[SLK]

Originally Posted by wolg

The punter who has bought into the sensex at above 20000 levels is not the promoter, but the middle class person who became too greedy.

I'd agree with you on most part but not this. It were the FIIs and the retail investor was just riding with the wave, It'd have continued if the FIIs won't have started withdrawing.

I don't know if in net result FIIs lost money in India or not but if they gained by selling in early phases of the downfall, they'd have lost all of it by the end selling spree. That said they left the money in India before they ran, but they'll be back .

[Disclaimer: General crap, don't rely on what I said]

[Sudipto-S-Team]

Originally Posted by wolg

If you want to invest, invest for the long term at cheap levels and then forget it for maybe a year.

Agree with all that you say and you have articulated it so very well. Just wanted to add one clarification to the point made above. The word "cheap" should not be used in the conventional sense of the term to mean today the price is cheaper than what it was earlier. It's a relative word.
Tisco looked cheap when it came down to Rs 500. But that was cheap relative to its earlier price of 1000. Then it came down to 300 and looked even cheaper relative to 500. Then it came down to 150 !!! Panic had gripped everyone by then.
A stock should be seen as cheap when it comes to you below its intrinsic value.
Tisco's book value being Rs 300 it is cheap at around half of that or thereabouts.

[NetfreakBombay]

Originally Posted by Sudipto-S-Team

Tisco's book value being Rs 300 it is cheap at around half of that or thereabouts.

One comment in general about book value..

This value is not set in stone and it takes large efforts to calculate "actual" book value. And this is not shown clearly in released balance sheets.

For example, value for things like Land, Machinery etc can be calculated easily and transparently. So their contribution to book value should usually be fair.

But, for quite a few companies (E.g. in Financial Services/ Oil and Gas/ IT and Export oriented sectors) large amount of assets might be "Level 3". I.e. they are difficult to price and management has control over valuation.

Level 3 assets are illiquid and hard to price. L3 assets include PE investments, RE, and other mortgage related
securities that (related to the subprime crisis or otherwise). Credit card investments and so on.

Export houses have to rely on such instruments o hedge against fluctuations in forex rates and accounting laws in India are not strong enough to bring transparency to such assets.

[Sudipto-S-Team]

Agree with netfreak entirely. That's why I put equal emphasis on top quality management with a history and track record. Nothing is sacrosanct in the world.
I wouldn't trust the book value of a lot of banks and real estate players.

[ravibhat]

Well statements I made based on what I read. I have also mentioned I am not making my own statements. Because Nifty crossed 3100 levels it can touch upto 3450 (Sensex 12500 levels) levels also now which is analysed as maximum upside in short term.

If Market starts falling from Nifty 3400 levels expect it would loose close to 1000 points easily. Thats where Mutual Funds, FII selling pressure starts.

Regards,

Ravi.

PS Please don't do trading based on what I say I am typing based on what I read and understood.

[Sudipto-S-Team]

In today's world every one here can read what you are reading. We are all literate. Every one here can listen to what you are listening. Those of us (like me) who don't read the pink papers' opinions and don't listen to business channels' crap do it by choice.
Because they have been seeing this stock market for the last 20/30 years and have seen many such ups and downs and have seen many such "analysts" and know how they all fall flat.
If you have nothing original to offer then don't offer it. We are talking about hard earned money of people here. For God's sake stop making such statements "if nifty goes above x it will go to y and if nifty comes down below x it can go down to y."
Even children laugh at this. It's like telling a pregnant woman - if you don't get a son you will get a daughter. Stop that non-sense please.
If you are not making your own statements - as you admit - please stop making them. This is not the same as passing second hand knowledge about a car that you have never driven. It is still okay to do that. But talking about the market as if you know everything is just not acceptable. People have lost a lot of money and a lot of hard earned lifetime's savings.
If you don't want people to trade based on what you say then why are you saying all this?

