panch-tattva…some guidance

Dear Investors/Traders,

This is a useful site for keeping updated about most economic matters where the commentry is with an eye on Indian stock marktes (’panch-tattva talk’ is devoted to this part). For practical use also I cover Indian stocks and the results, whenever announced, are analysed and investment/trading strategy is given (covered under ‘panch-tattva/post result), to understand it more fully please read following:

a) The panch-tattva points level denotes that stock is weaker if it has points under ‘1000′ and is stronger if it has points over ‘1000′. At level of ‘1000′, the stock is supposed to be rightly priced. The variation against 1000 level does not denote the exact proportion in price strength.

b) The panch-tattva points are obtained on the basis of most recent quarterly results , management strength, industry prospects, political climate, price history, interest rate scene etc. It actually takes care of every aspect affecting the price.

c) The trading strategy is given in each case and should be followed.

d) Since there are always fresh developments affecting the price, a stop loss mechanism should be followed. You may sell off half the quantity upon underperformance of 3pc against broader indices and sell entire quantity upon 5% underperformance by the stock bought. Once out of stock you should not look back at the same stock until fresh assessment has been obtained under ‘panch-tattva’.

e) Some stocks would be studied and regularly posted on this blog site for every body to take advantage without charges. You may simply track prices to have confidence in the efficacy/efficiency of the system before actually trying your hand out.

f) This system has been empirically tested for over a decade and many investors have drawn immense benefit out of the ‘panch-tattva’ advice.

Gentlemen, the taste of the pudding lies in eating, you may ask for advice in respect of stock(s) of your own choice at a moderate charge of INR 1000/- per scrip(this will provide you guidance after every quarterly result and at other times for the whole year). You may contact me at Cell +919724313034/+919376168780 or email me at krsnakhandelwal@yahoo.com .

You also find here glimpses of history and practical theories applicable to stock market movements. A student of finance, economics , management would be enriching himself with wisdom to face the job interviews.

Hari Om,

krsnaKhandelwal

panch-tattv/post result…infosystch,gammonind

INFOSYSTCH @1721 (100709) gets 1193 panch-tattva points and this should be made part of your portfolio right away.

GAMMONIND @161 (100709) gets 1058 panch-tattva points and you may buy it for medium/long term.

panch_tattva talk…they have done it

Friends,

The worst fears have come true and those who set course to bring the Nifty down to 4000 have demonstrated it. I may tell here that this downward movement has been engineered and is not natural. The technical position had got worsened and public got slightly unnerved. I still say that take this opportunity for buying. They say that the gaps are filled first and then only the further march is seen. This also has happned now.

Fundamentaly, the IIP number is better for the may month at 2.7pc, basic goods growth has been better than year before, in May month. The rupee has lost 2.3pc this week ($ Vs Re 49). FM said that the stimulus package cost Rs 40000 crs to govt in lost revenue. Also, if the scrip-wise changes are seen there are very many surprises.

The whole week of weakness has not impacted Maruti’s share price where as it should be most sensitive if the economy is supposed to be poorer. I know just one thing that if the first dozen or so results come alright, the Nifty can’t be suppressed any further. Infosys has given an OK result already.

So, if you have staying power, stay put.

HariOm,
krsnaKhandelwal

panch-tattva contest…predict nifty closing on 14th july ‘09

Friends,

You are invited to predict Nifty closing on 14th July 2009. Please post your Nifty number which you think Nifty will close at on 14th July ‘09 in the comment box of this post before 1200 hours of 14th July ‘09. One person can enter only one entry. The predicted number closest to the Nifty closing points on the 14th July ‘09 will win for the contestant a prize of Rs 500. The entries which come within range of +/- 5 (five) points of actual closing points of Nifty will win for the contstent/s a consolation prize Rs 100. Please mention your complete address along with your answer and we will be pleased to send the cheque for the prize money to the contstent.

HariOm,
krsnaKhandelwal

P.S. You will not be entitled to raise any dispute and our judgement only will be final. And binding.

panch-tattva talk…IMF endorsement

Friends,

What we have known by way of pleasent feeling, IMF has endorsed it based on solid data and calculation. It has raised India’s growth forecast to 5.4pc (for China its 7.5pc). In 2010 it sees India growing by 6.5pc in terms of growth rate. IMF has given optimistic out look about the world economy too. This is a very important observation from the angle to judge where the Indian stocks are headed.

