My 2012 forecast of Indian market & Top Ten stock picks

 Wish you all a very happy and wealth generating new year -2012. 2011 will definitely be remembered as one of the  forgettables years  for the Global stock markets as far as investment returns are concerned. While the US markets closed virtually unchanged with respect to 2010 closing level(0.4% down), Europe market closed at 12% down (STOXX Europe 600 index).Indian market was the worst performer among the major markets with Sensex down by 25%. A combination of domestic factors like high inflation and interest...

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Time to invest and build long term portfolio

This is uncertain but interesting times when the markets and Rupee are touching new lows . Fear is the all  pervasive emotion hitting all the market parcticipants with investors and traders triping over each other to sell their assets . In these uncertain times , what should be our investing strategy? Should be stay away from the markets are should be stay put? Should we be buying or selling? Should we be aggressive or passive? Should we time the market? Could the market go down further? Its these times, when a short sighted and a...

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Would Greece default? Consequences for others including India

   Its incredible and wierd to think that a tiny economy like Greece with $310 Billion GDP(<0.5% of world GDP) could threaten to engulf and freeze the world financial markets with the prospect of Greek default on soverign debt payments. The experts are predicting that the damaging impact of such an event could be more catastrophic than Lehman bankruptcy due to the contagion effect it will unleash on european banks and PIGS nations like Italy and Spain. Why is the prospect of Greece default such...

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Developed world at the cusp of recession - Implications for Indian markets

  The first world consisting of developed nations  - US and west Europe - are at the cusp of recession again . This time not due to recklessness and greed of private sector (mortgage companies and investment banks) but due to profligacy and extravagence of the goverments. Unthinkables like developed and rich nation governments teethering at the edge of bankrupties are happening these days. These are interesting times for everybody as these changes herald the beginning of the new pecking order when the economic power of...

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Beginning of the end of American Economic Hegemony - implications for us in India

We are witnessing very interesting and extraordinary times these days when two of the un-thinkable and the un-imagined events happened . Both the events announced  the "Beginning of the End" of American Economic hegemony  The first event was related to US debt ceiling crisis which brought US Govt.to the brink of default recently on August 2. Just hours before the deadline of potential default , the congress finally put its stamp on increasing the US Govt. debt ceiling from $14.3 Trillion by $2.1 Trillion. However,...

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How to deploy principles of Value investing to pick winner stocks?

In my earlier article on July 10th named "How to take advantage of the biggest growth story of the 21st century-Indian economy”, I had talked about my "Hi-Five principles/framework" of value Investing which I use for picking great businesses (stocks) within Indian economy. This framework has been inspired by the principles followed by Value investment gurus like Warren, Benjamin Graham & Philip Fisher                                                  ...

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How to take advantage of the Biggest growth story of 21st century- Indian economy?

 In my earlier blog, I had talked about Indian economy being the biggest growth story of the 21st century. This is based on how the most reliable global institutions and global banks are forecasting Indian economy to power ahead of US and China economy by 2050(pl refer to the earlier blog on 25th June). As mentioned earlier, Indian economy would grow 4 times by 2020(in a decade),14 times by 2030(20 years) and 20 times by 2040(30 years) and so on. Potentially,you could grow your wealth by same or better muliples by investing...

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Value Investing - The art of taking advantage of market inefficiencies (with few examples)

 In my earlier blog,I have talked about markets not being so efficient in pricing the intrinsic value(true value) of the businesses/ companies, especially from a long term perspective . Value investing is all about taking advantage of these efficency gaps, whenever they present themselves to us . Lets now talk about why markets are not so efficient many times... Price volatility in the market is driven by multiple forces:- 1) Fundamentals volatility - Change in information regarding fundamentals of the business...

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Biggest growth story of the 21st century - Indian economy

Warren Buffet once said that he owes his remarkable sucess to a luck factor as he was born at the right place(USA) at the right time. The stupendous growth of US economy after world war II for the next 60 years was the biggest growth story of 20th century. Warren and lot of other legendary investors like Benjamin Graham, Philip Fisher, John Templeton were born at the right time in US and rode the US economy growth to create their wealth in billions of dollars. We , Indians are staring at the same kind of opportunity to create huge...

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How efficient is the Efficient market theory?

Efficient market theory is one of the key theories of modern finance. It challenges the concept of value investing.Widely taught in all Ivy league universities, it says that its impossible to beat markets consistently as markets  are super efficient in capturing all the relevant and latest information and events Therefore no living mortal can achieve better returns than market consistently. Many of the big investment gurus have scoffed at the efficiency of the market . Warren buffet once said that "if markets were so efficient as the...

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What is "Value Investing"

Value Investing : This is a investment philosophy , conceptualized by Benjamin Graham in 1949 in his book "Intelligent investor" . Benjamin Graham is known as the greatest investment guru of 20th century - mentor to legendary Warren Buffet. Its an investing style which demands investing in assets/stocks available at a price which offers substantial discount or "margin of safety"with respect to intrinsic value. Margin of safety: This concept has been considered as key cornerstone of value investing by big investors...

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