Financial Wisdom – By Kalidas

Radical Solution for Credit Crisis from Kalidas

Confused Mind, Clear Answers (08-11)

with 169 comments

Ref: 08-11– for November 2008

                                       Confused Mind, Clear Answers

This column has become popular. The October is coming to an end. I am starting today “November  series”. The October series will be archived and made available from Download center.

 

The reason for separate column for each month is to help reader go down to the comment section very fast. The WordPress does not list latest comment on the top, so the reader have to scroll down to last comment before the comment box appears.

 

All enquiries that were not related to the concerned article may be posted here. Please follow the norms as under:

 

1.      Post maximum 2 questions at a time.

2.      Do not write by impulse. Write it in Notepad or editor, have them spell checked, be concise and precise. Use excellent freeware editor like Jarte 3.3 (Download link http://www.jarte.com/download.html) or your notepad. Jarte has hot connect feature. Read that to help you post without spelling error.  Also do not leave too many blank lines near or after the end. Write your signature, City, Country in single line.

3.      Ask here only those general questions that were not related to the article published.

4.      The article related questions may be posted under comments section of relevant article. They should not be posted here. They could be deleted and not answered at all.

5.      Avoid compliments and terms like Thanks, Sorry, Regret, Regards etc. or accolades.  Avoid unnecessary adjectives or adverbs.

6.      No reply will be posted to person signed as Guests.

7.      Post your questions for the current month. It will be closed 1 day before last date. I will answer below each question.

8.      Not that every question will be answered. If anything is replied or commented on earlier, it will not be replied to avoid duplication.

9.      Name the stock, NSE Symbol, Cost price, Quantity and Current Market Price (CMP), if you want specific guidance for specific situation. For normal opinion, you may give the name of the stock, symbol and the market.

10.  At month end, I propose to consolidate into html or PDF file for say, 08-010 and post it on download center for download. The link will be mentioned.

 

Thanks for your cooperation. Start posting your comments from now on.

 

Kalidas, Hong Kong

31-10-2008

Written by anilselarka

October 31, 2008 at 2:38 pm

169 Responses

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  1. Dear Sir,

    I would like to be guided on following stocks and it’s future prospective .

    I own them at below Quantity * Price . Should I invest more in them or sell out and switch to some other stocks.

    IndiaBulls 150@Rs. 175 (CMP – 110)
    IndiaBulls Security 200@Rs 70 (CMP – 25)
    Adhunik Metalinks 100@Rs. 90 (CMP – 42)
    GV Film 1000@Rs.2.5 (CMP – 1.41)
    JP Associate 50@ Rs. 100 (CMP – 66)
    Appolo Tyres 100@ Rs. 37 (CMP – 24)

    Regards
    Pinto, Ludhiana,INDIA

    Pinto

    October 31, 2008 at 4:17 pm

  2. Dear Kalidas ji,

    Looking to buy (staggered) the following Stock:

    Sector: Energy / Power
    Script: Suzlon
    Long Term: 28 months
    CMP: 45

    ========================================
    PE ratio 5.46 29/10/08
    EPS (Rs) 8.46 Mar, 08
    Sales (Rs crore) 1,470.59 Jun, 08
    Face Value (Rs) 2
    Net profit margin (%) 20.09 Mar, 08
    Last dividend (%) 50 20/05/08
    Return on average equity 20.39 Mar, 08
    ========================================

    Regards,
    Girish, Pune, INDIA
    (g.rateshwar@gmail.com)

    Girish

    October 31, 2008 at 8:29 pm

  3. Hi Kalidas,

    I’m stuck with Sesa Goa – 1000 shares @ 168. CMP – 80. How and when I could exit this stock with minimum losses.

    S. Muthu Raman, Chennai, India

    0811-005 Kalidas Replies to S Muthu Raman (Sunday, November 2, 2008 )
    Honestly, I have not followed this stock at all. There are some unknown factors like merger of present company with the holding company Sesa Goa Ltd. (SGL).

    1. Further, the main raw material -Coal- prices are on upswing (though they have come down lately, but may flare up from Mid Nov with rise in oil prices). Effect on environment is another sensitive issue.
    2. The finished ore is consumed by base metal manufacturers like SAIL, TATA STEEL, China mills etc which are capital intensive industry. With so much of credit squeeze, the demand for steel will substantially subside. The ore prices have dropped but they may go down all time low in distant future. Interest rates in India are very high, and world wide the rates may rise to unbelievable extent. Present rates are eyewash – no one is lending, so there are no transactions.
    3. The company as per Director report is owned by Vedanta Group UK (Sterlite group). They are shrewd manipulators of stock prices of group companies. With all major brokers gone, how are they going to manage upward prices, is dificult to say.

    Under the circumstances, although the PE is low, we do not know the company’s hidden liability to its parents. I also do not know whether 1:1 bonus split is reflected in stock prices and also in balance sheets.

    Normally, I do not invest in such ore companies. so, I do not advise on them. You will be better placed to refer to some other experts. Just keep above 3 points in your mind.

    Muthu Raman S

    October 31, 2008 at 10:09 pm

  4. Dear Sir,

    I would like to be guided on below stocks and it’s future prospective. I own them at below prices * quantity. Should I buy/hold more in these stock or switch to gems by you.

    Indiabulls Fin 200 @ Rs 175 (CMP- 110)
    Indiabulls Security 200 @ Rs 60 (CMP- 25)
    Adhunik Metalinks 100 @ Rs 98 (CMP- 41)
    GV Film 2000 @ Rs 2.54 (CMP- 1.47)
    JP Associate 300 @ Rs. 90 (CMP – 70)
    RIIL 50 @ Rs. 800 (CMP – 330)

    Regards
    Pinto , Ludhiana, INDIA

    pintopress

    October 31, 2008 at 11:46 pm

  5. Dear Sir,

    I have around 2 Lakhs in Mutual fund investment. Now I am losing around 1 Lakh. Should I redeem the Mutual fund and Invest in IFCI and Essar oil around 50,000 each?Pls advise…

    Regards,
    Rajmohan babu,
    Pointe-Noire, Congo

    Kalidas Replies to Rajmohan Babu (ref: 0810-043 of Saturday, November 1, 2008 )
    Yes, it will be faster to recover and also make profit on those counters.

    Rajmohan babu

    November 1, 2008 at 12:46 am

  6. Dear Sir,

    Is it prudent to switch from gold to silver. I hold 15 gm 24 carat gold which i want to convert to silver. They both have comparable prices as of now 15 gm gold (18000 approx) = 1 kg silver (18000 approx).

    Kalidas: Yes

    Regards,
    Vivek

    Vivek Dhariwal

    November 1, 2008 at 3:02 am

  7. Guru,
    Can we learn from you the framework of investing slowly over period of time where we can become 60% Kalidas. Your NASA is beautiful outcome of a creative mind, however if we can know what are the parameters to be watched and how it affects the dynamics of investing world, that would be ultimate.
    Regards,
    Venkat
    Chennai, India.

    Venkat

    November 1, 2008 at 12:29 pm

  8. Regarding Gold. As per your earlier mails, things wer to change 2 Fridays back, both have come and gone , but there has been only negative impact on gold. When can I see it shining (though Nov and Dec are yet to come). Also as seen above you are also advising an investor to switch from Gold to Silver – Why?

    Xavier
    UAE

    Kalidas replies: Both Gold and Silver are precious metals Since gold has very high value, the Central Banks keep their reserve only in Gold (to some extent in Silver too). Gold today is 70 times more expensive than silver.

    Silver is poor person’s gold. It is precious metal and also industrial metal, though of late its application in photography is reduced. In 1984, when the Gold prices rose to $800, silver prices rose to $ 50. The gold silver ratio came to 16 times ($800 for Gold/$50 for silver). Today, Gold is at $ 750 and Silver is $ 10 or the ratio has expanded to 75 against just 16 in 1984. Thus, the silver is more undervalued than Gold. However, the big funds and Central Banks use nowadays the Gold as the holding.

    While Gold is a turtle, the silver is a rabbit. Silver comes down or goes up by 20% in one single day, Gold does not. This is why Funds and Central Banks prefer Gold. Silver is best bought when it is at lowest. i am personally accumulating Silver bars from Po Sang Bank (Bank of China)/ Each bar is 0.999 and weigh 10 tael or 375 grams. Of late, there is no supply for over 2 years now.

    To me, the Silver prices could go up nearly 5 times minimum and 12 times maximum. There is huge short position of silver in the market and some of the largest banks in the world are reportedly short of silver in millions of ounces. Please note that if gold corrects 5%, silver could correct 10% . It is the most dangerous metal to play, but best to hold on long term basis. My average price of silver is not even $ 5.19 and sold some at $ 19 and above. I am still holding it for a long haul.

    Please note that if someone ask for preference of One to another, I give opinion based on which one will give maximum return. Also higher prospects also attract higher risk.

    Xavier

    November 1, 2008 at 2:48 pm

  9. Dear Sir,

    I would like to convey my sincere thanks to you because by following your advise in the month of January this year, I sold my entire portfolio worth 6 lac.

    I am of 40 years age. I am a government servant and earning 34000 right now which will shortly become 48000 due to sixth pay commission.

    I can save around 20000 per month. Please guide me about the strategy for regular investment in some really blue chip and rewarding companies. I can stay invested for longer period I. e 10 years

    Joshi

    0811-004 Kalidas Replies to Darshan Joshi ( Sunday, November 2, 2008)
    Mention your location, otherwise I will not reply in future.

    You may buy Gas related stocks which is the future. Buy up to Rs 12,000 (25% of expected income) every month in very good stocks like GAIL (Gas Authority of India Ltd.), Petronet, LIC Housing Finance (LICHF), some IFCI, Indraprashtha Gas in Delhi, RPL (Reliance Petroleum Ltd,) and some stocks like Essar Oil (small portion for employees, larger for businessmen who understand the risk)

    Until you have built in Rs 10 lakhs in bank deposits, do not invest too much into stocks, even if you are experienced stock investor. Build the savings first and then invest.

    Darshan

    November 2, 2008 at 2:20 am

  10. Kalidas,

    After reading your various articles on the potential of Gold as an asset and its projected return in long term, I am planning to buy the Gold. I am presently in USA. Can you please suggest where in USA I can buy gold? I have researched various web sites but zeroed in on http://www.monex.com wherein they are selling various gold coins. I am reproducing some of them with the prices as of 31 Oct 2008:
    Gold Vienna Philharmonics -USD 769.30
    Gold American Buffalo – USD 774.40
    Gold American Eagle – USD 778.50
    Gold Maple Leaf – USD 769.40
    Gold Krugerrand – USD 759.60
    The Gold is sold from 1 ounce to 10 ounce of 22/24 carat Gold coins/bars.
    Since I am a small investor I am planning to invest about $3000-$5000 in Gold. Please give your expert opinion on this and guide me if there are any other web sites where I can get Gold in USA. Since I will be returning back to India I also want to know if I need to pay any import duty on the Gold coins I purchase in USA.

    Thank you,
    Ravi, NJ, USA

    0811-003 Kalidas Replies to Ravi (Sunday, November 2, 2008 )
    Do not buy coins – they are expensive than raw metal, some time over 20% to 30%. When you try to sell these coins in India, for example, the silver trader will pay you based on metal content, rather that historical storage value for coins (oldest coin command more premium)

    I do not know about others. A few times, I bought from usually very reliable APMEX (American Precious Metal Exchange – Link is http://www.apmex.com/). I bought long time ago, so check everything before you buy. They deliver physical silver only within USA within 3 days under insured parcel.

    Otherwise, I buy locally in Hong Kong, but there is no longer dependable supply from Bank of China who used to be seller of 10 tael (375 grams) bar. I used to buy them every month depending upon my monthly income. I bought it for over 6 years, and have stopped, because my upper limit has reached.

    Ravi

    November 2, 2008 at 2:28 am

  11. On Gold/Silver: Sir, why do you think that gold/silver bull run will last 3 years(I assumed this, since you mentioned in previous post it giving handsome returns in 3 years). In 1971, gold was about 35$ and in 1981 it was at its peak at 800$. It lasted 10 years.

    If you think that the world will move to Gold/Silver standard from $ Standard, will it only take 3 years to fully reflect the paper money value to reflect in Gold/Silver Prices or the Bull run in Gold/Silver prices can last 10-15 years with 30%-50% returns compounded annually with silver giving better returns than gold (to fully account paper money into gold). My question may sound ridicules but my mind is really confused over this.

    2) What should be the upper price limit to buy silver. Shall I accumulate till 20$/ounce (as and when the money comes).

    3) I intend to keep 20% of my investments in Physical Silver. Is it the right strategy to maximize returns.

    Please advice,
    Vivek, Gurgaon, India

    0811-002 Kalidas Replies to Vivek(Sunday, November 2, 2008 )
    I never said that. Further, in any bull or bear market, only 2 or 3 years show steep rising or falling trend, rest of them are merely consolidation phase.

    The markets usually follow the pattern of 3,5,7, 12 and 20 years for various phases. Mostly first 3 phase are very important. Property market changes direction every 12 years. And commodity market changes critical directions every 20 years. These are my self imposed rules from experience, not found anywhere in the text book, and you need NOT follow me just because I told you so.

    While I would buy silver up to $18 internationally, currently I would buy up to $ 12 due to extreme volatility, and then halt, taking periodic profit on 50%, leaving 50% intact to be sold slowly once the silver goes above $31/Oz. Please note that there is ample supply of silver in India. in fact, major portion of world’s silver has accumulated in India.

    This is why Warren Buffet when he bought several hundred million on ounces of silver physically, could not succeed in material gains, because he never thought that Indians would come out to sell the silver in physical market that much. Indians are loyal to gold, not to silver. women folks in India are enamored by Gold, not silver.

    I have been buying silver like Recurring deposit account. Allocate about 3% of your monthly salary to buy silver now, reducing the % when the silver reaches $21. Then ride the rally – do not buy more – but liquidate slowly in the market.

    Vivek Dhariwal

    November 2, 2008 at 2:41 am

  12. ALKESH SHAH,AHMEDABAD.

    RESPECTED SIR,
    I AM SILENT READER OF YOUR POSTING.MY QUERY IS REGARDING OIL MARKETING COMPANY. RECENTLY YOU HAVE GIVEN CALL OF PURCHASE FOR HPCL & BPCL.BUT IN THE SAME FIELD IOC IS DOING BETTER THEN BOTH THE ABOVE COMPANY & IS PROFIT MAKING.WHY YOU HAVE NOT SUGGESTED IT?

    0811-009 Kalidas Replies to Alkesh Shah (Monday, November 3, 2008)
    I had in the past recommended buying all 3 majors – IOC, BPCL and HPCL by selling Reliance (RIL) when it was near 3400. However, after market crash, the cash has disappeared into thin air. Even Government of India will be under pressure in next 2 years to reduce its stake in State Owned Companies to reduce budget deficit.

    So, we go for cheaper cousin – HPCL – that also pays good dividend. in the event of sale of stake in oil majors, the Government will chose the smallest one , that is, HPCL. Now, this may not happen now – ma6y be 5 or 7 years down the road.

    The Government knows pretty well that the days of SENSEX 21000 glory are not going to come back for another 7 years. In fact, that was the golden time for the Government to reduce its stake in almost all major state owned enterprise, including banks, to raise over Rs 300,000 crores from the market and then reduce tax rates to benefit the corporate , individuals, and itself, because after tax cuts, the market would rally again, and the government holding though less in % terms will be same or even more in value due to rise in stock prices. What was given on one hand would return on the other. All budget deficits over the years would have disappeared with one master stroke.

    ALKESH SHAH

    November 3, 2008 at 8:50 am

  13. Dear Kalidas Sir,
    I am holding 3000 Sundram fastners purchased at an average price of Rs 27.40. Currently the share is traded at 20.4. What is your opinion? Can we continue to hold or can we switch to some other stocks.
    Thanks and regards
    Ravi, Chennai, India.

    0811-013 Kalidas Replies to Ravi (Monday, November 3, 2008 )
    I do not follow the stocks of companies having operation in South India for the reason of low liquidity. This company is good one with sales of over 1600 crores. But look at the volume – just 25000 or so. The face value is Rs 1, Auto industry is having difficult time, the stock not so cheap, upside potential is also not that great. A decent stable stock though – a good donkey. There is risk that this stock may have reverse split or 5 into 1 or 10 into 1 shares, then only it will move. Funds do not like the stock if they are below $ 5equivalent or Rs 250 at least. Any stock below $5 is considered “penny stocks” in USA and funds do not have charter to buy such stocks. Many Indian companies do not have this market knowledge.

    If you need stability, it is a good one but it is in dog house. Better switch to others.

    Ravi

    November 3, 2008 at 7:25 pm

  14. Respected Sir,
    I am silent reader of your posts,these are simply fantastic,sir I bought only one counter IFCI, 15000 shares @ average price 56, last year, these holding is with me till date, I have lost lot of money, sir advice me which stock to be taken to recover my money as soon as possible with Rs 5 lac available with me
    Thanking you
    Neeraj Delhi

    0811-016 Kalidas Replies to Neeraj (Tuesday, November 4, 2008)
    When did you buy it? I have mentioned before you should give me full details of your transaction so that I could give your reply based on tax effects also.

    Anyway, nothing wrong with the stock. See my recommendation. You may buy more during steep correction expected in next 20 days or so. Stay liquid for the time being. If you are courageous, sell part during current rally and try to buy them back when the stock drops. It may sound risky to you because of your cost. Otherwise, stay put and buy more when the stock corrects steeply.

    NEERAJ, Delhi

    November 3, 2008 at 11:41 pm

  15. Hi Kalidas,

    I have started following your messages just recently and I regret I didn’t on Jan this year.
    I bought 150 RPL @ 264 and its wandering around Rs.90. Should I average it in the next dip during
    the second and third week of this November(as you have predicted) or I should switch to some thing else which can average my losses.

    Thanks,

    Praveen, Chennai, India.

    0811-017 Kalidas Replies to Praveen (Tuesday, November 4, 2008)
    If I were you, I would swap the holding to Essar Oil and Essar Shipping for faster recovery. To me this stock is going down to Rs 60 or below even if the production starts. Buy on rumour Sell on facts.

    RPL today is one of the most expensive Refinery stocks. If you wish to hold, wait it to come down to Rs 50 or 60 when you can buy 3 times the current quantity. Remember, there are thousands like you sailing the same boat. the chance of major capital appreciation is remote except some outbursts in the name of Reliance or Ambani.

    Ambanis have played this stock to their convenience. When it was languishing at below 30, they merged with RIL to claim the tax benefits. When they knew that higher oil prices were against them, they spun it off to same company again, When the company does well, they will re-merge with the parent RIL as backward integration measures. In short, they act like opportunists and active asset trader rather than real owner.

    Praveen

    November 4, 2008 at 1:24 am

  16. Kalidasji,
    I have a simple question. I am small investor and have question on “how to treat each transaction as separate one”.

    eg – I have 1000 IFCI at average 50.

    I purchased 400 shares recently at Rs 16.75. Now it reaches at Rs 19.

    But I cant sell as transactions works as FIFO and first 400 shares priced Rs 50 will be sold and I will be in loss.

    Is there any way out ? other than maintaining two different accounts.

    Best regards,
    Prashant , Chennai INDIA

    0811-014 Kalidas Replies to Prashant (Tuesday, November 4, 2008)
    You are an individual, not a fund manager. Yes, from tax point of view, FIFO will apply, and in that case, you will be technically booking loss. Maintain two sets of spreadsheet – one from Tax point of view, that is, official using FIFO method and another personal one using LIFO method (Last In First Out)

    Normally what I do is the following:
    Before I buy anything, I try to sell the items with losses. For instance, if I were you, I would sell the IFCI 1000 @ 16.75 or about near the end of the day, so that there will not be much price difference when the stock opens next day.

    Next day, I buy entire 1400 shares of IFCI @16.75 or more or less.

    The idea is when I sell IFCI @ 16.75, against my original cost of Rs 50, I am booking a loss of Rs 33,250 from Tax point of view using FIFO method. So, later on, when I sell some other scrip, the gains are set off against booked losses. Supposing I bought and sold on short term basis other stock, say Essar shipping, booking a profit of Rs 33,250, and I had not sold IFCI, then I would be forced to pay tax on short term capital gain @ 30% or Rs 9,975

    If I had booked the loss of Rs 33,250 on IFCI earlier, I would not be subject to any tax, because ST gain is set off against ST Loss. And your position is same – you still hold 1400 shares of IFCI as before (1000 old one in new bottle and new one of 400). Even if you have bought entire 1400 at say Rs 1 higher, you lose Rs 1400 against tax gain of Rs 9975 or you save net Rs 8,575. If you could buy IFCI cheaper next day, the gain would have been higher.

    I never bother about Tax if I am making substantial gain. If I make Rs 100,000 and have to pay Rs 30,000 tax, I would pay it because my net gain is Rs 70,000. If the market severely, then my profitable situation would be worse than my post tax gain.

    Always rely on opportunity to sell, because most of the times, the opportunities slip away if not taken. Let the government make money, so long as you make money. Be large hearted. And when you get chance, always book the losses first near end of the day (never buy on same day for obvious tax reasons) and try to buy back only on following day early morning (do not wait) , so that your position remain same and you can safely gain on other stocks without paying any taxes.

    Prashant

    November 4, 2008 at 8:48 am

  17. Dear Kalidas Sir, Thanks for the guidance. You have given us a new dimension about $5 stock, which we are unheard off till now. Also when you addressed to Prasant, Chennai you have said short term tax at 30%, but it should have been 15% as of this financial year. Please correct me if i am wrong.
    Thanks and regards
    Ravi, Chennai, India

    Ravi

    November 4, 2008 at 12:15 pm

  18. Hi Kalidas sir,
    I am regular visitor for your blog and also regularly check the messages in the Moneycontrol Message Board.
    I have invested in stock market and made huge losses.
    Can you suggest me what to do with my holdings and how can I get the tax benefit on the losses i have incurred.
    my holdings:
    IFCI 175 shares @Rs. 114 Dec 2007
    Indiabulls finance 152 shares @Rs. 850 (from dec 2007 to march 2008)
    Reliance Communication 151 shares @Rs. 541 (from jan 2008 to Aug 2008)
    Subex 50 shares @ Rs. 413 on 4th Nov 2007.
    -Venkat

    Venkat Gurukrishna

    November 4, 2008 at 7:30 pm

  19. What is the future of Pharmaceutical Industries?

    M Anbarasu

    November 4, 2008 at 11:21 pm

  20. Hello Sir,
    I just wanted to know what’s initiating the stock market rally in US , you said that either something is cooking or really there is some good news.We haven’t heard any view about this rally from you. Do you think that we need to start investing or still we need stay on cash so that the markets correct at least 30% as you said.
    Please render your analysis on this

    Thanks& regards
    Manjunath,
    Bangalore

    0811-020 Kalidas Replies to Manjunath
    (Wednesday, November 5, 2008)
    A couple of rally due to expected election outcome in US is not indicative of trend. When the upward trend is established, then it could be called rally, otherwise it is just a blip. Nothing goes down in straight line. As a rule of thumb, out of 5 days, 3 days ahead, 2 days behind for two weeks in a row, may indicate some change of direction – but it must be read with other events too.

    When I gave the call to invest, it was right time, now that the market has already advanced, it may be a time to sell selctively in election led rally. Yes, there are some outstanding values where you can make the investment regardless of market status. There are some good bargains.

