[ijeet]

Originally Posted by J.Ravi

Today, three out of five of my buy orders were executed successfully.

100 Engineers India @ 175 [less than the recent OFS price!] BSE

50 PFC @ 175 NSE

50 Tata Motors @ 311 NSE

I wonder whats ailing Tata Motors, numbers from all the continents are better YOY and MOM. EU and US numbers are great even China numbers are up 5%.

[manduvindupondu]

Guys, any idea on robinhood.com? They are a discount brokerage in US offering low cost brokerage service. Like our Zerodha in India.
Please suggest your experiences in US market trading/brokerage as many TBhpians might have travelled onsite.

[blue_pulsar]

My God! SBI fell below 160 today! What do you guys think?

[audioholic]

Most banks are reporting 52W lows. Is it a good time to invest in some? Or is this trend going to continue for some time?

[drsingh]

Originally Posted by audioholic

Most banks are reporting 52W lows. Is it a good time to invest in some? Or is this trend going to continue for some time?

Banks are being forced to declare bad loans as NPA's and clean up their balance sheets. The RBI or the government has to help then by either reducing interest rates or infusing capital. If in next two months no steps are taken, next quarter results too may be poor and more NPA'S will show up.

If you want to invest in PSU banks, wait a quarter and for any actions by the government or RBI.

HDFC, AXIS, seem safer as they have low NPA 's.

[ravradha]

700 point decline - for what reason? Because Yellen mentioned the word 'stock market crash'

I seriously believe it's a great time to invest!

Not in specific stock but the Index.

Bought 50 OIL @ 320 BSE.

[ijeet]

Originally Posted by ravradha

700 point decline - for what reason? Because Yellen mentioned the word 'stock market crash'

I seriously believe it's a great time to invest!

Not in specific stock but the Index.

I've been shopping too but on the other side the thought of 2008 is crossing mind and this time it will be worse because fed doesn't have any a
arrows left. I don't think they can do more QE now and already debt of 9 trillion.

But still anybody who is in cash and have spare to put-in will make good money in long term.

[manduvindupondu]

A basic question. How did PSU banks accumulate so many bad loans. They scrutinize a lot, dont approve risky loans, take lot of time in loan approval, take proper collateral. How did they get so much bad loans is beyond me. On top of it, SARFAESI act empowers them to recover the loans. Can someone from Banking industry provide an insider perspective of whats wrong going on? Is it the case of too many "Kingfisher" type fiascos?? I am unable to understand.
I bought some stock of SBI @ 156 today (book value 165) as it is the banker to every Indian. :-) I feel as long as Central Gov "Tathastu" (blessings) are there, nothing bad happens to SBI.
But SBI may go to 50 levels like other PSU bank stocks which are at 1/4 book value rates.

[ghodlur]

Originally Posted by J.Ravi

Bought 50 OIL @ 320 BSE.

You seem to be getting greedy sir. Continue as they say you should be greedy when markets go down and wary when markets go up.

Originally Posted by manduvindupondu

I bought some stock of SBI @ 156 today (book value 165)

Originally Posted by blue_pulsar

My God! SBI fell below 160 today! What do you guys think?

Imagine me buying at 220 and still feeling the shocks.

Originally Posted by ghodlur

Continue as they say you should be greedy when markets go down and wary when markets go up.

Warren Buffett's famous quotations “Be fearful when others are greedy and be greedy when others are fearful” and "Buy when others sell and sell when others buy" are the basic thumb-rules for the long-term investment. Thanks, ghodlur.

[Simhi]

Originally Posted by manduvindupondu

A basic question. How did PSU banks accumulate so many bad loans. They scrutinize a lot, dont approve risky loans, take lot of time in loan approval, take proper collateral.

Thats because all this process is not applicable for people with political connections where loans are approved without collateral and recovery process is not followed.

[VindyWheels]

And add to that "Only when the tide goes out do you discover who's been swimming naked." - Warren Buffett

Originally Posted by J.Ravi

Warren Buffett's famous quotations “Be fearful when others are greedy and be greedy when others are fearful” and "Buy when others sell and sell when others buy" are the basic thumb-rules for the long-term investment. Thanks, ghodlur.

[manduvindupondu]

Lol, so majority of these bad loans are to politically connected people/entities. That explains it. In short, "Welcome to India" . On a more serious note, I feel there are value picks in Axis Bank, Tata Motors, Tech Mahindra, ONGC (good dividend), HDFC, Kotak Mahindra Bank, VEDL (for pure trading), L&T. Please avoid ALL Public sector banks except SBI. My opinion.

[nowwhat?]

Originally Posted by manduvindupondu

A basic question. How did PSU banks accumulate so many bad loans. They scrutinize a lot, dont approve risky loans, take lot of time in loan approval, take proper collateral. How did they get so much bad loans is beyond me. On top of it, SARFAESI act empowers them to recover the loans.

Most PSU banks are really not interested in retail loans despite the fact that it is one of the most securitized debt out there. This nonchalance manifests in many ways such as quoting noncompetitive interest rates, taking longer processing time, asking for processing & all sorts of fees upfront, etc. In fact, the disinterest can be seen right away itself when you approach a PSU bank manager for a loan. All this despite the fact that the bank will get at least 80-100 paise to the rupee in the case of a default for a home or a car as consumers don't usually default as they have a sentimental attachment to whatever they take a loan for.

All this is in stark contrast to commercial lending. There companies take on debt for all sorts of needs such as working capital, trade financing, etc. where a bank would be lucky to get 50-60 paisa to the rupee back in case the business goes southwards. To top all this is lending to bankroll the government be it in the form of lending to regional power distribution companies, mobile service providers for spectrum auction payments and so on.

The reason why PSU bank managers prefer commercial lending is because the ticket size is much larger. Instead of going through a lot of effort for a paltry 1 crore home loan or a 10 lakh car loan, the bank manager needs to only put in some more effort for a 100 crore or 1000 crore commercial loan that will meet all his lending targets and also his deposit targets as the money would usually be lying in the bank for some time as fixed deposits. A lot of times, the bank manager will help the client massage the data to facilitate the loan.

Some PSU banks have realized this drawback and a few like SBI have worked hard in the past few years to build a retail portfolio.

The current problem with NPAs is because the RBI Governor has directed all banks to fully disclose their NPAs this quarter. This is a foolhardy move as it was bound to hit the banking system because commercial lending is sometimes like a giant Ponzi scheme. When there is liquidity, a promoter may see that a business not doing that well, he may finance another business and then pay off the non performing loan for the sake of his credit history to avail more loans in future. However right now there is NO liquidity in the banking system which is why banks are not fully passing on the few rate cuts the RBI announced.

As I have said before, the incumbent RBI Governor is a doomsday economist, high CRR has sucked liquidity out whereas a high interest rate has kept borrowers out. The government is unable to implement GST or land reform and is stuck in the UPA-economics of keeping inflation and CAD low.