First cricket test match I watched- Eng Vs India Chennai 1972-73

Must have been Pongal of 1973, Kumar (cousin) had a ticket and was generous enough to allow me to watch for a day, the second day of the test match. That ended up being just about the best day of the match, though very slow by today's standards.The joy and excitement of getting in to a crowded stadium , the buzz, one could hear from outside was fantastic.I had gone with Raghu, Nandu and Ravi was also there. It was quite a task finding a seat for yourself. I think the stand was "D" (Wallaja Road sid I think )which  offerred a reasonably good straight view.Saw Chauhan play and miss a few balls of Geoff Arnold and finally nicking one to Alan Knott. Spent most of the time drinking in the atmosphere, watching the players. I was what 11 years and the bowling appeared much faster at that age. Could hardly see the ball when Cjris Old bowled. Sunil Gavasakr also did not make many. Wadekar , I recall played a few nice pull shots but got out in 40 s. Major part of the day, batting was from Pataudi and Durrnai. Very slow but when the crowd got bored and demanded a six, Durrani obliged. Pataudi also cleared the boundary a couple of times off Gifford or Pocock, don's recall.

Tony Greig ( at 6 ft 6 or 7 inch) was towering over almost all, especially the Indians.Saw GR Viswanath briefy. Those days, one could carry food and we did go fully equipped on that front.The stadium was packed. Pre TV days, whover watched at the stadium were the only ones who got to watch. Of course the usual touts who managed to enter the stadium even before the gates opened and try to corner seats and sell the same off at Rs 1/2 each.Guys used to sleep just outside the gates overnight just to get a vantage point and in seat inside the stadium.

The next match I watched was the one against Australia in 1980 ( Allan Border team)

TV cameras capture the game better but the joy of watching in the stadium and getting a full view of the play area and the sound of bat hitting the ball and of course the joy of watching in person is unequallable

Books-Hot,Flat and crowded by Thomas Friedman

  

 The author talks about the importance of greening the earth. 

Talks about the increase in population over the last 50-60 years ( I recall reading that the population of India of 1930 s used to be around 30 Crs)  the population of the world in 1961 was some 3 Bn and that of India    0.44 Bio. World population now is 7 Bn and India's 1.24 Bn    . There is  need for  energy for good quality life, but the increase in energy requirement, the likely increase further of the same with increased requirement by a significant population in China , India etc who at present do not enjoy access to energy plus the increase by the current users of energy would push the overall requirement to very high and unimaginable levels

He concedes that US has been one of the greatest energy guzzlers and also concedes that the other nations have a right to claim that they too have a right to enjoy good quality life , which at this point of time means, great energy consumption. The author talks how  CO2  emission from around 280 ppm sometime at the beginning of Industrial revolution os closer to 400 ppm and showing clear signs of getting to 550 ppm

Author talks of how use of Fossil fuels like Crude oil,coal etc are increasing CO2 emissions dangeously.

The author talks of the impact of increased release of  greehouse  gases like CO 2 ,Nitrogenous oxides etc in to the atmosphere namley increaes in tempretaures across the globe, lower forest cover, increase in extremes , floods ( ice melting),droughts, tempests etc and .

Author may sound grandiose and boastful when he talks of the need for US to show leadership and how it is only US who can bail the world out of this but one has to concede that any author who undertakes to write on a subject like this is expected to think that they know something that others did not know or know but others  have not  cared to ariculate .. and are expected to sound preachy ,pedagogic. One needs to give allowance and get on to gather what the author says. He does quote a lot of experts and draws on their knowledge and experience. His use of statistics and analogies/metaphors sound a bit over the top but let us concede that he has done a good job and take the essence of the book.

The author somewhere along the line concedes that there may be a small chance that  increase in greenhouse gases may  in fact not cause climatic changes and take the world to a disaster as has been predicted but the probability is high that such an eventualitry is highly likely and argues as to why we should take a chance and also mentions that with or without thye worst consequences that are predicted, "greening" does bring enormous benefits.

One chapter almost fully,m he devotes to the petrol politices and how prices of petrol impacts the policies and behaviour of nations, He takes the example of Iran, Saudi Arabia and traces how increased prices led to increased influence by these nations , increased money in their hands led to increased funding of  terrorism,increased funding if religious schools ( Madrasas) . With increased money , the mneed to be innovative and be connecte to the world to derive technical knoweldge etc gets less and with more time in the hands there is the temptation to spread religious fundamentalism. I think , increased money also gives you an aura on some ordained power.the author also traces how, US and European nations policy of reducing energy in the 80 s by use of fuel efficient vehicles, use of alternative fule etc brought the prices of oil down and almost brought the middle east nations to start behaving better

The author visited parts of Pakistan and gathers that most of the Madrasas there are funded by Saudi. Madrasa attract people since that is one way of escaping poverty , get food , get some education , may be the wrong type but all the same some education and respectaibilty etc. This chapter sounded very logical and sounded atleast to a reader like me who has a basic understanding but not a thorough knowledge of Middle east politics.

The author spoke to a number of experts on Environment and greening experts. Does make a good case for the need to green.He logically sidesteps the doubts cast on the possible ill effects of current emission of green house gases, CO 2 to a large extent by coming out with reasons to green even without the likelhood of those extremes.

Tropical forests just 7% have a disproporionately large  variety of flora and fauna variety

Talks of Indoenisa's tropical forests and how deforestation there means higher emission.
Trees and plants absorb CO 2 (photosynthesis) , lets out Oxygen and also give out CO 2 . But absorption far greater than the CO 2 that is let out. Author talks of how burning of forests could let out all the abosrbed CO 2 , he equates it to 10 years of CO 2 emission in one shot. O f course this also means , we cut out the possbility of future absorption of CO 2 by forests.