    Yes, you need not be 100% cash now, Scout the opportunities and invest some amount. Some counters like IFCI is good to invest. It is almost due for upward run for a while. In fact , super bull market investment risk is reduced considerably.

    We have to see the what the President elect may say. Fundamentally, nothing has changed except the Election. In fact the situation is worsening on financial sector.

    Manjunath

    November 5, 2008 at 12:07 am

  21. Sir,
    I want to know what is the influence of crude price on oil refinery stocks. Why RPL and Essar oil stocks fall when crude prices going down?

    Krishna

    November 5, 2008 at 11:18 am

  22. What does Obama wining means to markets?

    -Venkat
    Chennai

    Venkat

    November 5, 2008 at 12:54 pm

  23. Kalidas
    My persistent question is in relation to gold, since I have purchased some at $890. Now it’s been over a month and the new President has been chosen, will it start to move above 890. If yes then by when. I could hold it till last week of Dec at most and then I may to book losses. Your updated view will be most appreciated.
    Xavier
    UAE

    0811-022 Kalidas Replies to Xavier (Wednesday, November 5, 2008)
    You and every reader must know the following with reference to gold.

    Gold should not be traded like stocks on very short term basis by ordinary investors . It is highly sensitive politically charged metal that depends on variants like Dollar, Oil Prices, Inflation, Central Banks, manipulation by some authorities like FED, hedge funds, banks like JPMC etc.

    It is beyond the knowledge of ordinary investor to read so many events together. If at all one wants to trade gold on short term basis, he has to buy it only on dip, at least 10% to 15% down from recent high in very short time frame.

    Most of the governments want to keep interest rates low, for which they need lower inflation, for which they need low oil prices, for which they need strong dollars, for which they force down the commodity currencies like Aussie dollar, Can dollar, South African Rand and Russian Ruble, so that cost of gold in $ terms come down. Central banks hire hedge funds to short the gold so that their interest rates do not rise.

    These are very intricate and inter-connected matters which is beyond the grasp of even professionals, leave alone ordinary investors. The people never bought it when gold was consolidating at below $300 (my average price of gold buying never exceeded US$ 330)

    Gold looks good in name, looks very simple, and yet most difficult to trade the metal due to above complex matter. In next 15 days, the oil prices may hit new high. that will push up the price of gold. It may behave differently today due to post election rally.

    There is a saying that “Buy or Sell on rumour and reverse the trades on facts”

    I have authentic information that US does not have 8134 tons of gold as claimed. When that facts become known to the market, the gold prices will zoom beyond imagination. I can not tell you when this will happen, but it will happen surely.

    Under the circumsstances, I can not give you precise prediction at this point of time, because we can not have control the short term factors. However, if you are short term operator, you should trade the following manner:

    1. Never chase either buying or selling
    2. Keep two orders – one Sale order much beyond curent market price and another Buy order much below the current market price.
    3. Say, the gold is trading at $800, and gold is going down, Dow going up, dollar firming up, Oil going down etc. In that case, set the buying limit 4% to 5% lower. If the momentum takes the metal down that much, the price of $766 or 760 may be reached, and your order is filled. However, profit taking will push the market higher, and when you come to the office next day morning, you are alread in money.

    Similarly, if you want to sell in volatile gold market, and some bad news have come out relating to Dow, Dollar, Oil etc. set the selling price 5% or more than CMP. If the momentum goes forward, there is again possibility that your order will be filled and in profit taking the price may come down.

    This is imperfect art.

    Xavier

    November 5, 2008 at 2:22 pm

  24. Kalidasji,

    pl. let us know from which source Gold to be purchased in India, so that the reasonable price(including making charge) and valid certifications are met and the selling/buyback in the market is easier and faster.Also would like to know who purchases @ market price.

    Rang-jama, Bangalore,India

    0811-026 Kalidas Replies toRang Jama (Wednesday, November 5, 2008)
    Sorry no idea. Try MMTC (Government of India company who sell Gold and Silver in Bar form to Indian investors at international prices. But DO CHECK EVERY THING or some famous jeweler in your city.

    Local jewelers do not issue any certification – they may at the most make a marking of purity or write down on the invoice if you take it (Take the official invoice, even if you have to pay 2% Sales Tax) .

    You have to take them to Dharam Kanta (a voluntary service in Mumbai where they test the purity and advise you the contents – they too do not issue any certificate.

    It is amazing that the world’s largest private holder of gold does not have elementary mechanism in place to help investors to invest in gold comfortably.). Contact your city’s Bullion Association – they might be of some help.
    If you can not find the source, just forget it.

    There are no making charges in the bars or lagdi, as they are called. They are 24K or 9999 purity

    Rang-Jama

    November 5, 2008 at 5:16 pm

  25. Dear Sir,
    Quote”(ref: 0810-010 Wednesday, October 22, 2008)” unquote.
    You intend to write an article on the fundamentals of picking up a good stock. Just wanted to clarify whether “ACTION TIME TO BUY the Stocks” is the article you were mentioning??
    Secondly, in your NASA, you advised to “Sell High PE stocks, banking stocks in rally. SBI, BOI, BOB, HDFC Bank expensive and Reduce bank stocks progressively”. My understanding is, as the interest rate is lowered the margin may reduce but bank will attract more customers for loans, so the stocks should go up in value?? Analyst are bullish on bank stocks especially BOI since the results are good.
    Your explanation will help to understand better. What is the right PE to buy banking stocks??
    Shubguru(MMB)
    Singapore

    0811-028 Kalidas Replies to Shubguru (MMB) (Thursday, November 6, 2008)
    I maintain my position. The banking stocks are expensive. Difference of 1% is not going to attract more customers. In fact, banks are reluctant to lend due to problems in stock market, stock financing, auto financing,. home mortgage etc. When the interest rates go down, the margin contracts, so profitability goes down. Bad loans are raising ugly head – you will know 6 months down the road. Do not read past or present figures – they reflect the position of 3 to 6 months before the report date. In stock market, you look forward what could be rather than what it is. I was a banker for 19 years, and know Indian banks too well. Most analysts are bookish; they are same lot who were predicting SENSEX to reach 30,000 to 60,000. They look at the chart and the charts do not smell.

    shubguru(MMB)

    November 6, 2008 at 12:03 am

  26. Respected Sir,
    I am planning to invest Rs 5 Lac to recover my money which I have already lost in this market. detail of my planning is given below-
    10000 IFCI @ 15-16 ( Expected buying price)
    1000 Essar Shipping @ 30-32
    800 Essar Oil @ 55-60
    500 GE Shipping @ 140-150
    500 LIC Housing Fin @ 160-170
    1000 Adlabs Film @ 125-135
    Sir, this is my planning to buy all stocks as come on my expected price, and I can hold it for one year, sir suggest me, should I make any changes in my planning in respect expected buying price or quantity
    Regards
    Neeraj

    0811-029 Kalidas Replies to Neeraj (Thursday, November 6, 2008)
    You are trying to buy at year’s low – and there are thousands like you who are bottom fishers. Not impossible, but the market has to correct by another 3000 points. Try your luck. They are good prices, but I am sure, when the crash comes, you will lower the target prices. You will never be able to buy the stock if you try to do bottom fishing.

    NEERAJ, Delhi

    November 6, 2008 at 12:05 am

  27. Kalidasji,

    If gold(24 carat bar) bought in Dubai by this weekend, What price range one can buy and what sort of certification should be looked for? Hope this bar can be sold at market rate with jewellers in India.

    Rang-jama
    Bangalore, India

    Rang-Jama

    November 6, 2008 at 1:40 am

  28. Hi Kalidas,
    I am from Belgium. I just wanted to pay respect for your effort of sharing knowledge. It is a delight to see such insightful details here. Keep it up.

    Also, let us all know how to do more informed investments.

    Raj,
    Gent

    Rajsoman

    November 6, 2008 at 4:23 am

  29. Hello,
    Can you please suggest on this stock – IVRCL. Looks like it doing pretty good and have a very strong order book as per a latest article on MC. It has the PE: 7.15,
    EPS (TTM): 17.82 and CMP @ 127.25. Does is makes sense to buy it at these levels with 52 week low being at 57. Please suggest.

    Suman,
    Zurich.

    0811-030 Kalidas Replies to Suman (Thursday, November 6, 2008)
    I have not followed this stock, but just had a glance at it. Looks like a good company, too much diversified, but in variety of projects. Good history too. The stock appears to be not cheap nor expensive, because companies like this command low P/E multiples of about 8 or about.

    It will be a good buy in steep market correction. In short term, it may not rise much due to liquidity freeze, which is the main enemy of the business of this company. Place it on your radar and hit it when corrects on its own. I would not read much for the order book because such capital intensive projects are the first victim of recession.

    Please note that this is a Bull Market stock, outperforms index in bull time and underperform in bear days. This is why this stock is best bought when the market comes down 2 or 3 days in a row

    Suman

    November 6, 2008 at 3:42 pm

  30. Dear Kalidasji,

    I have 350 TCS share at Rs.800, Please suggest when Should I sell them and swap to Essar Oils.

    Sarit
    Mumbai

    0811-032 Kalidas Replies to Sarit (Thursday, November 6, 2008)
    TCS is solid company with no debt and huge sales and profits. But the number of shares are too many. It did not go up as much as it should. Further, both Tata Steel and Tata Motors are reeling under debt and irrational acquisition of Corus and Jaguar. Tata house itself is reportedly selling these shares to meet the Corus related obligation.

    Your losses are 40% nearly. You have to shift to the counter where your gain in short time could be 80% to 120% minimum. If you want to remain in software industry, then there is no other better scrip than what you hold. what you can do is to sell 70% when it goes higher and buy back when it corrects. Go on doing exercise.

    Alternatively, you may SELL the TCS (497) 300 shrs and buy Essar Oil (Rs 80) 1900 shares. If Essar goes to Rs 112, your capital is covered. Anything above is your profit. SELL another 50 shares of TCS and switch to IFCI 1500 @ 18 or below. When IFCI reaches 25, your losses on TCS equivalent is recovered. Anything above is your profit

    Sarit

    November 6, 2008 at 6:40 pm

  31. Dear Kalidasji,

    I am holding 800 India bulls Fin Serv share at Rs.275, Please suggest when Should I sell them and swap to some other counter.
    Rahul
    Haridwar,INDIA

    0811-033 Kalidas Replies to Rahul (Thursday, November 6, 2008)
    Brokers’ stocks are Bull Market’s stocks. In fact, one should NEVER buy broker’s stocks. About 10 months ago, I told everyone on MMB to avoid Brokers’ and Insurance company’s stocks. and you are seeing the result today. – All top brokers like Bear Stearns, Merrill Lynch, Lehman Brothers have failed and Morgan Stanley and Goldman Sachs are severely bruised. The brokers usually manipulates their own stocks by spreading rumours, big talks. When people feel strongly to buy the Broker’s stocks, it is usually first warning sign of end of the bull market run. This is why this broker’s name is India Bulls.

    I would sell India Bulls fin Serv. who have only paper assets; and switch to hard assets owners like Essar Oil, Essar Shipping, IFCI, RNRL (relatively safer ones) and DISH TV, Arvind Mills, SpiceJet, IB Retails (of same India Bulls group) with relatively lower safety and King Fisher Airlines (more risky, but equally more rewarding).

    I do not know your risk taking appetites, If you are not businessman, but a salary earners, better go for more safety like Essar Oil followed by Essar Shipping. (although some people might give very unfavourable opinion on Ruia family)

    Rahul

    November 6, 2008 at 8:46 pm

  32. Sir, I would like to have your views on the reported (news item) increasing default on credit cards in USA (if not possible here, atleast under NASA).

    Kalidas: No need. Too general topics are not discussed. I discuss only those topics which have bearing on stock prices where people invest and make or lose money. Credit card default is normal feature in USA for several years – such things are not prevalent in India at least at the moment.

    sekar,Delhi,India

    November 6, 2008 at 10:12 pm

  33. Sir,

    Regarding your reply (0811-014 Kalidas Replies to Prashant), i have a query. You seem to be calculating ST profit /loss on a daily basis. I dont understand why we need to calculate net ST profit on a daily basis, when one needs to account for ST profit /loss only at the end of financial year.

    Can’t one keep on making ST profit all through the year, and book ST losses (by the methods you have mentioned) towards the end of financial year?

    Please clarify.

    Thanks
    Prabu
    Chennai, India

    Kalidas: It is left to the individual. I normally book largest losses first, and buy back same counter on following day. If there are some major profits, they would not attract taxes. there are no set rules for booking ST profits or losses.

    Prabu

    November 7, 2008 at 12:22 am

  34. Kalidas ji,

    I have already swapped my IndiaBulls, ICICI Bank, SBI, Reliance Industrial InfraStructure, RIL shares to Essar Shipping/Essar Oil/IFCI/RNRL/Guj Ambuja.

    My holding average of above stocks is:
    350 RNRL @ 86/-
    300 Essar shipping @ 39/-
    300 Essar Oil @ 84/-
    2000 IFCI @ 48/-
    300 Petronet LNG @ 58/-
    100 Guj Ambuja @ 58/-

    I sold off 50% of my GSPL stake yesterday and will switch it to PetroNet LNG in coming days.

    After your buy call , I had bought LIC Housing at 199 but sold at 225 yesterday.
    Bought Royal Orchid at 42 and sold at 46 yesterday.
    Bought Dish TV at 13 and sold at 16 yesterday

    I have following stocks now:
    Tata Investment 50@550 CMP 280/-
    L&T 90&1700 CMP 860/-
    Reliance InfraStucture (Previously Reliance Energy) 50@500 CMP 540/-

    Can you please suggest some swaps on how I can best make use of what is left of my portfolio.

    Thanks,
    Alex
    NY

    Alex

    November 7, 2008 at 12:35 am

  35. I found following companies under Oil Drilling/Exploration section on Money Control while I was looking for a list of Oil producer companies. I have also listed their 52 week high and CMP.

    Company Name 52H/52L/CMP
    ————————————
    Alphageo 1078/135/142
    Cairn India 342/88/136
    Dolphin Offshor 363/105/128
    Selan Explore 329/109/161
    Shiv Vani Oil 739/252/276
    GAIL 555/165/202
    Hind Oil Explor 176/43/72
    Aban Offshore 5555/610/966
    Jindal Drilling 2176/326/332
    Reliance Natura 249/36/49
    ONGC 1356/538/743
    Asian Oilfield 446/39/43
    Interlink Petro 45/9/13

    Do you think any of above can be a good pick in coming weeks?

    Alex
    New York

    0811-034 Kalidas Replies to Alex (Friday, November 7, 2008)
    Often investors make mistakes in defining Explorer, Producer, Refiner and Retailer. For them everything is Oil, and this is why they lose money by taking wrong position at wrong time.

    Exploration is extremely high risk venture. Even I would not touch it with 70 feet pole. There is always hype on this kind of companies. Look at Jindal Drilling – stock reached 2176 and low was 326, not at 332, losing over 90%. Just because there is drilling name does not mean they are producers.

    There are very few genuine producers like ONGC and followed by Essar Oil, RIL (to some extent) and Videocon Industries ( to some extent). Except for ONGC, there is no real producer of substantial size.

    Do not go for Explorer. They will dig 200 wells and get oil only in one. These companies are always running around with begging bowl. Simply ignore them for investment of any kind. Further, explorers need deep pocket bankers or financiers.

    Then comes Refiners like HPCL, BPCL, IOC, MRPL, RPL, Essar Oil, Bongaigaon Refinery etc. They are good when the oil prices are down. The major drawback for these refiners are controlled prices of final product. This is why SOE refineries are under performing.

    Then comes retailers , the Petrol Pump or Gas Station owners. Here too controlled price play havoc. This is why almost all gas stations of RIL have been closed down.

    I never focus on Explorers or ultimate Retailers. I just focus in middle two stages – Production and Refining.

    I can not study all the stocks you have listed. I follow only large ones – smaller players can lose in highly competitive environment. Keep a proper mix – Producer and Refiners (State owned and Privately owned like RPL and Essar Oil.

    My view is that in next 10 days, oil will rise, benefiting ONGC. Buy them now in anticipation of rise in oil prices. Around 20 Nov sell producers stocks and buy refiners’ stocks. If you disagree on my view, reverse the strategy.

    I am sorry I can not guide you on individual stocks. It will take 3 full days to work on them and I do not have that luxury.

    Alex

    November 7, 2008 at 1:57 am

  36. Dear sir,
    I am silent reader of your post.just now I started to invest in gold & share market. I am small businessmen having steel shop. I have 3 tonnes of copper wire scrap with average price of 370 now it`s price is gone to 250. at 270 I have sold 500kg & shifted to gold at 728$ but though,I am in big loss. please suggest your views on copper. what should I do to recover loss.
    thank you.

    0811-038 Kalidas Replies to Kalpesh (Friday, November 7, 2008)
    Well, you are asking for my opinion on your physical business. This is not my regular line. Here I too will treat it like stocks (except swaps) . Same rules will apply. I take the following view:

    Copper will shine again. With so many power generators being set up, the distribution will require copper in very large quantity. further, the copper has come down only due to paper trades and artificial act of popping up of dollar. The oil prices are set to rise in next 10 days (and fall later again quickly after roll over) that will push up all commodity prices like Copper.

    Now this is a question of view – I may be right or could be wrong. if you disagree on my views, you have to modify your approach and ignore my views.

    1. Do not count average cost. Treat each purchase as separate deal
    2. Remain the market all the time. If some one ask for supply when the prices rise, give him even if it is below your cost.
    3. As soon as the price corrects, buy back what you have sold. Again treat it like a separate deal and if that lot goes higher, sell it again. DO NOT rely on average cost.
    4. Even if some lots were acquired at higher prices, you should trade that inventory up to 50% by following above methods, so that for every deal you may earn something. Sometime, it may not work – but do not worry – If you do this 5 times, and 1 or 2 times does not work, still the benefit is you are in the market.

    If you do not sell anything, only because you acquired metal at high price, the agents or brokers will spread the rumour that you are trapped, and you may be in problem. That will create bad image problem for you.

    If you go on doing the trades at market prices, never telling anyone what is your cost, you will remain more in the market. Never ever tell your buyers or agents what is your cost. Just tell them, I need this price without elaborating. Here is the example:

    Say, current market price of copper is Rs 250
    Step-1: Suppose it goes higher, say 310 . Sell 200 Kgs. If it goes still higher by another 5%, sell another 300 kg
    Step -2: If the copper falls after the sale to say, Rs 285 and does not go down further, buy back what you sold
    Step -3: If the metal goes higher, sell it again.

    Always allow metal to go higher by 10% to 15% at least in last 7 days before you sell. If the pace of rise is slow, then it may be a trend, so you hold back. You sell only if there is sudden break out of price within 1 or 2 days. There is always correction later. This way, you will be able to maintain existing inventory and also take advantage of price movement. If you sit like a duck, nothing will happen, market rumor could go against you, and your trades and reputation may be affected.

    By remaining in the market, you will quash those bad rumors. Make broker as your friend, not enemy. They are the people who spread the rumours. Give them slightly higher conditional commission while selling, (that is if you get me this price, I pay you 0.25%, if you get me this price, I will pay you 0.3% or so) so that they display more loyalty to you.

    Please note this very carefully before you implement above methods, Consult others tool. This forum deals with the stock market, not physical trades in commodities.

    Left to myself, I will accumulate copper on major dips and hold it in different godown without anyone knowing. When the price rise, I will bring it to my regular godown and then sell from there. I would never disclose location of other godowns. Under the present market conditions and growth of power and distribution sector in India, copper is the metal that will be more valuable than Aluminum or steel or even Gold.

    Do not switch from Copper to Gold,. If you do, you are exiting from 50% cheaper metal (copper) to 150% costly metal (Gold). Copper is your trade, so you know it very well. it is an investment for you. Gold is not your regular trade – so by indulging into gold, you will be speculating. Let the regular metal – Copper – make money for you in regular trades. Trust your business, not others’.

    kalpesh latur maharashtra india

    November 7, 2008 at 2:01 am

  37. Once you commented that “Right actions are not taken now then credit crisis will spread entire US economy.” your words are becoming true.First credit crisis was limited to only Finance. Then it spread to Auto sector now Retail sector is also heavily affected in this mess.
    1.Finance
    2.Auto
    (GM’s `Time Is Very Short’ for U.S. Aid, Altman Says, Nov. 5 (Bloomberg) — General Motors Corp., hammered by the worst auto market in 25 years)
    now
    3.Retail
    (NEW YORK (AP) — The nation’s retailers saw their sales plummet last month to the weakest October level since at least 1969, as the financial crisis and mounting layoffs left shoppers too scared to shop.)

    They have not seen so worst market since many years.
    Everything is going down in US. Stocks, Commodity, Gold , Silver etc.
    I Think entire US economy is going to collapse…
    If all these things are happening so fast then Why US is not officially declaring “Recession” ?? And what will be effect of this declaration on US and Indian Stock Markets ?????
    Jayesh Ghatkopar Mumbai

    jayesh

    November 7, 2008 at 3:27 am

  38. Sir,

    I have 100 HDIL bought at @ 883 and I am sitting in huge loss. I can wait for a long period but would it be good idea to swap this with some other stock? If so, could you please suggest me which one can I buy to recover this loss?

    Thank You
    Nandhu
    Milpitas, California
    USA

    0811-036 Kalidas Replies to Nandhu (Friday, November 7, 2008)
    Normally, One should cut his losses when he loses 9% so that balance capital saved is 91. It is easy to make 10% (9 out of 91) than making 80 out of 20 or 400% (when the stock slumps to 20 from 100 losing 80). I have not studied your stock (you should mention Name + Symbol + your Cost Price + current market price CMP + Quantity) to help me give my opinion. I need to know what will be the funds at disposal when sold at current market price.

    Wait for some more time before I could respond.

    Nandhu

    November 7, 2008 at 6:55 am

  39. Dear Kalidas sir, You have mentioned in NASA that Bank of England have cut the interest rates and soon RBI may follow. In that case is it a wise decision to invest in debt mutual fund.
    Thanks and regards
    Ravi, Chennai, India

    0811-035 Kalidas Replies to Ravi (Friday, November 7, 2008)
    This is no time to go for any mutual fund. All funds are under severe redemption pressure, and therefore, they will become very illiquid. When you have thousands of stocks in bargain basement, when you can manage your own money, why do you think of entrusting your money to some one for management?

    4P = Pen, Patni (wife), Paisa and Property, should never be given to someone for management. If it is your job, do it yourself. This is my old man’s view.

    Ravi

    November 7, 2008 at 9:06 am

  40. Kalidasji,

    Have invested recently(last week) in GSPL QTY 2000 @ 36 and now cmp 29. Keeping in view the recent happenings in GSPL (proposed 30% contribution to Gujarat state welfare), shall I wait for this stock to move up and then swap with Petronet/similar stock in the same sector, or swap it now even booking loss in GSPL? Your advice will be appreciated.

    Thanks in advance

    Rang-jama, Bangalore, India

    0811-040 Kalidas Replies to Rang Jama (Friday, November 7, 2008)
    Due to controversy regarding 30% tax, it is advisable to sell and not to look back any Gujarat government related stock, howsoever attractive they may become. I am also withdrawing my suggestion by specifically marking the change today.