Originally Posted by ravibhat

Well statements I made based on what I read. I have also mentioned I am not making my own statements. Because Nifty crossed 3100 levels it can touch upto 3450 (Sensex 12500 levels) levels also now which is analysed as maximum upside in short term.

If Market starts falling from Nifty 3400 levels expect it would loose close to 1000 points easily. Thats where Mutual Funds, FII selling pressure starts.

Regards,

Ravi.

PS Please don't do trading based on what I say I am typing based on what I read and understood.

[sanjaymugur]

Originally Posted by Sudipto-S-Team

"if nifty goes above x it will go to y and if nifty comes down below x it can go down to y."
Even children laugh at this. It's like telling a pregnant woman - if you don't get a son you will get a daughter.

so what actually is your problem, did you trade on Mr Ravi bhats analysis...

that's how technical analysis is done,... those are what is called support & resistance levels & to pick the correct one is the problem...

Originally Posted by Sudipto-S-Team

That's why I put equal emphasis on top quality management with a history and track record.

talk about history & management of lehman brothers... you know well..& even warren buffet was wrong in his fundamental analysis of TECH companies, he has missed a golden chance in 2000, or even if he had invested in google it would have been good...no.. there goes fundamental analysis...

Originally Posted by Sudipto-S-Team

Nothing is sacrosanct in the world.

this is less confusing when you are talking abt markets .. right ..haaaa

Originally Posted by Sudipto-S-Team

People have lost a lot of money and a lot of hard earned lifetime's savings.

when these guys make money do they at least make a donation to a worthy cause... at least warren buffet has committed 85% of his assets for a cause.. so no point is supporting ordinary investors who invested thinking they double the money when in reality ( theory of averaging), ordinary people can make only 10% -15% of their money...

& all those who subrscribe to theory " BUY & HOLD for long term".... go & ask people who invested in mkts when SENSEX was at 5000 levels.. most of the prices have come down to those levels & still the same old saying goes , buy for long term .. LOL...

you got to TIME the mkt both buy & sell.. of which Sell is the most important timing you make....

& I am with Mr Ravi bhat for TA (technical analysis ...)
particularly TA with ELLIOT WAVE theory is the best both for long term & short term.. those who were good in this have exited mkt @ 20K levels... & sitting on cash now.... & have gone short. those are just 5% in the stock markets...

in a BULL MKT P/E or book value does not matter as the price gets exxagerated & so does in a bear mkt... book value will be thrown out of window .....& hence price reaches extreme on either ends...

anyways to each his own.....

[DCEite]

Originally Posted by sanjaymugur

& all those who subrscribe to theory " BUY & HOLD for long term".... go & ask people who invested in mkts when SENSEX was at 5000 levels.. most of the prices have come down to those levels & still the same old saying goes , buy for long term .. LOL...

So what you essentially mean is that the market is cyclical. What goes around comes all the way back around.
Which implies that say if you bought a stock for Rs. X today, and is a so called blue-chip stock, then there is every possibility that 8-10 years hence, the value of the stock is still Rs. X or around, owing to cyclical changes.
Am i correct?
If this is the case, then investing in equities in MF and stocks for long-term is totally non-sense, unless one tracks the stock price on daily basis, and sells it when the cyclical Bubble is about to burst.

[Sudipto-S-Team]

Sanjay
Let me state categorically that I have nothing against technical analysis. And I didn't want to start a technical vs fundamental fight here. I know both have their place and time and situations and personally I use both.
But I feel spreading second hand knowledge - whether technical or fundamental - in a most casual manner on a public forum is not on, particularly when one is being repeatedly proven wrong.
Technical or fundamental - an analyst should explain what he says and back up his statements with logic, however flawed or wrong that logic may be. Just quoting a few arbitrary figures on the upside and downside is being irresponsible, to say the least. In fact that's an insult to the science/art of technical analysis.
On the other points you make - yes Lehman Bros went down despite being a respectable company with a long track record. More respectable companies might go down in future but that doesn't mean we should dump respectable companies !!!
Princess Diana died in one of the safest and almost crash proof cars in the world. I would still choose a similar car, if I could afford it, because I think it's pretty safe.
Regarding Warren Buffet missing the technology boom - I don't remember reading in any of his AGM speeches (bible for many investors) that he regrets that. And he continues to remain very very very rich by investing lifelong in companies whose businesses he understands. Ask him about yesterday's Dow closing level, he wouldn't have the foggiest.
To sum up my opinion, when someone predicts a figure in the stock market he should be more serious. The stock market is a serious business. It's not a casino.