He is quite clear that as a class , politicians get attracted not by long term interests of the society but the short term interests of society where immediate benefits can be shown and get votes. He looks at some method of incentive and market mechanics being built in in such a way that greening bEcomes not just the fad of some environmentalists but becomes a commercially sensible option.
He is looking at good initial funding and encouragement by US government and in fact all Governments  to make sure that the interested producers long interest in protected . Also investment in technologoes to reduce the cost of generation of renewal energy sources.

The author also talks of how a gradually gathering people's movement is also necessary to have the change in tide of political and Governmental thinking. Most of revolutionary changes happen on the bedrock of people's movements.

Author's point about hwo the future costs to the society in using fossil fuesl is not factored in.

Author extensively talks of China's energy requirement and how critical it is to make sure that China becomes an early convert (internally ) or the equation could go awry.

Good book, gauthor given to extreme examples , incremental amd marginal examples do not bring out the point forcefully. As long credibility is not lost, it is okay.

Keep away from high debt companies

Conventional finance teaches that leverage is good when the overall return on capital employed is more than the cost of debt plus when you are making profits, interest cost gives you tax cover. Effectively you get the double advantage of additional return on a post tax basis.

Of course conventional finance also teaches that this could work to the Company's disadvantage if the return on capital employed is less than the debt cost and tax cover is a non issue if one does not make profits.

My personal experience even as recent as a couple of years , is that , if you are not a trader or a speculator , it pays to keep away from leveraged companies. If the expectations are 12-15% post tax, one will be surprised how good such a return is when you see the impact of such a return on a compunded basis , especially in the light of actual and empirical data of how the returns have been

Just to give a simple example, Rs 100 invested at 15% compounded in 5 years would be Rs 201 and at 12% the same would be Rs 176, quite a tidy sum.In the Indian market , there are shares where one can invest safely and expect that kind of returns without a perception of any serious risk.

Another caveat , even if one is ivesting in fundamentally good shares with very little downside risk is, do not invest on leveraged funds. Whether corporate or personal , Investment from borrowed funds is dangerous and puts you in a time bind. You may be right in the investment target but the point is you may prove to be right in the long term when in the short term you run out of money. You would be forced to take sub optimal decison on divestments

My favourite quote in this is of the economist Keynes.... " The markets cam remain irrational longer than you can remain solvent"........ 

Have seen shares like Shree Renuka. Geodesic, Subex reeling under debt. 

Oil refining and marketing Companies- Subsidy news

Appears to be a case of Government realising that Diesel subsidy can not continue for long. In recent times the subsidy has got availed more by the middle class which obviously was not the intention. We are closer to the "tipping point" now than anytime earlier. Even at the current market price of Rs 380 per share ( HPCL ) it makes sense

Mraket Cap is just around Rs 11-12,000 Crs , together with the debts the overall Enterprice value could be around Rs 50,000 Crs. Even a trebling of price, the overall EV could just be around Rs 70,000 Crs, well within a reasonable valuation for a 1,88,000 Crs turnover Company with refining capacities of around 15 Mn T and excellent network in place

I just wish I had accumulated a bit. The price could well touch Rs 2,000 in a few years time. Taking off Government subsidy is always fraught with uncertainties.

Need to tabulate all the refining Companies capacities, Mkt cap and other qualitative factors

Private sector companies can  benefit immensely once the price cap is taken off

Interesting piece on Japan Economy by Satyajit Das

An interesting piece on Japanese economy in ET . Some very interesting facts

1. The population is ageing so much so that the workforce to retired drawing pensions is low
2. Japan Real estate has been stuck at 1989 levels or so
3. Japan stock markets are at around 20-30% of their prices as of 1981 or 89.. , this was a bit of shock
4. With currency appreciation, their exports have become uncompetitive and stagnating
5. With theprevalence of Zero Interest rates ,savings are down
6. Debt as % age of GDP is around 150%
7 Servicing debt could be a problem the moment the interest rates go to say 2-3%

Just this much I can recall. Appears to be in some kind of vicious bind

Oil trading and refining Companies- Darkhorses

With the idea of  doing away with Diesel subsidy gathering momentum, Oil refining and trading Companies like HPCL, BPCL and IOC could have a spurt in performance and prices of their shares could see significant rise once the subsdiy is reduced substantially or done away with

Of course subsidy is a sensitive thing next only to Reservations. One can take a chance. Everything reaches a tipping point  and that time in case of diesel might be coming quite close.Fiscal deficit is threatening, inflation high, low growth rates, industrial confidence low, could just  be the confluence of all negatives to necessitate change.

It is a risk but worth taking. HPCL with a market cap of around Rs 10,000 crs , could easily go up by 3-4 times if things fall in place.Downside risk at this point appears low.

US Debt

Read a very interesting piece by Satyajit das on US Debt. It is around $ 16 Trillion. It is a known fact that US has been living on borrowed funds, in fact borrowing by all accounts is for consumption and not for investment in Capital goods.

The author quotes Keynes on debt. When someone takes $ 1000 , and is not able to repay, it is his problem , when someone takes $ 1 Bio or some such huge amount and is not be to repay , it becomes the Bank's problem.

This is exactly what appears to be happening with US. Other countries can't even let US currency depreciate, or like Germany of post WW I, US can easily resort to pumping in money , let the currency depreciate and pay back cheap USD.

US may not come down to doing that but countries like China can't afford to cut out supplies nor can they afford to let the USD depreciate.

At some stage, it has to reach the stage of the final straw which breaks the system.