    You may sell it at any time you wish. Other swaps have been informed earlier. Take your pick. Petronet is good choice but trading at higher than GSPL. Better try your luck with mid teen stocks like IFCI, Recovering 20% is easy with that stock. Also Dish TV, Spice Jet, Arvind Mill, TTML are relatively more volatile and have moderate risk. Stick to Petronet otherwise.

    Rang-Jama

    November 7, 2008 at 4:57 pm

  41. After doing some enquiries with HDFC,ICICI,IOB and Reliance money, for source of purchase of gold bar(24 carat) in India, have found IOB has the cheapest rate for the Gold bar with marking of IOB for purity but not the Swiss mark.It seems easy selling them for profit for individuals as per the international rates in India, is a big problem, since no bank has got the facility of buyback of the Gold bar and the local jewelers takes us for a ride while buying it from us, they know there is no bank who will buy from us. They pay only 3% more on the buying rate(remember to be negotiated) of 22 carat Gold, whereas 24 carat Gold has 8.4% more Gold than 22 carat. Do U think individual customer can gain profit as per the international prices in India?

    These are the findings of mine about gold purchase and selling in India. If there is any other better way, pl. let me know.

    Thanks in advance.

    Rang-Jama
    Bangalore, India

    0811-039 Kalidas Replies to Rang -Jama(Friday, November 7,2008)
    I have no idea. I had sold 24K gold to an Indian jeweler in Ghatkopar, Mumbai at international prices without any kasar. Of course, I also bought some other jewelry from there. I had Bank of China marked lagdi of 1 tael = 37.5 grams which was fully paid at international rates.

    In dealing with banks, you have to be careful how do they quote you rates. For instance, HDFC charged almost 10% more treating 1 Ounce = 28.35 grams whereas 1 Troy Ounce = 31.10 grams (up to 2 decimals). The gold prices are quoted in terms of Troy Ounce.

    Check how IOB charges you per ounce and how many grams do they consider per ounce, If they are quoting 1 ounce rate of 28.35 grams, then perhaps they are overcharging by between 8 to 10%. HDFC according to one reader charges gold prices based on 1 ounce = 28.35 grams

    If you can not find suitable place to buy or sell the gold, forget this investment. No point of dwelling on this point. Before buying, always check whether it is saleable.

    Rang-Jama

    November 7, 2008 at 5:25 pm

  42. Kalidasji,

    Since 2 days I am following your views on this web site. Can you please advise me whether to keep or not my short positions of Essaroil@83 and rpl@85 (2lots each). I was expected bear market for coming days so shorted. earlier I lost on same stocks in futures by buying @ 160 (both) and square up below 100rs. Lost all my margin money and also 100rpl, 1000 power grid to pump margin money. Kindly advise me

    With Thanks,
    Krishna, Andhra Pradesh

    0811-041 Kalidas Replies to Krishna (Friday, November 7, 2008)
    You came to a wrong place. I am not short term or F&O trader. I do not know well how your F&O market operates nor do I know their settlement mechanism. I merely advise long term potential of some stocks and also direction of the market based on fundamentals, I never read charts nor follow their patterns.

    Krishna

    November 7, 2008 at 7:23 pm

  43. Dear Kalidas Sir, Thanks for the kind advise. Your experience and sharing the knowledge with the people is simply great. Your writings are bible to people who are dealing in Financial markets. Please accept my words as this purely from heart.
    Thanks and regards
    Ravi, Chennai, India

    Ravi

    November 7, 2008 at 7:41 pm

  44. Dear Sir,
    I’m an avid reader of ur posts from MMB. Have been following ur write-ups and watching ur predictions hold true throughout the past months.Hats off to you Sir.
    Sir, considering that the US of A is already in recession, wud like to know how much will the world be affected,especially India? And what will be the duration for this crisis,assuming its a never happened before phenomenon. Also which r the sectors that will not be affected in India in a crisis like this?
    Thanx n regards,
    Niki

    0811-043 Kalidas Replies to Niki (Saturday, November 8, 2008)
    In last 50 years, the growth was taking place in war torn western world. WW I and II were the major reasons for their growth. The war destroyed everything in their world. They created world based on credit, debt and technology. It worked well for quite long, but then they gloated over the success and made several errors in financial management.

    India was built on savings. western world was based on “Spend first, save later” whereas in Asia (India, Pakistan, Bangladesh, Sri Lanka and other South Asian countries) the principle was “Save First, Spend Later” that caused very slow growth , but consistent one.

    Earlier, the growth was dependent on Exports. US was exporting its technology to the world, China, so did UK and Germany and France. Their population was very small to depend on domestic consumption based growth.

    For the last 5 years, though not officially recognized, the growth is only in those countries where the domestic consumption is in demand. Where number of people are more, will there be consumption and growth. India and China will start depending on their own people for growth. They do not need USA. The knowledge too is not anyone’s forte now. Education has spread so much that no one can claim monopoly on knowledge.

    The money has disappeared during this crisis. It will take 7 years minimum for western world to come out of the severest form of recession. India will not have recession – may be in some area where exports have so far been bread earners for many. The domestic requirement is so huge that it is almost 2 times more than US and Europe combined, Years of savings in every household will be the provider of the capital. Who has as much of gold as India has?

    Only our leadership lacks. Like our cricket team, we are yet to find really top Captain and Pace bowler, for Delhi. We need young leaders, not the tired horses like Man Mohan Singh. In business, the new generation has already taken over – it is time the younger generation dwell into politics and become leaders in next 5 years to lead the country.

    Growth sectors in India? Every sector will grow. Agriculture is one where the western technology will start arriving. There is no country in the world that has well defined 3 seasons. India is as sunny as California and Florida, as fertile as midwest in USA, and have as long coastline as US has. I can not single out any one sector which is not due for major growth. Indian software engineers will have more work at home than abroad. Diamond exporters will be selling more diamond in Indian then abroad. Just everything will grow, with more emphasis on transportation and warehousing. Rail, Roads, Air will lead followed by other industries. Warehousing will be another major thrust area.

    Everything has to grow except Corruption and we need efficient judiciary to support the growth. Money creates and brings dispute and it need to be resolved in few months not 20 years. Unless this is achieved, the growth will be there but stunted.

    Nikz

    November 8, 2008 at 3:26 am

  45. Dear Sir,

    If short position in oil markets for 20 days of US consumption can bring a run up in prices to almost of the tune of 50%, what can happen if the silver market which has a concentrated short positions by 2 US banks of world 100s of days silver production, will be forced to buy back due to evident tight supply of the silver in near future when the industrial users will have to fight for silver for persons investing in it.

    I know you said that it can run up to 5-12 times of the current prices. I was looking at the silver industrial uses, and many of its uses are still in infancy like in solar, nano tech, anti bacterial, in glass etc. Do you think, as these industries mature, and because of silver properties as highest conductor of electricity, best reflector, great antibacterial properties, lowest known inventories of Banks and Nations today, consumption once done in industry is difficult to recover it back economically, price inelasticity (small price of silver relative to cost of product), lower trust in paper currencies, one of the lowest gold:silver ratio, ever increasing investors demand from last 3 years, not much investments in mines in last couple of decades … why cant the Silver may run more than 5-12 times in 5-7 years ahead.

    You got a great holding price below 5.16 $ and i feel that the 9-10$/oz is the lowest we will see in the silver history as the whole dynamics will change for silver in near future as soon as major COMEX default for delivery. I really thank the big US banks and CFTC for keeping it manipulated so that i have read you in time and started keeping some of my net worth in gold and silver.

    Your views will help me and others reading you understand the great silver manipulation and future it holds. This may warrant a separate article from you gold and silver future impact on world economy and those who hold it.

    Please advice.

    Regards,
    Vivek Dhariwal, Gurgaon India

    Vivek Dhariwal

    November 8, 2008 at 7:59 pm

  46. Respected sir,
    I have an query about refining cost of crude oil. sir in international market crude oil is $60 per barrel, can you tell me what will be the cost of oil ( say petrol) at the consumer level after adding cost of refining & transportation.if crude oil goes down at $ 40 then what should be the consumer price of petrol, if we ignore govt restrictions etc.
    regards
    Neeraj

    0811-049 Kalidas Replies to Neeraj (Monday, November 10, 2008)
    You have to use Internet to research, or find out studying balance sheets of refineries. Try Energy Information Institute of US government – it is a good source for many information.

    Spell check your message always, You have 5 errors in original message of 5 lines. If you do not send the post duly spell checked, which is taxing all readers and me, I will not reply. Do not expect me to take trouble when you do not want to.

    NEERAJ, Delhi

    November 9, 2008 at 10:39 pm

  47. Sir,
    Please let me know the fundamental analysis for Essar Oil. How much this will move up after starting uptrend.

    Krishna

    November 10, 2008 at 12:31 am

  48. Dear Sir,
    I am ardent follower of your posts and have been reading since June 07. Unfortunately, I missed your Jan calls when you moved out of IFCI board and only to find you later in Mar 08 in ICICI board through some boarder.
    I started into equities as long term investments say 15 years. Initially bought Union Bank, UCO bank, TCS, IPCL, and Petro net in small quantities through IPO.

    I have been accumulating
    NOCIL in Nov/Dec 07 when you had recommended, as below.
    50 @ 69.16, 100 @ 56.39, 800 @ 38.02
    Spice jet 900 @ 44.98 ( average)

    Also, my portfolio is presently at a loss of 53% which also includes averages costs for IFCI- 1152 @ 63, LIC Housing 140 @ 244, HPCL 260 @ 246, Kingfisher 300 @ 82.80, GSPL 535 @ 51.37, RNRL 315 @ 98.44.

    I have planned to invest 1lac by 3rd week Nov into LIC as suggested by you from taking a LIC loan.
    Please advise me on how to handle the shares of NOCIL & Spice jet so that I can swap into IFCI or Arvind Mill etc. Also, on my investment plan of 1lac.

    As far as gold purchase is concerned, in Chennai we have scores of Gold jewelers in one single street called USMAN Road, T.Nagar, where they sell only 22 ct gold (916 hallmark) in 1gm, 3gm, 5gm, 8gm, 10gm, 50 gm coins. They use the market rate evenly which changes thrice a day. 3% extra is charged as making charges and 1% towards VAT. The same can be sold back to them at the prevailing market rate less 1%.

    24ct gold sold by banks is not purchased by these jewelers unless the same is used to buy back gold jewels at market rate for the same less 2 to 3%.

    Silver is sold only in 100 gm coins and very few sell in cut pieces. VAT 1% plus making charge of 1% is charged and the silver could be sold back to them @ 1% lower than market rate.

    Saravanan, Chennai, 09-11-08

    0811-050 Kalidas Replies to Saravanan (Monday, November 10, 2008)
    You have not done my article – Rebalancing Portfolio… and asking me to repeat what is already mentioned there. This is no time to invest new money, but reshuffle the portfolio first and then think of buying with fresh funds. It is like your old home is in disarray, you re plaster and repaint it. and then only buy new furniture.

    ARVIND: forget for a while. You have your plates full.
    NOCIL: It is cheapest, profitable. Its sales has gone up, employee cost has gone up that means they are rehiring people (that suggests that business may be improving), However, it is a weak stock at the moment, and in one major hit in the market, it may come down to single digit. Be prepared to buy – do not sell it. BUY 2150 to 3150 when it is in single digit.
    SPICEJET: Buy 1100 more and keep calm.
    IFCI : Buy 3 times you have
    LIC Hsg fin: stay with it.
    HPCL : Stay with it or sell it and keep cash to buy the first 3 above. You may be losing 10% and buy others at 50% to 70% loss with same money
    RNRL: Be prepared to buy RNRL but only in deep correction. Of late, it has advanced by 20% – so let it come down. Do not hurry. Ideal level is 41 to enter.

    GOLD: The dealers are reasonable. However, take pucca bill even if you have to pay 1% more for taxes and ask the dealer to write the purity on the bill itself. Bank’s charging of 2 or 3% more is okay because they have to pay import duty of 2%
    SILVER: This is my favourite metal – very volatile. If you are not very old person (not over 55), buy it and keep it in the form of 100 gms coins or even smaller one. Ensure that your dealer is giving pucca bill with proper description and purity measure.

    Gold and Silver are the metals to be bought from the dealers who are also prepared to buy back. After buying try to sell some small quantity to some other dealer (not same) and see what value does he give.

    Of late, even Jim roger said that silver is the cheapest metal around.

    Muthu Saravanan

    November 10, 2008 at 1:33 am

  49. Hi Saravanan

    In your post, you mentioned that Silver is sold only in 100 gm coins somewhere in USMAN road T. Nagar.

    Can you please tell which shop. I enquired in Saravanan stores in USMAN road but they sell only silver utensils and not coins

    Thanks
    Prabu, Chennai, India

    Prabu

    November 10, 2008 at 8:49 am

  50. Dear Sir,

    Yesterday I happened to read this article.

    http://www.marketoracle.co.uk/Article7171.html

    Author is talking of Dollar devaluation to the extent of 70%. Most of the other things he talks are in line with what you have been saying. Sir do you think it is possibility?

    Suppose Dollar goes down by at least 50 % in its valuation, say in next 2 two 3 years time frame and gold reaches 3000$ during the same period, this indicates appreciation of gold is due to devaluation of dollar and nothing else. That means buyer of gold may not get that benefit if it had appreciated due to the demand supply gap than devaluation . So buyers of gold in other countries may not get that benefit because their local currency might have appreciated to that extent. (So Indian currency may be 25Rs to a Dollar) Is it not better to be in currency than a gold if dollar devaluation is a possibility?

    Shiva
    Bangalore India

    Shiva

    November 10, 2008 at 11:10 am

  51. Kalidas garu,

    Please update me about Essaroil, Today I may buy on your advise. Is it comfortable to buy around 80. will it go to 60 again.

    Thanks
    Krishna
    Hyderabad

    Krishna

    November 10, 2008 at 11:12 am

  52. Dear Sir,

    I am holding HDIL ( Housing Developement Infrastructure Ltd ) 500 shares @ 390.Now in loss at CMP of 126.Can you please advise to hold it or swap in to IFCI and Essar Oil for early recovery of invested amount.Kindly advise as I am unable take any decision.

    Thanks
    Raj Patel
    Ghatkopar,Mumbai.

    RAJ PATEL

    November 10, 2008 at 6:56 pm

  53. Dear Kalidas sir, This is the report about the company called compact disc from capital market on 5/11/2008. The EPS of the company seems to be around 37 and currently quoting at Rs 43/-. Your advise is required for investment. Attaching the report of the company by capital market.

    Compact Disc India spurts on issue of equity warrants at huge premium

    Compact Disc India galloped 5.52% to Rs 44 at 15:14 IST on BSE after the company said it would issue convertible warrants at Rs 100 each, a 127% premium over the ruling market price.

    The company made the announcement during market hours today, 5 November 2008.

    Meanwhile, the BSE Sensex was down 507.67 points, or 4.78%, to 10123.05.

    On BSE, 1.31 lakh shares were traded in the counter. The scrip had an average daily volume of 49,257 shares in the past one quarter.

    The stock hit a high of Rs 45.50 and a low of Rs 40 so far during the day. The stock had a 52-week high of Rs 130.95 on 18 January 2008 and a 52-week low of Rs 25.70 on 27 October 2008.

    The stock had outperformed the market over the past one month till 4 November 2008, rising 9.45% as compared to the Sensex’s decline of 15.13%. It had, however, underperformed the market in the past one quarter, falling 43.27% as compared to the Sensex’s decline of 27.07%.

    The small-cap animation outsourcing services provider has an equity capital of Rs 9.57 crore. Face value per share is Rs 10.

    The current price of Rs 44 discounts its Q2 September 2008 annualised EPS of Rs 37.99, by a PE multiple of 1.15.

    The board of Compact Disc approved issuing 28 lakh convertible warrants at Rs 100 on preferential basis to non-promoters. Each Warrant will be convertible into one equity share of Rs 10 each of the Company at a premium of Rs 90 at the option of the warrant holders, at any time within a period of 18 months from the date of allotment of warrant.

    Compact Disc India’s net profit surged 114.9% to Rs 9.09 crore on a 119.3% rise in sales to Rs 46.68 crore in Q2 September 2008 over Q2 September 2008.

    Compact Disc India offers animation outsourcing services. The company produces animated entertainment for movie theaters and television.
    Thanks and regards
    Ravi, Chennai, India

    Ravi

    November 10, 2008 at 10:13 pm

  54. Dear Kalidas sir,

    Can you please let us know more about “China’s $586B stimulus package”, how the markets behave, will this rally continue for at least 10 to 15 day? Will the Indian market get any good benefit from this?

    Thanks in Advance
    G Sankar, Hong Kong

    Kalidas: Never believe China. They do not pay even 2000 yuan as salary to their workers. Do you think that they will spend US$ 2000 or 14,000 yuan per family throughout China? Listen from one ear and throw it out from other.

    gs_2007

    November 10, 2008 at 10:57 pm

  55. Dear Sir,

    Thank you for your Invaluable guidance. It gives more confidence and a clear vision.
    I am 42 and working as Finance Manager for US company.

    I shall try to sell small qty of silver as suggested by you this weekend or so and let you know.

    Waiting for the correction likely to happen around 2oth or so.

    For Prabhu,

    Silver Coins are available at NAC, GRT Joy Alukkas.. The first 2 also take orders at the current rate and deliver the coins (100gm) within 2 days.

    Saravanan, Chennai 10-11-08

    Muthu Saravanan

    November 11, 2008 at 2:18 am

  56. Hi Saravanan,

    Thanks for the info. I have some info about gold that i have enquired so far. Hope this helps you.

    I normally go to Saravana stores only, as many of my relatives have evaluated the cost/quality of their gold and given the verdict that it is the best place to buy.

    When i enquired about 24 carat gold on one day at saravana’s, they told that the sell rate is 1250/g for gold bars. The sales person also told that they will buy their gold at 1% less than the “market price” (for cash back). Incidentally the market rate on that date for 24 c gold was 1194 Rs/g. So if i had bought the gold and sold back on the same day, i would have to lose Rs 1250 – 0.99*1194 = Rs 68 , or approx 5.5%. For 22 c gold coins, if i bought and sold on the same day, it works out to 5% less. So we need to get atleast a 6% appreciation in gold for a break even in any case.

    Thanks
    Prabu, Chennai, India

    Prabu

    November 11, 2008 at 9:39 am

  57. Guru,
    Is The Federal Reserve Bank a privately Owned Corporation
    -Venkat
    Chennai

    Venkat

    November 11, 2008 at 12:49 pm

  58. Dear Sir,

    What can a company do in case of impending $ failure. We have contracts in euros. There is no protection possible against currency fluctuations as almost all contracts are spot and not fwd. And in spot u can’t do hedging.

    Sir in these time is it possible to do a hedging in companies contract in financing projects especially in spot contracts.

    Aloke, New Delhi, India

    0811-054 Kalidas Replies to Aloke (Wednesday, November 12, 2008)
    Your question is incomplete. Give one example, so I can understand.

    Aloke

    November 11, 2008 at 2:41 pm

  59. KALIDAS ….I have around 3 lakhs to invest .
    Can I go ahead and buy IFCI shares alone
    with 3 lakhs since it is now at around 20. I am thinking of a 1 year investment.
    please advise –

    Sunil (City and Country not mentioned – Please mention it in future)

    0811-052 Kalidas Replies to Sunil (Wednesday, November 12, 2008)
    Do not invest all money in same counter. Divide your amount in 3 lots

    When the markets are down, buy as under:
    IFCI – 6000 @ Rs 18 or below – Amt Rs 108,000 (If the price is less than Rs 18 – buy more equivalent)
    Dish TV 3000 @ Rs 18 or below
    I will give you two more names later. Watch this space after 2 days.

    Sunil

    November 11, 2008 at 5:53 pm

  60. Dear Kalidas,

    Please advise(Buy/sell/hold/swap) on the following scrips consituting 60 % of my Equity Investment:
    ICICI Bank 170 @ 890
    Reliance Power 472 @ 245
    Cairn India 709 @ 142
    ICRA 76 @ 887
    TCS 67 @ 993
    Idea Cellular 502 @ 83
    BEML 33 @ 1075
    Suzlon Energy 151 @ 212
    Tech Mahindra 18 @ 1420
    Future Capital 32 @ 705
    Asian Hotel 38 @ 553
    Zylog System 80 @ 251
    Tata Steel 20 @ 473

    Sri Chanakya,Reykjavik,Iceland

    Kalidas: I do not know many of your stocks. I will reply in 2 days here. Watch this space.

    Sri Chanakya

    November 12, 2008 at 12:57 am

  61. Dear Sir,
    I am small investor & have been following you since last one year.I have saved my hard earned money because of only you & lot of thanks for that. Your all predictions made before 6-8 months are coming true nowadays. Only you had predicted current American situation before 4-5 months. You can see the events before months and months ahead before world know…
    Hats off ……..
    Sir, I have learned lot of important lessons from you for not only stock market but also for Life. A goat walking with other goat does not see anything lied ahead because it just walks it’s head down towards it’s legs and earth. If one goat mistaken fell into river of water others will follow automatically. Because it does not use it’s brain or may be it not have. There are thousands of goats who just follow crowds in stock market and loss heavily.
    But thanks to you, I try to send more blood and more oxygen into my Brain to make it more and more sharper for not only money , stock market but also for other important life decisions. I know i cant be another Kalidas but if i am only 2% of you it’s more worth.
    Bhavesh, Mumbai….

    bhavesh

    November 12, 2008 at 2:20 am

  62. Dear Sir,
    I sold almost entire portfolio of Rs. 1.25 lac in recent rally which was bought at level of 8500-7500 in 25-30% profit. Now i have only 150 shares of IFCI & Cash Rs. 3.40 Lac. My thinking is to buy following stocks of Rs. 1.30 lac (38%) at first attempt at following prices.

    Lic hsg 125@190=23750,
    Ifci 1000@17= 17000,
    Essar oil 200@70 = 14000,
    Essar shipping 750@35 =26250,
    Rnrl 150@43=6450,
    MIC Elec 200@37=7400,
    Mtnl 150@60=9000,
    Spicejet 500@11=5500,
    Tips 100@21=2100,
    Compac disc 100@35= 3500,
    Taj Gvk 100@45=4500,
    Royal Orchid 150@39 =5850,
    Dish Tv 300@15 = 4500.
    I have set another buying of Rs. 2.1 lac (62%) at 12-13% down from above prices. Which is like this
    Lic hsg 225@170 = 38250
    Ifci 1750@15 =26250
    Essar oil 350@62= 21000
    Essar Shipping 1400@30=42000
    Rnrl 275@ 38= 10450
    tips ind 200@18= 3600
    compac dis 200@31= 6200
    Taj Gvk200 @ 40= 8000
    Royal Orchid 300@35=10500
    Dish TV 600@13= 7800
    Mic Elect 400@33 = 13200
    Mtnl 300@53 = 15900
    Spice jet 500@10= 5000
    I too will get a loan of Rs.50 k from my friend for 2 years which i will use if market corrects more and will use to buy HPCL, BPCl

    I can make 2-3 years commitment from now. And i have set my target of profit on my above investment around 400% minimum and 600% maximum within 2-3 years.
    Sir, I am 25 years old now and earning Rs.23k per month.
    Now let me know
    (1) Is my above strategy for buying at those prices good,bad or better,worst?
    (2) Profit target are achievable in real term or in only my dreams ?
    (3) should i make any changes in above strategy?