[jagan0677]

Originally Posted by Sudipto-S-Team

.... It's not a casino.

I am sorry to pull your words out of context, but of late the markets are looking frightfully similar to a casino.

Hopefully, normalcy will return and sanity will prevail when excess liquidity dries up, if and when it does.

Cheers

[Sudipto-S-Team]

Originally Posted by jagan0677

I am sorry to pull your words out of context, but of late the markets are looking frightfully similar to a casino.

Hopefully, normalcy will return and sanity will prevail when excess liquidity dries up, if and when it does.

Cheers

You didn't pull it out of context really. It has indeed been turned into a casino. I know a few guys who gave up their jobs and even a doctor who stopped his practice to bet on the market on a moment to moment basis - glued to the broker's terminal between 9:55 to 3:30, Monday to Friday.
Playing the market for fun with money you can spare is fine, but those who took to daily fatka as a profession are completely doomed and ruined. Many of them actually believed they were doing a business !!!

[sbasak]

Can someone please explain how short selling and hedge fund works? I read it on Wikipedia but still the concept is not clear.

[Sudipto-S-Team]

Short selling is when you sell in advance (without owning the shares) and then buy it back later at a lower price and pocket the difference. Suppose price of x is Rs 100 at 10 am and you sell 100 of that (you don't need to have it in your bank to sell it). At 2 pm the price is Rs 90 and you buy it back. So you profit Rs 10x100 (minus brokerage and other transaction charges etc) Instead of falling if the price goes up you lose money. Simple mathematics !!

Hedge fund is more or less like a mutual fund but it's for very high networth individuals (a few million dollars usually) and as such they don't come under any government regulation. They can virtually do anything they want to do with the money in terms of risk. (That doesn't however mean they can do illegal things.) It's more like a private arrangement between the investor and the fund manager. Mutual funds on the other hand can't do anything and everything with the money. They have to follow certain fixed do's and don'ts with the money and any deviation is penalised by watchdogs like Sebi etc.
Hedge fund managers are supposed to turn in a profit - whether the market goes up or down. On the other hand a mutual fund is always benchmarked against an index (it is always mentioned in the prospectus) and the fund manager is judged on the basis of how the fund has performed vis-a-vis that index.
So if my fund is benchamrked against Sensex and the Sensex loses 50 per cent in a year and my fund goes down 30 per cent then I would be seen as a good fund manager and in fact would get a bonus (though as an investor you would lose money because your NAV would go down) !!
But if I am a hedge fund manager I have to turn in a profit by doing whatever I want to do. I lose my job if my investors don't make money. Hedge funds generally charge a fixed percentage (whether they make profit or loss) plus a share of the profit. Different funds have different rates.
The best book on the above subject is Hedge Hunters from Bloomberg Press. A lady called Katherine something. But it will all go over your head if you try to read the book at this stage.

[sbasak]

Can anyone do short selling?

[Sudipto-S-Team]

Yes. Provided you have a good broker and lots of money as security deposit. Just one word of caution - it is way more dangerous form of gambling than buying. There at least you have the option of holding your stocks for a few months or years and then getting your principal back (if your call goes wrong). But in a short sale if the call goes wrong you just lose money. Because you have got to square your transaction off by buying it back. There is no other alternative.
I suppose this is not the right thread to be discussing the basics of gambling !! Incidentally, have you looked at my signature? Those are very important things to know when you are gambling in the stock market. Naked short sale is definitely just gambling and pure gambling.