Indian market tanked may be on account of the deal makers who may have pinned hope on budget , may be again, as per the promises to them by some in authority. Their accumulation before the event may have pushed them into unloading and fast. There may be the possibility of still more saavy groups to destabilise the public sentiment and later go whole hog for one way buying bout. Since the reason for sell off was misssing, we have to find answer in secretive and concerted action of groups which have always been finding ways to implement the quick gain schemes. Either way we surmise them working, the gains can come to us or them by maintaining the bullish vision about the market till such time where it is costly as per historic parameters or has gone too high too soon.

I recall the times in seventies. I used to read ‘Economic Times’ then, it used to be a serious paper and loaded with authentic information and articles from the learned (unlike today when lighter stuff has been thrown in). I learnt then that the USA’s steel production was 200 million tonnes. We were doing fine with about 6-8 million tonnes. I developed a feeling that if only India could start producing 100 million tonnes of steel, it would be very strong nation without poverty any more, in any pocket.

Today we have targeted 124 million tonnes steel capacity by 2011-12. I feel sorry about no prospect of seeing the poverty eliminated by then.

I may also tell you this is due to the apathy of the govts and not due to paucity of resourses that we have patches of poverty. If only 1 pc of incomes of highest ten percent income earners is transferred to take care of bottom thirty percent, we will see smiles on every face of India. Only thing is to find/develop mechanism (IT enabled) to do it. I am sure the top 10pc will not mind foregoing their 10pc of incomes. Their wealth is going to be reatined in any case. Here I would suggest that there should be an arrangement where the purchses from designated food stores, fees paid to designated schools, mecical bills of designated hospitals and season ticket purchases from railways are reinbursed on production of biils/proof by people/families holding a U-Ipin which should be given as per a criteria and renewable every year. This kind of payment may be put a cieling on. There may still be cases of fraud and misuse but it will be far less in proportion to what has been happening for most schemes aimed at helping masses.

Nifty is trading better this morning in Singapore, so also some of the Asian peers like Kospi,Taiwan, Strait and Shanghai. DOW has closed positive last day.

So, please be a foolhardy person and keep you funds in equities (as far as you think proper according to your appetite). The inflation is bound to raise its head and your umbrella is equity investment, it has always been. If the gold improves in value from here (about Rs 14500/10gms), it will be signal that inflationery times are round the corner. You have to not buy gold but equity after this is signalled.

So, don’t worry, be happy.

HariOm,
krsnaKhandelwal

panch-tattva talk…why the sell off?

Friends,

The govt has announced many an infrastructure related funding conveniences, it has also aimed at taking care of the deficit not very late in the day.

The excise duties have been kept at low level as against the expectation of some rise there.

The FMCG, cement, steel and auto off-take have been higher.

Rupee is not costly as earlier and IT sector should feel repite.

The corporates have raised handsome amounts through QIP.

Tatas have decided to attempt no further take-overs. They would concentrate of rationalising production and ensuring raw material security. They plan to raise capacity utilisation of their European facilities from 50pc presently to 85pc. They are confident of servicing debt worth $ nine billion on their books.

The Sensex PE is not at alarming level.

Much worse times have been negotiated ie the two quarters of degrowth have passed and there is light at the end of channel.

RBI may reduce interest rates further or at least keep them where they are.

If the rains fail to a bigger extent, there would be food import bill to tkae care and rupee would weaken. This is not bad for industry, hasn’t China thrived on back of currency under-value.

Then why the sell off? No body has an answer for this.

Nifty closed 4072 today. It has lost almost 12pc from the recent peak. It should be taken as opportunity to enter market by those who were left out. The DOW has come back above 8200 already today.

HariOm,
krsnaKhandelwal

panch-tattva talk…post budget

Friends,

The budget has been rated as good by some and not so good (even bad) by some. The real concern shown by experts and foreigners is about the large budget deficit that has been left uncovered. There contention is that govt borrowing will be on a large scale and would put pressure of interest and elblow out the business borrowers. In fact this is a faulty perception.