    Thanks in advance
    Bhavesh, Mumbai….

    bhavesh

    November 12, 2008 at 2:52 am

  63. Kalidas ji,
    Please advise me on Essar oil at current price.

    krishna

    November 12, 2008 at 6:14 pm

  64. Sir,

    I’m a small investor & my current portfolio looks like,

    ABB Ltd 30 @ 770
    ABG Shipyard 50 @ 373
    IFCI 500 @ 20.65
    KEC International 25 @ 416
    L & T 24 @ 1085
    Maruti Suzuki 20 @ 806
    Reliance capital 35 @ 1219
    Reliance Communi 30 @ 437

    Recently I sold some Reliance (RIL) shares and keeping the cash for other opportunities.

    Can you please suggest some swaps on how I can best make use of what is left of my portfolio.

    My present portfolio is under loss of 49%

    Thanks in advance,
    -Jana
    Bangalore, India

    Jana

    November 12, 2008 at 7:02 pm

  65. Dear Sir,

    what is your opinion about Chennai Petroleum Corporation Ltd. ? They have paid 29 rupees as dividend in 2008 and since 2005 they have paid 120% dividend (face value-10 rupees). Though their debt is quite high.

    regards,
    v8r, Mumbai.

    v8r

    November 12, 2008 at 9:48 pm

  66. Sir,
    With current circumstances it is very obvious that US is getting in to depression taking world in to recession. Devaluation of US currency is imminent. If this happens, it is in a way good for US right? Because suddenly US deficit will reduce by half or even more based on the percentage of devaluation. US goods will be more attractive across the world. Suddenly their export industry will boom. People across the world may start preferring ‘Made In US’ goods than their local counter parts due to high quality and cost same. Overall it is good for US production companies . More jobs will be created in US to meet export demand. Do you think it is possible and US say 5 years down the line will be the biggest exporter than importer?

    Shiva
    Bangalore India

    0811-055 Kalidas Replies to Shiva (Thursday, November 13, 2008)
    wishful thinking, You are thinking like a father of a child just borne, that one day he will become an engineer, or win Nobel Prize and earn crores of rupees. This is not arithmetical that if this happens then other happens 2 times of 3 times, keeping others constant.

    Indian Rupee has devalued from Rs 4 to Rs 48 today – did India become biggest exporter in the world? Did India create millions of jobs only due to devaluation?

    What US will export – except Boeing and some pharmaceuticals. Today’s USA lives on military hardware. this is why it seeks war on continuous basis – Afghanistan, then Iraq, then Iran and so on.

    You are presuming that in 5 to 7 years US will become largest exporter in the world, provided it exists. Who knows whether Barrack Obama is the first even Black President or last ruling President of a country once called United States of America?

    Shiva

    November 12, 2008 at 11:06 pm

  67. Dear Sir,

    I am posting same question here again which I asked in your old relevant link. I thought people may not read your comments if replied once it goes out of main page.

    At Last Paulson & Gang realized that bad assets they were thinking of buying are really valued zero. Realization has come late but it is better late then never. So they are not going to buy any derivative backed assets . Did they get link of this site ?? :-))
    So it is good for American citizens and bad for the banks and financial institutions. Now with this change do you think Dow hitting 5000 is possibility?

    Shiva
    Bangalore India

    0811-056 Kalidas Replies to Shiva (Saturday, November 15, 2008)
    It is an eyewash. What they say and what they mean is different. Paulson came up with $700 Bln package to save Goldman Sachs to whom AIG owed large sum ($70 Billions as per report). Initially, when AIG was given $85 billions, they reportedly paid off $20 billions to GS. This was not enough to save GS. so when they were given surreptiously additional 129 billions, they must have got rest of $50 billions. If they did not receive this sum, GS would have to file for bankruptcy.

    Now read the statement from GS CEO recently that their firm is doing better. Obviously, they got their dues paid back. You might see improved result in Dec Qtr.

    Paulson wanted additional $350 billions from Senate ( as per original scheme, 50% was to be disbursed through Paulson immediately and for balance 50% the treasury had to receive prior approval after presenting the report of earlier disbursement which has obviously failed. The senate sent the feelers to Paulson and Bernanke that they were not favourably disposed to disburse additional $350 billions.

    So instead of waiting for official rejection from Senate, Paulson has decided to withdraw the application for further disbursement. It shows him in better light.

    No American reads this site, and even if they do, they are against it. In my published letter to President Bush, I received 19 reply stating that they would not invite Kalidas, there are thousands of them. I had deliberately inserted this in poll to see the American’s reaction.

    The trouble with Americans is that they want to listen what they want to listen. They give a damn to non-Americans. They still feel superiority complex and still thrive in the world of eternal supremacy. They are learning hard way. until today, they do not know what has hit them, how, why and how long. Let them live in dream world.

    Shiva

    November 13, 2008 at 7:34 am

  68. Dear sir.
    Yesterday I found your buy call post for TTML and GTL Infra, today I can not find it.

    Renukswami.
    Pointe Noire, Congo

    0811-060 Kalidas Replies to Renukswami (Saturday, November 15, 2008)
    It was my first information analysis, but the facts were different. NTT was buying into TSS (parent) and not TTML directly. Mr. Rajmohan Babu wanted to buy very large size, that persuaded me to withdraw the article, lest the readers make mistake. I have since posted revised article yesterday based on available facts that were different than previous one

    RENUKSWAMI

    November 13, 2008 at 12:58 pm

  69. Dear Sir,

    Couple of months back you had published probable companies on the verge of collapse in MMB . In that list GM was on the Top . We are seeing that happening right now. I am not sure if GM will survive with Pulson pumping money due to Democrats pressure. GE was second in your collapsing list. No news is coming out about GE except that it has won FDIC Insurance. Sir, is GE in ICU yet or is coming out? What is the significance of this FDIC insurance?

    Shiva
    Banglaore India.

    Kalidas: Sorry shiva, I can not go on replying to you. Others have more portfolio problems than the general question that you have posed. Briefly, Yes, it is still in ICU. When a person is on death bed, he does not come out soon and up running. It will fail. Buffet or no buffet

    Shiva

    November 13, 2008 at 2:49 pm

  70. Dear Kalidas Sir,
    I need your guidance on the following two stocks.
    Jai Corp(NSE -JAICORPLTD) – around 1 lakh shares – Purchase price – 300, CMP-140, 52wk high – 1450.
    RIIL (NSE- RIIL) – around 1000 shares – purchase price – 1000, CMP – 393, 52wk high – 3300

    I am into these counters from around 2 years, saw all time high values and very high virtual profit and today my principal is also down by more than 50%. Both these are Mukesh Ambani linked companies and have good infrastructure story. If I hold for around 2 years, can I see the all time high price back again or should I book losses and move to other counters?

    Girdhar, Bangalore, India

    0811-061 Kalidas Replies to Girdhar (Saturday, November 15, 2008)
    You are in relationship stocks. If you really wanted to invest into Mukesh Ambani, you could have gone into RIL directly, rather than getting into company like Jai Corp who were just a broker liaising with Mukesh and others.

    Further, make it a rule. If you have made very early entry, when the stock trebles, you sell 40%, so that your entire capital is recovered with profit on 7% holding. When the stock gets into 5 times, you sell 80% and when it is 8 times, you sell everything never to look back. If you had done that you would have at the most floating profit at stake, not the core capital. Now forget it, done is done. Be careful in future.

    Now let us explore the relationship angle a bit further. Now that Mukesh stable may be facing pressure, the opportunists like Jai Corp will go away. They are the friends of fortune. They are not like dogs that display loyalty to masters at all times.

    Coming to Jai corp, I just had the glance at the balance sheet. One thing I noticed, they made the file size so large that it will take hours to download it, so that people do not read their balance sheets. I deliberately waited for over 25 minutes at fastest Internet connection that I have here in Hong Kong.

    Before I go further, I tell you another thing. I never trust a company which does not pay proper Income taxes. If they pay Income Tax, then their income could be real. When Chidambaram introduced MAT (Minimum Alternative Tax), all companies reporting bogus profits and paying no taxes to boost the value of their shares, immediately reverted to massive losses. That was the best move of the Finance Minister. But he did not continue. Many label avoidance of tax as tax planning; to me this was a tool to manipulate the share prices. A good businessman saves the taxes by proper means, he never avoids it altogether.

    Please go to the web site of Jai Corp and download the Balance sheet for 2007-8. It will take long. I have noted the following features:

    The company shows its Net Worth of Rs 2,560 crores (2007-08) massively up from Rs410 crores (2006-07) , that is, jump of 2150 crores! There is no increase in Fixed assets (if they were really manufacturers), but increase in Investments and Loans and Advances. They debited some assets on assets side and credited under Reserves making it as part of the capital. The whole balance sheet, in my personal opinion, stinks.’

    They are also showing over 2.1 millions shares of RIL ltd valued at Rs 2800 . They hold massive equities, mutual funds etc. all must have been down by 50% or more.

    It may be noted that RIL’s main Auditors Chaturvedi & Shah, who are also Auditors of RIL, will no longer be the auditors this year. JR Batliboi will replace them. This means that RIL and Jai Corp are drawing apart.

    The company in my opinion has grandiose schemes, little real assets, pays virtually no taxes, there is little income, real turnover is shown higher whereas the production has been cut down, bulging assets and liabilities in the form of Reserves, and investments in shares, stocks, debentures and what not running into thousands of crores, does not speak well of this company. This is a balance sheet where assets and liabilities are borne out of thin air. This balance sheets names so many companies as subsidiaries that even Directors may not have heard the names.

    Mukesh Ambani is on downhill. There is a road divider ahead. Both may be separating soon or have already separated.

    Compared to your cost, the value is 67% down as of yesterday. The stock has go up 3 times if you were to break even. You have to swap into shares that may rise 4 to 5 times of dependable companies with real physical assets.

    If the stock rebounds, go on selling it and retain cash – that is what I will do. Right now, I will not ask you to swap into any other stock. First get out and then I will tell you when to enter other stocks. If you do wish to swap into other stocks now, may be you can try IFCI, Gail, Petronet, Dish TV (slightly risky – their losses are mainly on depreciation – not cash losses). and some more, but I will tell you specific in 2 days. It has taken over 2 hours to see the numbers of this company.

    To me this stock is not even worth Rs 10, but I may be stupid. It is speculators’ stock. May be in strong rallies, it may go to Rs 200 – I have no idea. Any material rise in this company will be treated by me as Sell opportunity.

    I did not have time to study RIIL (is it Mukesh or Anil?) I will write later. This is not the place where my such detailed reply was warranted.

    When you invest in a company, just check whether it is worth investing from Assets point of view. Do not consider relationship. In this world, even father and son separates (Ranbaxy), even brothers quarrel like Mukesh and Anil Ambani, Mafatlals, Nandas, Bajaj etc. where is the question of trusting such third party relationship with almost Rs 3 crores of rupees?

    To your specific question, whether you can recover your investment in 2 or 3 years by holding on to it, my answer is NO unless you are downright lucky.

    Please study the balance sheet, call your Chartered Accountatnt to see the balance sheet, and seek his opinion whether it is really a true state of affairs.

    Girdhar

    November 13, 2008 at 3:13 pm

  71. Kalidasji,
    Paulson has declared that FED will not buy bad debts of banks but instead will use the 800 billion to recapitalise them so that they can lend more to good businesses. Is this not what you have been saying all along . Will this solve the problem & push up growth in US Industrial sector.
    Also , can you tell us why you feel that China’s capital infusion plan is not true. They couldnt be blatantly lying going into the G20 meet.
    I had sometime back asked you if this wasnt actually a good time for India & China to collaborate considering that nearly half the worlds GDP growth is happening here ?

    Deekay,
    Indore

    Already replied under ref; 0811-056 and also replied to you later.
    13/11/2008

    Deekay

    13 Nov 08 at 12:50 pm

    Deekay

    November 13, 2008 at 6:13 pm

  72. Dear Kalidas sir,
    The inflation for week ended has come down. Will it have positive impact on stock market for short term & medium term. Your opinion is required sir.
    Thanks and regards
    Ravi, Chennai, India

    0811-063 Kalidas Replies to Ravi (Saturday, November 15, 2008)
    How many times I have to tell you that we are in deflation, not inflation. You are seeing prices falling everywhere – stocks, bonds, properties, gold, silver, commodities. Apply your common sense – do not have to read Government’s CPI figures.

    Ravi

    November 13, 2008 at 10:15 pm

  73. Dear Kalidasji,

    Thanks for your wonderful suggestions for thousands of new investors like me.

    I have started investing in Mutual funds starting from 2005.My portfolio of the mutual funds as of now is that my funds have lost from 35% to 50% of the original value.

    What advice would you suggest for me? Can I hold to wait or can I redeem some or the entire investment of mine in the Mutual Funds.

    Best Regards.

    Muhammed Yousoof,
    Salalah,
    Oman

    0811-065 Kalidas Replies to Muhammed Yousoof (Sunday, November 16, 2008)
    Since you are from Oman, I do not know whether you are talking of mutual funds in Oman and what kind of funds do you hold. Is it international or India related funds?

    Are they closed end or open ended funds (if you do not know the answer, do not bother)

    I am not fan of mutual fund investing nor I am an expert (because I never paid attention to this sector. Right now, the old mutual funds are facing tremendous redemption pressure. They are all saddled with the old stocks bought at high prices. Even if the market recovers, these funds will not perform as well. If new funds are floated by same companies, they will not perform well either, because old funds will sell their dead inventories to new funds.

    What I would do is to invest into totally new mutual funds of leading banks who did not have any old funds in their portfolio. They will make fresh purchases at today’s bargain prices which will flourish. Old ones will transfer hat from one to another.

    A case to the point. When Indian market collapsed came down to as low as 2780, HSBC Hong Kong did not have old fund presence in India. They came up with the new fund. I advised everyone to invest into this fund because it was promoted by large bank like HSBC and they did not have old funds who would pass on dead stocks to new ones. And this fund outperformed almost every fund in the market.

    The stocks today are so cheap, that even ordinary investor can pick up good blue ships at bargain prices and hold onto it, instead of mutual fund.

    Muhammed Yousoof

    November 13, 2008 at 10:48 pm

  74. Dear Sir,

    Dow Broken Important level Of 8000 & found support at 7965 as per your rule of 30:70 & Closed with Sucker’s rally. Citi group is Very near to Bankruptcy as it’s price fall of 50% within a week. So do you still think that Dow will 40% fall and will touch at 5000? And what you think about Sensex which has already broken level 8000?
    Is it time to invest fresh money into stock market ?
    Regards
    Bhavesh
    Mumbai

    bhavesh

    November 14, 2008 at 12:23 pm

  75. Ravi

    If you want to know about relation of Inflation & stockmarket in deeply then try to find Kalidasji’s wonderful post “Inflation & stockmarket ” from MMB messagebord .
    All the best
    Bhavesh Mumbai

    bhavesh

    November 14, 2008 at 12:30 pm

  76. Dear Bhavesh,
    Thanks for the information.
    Thanks and regards
    Ravi, Chennai, India

    Ravi

    November 14, 2008 at 12:58 pm

  77. Sir, What a fantastic answer (12th November) to the query of Shiva. Given that your replies mostly come true, of course belatedly, yet my mind refuses to accept such a scenario – Barrack Obama was the first ever Black President or last ruling President of a country once called United States of America? Atleast here, I pray God that such a scenario does not emerge at all.

    sekar

    November 14, 2008 at 6:15 pm

  78. Good Evening Sir,
    we havent heard from you past 2 days . Hope you are busy with writing another eye opener blog. Just wanted your review on News which is read it on CNN MONEY
    “FDIC’s Bair pushes aggressive mortgage plan.

    NEW YORK (CNNMoney.com) — In a surprise move, FDIC Chairwoman Sheila Bair Friday unveiled details of her plan to have the government help delinquent homeowners.

    The key element of the proposal: Housing payments for delinquent borrowers would be reduced to 31% of gross monthly income.

    To get there, mortgage rates could be set as low as 3% for five years, before increasing at an annual rate of 1 percentage point until it hits the prevailing market rate. Loan terms could be extended as long as 40 years.

    To encourage lenders to partipate, the government would share up to 50% of the losses if a borrower who had been helped ended up in default anyway. The risk of re-default had been one obstable to getting lenders on board with systematic modification plans.

    In addition, the FDIC would pay servicers who process mortgages $1,000 for each re-worked loan.

    The plan is expected to initially help 2.2 million borrowers get new loans; after some borrowers re-default, 1.5 million would ultimately keep their homes, the FDIC estimated.

    The plan would cost an estimated $24.4 billion, which Bair has said could come from the $700 billion bailout Congress approved last month.”

    I’m just curious to hear from you whether this plan goes through will it work.

    please throw some more light on present US situation as you havent written on this say from past 10 days .

    Thanks & Regards

    Manjunath

    Bangalore

    Manjunath

    November 15, 2008 at 12:40 am

  79. Dear Sir,

    I made few investment as follows and need your suggestion on how shall I proceed further to reduce losses.

    DECAIR – 4000 @ 63 – CMP 26
    GSPL – 4500 @ 50 – CMP 29.50
    IFCI – 20000 @ 25 – CMP 18.70
    DISHTV – 2000 @ 18 – CMP 16.10
    TVSMOT – 1000 @ 32 – CMP 27

    My query is, should I re balance my portfolio. If yes, could you please guide me how should I do it.

    Thanks, Naresh Kumar
    Faridabad, Haryana

    0811-067 Kalidas Replies to Naresh Kumar (Sunday, November 16, 2008)
    Good portfolio. Little bit of adjustment.

    Sell 3000 IFCI Buy 3500 Dish TV
    Sell 1000 TVS Motor Buy 1500 Dish TV
    Note 1:
    Note that TVS is still good to own, it is just for efficiency.

    Dish TV can recover very fast and may give you above average return, though it may sound risky looking at its accumulated losses. However, most of the losses are due to heavy depreciation usually associated with the electronic goods company Dish TV is in recession proof industry. When people do not have job, they still watch TV and sop opera. Its latest bhakti channel may evoke strong response in religious minded India. It is very creative idea. You may buy 1000 more of Dish TV by selling others like IFCI to make it 8000 in all.

    Note 2:
    IFCI is better quality at the moment. However, finance stocks may remain under pressure for over next 12 months except some occasional outbursts. Its profit may be dented due to devaluation of many of its stock holding. However, there is no practice to mark the portfolio to the market.

    Deccan Air: you have to buy more when your resources permit. There is no hurry. Allow 20 Nov to pass and see whether it drops. Prepare yourself to buy 6000 more of KFA (formerly Deccan Airlines)/ Their problem is partly company specific and more industry specific over which they have no control. They do have liquidity pressure. According to non verifiable reports, they are raising money at very high rate from the market.

    Naresh Kumar

    November 15, 2008 at 1:16 pm

  80. Hello Mr. Kalidas,
    What’s your analysis about the Food & Beverage and the Food Processing Industry?

    This Industry could see substantial up move considering India’s domestic consumption growth.

    Could you mention any specific “gem” in this field for investment?

    Thanks,
    Atul
    Singapore

    0811-068 Kalidas Replies to Atul (Sunday, November 16, 2008)
    It is a good defensive sector. But the other sectors have come down so much that it is better to be aggressive on others rather than relying on this turtle. When the market recovers, this sector will not rise much; in fact it may fall.

    I will buy only ITC. When I do not take positive view on the sector, I ignore almost all companies.

    Atul Upare

    November 15, 2008 at 1:47 pm

  81. Dear Sir,
    Looks like things have started turning bad in US social life .Just now I read in SFO Quote Laid-off Silicon Valley worker kills three: UnQuote. I wish at least US government should ban guns ASAP as you had written some time back

    Shiva
    Bangalore India

    Shiva

    November 16, 2008 at 1:04 am

  82. Dear Kalidas Sir,
    I am small investor from a small town in A.P.,India. i am from Nandyal in A.P..
    I am thorough reader of all your articles. Your articles really eye opening to gullible investors like us.
    I have huge quantity of Bartronics at an average price Rs.200/-.Now the the price has come dconw to Rs.75/-. They are in the business of smart carda and RIFDsolutions. They expet huge Government orders and also from Railways. Like me there are several small investors stuck in this stock. Plese anylse its performance and guide us whether to stay with the holdings or get out at the present rate so as to save further erosion of our investment. thanking you sir.

    Kalidas: I just made cursory glance. It has excellent high tech product range so essential for India. However, I could not study its financial. Watch this space when I reply later in next 3 days

    a. sreenivasa reddy

    November 16, 2008 at 11:35 am

  83. dear kalidasji, i would invest my 100% cash in equity market in 4 steps from now whenever sensex plunges 500 points each time and want to forget it for 2 years? what’s your view?

    Kalidas Good strategy. However, if the market becomes too bad, defer your steps wisely.

    sunny singh

    November 16, 2008 at 8:37 pm

  84. Respected Kalidas Sir,
    Recently in one of query you have given Sell strategy of Bull Market When someone is sitting on handsome profit & was – “when the stock trebles, you sell 40%, so that your entire capital is recovered with profit on 7% holding. When the stock gets into 5 times, you sell 80% and when it is 8 times, you sell everything never to look back.”

    Now my query is regarding Sell strategy considering current Bear Market : Which strategy which one has to adopt when stock price goes down after its purchase and one is sitting on capital loss.

    Pl. reply because reply of this query will help many investor like me.

    0811-070 Kalidas Replies to Alkesh Shah (Monday, November 17, 2008)
    I have written whole article – Re balancing Portfolio – you may find it in the side bar. You can also download PDF copy and excel worksheet in the download center.

    ALKESH SHAH , AHMEDABAD

    November 16, 2008 at 9:22 pm

  85. Kalidas Sir,

    Just like you prepared a pro-forma income statement for RPL can you prepare a consolidated income statment and balance sheet for Tata Steel or Hindalco. I understand that these companies are in serious trouble. But still i think that at some pricce they will be attractive.

    If you can prepare the forecasted statement that will give an idea as to how Tata Steel will be able to pay the interest and loan payments. Also will they be able to make these payaments from income earned by Corus? Debt equtiy ratio will be high. But i think what will decide the future is cash outflows and not some academic ratios. These questions will be very helpful in understanding the price at which one can get into Hindalco and Tata Steel. Only a person like you can do this because of your holistic knowledge and analytical skills.

    Regards,
    YSB

    0811-071 Kalidas Replies to YSB (Monday, November 17, 2008)
    We have to wait until the December quarter is out. Without more information, the exercise is futile.

    Both companies will be in position to finance their deal. Both group have enough assets to raise the cash. Let us see how they meet obligations. Both Birla and Ratan Tata needed two slaps on either cheeks, and they got it. Now let them behave properly.

    YSB

    November 16, 2008 at 11:11 pm

  86. Sir,

    Thanks for your response.

    As per your following suggestion I can buy 6000 DECAVI/KFA now or does it worth waiting for more down side ? Shall I switch from GSPL to Dishtv ? I still have some cash, shall I stay liquid ?

    >> your suggestion as follows:
    Deccan Air: you have to buy more when your resources permit. There is no hurry. Allow 20 Nov to pass and see whether it drops. Prepare yourself to buy 6000 more of KFA (formerly Deccan Airlines)/ Their problem is partly company specific and more industry specific over which they have no control. They do have liquidity pressure. According to non verifiable reports, they are raising money at very high rate from the market.

    Regards, Naresh Kumar
    Faridabad

    Not now, wait till Nov 20. I will tell you then.

