Friday, June 27, 2008

Time to start gradually buying shares

I still feel that one should start making selective shares buying. Unforunately, I don't have much investible surplus. I still maintain that people should either go for predominatly equity based funds or make selective buying of good companies. Some of the companies, I am reasonably convinced are
Current sensex level is a bit leass than 14k. It is quite possible that the sensex could go down to 12k

TN Newsprint,
Sundaram Finance
Seshsayee paper
Sonata Software

Some A group shares like, ITC,HLL can also be accumulated in small numbers .
Oil trading Companies would be a long and risky shot

Some of he Banks like SBI, Union Bank could still make sense.

Investing in Debt fund is also not a bad idea . From the current interest rate, any lowering of interest rates would mean Bond prices would go up , leading to higher NAV


Friday, June 13, 2008

Intelligent Design Vs Evolution etc

Before getting in to ID (Intelligent Design - As if God is looking for an Identity) Vs Evolution, just briefly delving in to this concept of personal God.

Concept of a personal God Who metes out rewards/ punishments or listens to the prayers is quite difficult to digest.Sheer size of the universe and the life forms make it unthinkable for us that there could be someone tracking each lifeform.Of course one also realises how limited our thinking can be. It is in fact limited to what we perceive with the 5 senses. People with great imagination have gone beyond that , and found things which exist which we can't feel/see.
This , in fact is one of the biggest arguments that believers put across. One can not conclude that what is not seen/heard does not mean it does not exist. Existence can not be a function of what we with our physical powers see/ hear. Science which encourages conclusions based on estbalished facts is nothing but establishment of facts which can be seen/heard.Various gadgets /aids have expanded this, but still may not be sufficient for us to see all ,hear all and feel all.Scienctifically established facts of a period can not be limiting factor for new scientific findings nor should it limit the realms of imagination.After all Giants of Science, when they did discover things did not always have the means and wherewithal to have the same validated physically. Quite a lot of the theories got validated much later and that too with the help of additional aids/instruments and in some cases actual happening of an event.
What is relevant is also the fact that in a number of cases, the Scientists were rejected, ridiculed ( a Copernicus and Galileo are cases in point) and in some cases excommunicated.History of scientific findings can in fact be held in support of the fact that establishable science facts are not the only true ones. There is a whole lot of truth lying to be discovered.Non discovery of some at a certain point can not render the same as Unscientific or fiction.

Digressing again in to Concept of personal god,doubts about a personal God does not however mean that one questions the concept of God . One can accept the concept without accepting the concept of a personal God.

As we gain more knowledge , there is this one set of people who are in raptures wondering and appreciating the phenomenal structure,design and mechanism in the living organisms . What is being generally termed as the Intelligent Design. This group sees a grand and great structure and a intricate and complex and perfect design in living organsism and the Universe around us and find it to hard to digest that this could be a chance mechanism and call themselves the Intelligent Design group. It responds to reason that living structure and the balance in the world could not be an accident . That kind of accident where conditions for basic life formation , their structure, sustenance and proliferation could have happened by chance is 1 in a ......trillion , the probability is so low that it is impossible. Conclusion is that , once we recognise this impossibility of chance element , one veers towards an Intelligent design with the underlying assumption that there is someone behind that

The other group , who are the Evolutionists, say that Darwin's theory is not just about chance , it is case of the current state of things being evolved over several years. What is suitable to the particular environment is the one which survives. The one which survives proliferates and evolves to be more suitable to the environment. Progressively the survivors are the best specimens of any species or variety .Progressively there are variations which make the survivors more suitable to the environment.The cause and effect is, that the ones which adapt and change well to the particular rigours of the environment are the ones which will survive and thrive in the long run . The concept of evolution , is some kind of continuous adaptation and continuous improvement ( by the Creator ? Ha ha, pulling evolutionist leg ).While on the one hand , I am tempted to buy Richard Dawkins book on this ( he is a confirmed Evolutionist and Anti Intelligent Design ), I am also a bit apprehensive about the possible impact it may have on my current beliefs. One hates confrontation even if it means with one's existing thoughts/beliefs which are rooted in belief in Higher power.

This debate could be never ending for the simple reason that it could never possibly be established one way or other.

Whenever we see structure and perfection, we always attribute it to a designer or a creator.Similar reasoning and logic is extended to the Universe/life forms.

