time. Now that secret wish has been fulfilled, I think I can say few words… Continue reading rest of this article…