    Naresh Kumar

    November 17, 2008 at 12:49 am

  87. sir, please guide me;ihv g.v.films 7100@5.2;shiva cement 4200@12;gujfic bio 4100@19.kindly tell me what to do.

    Kalidas:
    To get reply, please append City and Country name to your signature invariably.
    To seek advice on any stock, mention stock name, symbol with exchange extension (.b for BSE and .n for NSE), Qty, @Cost and CMP. No reply will be posted if these details are not given.

    anu

    November 17, 2008 at 3:56 am

  88. Kalidasji,

    I have given all my Mutual funds for redemption after booking average loss of 48% and now I am holding cash 1.75 lacs to be invested in such a way so that i should be at least cover my loss, if not make profit. I am a senior citizen and I had invested 25% of my assets in MF and Stock market after investing in real estate(am in green since I had invested 14 years back in real estate).Whatever I had invested in equities, I have swapped(or in the process of) with other stocks according to your suggestions. pl. advise me regarding this redemption money 1.75 Lacs received from MFs.

    I am a regular reader of your articles. You have given the courage to face the crisis and also shared the views for salvaging the money and reinvesting them to come out of the loss. We owe a lot for your wisdom.

    Rang-Jama, Bangalore, India.

    Rang-Jama

    November 17, 2008 at 2:32 pm

  89. Hi kalidas Ji,

    From your replies I can see you have a BUY call for Dish TV at current levels.
    Minding the below points do you think it can bounce back?
    After all my market knowledge is very limited I would like to find your comment regarding this.
    1) New rivals like BIGTV & Airtel Digital TV are wooing customers and Dish TV subscriber base is not expanding as it was.
    2) I have browsed through DTH forums and able to see DISH TV is of the most hated from customer point of view.
    3) Always there will be a xerox of hit versions in the media like ‘American idol’ being available in almost all the
    channels with different names and I guess Bakthi channel will also fall under that category if it becomes a hit.
    4) Dish TV’s profit lies purely based on how many new customers its going to have in the future and it seems to be
    a down trend going forward.

    Many Thanks,

    Praveen,
    Chennai, India.

    Praveen

    November 17, 2008 at 2:38 pm

  90. Dear Kalidas,

    Please advise(Buy/sell/hold/swap) on the following scrips consituting 60 % of my Equity Investment:
    ICICI Bank 170 @ 890 CMP 387
    – SELL and raise cash
    Reliance Power 472 @ 245 CMP 109
    – Be a progressive buyer at Rs 92, 81, 71 up to 1528 shares
    Cairn India 709 @ 142 CMP 136
    – SELL in rally, swap to Gas stocks like Gail, Petronet, GSPL
    ICRA 76 @ 887 CMP 390
    -SELL and raise cash. Never buy this kind of stocks
    TCS 67 @ 993 CMP 520 –
    – Hold on to it. Buy more in deep correction (1000 points)
    Idea Cellular 502 @ 83 CMP 50
    – Heavy debt. Switch to TTML. SELL 502 and buy 2000 TTML. Buy more of about 3000 if your resources permit.
    BEML 33 @ 1075 CMP 380
    Suzlon Energy 151 @ 212 CMP 55
    – Buy 4 times. 2 times now, 2 times later if its corrects. Don’t bother of about 1 or 2 rupees here and there.
    Tech Mahindra 18 @ 1420 CMP 293
    – I do not invest much in High tech software stock because I do not understand them. from Moneycontrol, I do not know how did they lose over 500 and 300 crores in last two years (negative Income side). Viewed web site and saw critical information. Looks like good software company like others, with sizable turnover. Stock is relatively cheap, trading much below its IPO price of Rs 365 in Aug 2006. Profits good, but it is a service company, susceptible to recession. Nevertheless, it is a good value at this price. No need to sell but buy 6 times in 3 stages, first stage now, second in every 500 pts correction. Third stage when the market faces meltdown.
    Future Capital 32 @ 705 CMP 177
    – Never buy broker’s stock. They are all hyped. This is from Pantaloon group? SELL and raise the cash
    Asian Hotel 38 @ 553 CMP 271
    -SELL and switch to other smaller value of bigger Hotels stocks. Hotel Leela, Taj GVK, Hotel Royal Orchid, India Hotels. Just swap it. Do not buy this stock again.
    Zylog System 80 @ 251 CMP 113
    – Another hi-tech stock – not my speciality. Unable to see its balance sheet. this company has large current liabilities. such companies are usually cash rich, this one is not. They are in good business though. Growing company though. Consult some one else, though on the face of it worth buying at current level. No. of shares are too low. The company has to raise capital as its debt level is rising.
    Tata Steel 20 @ 473 CMP 166
    – time is coming to buy. Watch it closely and buy it in any major correction,. Buy about 80 more if resources permit. But buy in 2 or 3 stages. It may take a while to make real money in this stock.

    Sri Chanakya,Reykjavik,Iceland

    Kalidas: I do not know many of your stocks. I will reply in 2 days here. Watch this space.

    Dear Kalidas sir, Please advise

    0811-073 Kalidas Replies to Chanakya (Tuesday, November 18, 2008)
    Read my comments under respective head as above.

    Sri Chanakya

    November 18, 2008 at 6:43 am

  91. kalidas ji,
    kindly let me know about essar oil and RPL. How these stocks will be for 1 year.

    Kalidas:
    To get reply, please append City and Country name to your signature invariably.
    Separate articles are written for RPL. Detailed recom also posted for Essar Oil – see stock watch

    krishna

    November 18, 2008 at 10:15 am

  92. pls tell abt prospects of GMR INFRA?can i buy it at CMP?

    amit

    November 18, 2008 at 1:17 pm

  93. Hi Kalidas sir,
    I am regular visitor for your blog and also regularly check the messages in the Moneycontrol Message Board.
    I have invested in stock market and made huge losses.
    Can you suggest me what to do with my holdings and how can I get the tax benefit on the losses I have incurred.
    my holdings:
    IFCI 175 shares @Rs. 114 Dec 2007
    INDIABULLS FINANCE 152 shares @Rs. 850 (from dec 2007 to march 2008)
    Reliance Communication 151 shares @Rs. 541 (from jan 2008 to Aug 2008)
    Subex 50 shares @ Rs. 413 on 4th Nov 2007.
    -Venkat Gurukrishna
    Bangalore, India

    0811-074 Kalidas Replies to Venkat Gurukrishna (Tuesday, November 18, 2008)

    Sell all near the end of the day, Following day, buy back the following:

    IFCI – 2000 (175 + 1825). Buy more if you can

    IBRETAILs: Retail Arm of India Bulls – at Rs 15 (came down from Rs 120). Buy 2000 (Investment Rs 30000; you got Rs 15000 from INDIABULL FIN). IBRetail is mostly moving in upper or lower circuits. It can make money faster than other in same group. It is a lousy group though.

    You got Rs 30,000 selling 152 of RCOM. Buy 700 of RNRL of same group. It will recover faster than RCOM which is in heavy debt.

    What is Subex? You must know that my time is valuable. you have to take some trouble of presenting your affairs properly. Unless you give me all 5 details – Stock Name, Stock Symbol, Quantity, Purchase cost and CMP (Current Market Price), do not expect any reply.

    By selling all above, you have booked all losses physically which will be available for set off @ 10% to 15% depending on whether it is long term or short term.

    NOTE that never bother about taxes, if you are making money. Just because you want to avoid taxes, do not let go profitable sale opportunity. You have nothing to lose if you have to pay taxes out of profit. Always be broad hearted in this matter.

    Venkat Gurukrishna

    November 18, 2008 at 5:24 pm

  94. sir, kindly advise what to do,i hv: gujfic bio 4100 @ 18 cmp 4.75 shiva cement 4500@ 12.20 cmp 4.73 ashok leyland 550@ 23.20 cmp 14.90 aurbindo pharma 125@ 372 cmp 121.20 rico auto 950@ 18 cmp 10.60 prism cement 1400@ 37.20 cmp 15.50 i can hold them but if u can advise something better,i hv 1lakh that i can still invest. thanks … anu,new delhi,india

    anu

    November 19, 2008 at 3:09 am

  95. 100 SSI Ltd(NSE Code Softsolint)@Rs 240. Now this is acquired by a NRI owned PVP Ventures Ltd (NSE Code PVP) CMP Rs 36.05 (Closing price on 18.11.08). Company having a proposal to develop a township at Binny Mill, Chennai tied with melted Unitech.

    Morgan Stanley proposed to invest in Real Estate Industries in India around 1 billion Dollar. Sir, any hope built in real estate industries in India?

    Mathi

    November 19, 2008 at 3:13 am

  96. Dear Sir,

    GE SHIPPING 20@ 357 – CMP 160

    Should I buy 2 times or Swap into Essar Shipping.

    Rajmohan babu, Pointe-Noire, Congo.

    0811-077 Kalidas Replies to Rajmohan babu (Wednesday, November 19, 2008)
    In terms of quality, management, and speed of the stock movement, GE shipping is 10 time better than Essar shipping. I was shocked to learn that Essar Shipping in spite of increasing sales substantially, lost money due to loss on Forex operations. We do not know how could they lose money in Forex operation. They are in shipping business earning steady hiring or rental income on its tankers. Their balance sheet is also not available on their web site.

    Buy 30 to 80 shares of GE shipping and stay with it

    You may buy Essar Shipping a bit later. Let it consolidate and buy it when the market corrects severely by another 40% from current level. It may happen in single to maximum 5 days – that will be the time, when you start investing new money.

    Rajmohan babu

    November 19, 2008 at 5:17 am

  97. Sir ji ,

    Would like to know your views on following:

    Godrej Industries: Keeping in mind that sometime in 2009, Godrej Properties will be listed. I have seen their land bank in Vikhroli its just enormous. At CMP of 64, do you think its a good bet for future once they start development of their land bank?

    Praj Industries: CMP:64, Zero debt company, With 10% ethanol blending with fuel being mandated by GOI. Do you think its will have good future ?

    Swaraj Engines / Punjab Tractor: With GOI having big plans for agriculture, Agro-Auto sector, Not much details about this stock but both had god results. Swaraj- 100% rise in sales while net profit increased by 61%. Punjab tractors – 178% increase in net profit while sales rose by 48%.

    Thanks
    Nitin

    0811-078 Kalidas Replies to Nitin (Wednesday, November 19, 2008)
    I was borne in Ghatkopar, so I know little bit more about Godrej.

    GODREJ INDUSTRIES
    Godrej is a vast enterprise. It has several subsidiaries, trusts, private companies etc. We do not know who owns what? We can not speculate what we see in Vikhroli belongs to Godrej Properties or to some other companies or Mr. Godrej himself in his personal capacity or family trust.

    Do not go by small value of Rs 64. The stock was split 6:1 in 2006, and its Face Value was reduced to Rs 1. The equivalent value before split works out to Rs 384. Its earnings are not that high. Even current P/E is over 33. Yes, it is a good group, but it is highly conservative, run like family owned partnership firm, do dynamism, and not so innovative. Always a late starter in many fields.

    Personally, I am not in favour of such companies, although the people behind them are reputable. In stock market, we need performer, enterprising people. Dhirubhai Amabani , with just Rs 15,000 in his pocket after returning from Aden, started off 30 years later than Godrej and has achieved turnover of thousands of crores. Godrej is stuck in his own storewel.

    PRAJ INDUSTRIES
    When the millions and billions of barrels of oil is still burying below the soil or sea, there is no case for alternative fuel like Ethanol. Just because the oil prices rose to $140 does not mean there was worldwide shortage. It was more due to paper trading. Read my article – A Nation on the Grill.

    The company is reported to be still in Pilot Project. Due to rise in oil prices, there was lot of hype in alternative fuel stocks. I would rather opt for free natural energy resources like Wind (Power) or Solar (Power) where raw material cost is ZERO. Ethanol is still produced cheaply from Oil. Bio-fuel is very expensive.

    The best alternative is still Gas, Neclear Power, Solar Power and Wind Power – not bio fuel where the failure of crop due to vagaries of weather could cause price upheavals during monsoon – pre or post – days.

    Stay away.

    PUNJAB TRACTORS
    Very good stock, but not that cheap enough compared to the market. The stock lost 2/3rd of its value, whereas many other stocks have lost 80% to 90% value. Yes, best amongst all other stocks, and highly defensive too, good as solid long term, but under the current market, it is expensive. Many others can outperform this stock.

    SWARAJ ENGINES
    Not very big companies with almost stagnant growth for over last 5 years. I did not find the kind of growth you mentioned. See the financials at : http://www.moneycontrol.com/india/stockpricequote/engines/swarajengines/14/19/profitloss/marketprice/SE
    Not favoured by me. I think there must be something wrong with the management. How could you otherwise explain no growth at all for 5 years in booming economy? Liberal imports from China also restrict growth of this industry.

    Stay away.

    Nitin Pillai - Mumbai - India

    November 19, 2008 at 11:43 am

  98. Dear Sir,

    What is happening in the market ? Total liquidation !! You mentioned once in TTML article but never elaborated.? Again in your response to Rajmohan babu you said
    Quote
    You may buy Essar Shipping a bit later. Let it consolidate and buy it when the market corrects severely by another 40% from current level. It may happen in single to maximum 5 days – that will be the time, when you start investing new money.
    UnQuote
    So does it mean you are expecting SENSEX level of 5 to 6K in next few days or months?. Sir Heartbreaking level sir UPA started with 5K and ending its term with 5K with no progress..:-))

    Shiva
    Bangalore India

    0811-079 Kalidas Replies to Shiva (Wednesday, November 19, 2008)
    I have already mentioned that US is still not aware what has hit them. They are taking actions in the dark. When the Dow Jones hit the sensitive or critical level, the US administration asks certain fund to bid up the prices in final hour or near the end to lift index by 900 to 1000 points. Tell me, who will buy stocks at 15% higher price than morning in this down market ? No one. Those who have access to Paulson/Bernanke funds of $ 2 trillions (distributed by Bernanke in last 2 months) will do so, because they are not answerable.

    1000 points movement on upside and downside has become order of the day. US is in recession for over 12 months, but still does not admit it, whereas other nations stupidly admitting that they are in recession.

    When a bank like Citibank fires 52,000 employees in single day, you must understand the gravity of the situation. I am no longer in prediction game as to what level the SENSEX might go down to, but one day like earthquake the market will be flattened with massive 2000 to 3000 points fall in Dow.

    How much SENSEX will fall is anybody’s guess. Among the major index weighters, SBI and ONGC are strong, and may remain so. Maruti will not go down much. TISCO and TATA MOTORS are vulnerable. Infosys and other softwares are strong and may not go down more (they are doing well – in fact both Infosys and Wipro have mentioned that they are going to hire over 25000 new employees, if I have read the news properly), Other losers will be ICICI bank and Larsen & Toubro. Reliance is weak on its own, and if any bad news relating to Forex losses hit them hard, that will bring down the index.

    How much I do not know. SBI may come down to Rs 800; L&T to 310; RIL to Rs 800 (without Forex losses) or Rs 300 ( with Forex losses); ONGC may drop by 10%; others may not lose as much except ICICI that will certainly reach Rs 180. Now, count the index based on the above loss of points, and you get reasonable estimate of SENSEX.

    I have told you earlier, that I am now very stock specific. Once when RIL was at Rs 3400 (or Rs 2700 I do not remember) when I asked everyone to swap RIL into HPCL, BPCL and IOC. Now look at HPCL – when the SENSEX was at 17000, the HPCL was at Rs 255. Today, the SENSEX id down to 8773 or almost 50% down, and HPCL is down to Rs 230 or just 10%. RIL is down by Rs 2300 or massive 67%. HPCL has outperformed SENSEX and also RIL. The people were laughing at me when I suggested this swap.

    In short, not all Index stocks will go down, though each will go down in varying degree. This is why I am not concerned about movement in index. Yes, when the index go to such low level, one may buy Kotak SENSEX (at 87.20) and some other SENSEX related units trading in OTC market at that time so that they can make huge gains.

    Please note that all high p/e stocks will be battered – like RIL, LT. Whether SENSEX will go down to 500 or 6000, it does not matter – it is still twice of 2780 in 2003. SENSEX is outperforming every major index in the world today. In fact, almost all fund managers are bullish on SENSEX because for single most reason – No monetary crisis in real terms in India. This is relative to world market.

    ADDENDUM:
    This is the reason I was advising only “Rebalancing the Portfolio”. When the above situation happens, that will be the life time buy opportunity. One can make even 1000% gains in 5 years, IF you buy at that time. That is the time, when One has to put in NEW MONEY

    Shiva

    November 19, 2008 at 5:48 pm

  99. Dear Kalidas sir, I am holding 2000 shares of Orchid chemical (Nse code orchidchem) at an average price of Rs180/- current price is Rs 86/-. What is your advise. can i hold or swith to some other company.
    Thanks and regards
    Ravi, Chennai, India

    0811-079 Kalidas Replies to Ravi (Wednesday, November 19, 2008)

    “UNWRITTEN RULE” IN STOCK MARKET
    which says that if many investors lose fortune in one stock, they never return to that stock soon. It takes years before the unpopular stock becomes popular again, regardless of the bounties of good news.

    Orchid Chemicsls was fund managers stock, especially Lehman Brothers whose name is taken today with disdain. No one will want to associate with that stock again, so soon in good size.

    They are in pharmaceuticals, a sector I do not understand. You have to ask others for this stock. This kind of stocks have complex products that neither I nor you can evaluate. Further, they are susceptible to Patent infringement lawsuits in USA – you know what happened to Ranbaxy.

    So why speculate on this counter? There are many who are more down than Orchid and have more real and easy products to understand.

    If you want to stay with them, ask other experts in this field. I stay away all the time.

    Ravi

    November 19, 2008 at 6:23 pm

  100. Dear Sir
    Could you advise to buy ABG Shipyard,CMP-105,
    Year High-1045, PE Ratio:3.55.
    Is Essar shipping is better than ABG Shipyard?

    Regards,
    Vijay, Bangalore, India

    0811-081 Kalidas Replies to Vijay (Wednesday, November 19, 2008)
    You may place this stock on your watch list for long term buy. This is true shipbuilders with reasonably long history. These kind of stocks usually falter in recession, but I take the view that India is recession proof. With so many ports being built around the country, and also in China, with raw material prices falling (steel plates is a major consumption material), exports incentives, even domestic demand will rise especially from nearby refineries like Essar Oil and Reliance Petroleum Ltd. There will be more demand from these two refineries in future.

    Not only that, the Defense department orders may begin to arrive in future. India is having 3 pronged coast line that runs into thousands of kilometers.

    This is one company that can see its stock multiply several times in next 7 to 10 years. this is a capital equipment industry like BHEL.

    The stock is not comparable with any other stock, even GE shipping. This is a shipbuilder whereas Essar shipping is user. Both are in different industries. Essar Shipping has good future because it is the only major tanker operator. with RIL and ESSAR combined to operate 800,000 barrels of oil per day, the domestic demand will far outstrip the slackness of demand from overseas. I am sure that Sales mix, now dominated by Exports, will be replaced in favour of domestic users.

    BEST BUY – when the market slumps suddenly and when the recession talks take hold in India, when a couple of orders are postponed for this company, that will be the time to enter. Even now, one can buy, PROVIDED he realizes that it is not going to be short term play. It may leave strong legacy for your children, if you invest into this company this year.

    Vijay

    November 19, 2008 at 7:05 pm

  101. Hi Shiva
    It’s really funny to see SENSEX at 5000 at the near end of UPA term. If we consider SENSEX = progress meter of India then there is really no progress. It seems that UPA’s days are over. UPA’s main slogan will be “Mahengai Kum” but what about sensex which has become part of life of almost 40-50% earning Indian people.
    Now we will see again progress in BJP term and again sensex will reach those high. I guess so.
    I think stock market at level of 5000 will be too short that Any single FII or Big Indian brokers will be able to manipulate it.Will UPA hire big Indian brokers to manipulate sensex?
    BTW level of 5000 will be screaming buy for me….

    Dear Sir,

    I am working as manager cum accountant in small firm at Navi Mumbai in Agriculture market. You might have heard about that. At your time it was in Musjid Bunder. Which is second life line of Mumbai. The prices of various commodities has come down almost 35-40% due to huge crops and money disappearing . We sold Dry dates at Rs.120/-kg which is poor people’s dry fruit. Now same dry date we sell at 55-60 per kg. When sensex crashed from 20k to16-17k we had to worry about debtors. That time payments were coming late. It was effect of Stock market crash. And our bad debtors also increased. Even a single Shopper was involved in stock market who even doesn’t know Where does stock come in balance sheet ?

    Now scenario is little bit slowly changing.Now our bad debtors are not 2% of total debtors. And 25% of bad debtors are Bigger Malls (like Subhikhsha, Radha kishan etc).People are not putting any new money in sensex and afraid like host as sensex.They will surely not invest in stock market in next two years Until this havoc is forgotten. Now Commodities Prices are becoming steady. I think businesses will be again on inflationary path within next 6-8 months.

    Sir your sharp view is welcome.

    Thanx Bhavesh Mumbai

    0811-083 Kalidas Replies to Bhavesh (Wednesday, November 19, 2008)
    You said it all. The commodity prices are now stabilized. They will be on rise again. Your bad debts may be temporary – payment delayed is not payment default. It is too early to judge them bad. In your business, the reputation of trader is very important because most of the business is transacted through brokers. If some one spoils the name, and the brokers carry the tales, he will find difficult to stand in the market again. History shows that not many people have gone bankrupt in soft commodities like wheat, rice, daal, dry fruits, pulses, fruits etc. except in Oil or oil seeds. (to some extent)

    When I was in a bank at Mandvi branch (Kazi Syed Street) , I had to deal only with the firms like yours in Masjid Bunder. These are the traders having the best integrity. They will never default, unless something drastically gone wrong in their other business, like Share Market. The profit margin in your business being relatively low (because it is a volume business) many are tempted to play in stock market to make big bucks in short time. This is only cash rich sec tor in India.

    People have very short memory in the stock market. Once the market recovers even by 10%, the whole force will jump in to buy. It would not take much time to recover (at least Indian stocks) by 100% from all time low (which may be 6000 or so) . Thus, the market may rise to 12000 later, but not beyond. The people have lost so much money that they will not have patience to wait too long. 21000 is ruled out for next 3 years or so. However, India will be on forefront, outdistancing all mature markets like US., UK, Japan or even South East Asia. The only market that may come close or even outpace India will be Brazil and Russia. China may lag because it is too export dependent on US and Europe.

    You know that in olden days, SURAT and BHARUCH (near Ankleshwar) used to be the main business centers. Whole world used to come to this place for trades. India was the leader at that time. Columbus also undertook travel to discover India and instead went to USA. With major refineries being set up in same Gujarat near same place, old days are going to re-arrive soon. Yes, India will be re-discovered, and Nehru will be glad to have written the book “Discovery of India” It will be read again and again.

    The progress will be in India, Pakistan, Bangladesh and Sri Lanka in addition to Nepal. China will also trade more with India and steadily forget USA and Europe. so also will be rest of Asia including Japan. so do not worry about your trades and its temporary troubles. UNLESS there is war on India or there are some religious riots, India is well on way to strong prosperous path – It is irreversible.

    bhavesh

    November 19, 2008 at 8:43 pm

  102. Dear Kaidas sir, thanks for your bullet reply. now if i switch which stock could be better. can i put in the 13 stocks recommended by you in pro potion or is there is any other stock.
    Thanks and regards
    Ravi, Chennai, India

    Ravi

    November 19, 2008 at 11:57 pm

  103. 0811-084 Kalidas Writes to All

    I am glad to see that this column has become very popular with 101 comments and over 3717 views for this month (0811) alone. If we take the Oct figures of about 1700 views, this column will rank the first with over 5400 views combined for Oct and Nov 08

    Leading the pack individually, Action Time to Buy the stock has maximum page views around 3800, little bit more than Nov 08 figure of Confused Minds…

    I am sure the confused minds have finally found the clear answers, otherwise it would not have been so popular.