Interesting , but beyond my limited thinking prowess .Sometimes need to think out things itself may be a limiting factor. Faith is a lot more comfortable and a cure. Such a great leveller. It is such a big comfort to the less fortunate ( materially and psychologically ) that all are equal beyond the material world. I am not sure whether most of the less fortunate readily embrace religion,faith due to this, that is something which gives them a feeling of equality or it is just a case of genuine faith and hope.

One is of course humbled by what is around one. The sheer complexity and at the same time, a beautiful and all the time evolving structure and forms, it makes you feel the futility of your actions and efforts and at the same time encourages you to search for more knowledge and information
I don't consider myself as one of those who is among the very few, seeking a higher meaning, I think most ,if not all, of us do in varying degrees. Saints and Savants find that , we havn't.

One also wonders whether , it would be better to concentrate on what is on hand and what is doable by us and do it well like most of the successful people do rather than keep looking for the ever elusive higher meaning in life. That , in some could be a sign of failure to cope up with the immediate environment and and a bit of escapism. Lack of ability to achieve in normal walks of life could push one to this kind of a seach for an illusive ( mostly elusive anyway) higher meaning, which is nothing but an escape route. Um, treading on dangerous ground.Just thinking aloud.

PS: Happen to come across this site which is quite elaborate on the subject.

http://theory-of-evolution.net/

Tuesday, June 10, 2008

Good time to start buying shares

While each one has to make his/her own judgement, as a general advise , I would think that the markets have come down to an extent where buying select shares is safe and could provide good return in the medium to long term. Index may come down a bit further but even at this level , I think there is value in the following shares in the small number of Companies that I follow. These are Cmpanmies I am invested in or planning to invest
1. TN Newsprint- EPS around Rs 16, PE at a price of Rs 96, just 6 with very good visibility of atleast sustatining the earnings. Have consdierarble windpower capacity ( 30 plus MW), are commissioning a Cement clinker plant, expanding the paper and pulp capacity
Low marker capitalisation of around Rs 700 Crs . Pay dividend of Rs 4 per share
2. Seshasayee paper- Qtr 4 appears a bit lower. Reasons not ascertainable at this point of time. Even discounting that, EPS of a minimum of Rs 30 next year is easy, PE at current price of Rs 170 would be less than 6. Pulp expansion plan underway.
Low marke capoitalisationb of around Rs 240 Crs
Paper Industry has been a low profile Industry. This is one of the reasons why the PE s are low.
You go back, you will find that very few well run paper Companies have ever made loss in the past in India.
3. Sonata software- At Rs 31 with EPS of Rs 3.5 ( Consolidated EPS Rs 5.8 including their European subsidiary ) could turn out to be a good acquisition target. Market cap of only Rs 35o Crs
Current management is too conservative and have not expanded business much. The Company , however has enough reserve strength and intrinsic value to get to Rs 75-100
4. Sundaram Brake linings - EPS should be around Rs 35, PE of around 7, market cap of Rs 70 Crs. Could give 25-30% Compounded for the next 3 years.
5. Dark horses- Oil trading Companies HPCL, BPCL
M
arket caps are low, below Rs 10 k Crs. Oil can not be traded at these levels. TRhe moment it comes down to below $ 100, these can turn out to be multi baggers. Of course this is a bit risky, personally though I see greater opporunity than risk in this proposition
6. Zensar Technologies- At Rs 137 is down from Rs 350 a year back. PE of 13. Part of HV Goenka group
7. Most of the A Group shares which have fallen by more than 50 % in the last 6 months could hold value
May be a chance to spread portfolio across sectors being stock specific across sectors.
Some construction Companies which have not caught market fancy like JMC projects. Of course , in this case onw is not too sure about the management part. One has to do some research

Sundaram Finance- Holds more than 50 % in Royal Sundaram Insurance .By itself has a fantastic network and has been a consistent performer , very disciplined management
Has the potentiel to double in a year or two
Sugar Companies- Most of the commodities are up and hyped except a few like Sugar. Government can not let this Industry die. Cane prices are fixed , sugar prices are down. Situation can not continue like this. Bit of a risk, but worth taking the same

Textiles- Vardhman. Low PE. Last quarter profit was low, but at a market cap of Rs 600 Crs with a turnover of Rs 2000 Crs plus , with impact of recent expansions to come through n the curent year, appears to be a value buy. Current aset managemnt is the only blot. Most of the negatives have been deeply discounted like

Rupee appreciation
Low demand from export markets especially US
This Company depends a lot on doemstic market, performance should be reasonable. hey pay a consistent dividend of Rs 4, yeild of around 4%

Should be worth the risk