    Enjoy this blog. I am also encouraged to see so many participants. Neither of us met each other, and like Jab we met movies, the outcome is Mauja hi Mauja.

    Cheers
    Kalidas, Hong Kong

    anilselarka

    November 19, 2008 at 11:57 pm

  104. Dear Sir,

    Last year around this time you were virtually started pushing every readers/ followers of you in MMB to start selling . You were asking us not to be patriotic about Indian market and just sell and Selling was only motto you taught us that time. Now reading your answers to Bavesh and many others you make us feel proud to be Indian. Ofcourse ‘Start Buying’ has become your motto now. Aug2007 onwards,2008,2009 years will go down in the history as darkest years of the financial market. In future no one might even talk about the 1929 great depression in comparison with damage being created now. But for your followers like me it was just a cake walk. You are too unbiased and extraordinarily realistic. Though you have spent most of your time out side India you are great Indian Soul. You just want to see the India’s progress . Let me stop. You will start scolding not to write such things.
    Sir it is already late November. You said you would publish (at least electronic version) of ‘knowledge treasury’ in Nov. But no news on that. Are you waiting Dow to hit 5K and push US in to an embarrassing situation by revealing the Gold secrecy? :-)) Sir, your December India travel plan Please??

    Shiva
    Bangalore India.

    Shiva

    November 20, 2008 at 1:12 am

  105. Dear Sir,

    Opps I just did not see your message before posting my previous message . I am sure like me many of your blog readers would like to meet you. Why cant’ we plan your bloggers meeting in Mumbai or at any of your convenient cities when you visit India this time. If it is Bangalore it is my privilege I will take responsibility to arrange this.

    Shiva
    Bangalore India

    Shiva

    November 20, 2008 at 1:35 am

  106. Kalidas Sir,

    Please advise on Nagarjuna Construction.
    Specifically i want to know why do they keep setting up so many subsidiaries.

    Regards,
    YSB, Dehli

    YSB

    November 20, 2008 at 2:21 am

  107. sir,

    should i start buy in hpcl and bpcl now or wait till month end?

    rajarshi
    kolkata,india

    rajarshi

    November 20, 2008 at 3:43 am

  108. Dear Sir,

    I am very much delight to read our blog. When bear or bull market I have Kalidasji rule to make money in any phase.Nothing to worry. Whatever I am earning from stock markets that all belongs to Kalidasji wisdom. So I decide to contribute one portion of whatever earning from stock market to help one or two poor children to go for further studies in the name of Kalidasji.

    Rajmohan babu, Pointe-Noire, Congo

    Rajmohan babu

    November 20, 2008 at 5:11 am

  109. Kalidasji, Thanks for your comments on Godrej / Praj Industries.

    Have another question, it might be a very generic one. But your views would be appreciated.
    Indian planning commission’s 11th 5 year plan for 2007-12 focuses on “Agriculture, Rural Development, Industry, Services and Physical Infrastructure”. Do you have good agri-sector scrips in mind where we can invest for better returns with 5 years.

    I would like to list a few which I have been following for sometime
    1) Jain Irrigation Systems: CMP-297
    2) Subhash Projects: CMP-45, they are into water/waste managment.
    3) Bayer Cropscience: CMP-190

    Its not necessary that you have to comment on the above said companies. I would like to know which companies you follow in agri sector.

    Thanks
    Nitin

    0811-086 Kalidas Replies to Nitin (Thursday, November 20, 2008)
    I never buy agricultural commodity stocks. The real farmers are never listed, only crooks get listed. Since Income Tax is totally exempt on agricultural income, these companies show inflated profits to inflate the stock price. Except for Bayer, I would not trust other stocks. If you want to invest in agriculture, better buy some farmland.

    Nitin Pillai - Mumbai - India

    November 20, 2008 at 12:20 pm

  110. Dear Sir,

    I am eagerly waiting for your response on KFA/DECAVI & GSPL.

    Regards,
    Naresh Kumar, Faridabad

    Naresh Kumar

    November 20, 2008 at 1:26 pm

  111. Sir I am damn confused as I just bought L&T for 700 and as per you are saying that it may correct till 310 Should I sell it and re buy on the low or should i accumulate more to low down my cost price?
    please suggest
    Regards
    Ashish (Mumbai) )
    Spell check your message, before you post. I corrected 3 errors.

    0811-085 Kalidas Replies to Ashish (Thursday, November 20, 2008)
    Sell it. It is overpriced with high P/E. All high P/E will come down to single digit. You can buy back when it comes down by at least 50%.

    Ashish

    November 20, 2008 at 3:24 pm

  112. Sorry
    i have 50 shares of L&T@700
    the CMP on NSE is 710
    Regards
    Ashish (Mumbai)

    Ashish

    November 20, 2008 at 5:05 pm

  113. ohh okie will do that
    thanks a lot sirji

    okie one more confusion as of now the
    Essar oil P/E is 240.00 CMP: 67
    Educomp Solution P/E is 32.58 CMP: 1746

    also very high will that too may come to single digit?

    HDIL CMP:87
    KEC international CMP: 118
    has a low P/E of 1.54 & 3.74 respectively, are this shares good to buy at these levels?

    Regards
    Ashish (Mumbai)

    0811-088 Kalidas Replies to Ashish (Friday, November 21, 2008)
    It appears to me that some members are treating this column as “Discussion forum”. It is not. Here we expect the reader to disclose his specific problem and seek solution. I can not reply to same reader again and agaid on different stocks. I have other readers too who need reply.

    Essar Oil: I have replied to this point earlier. You can not use historical P/E when the company was not in production. It is in production now. Earlier, its sales for entire year was $500 crore plus, not it is Rs 20,000 crores in 6 months alone. In stock market, the future earnings and PE counts, not the current one. One may use current PE as starting point, but then he has to consider where the industry and the company will go based on hard facts and some sense of imagination.

    EduComp: I do not know this stock. Again a reminder – To seek advice on any stock, mention (1) stock name, (2) symbol with exchange extension (.b for BSE and .n for NSE), (3) Qty, (4) @Cost and (5) CMP. I can not do your job. No reply will be posted if these 5 details are not given.

    HDIL: No opinion at the moment. I do not like Builders’ stocks in bear market.
    KEC International: It is a lousy group. I do not touch them. Yes, power plants are being built and distribution grid are also built for which KEC will be getting lots of orders. Yet, the management of this company is very poor.

    Ashish

    November 20, 2008 at 7:58 pm

  114. sir
    can you suggest me what to do with DEVELOPMENT CREDIT BANK (NSE CODE “DCB” ? HOLD 100 @94/ AND 100@44/ AVG BEING Rs.69/ CMP 20.50 ON 20th NOVEMBER.HAVE I MADE A WRONG CHOICE?
    regards
    Ajay
    New Delhi

    Note: Spell check your message, before you post. In 3 lines you had 4 errors. (I have corrected all)

    0811-095 Kalidas Replies to Ajay (Saturday, November 22, 2008)
    Too expensive to buy. Yes, you made a bad choice. Banking stocks should never be bought at over 8 times EPS to make really good money. They usually trade at 8 to 12 times prospective EPS at the most. DCB has current EPS of 1.41 and prospective will be much lower. So, when you bought at Rs 94, did it not strike to your mind that you are buying stock at 65 times EPS? Amazing.

    One mistake all investors make is that if the stock has gone to say 150 and then drops to 100, they feel that it is cheap. They never ask why did the stock go to Rs 150 at the fist place? India’s growth story has caused so much of hype that many companies were splitting the shares from 1 to 10 or about to increase the share price.

    ajay singh

    November 20, 2008 at 10:36 pm

  115. Dear Kalidas sir,
    As predicted by you can we expect fireworks in oil prices. Is hpcl can be bought now or can it be postponed till markets meltdown.
    Thanks and regards
    Ravi, Chennai, India

    Ravi

    November 20, 2008 at 11:54 pm

  116. Respected Sir,
    Hearty congratulation and best wishes for the blog.Your hard work & time devoted to the blog is very well received by all of us.You have saved our hard earned money with your valuable advice at this juncture where every thing is falling downwords.
    Please do keep blogging we are in need of your great guidence & experience of life.

    kd chahar pune India

    kd chahar

    November 21, 2008 at 1:00 am

  117. Dear Sir
    Thanks a lot for replying so wonderful and beautiful message to me.
    What have you written in Second last para is just amazing. It has written by Pure heart & Passed through my heart. As your words become true, those days are not far away when India will again become strong prosperous country very soon in the world.
    Sir, I salute for your love to our motherland and for those innocent people like me whom even you don’t know.
    May god bless you!
    Bhavesh, Mumbai

    bhavesh

    November 21, 2008 at 2:40 am

  118. Hello,
    I have a question on ‘LIC Housing Fin’, as per your initial suggestion the buying range was (140-180), but as I see the CMP is about 166. Is it a good level to dip into this one or expect further corrections. DOW is down to the 52 weeks low today and closed more than 5 % down below 8000. I am under the impression that the markets would slide further and would reach about 7000-7500 range on Sensex. How will this stock evaluate at that period. Does it makes sense to buy at that time range?
    The second question is regarding ‘IVRCL Infras’ and NMDC. While IVRCL Infras is 1% up even today at this death market and NMDC is close enough to its 52 week low. They have recently also made some investments announcements in West Bengal(I am native of that place to keep some news) and how the future looks for this one? I know both are different sectors and type of stocks, but I basically wanted to get your opinion about your investment strategy on them. Let me know if possible. Thanks a ton.

    Suman, Zurich.

    0811-089 Kalidas Replies to Suman (Friday, November 21, 2008)
    The market meltdown has just begun. There will be huge rally only once when the 3 Auto makers get the life line from FED/Treasury. Already, they have agreed to convert GMCA (General Motors Acceptance Corporation) into a bank. They are converting almost every difficult borrower into a bank. We are going to see junkyard in the form of banks.

    I am writing another piece – Meltdown Begins – Prepare to Buy in 5 Stages – 3 in down stages and 2 in up stages. You never know what is the bottom. When my target price of LICHF is over 1500 in next 3 to 5 years, I do not care whether I pay 140 or 160 or even 210. Lower prices will satisfy one’s ego, nothing else.

    NMDC – I do not buy this kind of stocks. We have Tata Steel, SAIL, Tata Motors, why to go for their raw material of Babu managed companies?

    When Ratan Tata is leaving West Bengal, why do you want to get into same state who is not interested in state’s economy. Zombies live in West Bengal.

    Suman

    November 21, 2008 at 5:20 am

  119. Suman,
    Looks like you are optimistic .We are waiting for Dow to touch 5000 as per Sir’s thumb rule:-)) since it has closed well below 8k today. Imagine the LIC’s price of around 100 to 125 presuming Sensex may also kiss 5to6k 🙂 Personally I bought couple of hundred @ 162 yesterday.
    Shiva
    Bangalore

    shiva

    November 21, 2008 at 6:23 am

  120. Dear Sir,

    US never agreed they are in recession but suddenly FED is planning for Deflation. What an Irony!! Any how to counter act deflation , they don’t have any alternative few months down the line, but to reflate their economy. This is by devaluation of the currency. So Do you think Devaluation of USDollar is on cards far nearer than later ? I feel most of the European countries may also join the bandwagon to devaluate their currency. Looks like they are all happy to do that to come out of the mess. If this is possible scenario how do they do it ? Just by revaluating gold to some very high value say 1500 USD or whatever from the current 45USD or whatever?

    If they do so suddenly all asset prices ( including share prices) will just shoot up to the proportion of percentage of devaluation . Am I right? We may see in few days all US shares may jump by 30 to 40% if USD is devalued by 30 to 40%. Is it correct?

    India may not join the devaluation process. So Will there be any impact on Indian market by devaluation of USD? I am not sure if you want to touch this subject now but any pointers here and there will help me to explore things. I am just curious as these are all once in life time/century phenomenon. Apart from GOLD what all Indian stocks will benefit the USD devaluation? Oil and Gas stocks like GAIL/RNRL?

    Shiva
    Bangalore India

    0811-090 Kalidas Replies to Shiva (Friday, November 21, 2008)
    Shoot specific question without elaboration. The trouble with you that you have very idealistic mind. You have to critically evaluate your own opinion first.

    Devaluation is relative term. It is always reference to some standard – most use US dollar. If US is devalued, or declared devaluation, with reference to who? If US devalues and Europe also devalues as you claim, they cancel out each other.

    In India, when Rupee devalues, it is compared to US$. Against Pakistan currencies, it has appreciated by 40% (IRS/$ was 40 and PakRs was 60 to $ (I IRs = 1.25 PKR Today, the Pak Rs is Rs 80 and IRS is Rs 50 ( 1 IRs = 1.6 PKR). You always measure valuation with reference to certain standard and get varying result.

    The prices of anything is relative to supply of currency and availability of assets. If assets are more in demand and supply of currency is less, the prices rise. However, when the currency has been destroyed, the purchasing power of remaining currency increases.

    I can not discuss here more. My attention here is focused on specific problem a reader has with reference to his portfolio. I can read your opinion or statement, but when I compose new article, I will cover those points if not covered elsewhere.

    I want to limit the questions to 8 lines (without titles like kalidas sir, regards, thanks etc) and my answer to not more than 10 lines. so that other readers do not get distracted from specific problems and answers.

    shiva

    November 21, 2008 at 9:31 am

  121. Dear Mr Kalidas
    Should a small investor start buying the stocks recom by u or should buy gold instead. Which amongst the above 2 mentioned will give better returns
    Regards

    Shiv

    November 21, 2008 at 10:10 am

  122. I have read your crude realty of us through shorting contracts and I am going long on crude for that reason. But would it be proper time for entry as the expiry for the contract is 9th Jan on NYMEX. Please Guide me to this thing .
    Thanking You Sir.

    0811-091 Kalidas Replies to Vivek Bhattad (Friday, November 21, 2008)
    (1) To get reply, please append City and Country name to your signature invariably. This is the last time, I am responding to some one like you.

    You should not take speculative position based on my article. Crude Oil is a very complex subject. You have to be fully aware of political events, $ manipulation ($ Index on Comex), Oil price manipulation on NYMEX (Physical ) and NYMEX (Financial), and similar contracts on ICE, London (financial). Unless you have studied all 4 markets, you will not know what is happening in the crude market.

    Please cut down your position if you have not studied all 4 positions and clearly understood the ball game. You may play demo game on paper before venturing into this serious and speculative business.

    I am writing on Oil with reference to its potential effect on stock prices. I am good on stocks not on oil itself. Oil contracts have been successfully rolled over to January for which the settlement is in December. Use the following NYMEX link and study daily pattern properly. http://www.nymex.com/index.aspx , click the Crude Oil side bar, accept the agreement and then use detailed quotes from left bar. Also use http://www.ino.com which is highly informative site with real time quotes.

    Vivek Bhattad (India)

    November 21, 2008 at 4:40 pm

  123. How to calculate P/E of a company
    -krishna, hyderabad

    krishna

    November 21, 2008 at 4:49 pm

  124. I have been investing @ Rs 10000 a month in HDFC MIP Long Term Plan growth for last one year as part of my retirement plan. I am 52 yrs and I feel another about 10+ years of active life left. Do you have any other suggestions as I am seeing erosion in this investment also.

    My portfolio also has direct equity, Mutual fund, PPF,FDs, Nabard zero coupon bonds & Gold ETFs.

    Mohan
    Mumbai India

    0811-092 Kalidas Replies to Mohan (Friday, November 21, 2008)
    I do not know how MIP works. Right now, everyone has erosion in their value of investment. However, investing monthly does help to cross out + and – in course of time. HDFC is a reputed bank. Your other investment products appear okay to me.

    If you do are not investing into stocks or have any experience, I will not personally advise you to invest into stocks. Even if you do, invest beaten stocks like IFCI, Tata Motors, JSW Steel, LIC Housing Finance, all sitting on good price level to enter.

    Mohan

    November 21, 2008 at 5:50 pm

  125. Dear Mr.Kalidas,

    I would like to know your advice on following :
    1) SUNFAS- Sundaram Fasteners Ltd. I have 400 shares at 47.22 CMP-16.40
    2) HOTLEE – Hotel Leela. I have 430 shares at 43. CMP- 20.30
    2) CRECOM – Crest animations . I have 230 shares at 121. CMP – 21.20
    3) ASHMIN- Ashapura Minechem ltd. I have 175 shares at 151. CMP- 22.27

    Could you also advice from where to buy Gold Bars/Coins in Zurich ?

    Sonali, Zurich, Switzerland

    0811-093 Kalidas Replies to Sonali (Friday, November 21, 2008)

    1) SUNFAS- Sundaram Fasteners Ltd. I have 400 shares at 47.22 CMP-16.40
    Buy 1200 at current prices and then hold. Good stock. However, I normally do not buy South India based companies stock due to poor liquidity. This is a long established Sundaram group though.

    2) HOTLEE – Hotel Leela. I have 430 shares at 43. CMP- 20.30
    Buy now. Buy up to 1570 shares from current price and hold. If it goes too swiftly to Rs 30 or about, sell some. Excellent for long term (2 years or more)

    3) CRECOM – Crest animations . I have 230 shares at 121. CMP – 21.20
    Very complicated structure. Good industry but the company’s margin under pressure. The main Director is given huge salary and perks (Rs 72 Lakhs). High risk industry. shares are not so buoyant. I think there are better companies in same industry that can excel well. Though named relationship look exciting, but the high salary, retainership fees siphon off majority of profits. May be you can buy 1270 more shares and allow it to work. There is only one stock that can outperform this company in entertainment industry is Dish TV – relatively easy to understand. This company has lot go. However, in such industry, only one hit movie can change the fortune.

    4) ASHMIN- Ashapura Minechem ltd. I have 175 shares at 151. CMP- 22.27
    Are you working for some fund manager? How do you find such names? Looks cheap. Old company. Minerals on slowdown especially its Bauxite (used for Aluminum) and Bentonite. Pays good dividend (80% on Rs 2 Face Value = Rs 1.60 per share which works out to 7%n – not bad, but dividend may take hit this year. P/E very low, but prospective PE higher. Since your cost very high – must be chasing all mineral stocks – buy 825 now and more later.

    BUYING OF GOLD BARS in SWITZERLAND
    Are you asking me to find the gold bar seller in your own country where you work? Ask any Swiss bank or approach Habib Bank, Zurich or Credit Suisse or consult http://swiss-bank-accounts.com/e/index.html ( I do not know them).

    Sonali

    November 21, 2008 at 5:58 pm

  126. Dear Mr.Kalidas,

    I have a query regarding below stocks and how to reshuffle portfolio (if possible with minimum loss).I have still Rs.1 lac cash in hand. Please enlighten me as I seems lost on how to curb this immense loss. Mastek and HPCL are in my account from last 3 years, rest were during bullrun.

    Mastek : 200 @ Rs.198/-
    Okay to hold. May be sold in this market because loss not so big. Since price range of this stock is very narrow, much gain can not be expected. Buy only in deep correction if you want to hold and buy more. Sell it otherwise and buy more of RNRL where your losses are much more.

    HPCL : 175 @ Rs.280 /-
    Buy more in correction. No need to worry. It is long term winner.

    RNRL : 2000 @ Rs.155 /-
    You may buy more now (4000) and more later if resource permit

    RPL : 1500 @ Rs.188 / –
    Wait for Dec result. Read my article on RPL – find it from side bar

    TTML : 3500 @ Rs.46 /-
    Buy 1500 more and sent it for tender entire 5000 shares, .If they accept fully, buy later from the market entire 8000 again below 18 or so. The stock will drop after the initial buy back is over, but later, it may do well due to less number of floating shares (38 crore shares less). Read my article on TTML following the current article.

    Appreciate your time and help.
    Many thanks,
    Sandip Mistry
    Bangalore, INDIA

    0811-094 Kalidas Replies to Sandip (Friday, November 21, 2008)
    My reply is found under each stock. Read my Rebalancing Portfolio article first and understand the principle.

    Sandip Mistry

    November 21, 2008 at 6:03 pm

  127. Kalidasji,

    I had written this following message sometime back and I am waiting for your valuable advice on this , Sir.

    I have given all my Mutual funds for redemption after booking average loss of 48% and now I am holding cash 1.75 lacs to be invested in such a way so that i should be at least cover my loss, if not make profit in 2-3 years time. I am a senior citizen and I had invested 25% of my assets in MF and Stock market after investing in real estate(am in green since I had invested 14 years back in real estate).Whatever I had invested in equities, I have swapped(or in the process of) with other stocks according to your suggestions to my first message to you. pl. advise me regarding this redemption money 1.75 Lacs received from MFs.

    I am a regular reader of your articles. You have given the courage to face the crisis and also shared the views for salvaging the money and reinvesting them to come out of the loss. We owe a lot for your wisdom, Anilbhai. I am also from Gujarat. Anybody else in your place would have thought ke’Ghadini navarash nahi ane pai ni paidaash nahi bijani adhiyarima’-but yours is a Great job with enormous effort!! ‘mathu jhuki jay che aapni paase.’

    Rang-Jama, Bangalore, India.

    Kalidas: I think this post was already replied much earlier. Check your original post.

    Rang-Jama

    November 21, 2008 at 10:57 pm

  128. Clarifications sought by Shiva(Bangalore) have been interesting & thought-provoking (latest being on devaluation). Readers would love to have your detailed reply / views on this last subject-matter. Somehow, I have a feeling that your visit/reaction/reply on other links in this blog is less.

    Kalidas: already replied to Shiva. As I have mentioned this is specific question answer session, not a discussion forum. If you write something other than the intended purpose, it will be kept in mind while writing full article later. Here I do not want to entertain lengthy write up which takes up so much of space and distracts the attention of other readers – hope you will appreiciate that.

    further, I do not understand what you mean to say “Somehow, I have a feeling that your visit/reaction/reply on other links in this blog is less.” I reply chronologically regardless of preference for any enquirer or the subject matter. some questions that has been already answered in the article are not replied. The reader is expected to refer to those articles. Otherwise, it amounts to lot of duplication. I can not handle other enquirers if I go on replying on the subject already clarified or answered. I prefer specific questions without much elaboration. No more than 8 lines.

    vc sekar(Delhi, India)

    November 21, 2008 at 11:00 pm

  129. Sir

    You had mentioned that Crude will spike up between 20 and 24 of Nov. This did not happen this time. Any particular reason. I had made some investment in ONGC @ Rs 760 – CMP 660 or so. Please advice

    Thanks
    Prabu, Chennai, India

    0811-097 Kalidas Replies to Prabu (Saturday, November 22, 2008)

    It did not happen the way I thought and the contracts were rolled over to January 9 for which the expiry date is December 19. May be it was done through ICE, London where contracts are financials, not physical delivery and transferable to NYMEX. (Open interest position is over 290,000 contracts on very first day of the month) This is a crucial month.

    If it remains low, pick up some more shares of ONGC. Please note that in this market you buy only in dips – nothing is going to run away. One day the market is down by 900 points, another up 500 pts.

    ONGC stock, being an Oil Producer, moves much with the oil prices. When the oil prices fell by $10, obviously it corrected. Lower fuel prices help refiners like MRPL, SOE HPCL, BPCL, RPL, Essar Oil but they did not rise much. This means that either oil prices have to go higher to benefit ONGC or refinery stocks and airline stocks to go higher due to lower oil prices. If you are short term operator, better work on strict stop loss basis. Contact experts on short term trades. I am not good in that area.

    Right now the market is very fluid, and Investors hardly have control on prices. For the first time ever, US$ and Gold Prices rose together for last two days.

    May be some bank failure is on card. All indications suggest that Citi is about to fail that may have devastating consequences. UBS is next. Also fate of 3 Auto manufacturers. With so much volatility, one has to discipline to believe in a concept and buy the respective stocks while they are in correction, not on rise.

    Yesterday, the Dow soared in last hour after possible appointment of new Treasury Secretary. The price of $, Gold, Oil, stocks, bonds vary on highly charged news flow.

    Prabu

    November 22, 2008 at 1:30 am

  130. Referring to Sonali’s question about the Gold in Zurich, I would like to know your opinion of the quality of Swiss gold in particular and also the price worthiness of the same. I am referring to 24 Carat gold only and not the 18 Carat ones which are available in any jewelry store here in Zurich. let me know your thoughts on the same. What should be the right deal price if some one is interested in buying the same. I work for Credit-Suisse here so may be buying from then will be good. But is that the right deal and the timings.

    Suman, Zurich.

    0811-096 Kalidas Replies to Suman (Saturday, November 22, 2008)
    The gold as sold by Credit Suisse is at higher price due to its essay certificates and physical delivery. When you go to place like India and hand it over to a gold dealer, he will pay you raw gold prices, that is International Prices that may be 7% to 8% lower than Credit Suisse Gold Bar prices. The dealer is concerned only with the gold content, he does not care whether it is from Credit Suisse or Johnson Matthy. If you sell it back to CS, you may get their official Bid price. It will be easy sell.

    C heck with your bank for the price of 1 Oz (32.11 grams) gold bar with Credit Suisse stamp. If you are getting it at within 3% of ruling international prices, you do not have to go elsewhere.

    Try http://www.bullionvault.com/ to keep your gold at Zurich vault. When you want to sell, you can do it on line. The gold is physically kept at Zurich vault. If you want specific gold bar registered exclusively to you, they do it for small fee. (0.1%). The storage charges are 0.8% if you decide to keep the gold with them. I could not find physical delivery on their web site. Ask them over phone whether you will get physical delivery of gold once you buy it.

    In India, most of the gold that come arrive from Dubai called Tejabi gold which is in raw form with some marking not internationally recognized. These are sold at international prices. In India, you may try MMTC (Government of India company) to buy the gold at international prices. Approach MMTC offices listed on the website (difficult web site to find a way through) Better call them rather than wasting your time at the website. http://www.mmtclimited.com/newsitejewellery/gold_silver_medallions.html

    Suman

    November 22, 2008 at 4:18 am

  131. Not replied, Kalidasji,I have been checking the original post every time. Sir, and I am waiting for the reply eagerly.

    Thanks in advance.

    Kalidas: I will reply you when I feel the time is right. Right now, the market is in first stage of meltdown. Next 20 days are very critical. Some banks ormajor corporations may fail. Citibank is under intense pressure – anything may happen there. I will send you email, if necessary.

    Rang-jama
    Bangalore, India

    Rang-Jama

    November 22, 2008 at 10:07 am

  132. Sir,

    How safe is money in Indian Banks? With recent development of Citibank running into financial trouble, do we even need to worry about keeping money in banks? My savings are in normal bank FD’s (with SBI), some portion in SB a/c with ICICI bank (only for buying stocks at right opportunity), remaining in Citibank SB a/c (salary account). I learnt that deposit insurance covers upto 1 lac only.

    Also request you to send me an email with your mail id.

    Thanks
    Prabu, Chennai, India

    0811-099 Kalidas Replies to Prabu (Saturday, November 22, 2008)
    At the moment 100%. with nationalized banks. Private banks – upto Rs 100,000 under DIC or Deposit Insurance Corporation – check with your bank. Nothing to worry about SBI. for small account with ICICI Bank, there may not be much concern, but would prefer HDFC instead with same facilities, service and no controversies

    Almost all Indian banks may be affected isomewhat if something goes wrong with Citi Bank. Almost all banks have “nostro” account with that bank in the form of correspondent banking relationship. I am not sure whether those sum is guaranteed under any law in United States. Some insurers used to insure large balances of bank and customers, but today, we doubt even ability of those insurers.

    Stay safe. right now, not deposit interest rate, but safety of money is more important.

    Prabu

    November 22, 2008 at 1:32 pm

  133. Hello Kalidas
    I saw gold rising by $50 yesterday and since I had been in touch with you on the subject earlier, my question is will it hit $1000 soon or will it take time.

    Xavier
    UAE

    0811-100 Kalidas Replies to Xavier (Saturday, November 22, 2008)
    Failure of some leading American bank is on card that may have cascading effect. There is a crisis of confidence in keeping the savings with the banks. 3 Auto makers are also on verge of bankruptcy. it all depends how these crisis are playing out.

    For the first time, the Gold rose with the dollar – that creates more demand for gold in other centers. If $ rises vs Euro or GBP and Gold rises with $, the gain in gold prices in euro and GBP terms will be much higher. That may create more demand from those centers, because the credibility of their banking system is at stake.

    In India, same perception as Euro and GBP. There will be triple effect on gold prices in India – rise in US$ vs Rupee, Rise in Gold prices vs $ and finally real physical demand for gold due to incoming marriage season.

    To me, Silver is the best metal to invest. It is highly volatile though, but there could not have been more better opportunity as found nowadays. Right now, some large banks or central banks appear to be buying gold.

    xavier

    November 22, 2008 at 4:29 pm

  134. for Shivananda,

    You asked the question under irrelevant topic – Helping India’s Industrialists. You should have asked the question here. Following is my reply. Please post same question under this section to which following reply will be attached. This reply will be later deleted.

    0811-098 Kalidas Replies to Shivananda, (Saturday, November 22, 2008)When the fire is seen in home, you run to extract as much valuable as you can. There lies the answer. Due to potential legality, I can not be more specific.

    There are two aspects for Citibank. Is Citibank India a separate entity registered under Banking Regulation Act or branch of the parent Citibank, New York.

    If it is a separate legal entity, it would be governed by BRA and you might be insured at the most Rs 100,000 at the most. If you have two different accounts, each account is insured.

    If it is a branch of its parent in USA, then technically and legally, you are protected up to US$ 250,000 (earlier it was US$ 100,000) because it becomes the obligations of the parent. Citibank India is treated as if it has omnibus account with its parent, and each customer of its Indian operation is protected as if he had direct account with the Citibank, USA

    Under SIPC rule also (Security Investors Protection Corporation), the account holder of the branch or wholly owned subsidiary is afforded protection up to US$ 500,000 including Cash and Securities subject to sub limit for cash holding of US$ 100,000. There too, an account holder with the subsidiary of the US parent is treated as if he was the original customer of the parent. I have handled a case myself when my own company, a subsidiary of the parent, was forced into liquidation due to problem at its parents, and each customer was returned the money accordingly.

    Do not get into legality. It may take months. Act in your best interest so that you have liquidity when you needed it most.

    anilselarka

    November 22, 2008 at 7:20 pm

  135. Pertaining to the discussion we are having with respect to the Indian Banks and how safe they are with respect to the global turmoil, I would like to know how safe(as per your view) is to have a considerable lump sum with ICICI bank in India. To be specific, I have a considerable amount(in few lakhs) in the Quanta Optima FD accounts(which is the term ICICI bank uses as its kind of a pseudo FD where the money is automatically switched to FDs with span of 1 year and having reasonable interest rates(abt 9-9.5% currently) but its entire accessible to you anytime and can withdraw that when even you need without any hassles and can be operated Online. I just left them in that form with my linked Savings A/C with ICICI bank to avoid hassles for short term. I would need to use the most of this amount(few lakhs) for a social/family occasion in 2-3 months time from now.
    I have a savings A/C with SBI(in my native place) also and just didn’t move this amount to that for the simple reason that savings account has very insignificant interest rate and opening a short term FD with SBI requires your physical presence which is currently not in store for me at this moment.
    So, with all this background, I would really like to know if its still safe to keep the very few lakhs with ICICI bank or just dump it to the SBI savings A/C(leaving 1 lakh with ICICI bank as its insured) even when you will get a negligible interest on that sum still considering the safely of the amount. Please provide some light on this and your valuable suggestion on this.

    Suman Chakrabarti,
    Zurich.

    0811-101 Kalidas Replies to Suman (Sunday, November 23, 2008)
    Nothing to worry about Indian banks, including ICICI Bank. However, to be on safer side, open accounts on line with two leading private banks with similar benefits – Axis Bank (formerly UTI Bank) and HDFC Bank without closing account with ICICI Bank. Nowadays, with RTGS (Real Time Gross Settlement) payment system on can transfer funds between different banks instantly. Please register those account first – it takes about 24 hours for most banks.

    Suman

    November 22, 2008 at 7:47 pm

  136. Kalidasji,

    How safe to have SB a/c or current a/c or FDs or Locker with ING Vysya Bank? I am having all these with the same Bank and in the same branch, since it is close by and easy to carry out transactions from one place.pl. advice me if I have to shift these a/c s to different Bank/Banks.

    Ranga-Jama

    Bangalore, India.

    0811-102 Kalidas Replies to Ranga-Jama (Sunday, November 23, 2008)
    I would not worry about it. Lockers are also always safe with any bank because they are in the form of a trust.

    Rang-Jama

    November 22, 2008 at 7:50 pm

  137. Sir Out of a sudden why companies like Citigroup are on the verge of bankruptcy and major automobile producers like General Motors & Chrysler on the verge of filing bankruptcy?
    Sub prime has taken its toll on financial who used to hold these exotic derivatives but what is exactly wrong with these biggies?

    0811-103 Kalidas Replies to Vivek (Sunday, November 23, 2008)
    1. To get reply, please append City and Country name to your signature invariably.
    2. They were all technically bankrupt for over 10 years – Citi since 1992. You know in a mandir or temple, some beggars line up. When they find some donors, they with their rush to the scene with begging bowls. Donor distributes money or shawls, the beggars blessings.

    When the companies found that the FED on donors list and distributing billions of dollars in days, when they had wait for months to borrow from bank just few hundred millions, everyone has rushed to the FED buildings, senate and White House, seeking instant money. When you can make billions of dollars in days, why toil for several years for even 1/10th of amount. Free money is like sugar or gur – suddenly you find the black ants scrambling for a piece.

    There is a saying in India ‘ Behti Ganga mein hath dho lo”

    Vivek Bhattad

    November 22, 2008 at 9:25 pm

  138. Sir

    I need your suggestion on my portfolio mentioned as under:-
    Arvind Mill NSE Qty 500 @ 14.65 CMP 14.20
    (Buy more 500 to 1500 in correction)
    Dish TV NSE Qty 1600 @ 15.60 CMP 13.90
    (Buy 400 more in correction)
    Essar Oil NSE Qty 650 @ 74.50 CMP 67.85
    GSPL NSE Qty 400 @ 35.00 CMP 29.75
    (Buy more 300 now and 300 later in correction)
    Hotel Leela NSE Qty 700 @ 24.60 CMP 20.35
    (Buy 300 now and 1000 later in deep correction)
    IFCI NSE Qty 2000 @ 19.50 CMP 17.20
    IOC NSE Qty 50 @ 413 CMP 379.45
    LICHF NSE Qty 50 @ 256 CMP 181.25
    (Buy 50 more now, if you can)
    Petronet NSE Qty 200 @ 35 CMP 32.75
    (Buy more 800 when resources permit and stock is down to mid twenties, due to volatile market)
    I am a central govt employee and does not own a house yet.My dream is to purchase a house in Delhi with in a period of 3-5 years with the investment in securities. I can invest 2 lakhs more at this time waiting for your advise.

    0811-104 Kalidas Replies to K D Chahar (Sunday, November 23, 2008)
    My reply is in bracket under each stock. You have got a good portfolio with reasonable prices. When the stock drops further in deep correction, then only buy those stocks as suggested if they have come down more relative to others. You will buy your house with above.

    NOTE: You will change the above stocks only if you hear really bad news. Right now, there are none. Until such time, focus on your work and earn big promotion. The stocks will take care of themselves.

    kd chahar

    November 23, 2008 at 2:08 am

  139. Sir I do ask apology as I have commited error by not writing name and place.I am 40 yrs old and I have eight years service left.

    kd chahar pune india

    kd chahar

    November 23, 2008 at 2:15 am

  140. Hello sir
    I am holding the following major investment stocks

    IFCI – 4000 @ 20.50 CMP-17.20,
    ESSAR SHIPPING 2500 @ 37.00 CMP-28.40

    As prices are going down my total investment value also going down. So can I sell both of them and reinvest when market reaches bottom other wise just hold?

    What about investment in NALCO (National Aluminium Company Ltd)

    Please advise.
    Rajashekhar. Bangalore INDIA

    0811-105 Kalidas Replies to RajaShekhar (Sunday, November 23, 2008)
    Like you there are thousands who want to sell now and buy back if they come down. No one can predict “bottom” or “death”.

    No need to worry about IFCI now. Essar Shipping – buy 1500 now or split up in two lots – 500 now and 1000 when correction is more.

    Hindalco is better than NALCO at current prices.

    RAJASHEKHAR

    November 23, 2008 at 5:35 am

  141. RESPECTED SIR,
    I have purchased Larsen & Toubro Qty. 25 @ 1450 CMP 760.35 before few months. Recently you have given lower target of it.

    Is it better option to switch from L & T to Punj lloyd having CMP 150.15 ? Pl. suggest.

    Thanks

    0811-106 Kalidas Replies to Alkesh Shah (Sunday, November 23, 2008)
    Not a good swap. LT is still a better quality with long history. Punj has more hypes. Double sales does not result tripling or even doubling of profit, so rise in sales does not generate enough gross, that is, gross margin is under pressure.

    I am not convinced about Punj Lloyd. It is far too expensive from my viewpoint. I will let it pass. If you want to swap, sell LT and get into GAIL instead. Otherwise, stay with LT and buy more later, not now

    ALKESH SHAH , AHMEDABAD

    November 23, 2008 at 12:57 pm

  142. Dear Kalidasji

    I am strong follower of your messages, I don’t know why but I believe you a lot. Because I am not an expert in financial and only from last year June I am into this trading, as I said earlier I just followed your calls of sell everything and sold my entire portfolio and thanks to you and god even in worst market scenario I made 1lack with an investment of 3lacs.

    Now I have an amount of 6 lacs to be invested I am planning the following portfolio. can I start investing now with the below strategy.

    IFCI- 2 lacs – Reduce by Rs 1 Lakh and buy others as under
    Taj GVK- 50 thousand
    HPCL- 2 lacs
    Sail- 1 lacs
    Ambuja cements-25000 – Make it 50,000
    King fisher airliners-25000 Make it 50,000
    JSW Steel: invest 50,000

    This is the way I want to allocate my capital. Suggest me about the allocation is it right or else do I need to reassign the capital.

    I can wait for 2 years period.

    Sreedhar, Hyderabad.

    0811-107 Kalidas Replies to Sreedhar (Sunday, November 23, 2008)

    *Spell check your message, before you post. (5 mistakes corrected. Do not expect reply if you do not take trouble of posting the message properly after proper spell check)

    My reply against each stock as above. JSW Steel is added. Buy all either in market correction or stock specific correction.

    sreedhar

    November 23, 2008 at 4:24 pm

  143. Sir,
    Shall I buy 6000 KFA/DECAVI @CMP ? I am waiting for your go ahead as you know I already have 4000 @ 63
    Naresh Kumar Faridabad

    0811-108 Kalidas Replies to Naresh kumar (Monday, November 24, 2008)
    Do you have only one stock as above in inventory? My reply in two parts – use whichever is applicable to you:

    If KFA is one of your holding, then
    BUY 2000 @ 25 for below

    If KFA is the only stock you own, then
    HOLD for a while. It is not advisable to put all money into one company. You may have to diversify, for which you have to wait for right time. I take the view that the market is likely to react adversely to bad news from Citi Bank and Auto manufacturers. When Citi needs guarantee of $360 billions in addition to $20 Billion cash, it means that it is 100% bankrupt. If US government go on guaranteeing such obligations of such magnitude, it amounts to “State Bankruptcy” In other words, US is technically bankrupt.

    Naresh Kumar

    November 23, 2008 at 10:33 pm

  144. Hello Sir,
    I need your opinion about the share metioned below.
    AMTIND, bought 600@70 CMP@19.70.
    The full name of the share is Amtek India Ltd. Could you please suggest me whether i should stick with this share or swap to other.
    Vijay,
    Bangalore,India.

    Vijay

    November 24, 2008 at 12:43 am

  145. Dear Sir,

    Kindly advise me on whether to sell my GTLInfra shares 560 nos @ average price of Rs.75.04 CMP Rs.36.85 and raise cash to invest in shares already suggested by (NOCIL, SPICEJET, IFCI etc) during corrections. I find this share always moves between Rs.36 to Rs.39 and my loss is around 50%.
    Do you have any specific recommendation on this scrip. Please advise.

    Saravanan, Chennai, India, Sunday Nov,23,2008

    Muthu Saravanan

    November 24, 2008 at 2:48 am

  146. How do you project the power sector to perform: I have the below portfolio as currently on it. Do you suggest any alteration as prices are all far below than what was alike all sections. Let me know.

    NEYLIG- 120@121.87 – CMP – 55.40
    NTPC- 100@163.50 – CMP- 152.25
    POWGRI- 135@54.62 – CMP- 75.25 (Bought 110 in IPO)
    RELPOW- 96@233.37 – CMP- 106.50 (Bought 15 in IPO and 36 as Bonus Shares)

    Let me know your thoughts.

    Suman, Zurich.

    Suman

    November 24, 2008 at 6:25 am

  147. Kalidas Sir,

    I have Subex Limited(SUBSYS), 50 shares at Rs. 413.09. CMP is Rs. 31.60.
    Also I have Adlabs Films Limited(ADLFIL), 76 shares at Rs. 526.41. CMP is Rs. 155.40
    Can you suggest what to do with these shares?

    -Venkat Gurukrishna, Bangalore, India

    0811-110 Kalidas Replies to Venkat Gurukrishna (Monday, November 24, 2008)
    Subex Ltd. (SUBSYS)
    No comments. I do not follow the named stocks. I do not follow software stocks except few large ones. If I form an opinion later, I might send you an email.

    Adlabs Films (ADLFIL)
    Good to own but the prices are still way too high. Wait for some deep correction to buy more at that time. Do nothing at the moment. May be, if you are a risk take, to sell 50% of Adlab and buy dish TV/ Selling one share of Adlab will get you 10 shares of dish TV.

    Venkat Gurukrishna

    November 24, 2008 at 1:59 pm

  148. I have 1000 Reliance industries (very old investment)>I read in one of your replies that reliance can go up to 300 or 800 depending forex losses. Should I sell my shares & cover them at lower price? since we have seen 3100 price to sell at 1150(CMP) seems too low.pls advise.Also have 1000 shares of Sunpharma(old low price).should I sell them now?
    Sanjay Shah (Mumbai)

    0811-112 Kalidas Replies to Sanjay (Monday, November 24, 2008)
    Spell check your message, before you post. You had 8 errors. Also capitalize first letter and your name and avoid abbreviation like U for you and hv for Have. Unless you observe this protocol, do not participate here.

    you never asked the question why RIL went to Rs 3400 at first place. It was a hype – they were sub dividing company and giving shares of each company. It is a whole apple, and he was distributing each segment. the stock should not have gone to Rs 1800 or more.

    when it started coming down, you should have sold at Rs 2800 if you missed the boat at Rs 3100. At least 70% so that you could have had your capital back with substantial profit. The balance would have been just floating profit.

    Right now, we are in deflation. RIL will not see the old price for another 10 or 15 years. The crisis is extra ordinary. The money has disappeared, so the remaining money has higher purchasing power. (that is lower value of other assets including shares)

    If RIL is at 1100 and you wish to get 3100, you should have share that could easily triple relative to RIL. I would sell RIL in rally, any rally and will not look back until has reached its nadir.

    Sell it now and buy back with same money more quantity when it hits down. How much, I do not have crystal ball. But if his losses in Forex in RPL is great, then the stock could come down to as low as Rs 300. Otherwise, you may buy some at Rs 800 or about. Right now, it is a big SELL now. I may be right or wrong.

    Sunpharma is a very good company. I have not studied much. I may reply later.

    sanjay

    November 24, 2008 at 5:50 pm

  149. Dear Kalidas Sir,

    Kindly advise the price at which ICICI Bank will be a good buy. I understand that the bank is running into trouble (because of exposures to US and rumours). I have followed your articles on this bank earlier and I am well aware of your stance on this bank.

    But even then I feel that this bank provides the best services and it is easily one of the most agile banks in India (at least in consumer banking). It also has a potential to be more efficient than other banks in India. As compared to other public and private banks it is easier for this bank to change strategies and policies. In past this bank has demonstrated a good speed of implementing new technologies and customer centric approach (baring beating up of loan defaulters ). icicidirect is a good example of one of its product which is still one the preferred brokers. Therefore I seek for your view as to when this bank will look like a bargain to you.

    Regards,
    YSB, Delhi

    0811-114 Kalidas Replies to YSB (Monday, November 24, 2008)
    Suit yourself. One year ago, I projected the value of Rs 180 for ICICI Bank – and I still stick to that target. No more than 180

    YSB

    November 24, 2008 at 6:46 pm

  150. Dear Kalidas Ji,

    I need your guidance about tax savings vs. investment in shares. I am a salaried person with income 6L/pa. As in India we have option to save Tax by investing up to 1L under various schemes’s to save tax. Kindly advice if one should pay taxes according to tax slabs and invest the remaining surplus amount(if any, in my case, about 1.2L) in shares for better gain or invest in tax saving options(if in tax savings, what should be the right instrument to invest in .)

    I will be glad to hear your connoisseur advice.

    Best Regards, Rahul
    Indore, India

    0811-115 Kalidas Replies to Rahul (Monday, November 24, 2008)
    You have come to a wrong place. Well, Taxation is not my subject. I have only cursory knowledge of tax in India (I live in Hong Kong) and that too limited to stock market investments – not other schemes. You should consult your tax adviser for more specific advice.

    My general advice to investors is not to bother about paying taxes out of earnings. Short term taxes are just 15% and long term is NIL, so why bother so much about taxes and make the state as your enemy?

    Stock market does offer good planning for taxes. Under Indian Tax Law, only physically booked profit or loss are taxable. So never hesitate to book the losses on stock especially near the end of the day and buying back same stock in the early morning. Often the people miss the sell opportunity thinking about paying taxes. Many missed selling Reliance at Rs 3100 to 3400 after buying as low as Rs 600. If they made a gain of Rs 2500 and even if they have to pay tax @ 15% (NIL if held over one year), they would have paid at the most Rs 400 as taxes, making net gain of Rs 2100. But the name TAX alone forced them not to sell. So today, they are seeing the value of Rs 1150 or gain of about Rs 550 against net gain after taxes of Rs 2100.

    This is all I can tell you. I do not know about other tax saving schemes, so unable to guide you. What makes difference whether you make 10% without taxes or 9% after taxes? Whenever you make invest money, first see the safety and liquidity of your investment and then think of earnings.

    Rahul

    November 24, 2008 at 6:48 pm

  151. Kalidasji, I rebalanced my portfolio after reading most of your articles and remaining are as follows. I paid heavy “tuition fees” as you mentioned and at last found the right source. I am long term investor and can invest one more lack maximum by aiming to cover my losses and with some profit. I can share more details if you can allow me to send email. Can you please advice me on the following portfolio?

    Exchange NSE
    AMBUJACEM 400@57 CMP:57.35
    ARVIND 350@15.50 CMP:14
    BALAJITELE 270@66.20 CMP:64
    DISHTV 1100@16.10 CMP:14
    ESSAROIL 550@77.20 CMP:67
    ESSARSHIP 1750@35 CMP:27.15
    IFCI 10000@25 CMP:17.05
    JSL 350@ 36 CMP:31
    LICHSFIN 487@180 CMP:175
    ROHLTD 400@45.50 CMP:40
    TAJGVK 200@48.24 CMP:49.50
    WWIL 3000@ 14 CMP: 10
    JSWSTEEL 150@ 194 CMP: 188.55
    KFA 500@24 CMP :23.70

    Kumar,
    Tokyo, Japan.

    Kumar

    November 24, 2008 at 9:32 pm

  152. Kalidas,
    I have following shares, please suggest
    GMRINF 500@225
    RPL 1100@218
    Power Grid 1600@136
    Essar oil 200@241
    IFCI 1000@92, 575@105
    Deccan Gold Mines 500@120
    HDFC 75@1360

    Please suggest, in huge losses

    Krishna,
    Hyderabad, India

    Kalidas: RESUBMIT with CMP (Current Market Prices) This post will be deleted and new one will be replied

    krishna

    November 25, 2008 at 12:55 am

  153. Kalidas sir,

    I am very small Investor. I Invested around 20k in stock and now I am in loss of over 55 %. Please advise on below stocks which I am holding:
    BHEL 2 @ 2078 CMP 1302 SELL (+ Rs 2600) Buy GAIL 13 shr @201 (-2608)
    Deccan Gold 32 @ 57 CMP 16 (Why did you buy this stock? SELL and buy Dish TV 64@ 14 (-896)
    Reliance Communications 4 @ 645 CMP 205 Buy 6 more when 181 or below
    Reliance Power 32 @ 213 CMP 111 Buy more 2 when it hits 81
    Suzlon Energy 9 @ 281 CMP 47 Buy more as under
    TCS 2 @ 863 CMP 520 SELL 2@520 (+1040) Buy Suzlon 21 @ 47 (-987))
    Universal Cable 5 @ 91 CMP 34 BUY more 25@34

    I made beginning with the above stock. Please advise.

    Manish,
    Mumbai, India

    0811-117 Kalidas Replies to Manish (Tuesday, November 25, 2008)
    See the reply against each stock
    Also, Spell check your message, before you post. I hate those who do not take this basic trouble of posting the message.

    Manish

    November 25, 2008 at 6:11 am

  154. Sir, I think CITI Bank crisis has been solved, will this rally continue? Are there any other banks to fail now? Are there any chances of deep correction in near future? I have new money, can I start invest new money now? – Thanks Sankar, Hong Kong

    0811-119 Kalidas Replies to Sankar (Tuesday, November 25, 2008)
    Are you working for a bank or with some Sindhi firm who took large position into this stock or have own business?

    You are saying that $ 1trillion liability of Citi just imported from off shore account is resolved! This is a bankrupt bank in my opinion- invest at your own risk.

    Do not make your new money dirty overnight. Search for better counters.

    gs_2007

    November 25, 2008 at 11:25 am

  155. Sir,

    KFA/DECAVI is one of my holdings. My other holding are as follows:

    ESSOIL 500 @ 91 CMP 68
    -Buy more when it drops to 58. Otherwise do nothing
    PETLNG 500 @ 38.5 CMP 32
    – Buy more when below 28. No need to sell
    ESSHIP 500 @ 29.5 CMP 27
    – Retain the position. Buy 500 more when 23.50 (not scaring you. just market)
    ABHIND 5000 @ 8.05 CMP 7
    – Buy 5000 more at 6.85
    IFCI 15000 @ 25 CMP 17
    – Buy 5000 @16.10 or 15.85 (set this day limit. It will hit)
    TVSSUZ 1000 @ 32.50 CMP 24
    – Buy 1000 more at 23.50
    DISHTV 2000 @ 18 CMP 14
    – Buy 3000 more @ 12.10 (if it goes to that level – otherwise do nothing)
    DECAVI 4000 @ 63 CMP 23
    – Buy 2000 more now. Additional 4000 if it ever falls below 18. If it rises to 30 after your purchase at 23, sell it and buy back next time below 20 (not at 23 again)
    GSPL 4000 @ 48 CMP 29
    – Buy 2000 now @29 and 4000 more if it ever falls to 25 or below. Hold it 18M
    INDHOT 500 @ 48 CMP 46
    – too small position. Make it up to 5000 if you can. Good below 50. However, please note that whenever stock falls below 50, and remains there, it may see the lower level of 35. So, be a buyer progressively
    BALTEL 500 @ 72 CMP 64.5
    -Do not know this stock. I would sell and apply cash elsewhere.
    SPICEJET 2000 @ 11.85 CMP 12.80
    – I would hold it longer term, unless there is quick rally giving you good return. At any time, it exceeds Rs 18, stop trading. It will then rise to at least 25

    I have made the investment for 2-3 years and more worried about KFA/DECAVI which is more as its more than 60% down. I still have 8 Lakh to invest but I am not sure whether I should average out KFA/DECAVI first or get others as other holdings are quite low. Kindly guide me how should I proceed.

    Regards, Naresh Kumar, Faridabad

    0811-120 Kalidas Replies to Naresh Kumar (Tuesday, November 25, 2008)
    read reply below each stock above. DO NOT apply too much of new funds now. Use at the most Rs 2 lakhs. Keep the rest for emergency buying when the market suddenly goes down and many stocks are on lower circuit by at least 20%

    Naresh Kumar

    November 25, 2008 at 11:42 am

  156. Hello,
    I am still yet to receive a response in my above last posted message as below. May be it has got missed among so many other ones you receive daily. Please let me know about this:
    ******************************************************
    How do you project the power sector to perform: I have the below portfolio as currently on it. Do you suggest any alteration as prices are all far below than what was alike all sections. Let me know.

    NEYLIG- 120@121.87 – CMP – 55.40
    NTPC- 100@163.50 – CMP- 152.25
    POWGRI- 135@54.62 – CMP- 75.25 (Bought 110 in IPO)
    RELPOW- 96@233.37 – CMP- 106.50 (Bought 15 in IPO and 36 as Bonus Shares)

    Let me know your thoughts.

    Suman, Zurich.

    Kalidas: No comments. I do not follow the named stocks. If I form an opinion later, I might send you an email.

    Suman

    November 25, 2008 at 3:18 pm

  157. Sir,
    I read your views on MMB about Reliance touching 600 levels some six months ago. Now I am really impressed by your rationale.
    Sir just one query. Where do you see gold in next 2-3 years?? My conviction says that it must appreciate by atleast 60-70% if the current mess continues. Please encourage new investors like us by replying.
    Thanks, Anupam, NewDelhi

    0811-121 Kalidas Replies to Anupam (Tuesday, November 25, 2008)
    After Citibank event, I have revised my target substantially.

    US$ 3200 for Gold
    US $ 90 for Silver (My earlier target was $1800 and $60 respectively)

    In India, it may be different. If rupee is allowed to appreciate, the prices will be exchange adjusted accordingly.

    Anupam

    November 25, 2008 at 3:21 pm

  158. Sir,

    Further to my earlier message below:

    BALTEL 500 @ 72 CMP 64.5
    -Do not know this stock. I would sell and apply cash elsewhere.

    BALTEL is BALAJI TELEFILMS.

    Regards, Naresh Kumar Faridabad

    Kalidas: Sorry. Stay with it.

    Naresh Kumar

    November 25, 2008 at 5:36 pm

  159. Dear Kalidas Ji

    I have the following stocks purchased many years back and bought during IPO for NRIs. Wish to invest in India again. Have received pancard and ready to sell off portfolio and form new investments for long term. Please advise weather to retain or sell the following and what counters to reinvest back or make new investments as I have transferred the funds too

    sbi – 100
    rel energy – 100
    mrpl – 800
    chennai petro – 400
    finolex industries – 151
    ghcl ltd – 1000
    gujarat sidhee – 500
    i g petro – 300
    nagar fert & chem – 5000
    jct elect – 500
    zenith computor – 600
    united spirits – 1,400
    mcdowells holdings – 280

    Thank you

    Kalidas:
    Since you are new, please note the following protocol. May be bought in IPO but I may not know your IPO price or cost. By the way, if your name is Ashok Gorasia – are you Gujarati and from Dasa sorathia community? Are you by chance originally from Ghatkopar? Just a curiosity, because I had neighbour for over 30 years having same family name as Gorasia.

    To seek advice on any stock, mention (1) stock name, (2) symbol with exchange extension (.b for BSE and .n for NSE), (3) Qty, (4) @Cost and (5) CMP. I can not do your job. No reply will be posted if these 5 details are not given.

    Ashok Kumar, Malaysia

    November 25, 2008 at 11:08 pm

  160. Dear kalidas ji,

    Based on the current scenario, where the money is vanished, how can Gold still reach the estimated value you mentioned above?

    I may be wrong, but I feel that Gold (held by banks / individuals) will now be sold / leveraged to arrange for paying off debt and trying to escape economic stagnation.

    Sir, but I could not resist asking this question, as I could not find an answer anywhere.

    Regards,
    Girish, Pune (INDIA)

    0811-122 Kalidas Replies to Girish (Wednesday, November 26, 2008)
    After all Assets devaluation, stocks, bonds, homes, and other assets, the reckless governments have printed over $4 trillions of currencies in US, UK and Europe, with the result that we are going to enter the era of deflation and also hyper-inflation when the government will be obliged to raise interest rates over 30% in the above countries and be forced to reduce money supply to contain the inflation, which they will not do.

    Gold being a constant commodity will have pile of worthless papers stacked against it, that will propel the value in top most stratosphere.

    Gold, Silver, Palladium and to lesser extent Platinum will rise majestically. Commodities like oil steel, copper and Aluminum will also rise in their second bull run.

    Please note that all the commodities and precious metals have been artificially suppressed for over 24 years. Gold reached $800 in 1984 when the money supply was 15% of what it is now. In last 24 years, the inflation too has risen over 150% to 300% or even more (because they always change the Index standard).

    Even without accounting for trillions of additional money supply, the Gold should have been at $ 1600 to $2000 and Silver at $50 to $60 (Silver reached $ 50 in 1984 and today it is at $10 – 80% lower in spite of 150% rise in inflation on most conservative basis. Gold to Silver ratio in 1984 was 16 ($800/$50) whereas today, it is nearly 80 ($817/$10.2).

    Girish

    November 26, 2008 at 12:01 am

  161. Apology for the typo.

    Last line should read:
    ————————————————-
    Sir,i could not resist asking this question, as i cannot find an answer anywhere.
    ————————————————-
    Regards,
    Girish, Pune (INDIA)

    Girish

    November 26, 2008 at 12:05 am

  162. Kalidasji, as per your comment, giving CMP also here

    GMRINF 500@225 CMP 56
    -SELL and realize cash (+28,000) Extremely overpriced share. Think of buying back only when it is at less than Rs 10 (EPS is just Rs 0.34, that makes current PE at 175, how could you have paid 225 which is 775 times p/E ratio? Are you out of your mind? You never investigate such basic matters?

    RPL 1100@218 CMP@72
    – Sell 600 @72 (+45,000). Buy back when the stock goes below Rs 30

    POWER GRID 1600@136 CMP@75
    – Too many shares. Still way too expensive. Buy more when the stock hits Rs 31 or about. If you want to sell some now, you may do so to use the money elsewhere. I suggest you sell 600@75 (+45000)

    ESSAR OIL 200@241 CMP@66
    – Buy 400 more @66 (-26,400)

    IFCI 1000@92, 575@105 CMP@16.5
    – Buy 3225 @ 16.5 (-53,200) Buy Stage II – 4000 more in melt down

    DECCAN GOLD MINES 500@120 CMP@17
    – SELL everything 500 @ 17 (+8500)
    – BUY Dish TV 2000 @14.10 (-28,000)
    – BUY Abhishek Industries 5000 @6.85 (-34,000)

    HDFC 75@1360 CMP@1350
    – SELL 75 @1350 (+1,01,250)
    – BUY LICHF 300 @ 170 (-51,000)
    – BUY MRPL 1000 @ 35 (-35,000)
    – BUY Essar Shipping 2000 @27 (-54,000)
    – BUY IB Retails 2000 @ 13.50 (-27,000) Illiquid shares but may rise later.

    Cash Realized Appx + 227,750
    Cash Deployed Appx – – 255,400
    Net Cash surplus/outlay – 27,650

    Please suggest, in huge losses

    Krishna,
    Hyderabad, India

    0811-123 Kalidas Replies to Krishna (Wednesday, November 26, 2008)
    Read the reply above. If you have fresh money to invest,use above counters as per your discretion.

    krishna

    November 26, 2008 at 1:00 am

  163. Ashok Leyland 400 @ 35, CMP:14
    – BUY 1600 @ 14
    MRPL 180 @ 79, CMP:35
    – BUY 320 (or more) at current level
    RPL 135 @ 159, CMP:72
    – Hold. Buy more when it falls below 50
    RIL 20 @ 1523, CMP:1071
    – SELL with a view to buy back in correction or just HOLD
    IBULLS 26 @ 277, CMP:94
    -SELL
    SBI 32 @ 1535, CMP:1072
    -SELL
    Reliance Power 45 @ 300, CMP:107
    – Too late to sell. very small Qty. Buy more when <80
    Suzlon 265 @ 70, CMP:42
    – Heavy selling yesterday. Check the reason, Otherwise buy more 735@42
    Tata Tele 200 @ 38, CMP:19
    – Buy 600@19 and tender
    RCOM 100 @ 383, CMP:195
    – Buy 100@181 or less
    GMR Infra 260 @ 147, CMP:54
    – SELL and do not buy unless it falls to Rs 8
    SAIL 200 @ 159, CMP:63
    – Buy 200 more now
    Hotel Leela 200 @ 40, CMP:19
    – Buy 1800 at current level
    L&T 10 @ 735, CMP:736
    -SELL and use the proceeds elsewhere
    Sesa Goa 100 @ 147, CMP:68
    – Hold for a while

    Have 1 lac to invest and holding period for above scrips are 2-3 years, Kalisdasji your suggestion will be really appreciated.

    0811-124 Kalidas Replies to Nitin (Wednesday, November 26, 2008)
    To get reply, please append City and Country name to your signature invariably at the end of the message. further, I notice that almost everyone is sending over his portfolio of 10 to 15 stocks to me. This is impossible for me to handle. I can only provide you tool, which was in fact provided in the form of article “Rebalancing Portfolio…” found here and also in the download section.

    Please note that each unknown stock takes about 10 minutes for me to comment on. I can not spend so much of time for every enquirer – I have other business to attend. For this post, I have replied as special case. No more in future.

    Nitin - Mumbai - India

    November 26, 2008 at 8:42 am

  164. Dear Kalidas Ji

    Sorry for not providing details earlier. Being resent below. Please note these are stocks bought years ago and not monitored so did not sell at peak. Would like to invest more funds and also clear current holding or swap as per your recommendations.

    By the way I am gujarati but not from ghatkopar but from rajkot. I had left india 40 years back.

    Regards
    Ashok
    Malaysia

    Current Holding:

    0811-125 Kalidas Replies to Ashok,(26/11/08)
    This is the last time, Regret, unable to provide complete portfolio solution. it takes lot of time. Please refer to my article “Rebalancing Portfolio…” and be guided accordingly. It contains step by step instructions.

    This column is meant for specific problems or confusion.

    RELINFRA – BSE:500390100, @45, CMP:497
    -SELL 80% Balance is your floating profit
    SBI – BSE:500112, 150 @96, Cmp:1072
    – SELL all
    UNITED SPIRITS – BSE:532432, 1400 @ 77, CMP:844
    -SELL 90% and retain some. Your capital and major profit collected.
    MCDHOLDING – BSE:532852 280 @32, cmp:48
    – No idea about this stock
    CHENNPETRO – BSE:500110, 400@35, cmp:112
    – Buy more 600 now or under correction
    GHCL- BSE:500171 1000 @10, cmp:26
    – do not know this stock
    GUJSIDHCEM – BSE:518029, 500@10, cmp:7
    – do not know this either. No opinion
    IGPL – BSE:500199, 300@10, cmp:16
    – Get rid of small parasites. Focus only on some major holdings
    FINPIPE – BSE:500940, 151@10, cmp:28
    – SELL. Not popular group nowadays
    NAGARFERT BSE:500075, 5000@10, cmp:14
    -SELL all. Never buy fertiliser stocks
    MRPL – BSE:500109, 800@10,cmp:35
    – BUY more at current level and below. Buy upto 5000 progressively. sooner of later, this company may be privatized by ONGC
    JCTEL – BSE:500222, 500 @10, cmp:2
    -SELL. Small position. Do not know the stock
    SRHHYPOLTD- BSE:532842, 2500@10, cmp:17 – SELL
    SRHHLINDST- BSE:524410, 3800@10, cmp:5 – SELL
    ZENITHCOMP- BSE: 517164, 600@10, cmp:15 – SELL

    Ashok Kumar, Malaysia

    November 26, 2008 at 10:05 am

  165. Dear Shri Selarka,
    Specifically for your price projections for gold and equities, could you also kindly let us know your assumptions and how a change in the parameters could change the projections. This would be very helful for your followers to take a decision in case of sudden/ unexpected change in situations

    Vineet
    Delhi, India

    Kalidas: Good question, but it is too complex matter. It takes 12 page article to do that. Partly, it was explained in the article “A Nation on the Grill” recently. See the side bar.

    Vineet

    November 26, 2008 at 12:15 pm

  166. “Credit Default Swaps likely by next year” titled in 19th November Mint newspaper reported FM asked RBI to explore the possibility of introducing of CDS. What will happen in the Indian financial market after introducing CDS?

    Mathi, Madurai, India

    0811-126 Kalidas Replies to Mathi (Wednesday, November 26, 2008)
    Destroyed.

    Is FM out of his mind? Before educating common investors, he introduced Futures and Options where 80% of small investors participate. Result – All are destroyed.

    When Credit Default Swap has destroyed whole world, including ICICI Bank (though not formally recognized), he will bring in disaster which is right now happening right under his nose, before his eyes.

    India is a biggest holder of gold in the world today. Has FM paid any attention to make a market for gold bar or coins (9999 grade) which ordinary Indian can buy without going to vulnerable Gold shops who deliver inferior goods (18K or so in the name of 22K) , charge lot of kasar, and exorbitant prices for labour (Rs 120 per gram at some place)?

    Why the hell is he not telling RBI to come out with full proof scheme where Indians can buy Gold Bars of 5, 10, 100 tola with RBI logo and 9999 mark (24K) and small lagdi (1 tola or 10 grams) and very small affordable gold coins like 1,2, 5 grams which is exchanged almost all occasions – from birth to wedding to death? this will open up avenues for all investors, from poor man, farmer, middle/upper c lass person or wealthiest people in secured manner. Government will also earn 2% tax.

    When Indian own up almost 30,000 tons of gold and several billion ounces of Silver, he should bother about that existing inventory, create Gold and Silver bars with emblems of RBI or Government of India or image of our past illustrated leaders.

    This will create real savings of real asset, instead of speculating on paper derivatives“Maro saale ko” or send him to strong school teacher who will thrash him on his back after pulling down his pants or lungi

    He is not doing what he is supposed to do, and try to sit in the lap of United States which has destroyed 90% of world economies. He would be downright stupid to even suggest this measure at this point of time. If I were the Prime Minister, I would summarily dismiss him, not even giving him opportunity to resign.

    Mathi

    November 26, 2008 at 12:17 pm

  167. Kalidas,

    I fully agree with your thought about Gold, Silver and other precious metals. It is also logical that prices of these metals can go up 2-3 times (minimum) of present quotes in another couple of years. The stock market indexes are difficult to catch that speed. Though, individual stock can match it in next few years. It can be really difficult for small investor to decide about entry & exit timing to take advantage. This BEAR market cycle seems to continue for another year or so or even more.

    Would it be wise to consider Gold or Silver as safe investment and turn away from stock market for some time? How about partly physical & partly in Gold ETF? If the investment in bullion is to be given preference, which one is the best choice, GOLD or SILVER?

    Thanks for your valuable time.

    RGDS,

    HASMUKH RATHOD, PUNE.

    Hasmukh Rathod , PUNE

    November 26, 2008 at 2:27 pm

  168. Thank you Kalidas Ji for your advice.

    I have taken action as advise and looking at new stocks to invest.

    Meanwhile before investing in LIC HF, just wanted your comments on LICHF news today about them lending crores over last 3 months to the big property developers now who were unable to get funds from their own bankers to complete their projects. Is LICHF moving their core business from lending to house owners to now property developers?

    Ashok
    Malaysia

    0811-127 Kalidas Replies to Ashok (Wednesday, November 26, 2008)
    LIC’s main business is investment. You may call it lending also. They have to lend or invest the premium received without which they can not earn or exist. There is nothing wrong with them in lending, but it is not required. Almost all banks are nationalized banks and LIC too is owned by GOI. So why LIC should undertake the role of the banks – they have 100 times more funds than LIC has.

    The event is neutral otherwise. Real Estate developers, especially in India, are high risk borrowers. They are speculators. However, if houses are not built, then what happens to newly wed couples who want to buy new homes. Joint family concept is no longer that dominant in present day India.

    Ashok Kumar, Malaysia

    November 26, 2008 at 3:04 pm

  169. Hello Sir,
    I am posting the same question again.

    I need your opinion about the share mentioned below.
    AMTIND, bought 600@70 CMP@19.70.
    The full name of the share is Amtek India Ltd.

    PE of this stack looks still attractive to me but not able decide whether to buy more or wait for more correction.

    Vijay,
    Bangalore,India.

    0811-129 Kalidas Replies to Vijay (Wednesday, November 26, 2008)
    On the basis of the balance sheet is available , the company at this price is very attractive. The question is , why the stock has been hit so hard. It has raised capital between Rs 120 to Rs 150 domestically and by FCCB. There may be something that fails to meet eye when highly profitable company loses 90% of its value.

    There is only one note that attracts my attention (it looks innocent though). It reads as under:

    12. The company is undertaking derivative/swap transactions on regular basis. Any income/loss is accounted on receipt basis. (Source: Note to Account – 2007-06)

    I do not know why this clause exists. Most of the borrowings of the company has been in the form of FCCB which does not require much adjustment. Is the company speculating on FOREX market, we do not know. However, I will take a chance and buy some more shares say, 1200 @ Rs 20. If there is nothing serious, the stock could make good money.

    Please note that I do not follow this stock at all. I therefore go by historical news as available on newspapers’ web site. I am reading of late livemint.com which does not disclose any other major negative.

    Vijay

    November 26, 2008 at 7:27 pm


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