The reality is that India saves more than Rs 20 lac crores in a year. All this has to have some place to be injected in. The budgetary deficit absorbs it through govt borrowing, large part of which otherwise would have gone into vaults in the form of bullion and diamonds because for Indians rate of interest under 7-8pc for savings is not interesting enough, at the same time, Indian households can not be easily made to spend what portion of income they have kept aside for security of family in future years. It is on this strength that Indian families carry on for duration spanning even an entire generation without current income.

The second point is that the demands needs to be pushed for industry’s welfare. This can come about by recycling the savings in such a way that the society receives it in spendable form. The govts spending does this even if it is spread wide and thin. We know that when it rains, it rains in drops and over a wide area but the rivers start flowing to brim and even flood.

Similarly, if the govt spending is voluminous, it makes rivers of money flow every where and increases economic activity. Is is immeterial whether it has been wisely spent or has gone in hands of government-wallahs or in hands of ‘dalals’. It has been happening like this in India and pilferages have only retarded the pace but not stopped the growth. The ill gotten money in fact is more readily spent for consumption than saved.

I have discussed this all matter in detail because this has formed the basis of market’s weakness for the time being. The past experience has shown that our growth fell immediately after the FRBM was paid attention to. The fear of rise in rate interest is not right as the rise will be always be curbed by the foreign money that is ready to rush in at higher rates.

Now, there is one more point and that is the preferability of deficit financing over tax receipts. The deficit financing requires no machinery to collect revenue through tax. To get a net taxed rupee, two have to come out of payers pocket ( there is cost of administration, bribing, preparation of accouts by payee and the costs of audit and litigation etc.).

The rupee through deficit financing comes directly and every pocket suffers in equal proportion. The people who are on daily wages do not suffer at all as they are paid at sustenance level only,in times of inflation or deflation.

The govt has assured that the FRBM targets will be met gradually over the next few years. This is damn right thing to do ie to put off collection by way of increased taxes to a time when the world has become ready again for larger imports of goods of Indian origin.

So, let us celebrate the higher social spending provisions in budget. Let’s first bring more people in to capacity to pay tax than crib for things imaginery.

The market did turn positive yesterday and Nifty closed up 37pts at 4202. In the mean time the US markets have lost heavily and the Asian markets are following suit. Nifty will have to cross these international hurdles to get set on course of upward journey.

HariOm,
krsnaKhandelwal

panch-tattva talk…budget

Friends,

 

The union budget for 09-10 was presented by FM today . It was being awaited with great expectations. I my openion it has been very pragmatic and has given what could have been given in the present circumstances and also it has not taken any thing previously given. In a very strange way the FIIs have sold heavily today and the indices have suffered badly. Tomprrow, may be , on rethink, there would be some coverage of the lost ground , if not the whole . The sailing feachers are as under:

 

- the deficit will be 6.8% and is on expected lines (it was 6.2% last year). I would add here that the govt has spared industry from stiff doses of taxation and has decided to take care of FRBM at some time later. This should be seen very positively while the FIIs have not liked it.  The revenue deficit is projected at 4.8%.

 

-the FM has had both, the long term and short term , objectives in mind and has very clearly gone ahead without making complecations like his predecesser used to do.

 

- duties have not been upped and they stay at the prevailing level. This should in fact be celebrated because unconcerned govt would have resorted to raise revenue through excise duty hikes.

 

-FBT has been scrapped. This is a clear benefit to the whole corporate world and takes away many headaches. The corporate tax remains same.

 

-MAT has been raised from 10 tho 15% but again the reward has been given in the form of removal of surcharge.

 

- CTT has been scrapped. This meets a big demand. STT has been left untouched and this has been dampener.

 

-personal Income Tax Free limit has been raised by Rs 10000/-

 

 

 

There very many other provisions which do not have much bearing .  The outlays have been increased substantially and the social causes will be served through increased spending. How else the govt puts money in hands of public.  The increased spending will generate demand and resultingly the industrial out put will go up.

 

The infrastructure is going to have philip  as there are some announcements regarding this.

 

The disinvestment has been discussed as a policy but no road map is given, neither it could have been given.

 

All in all , we should welcome this budget and not frown as has been done some pundits.

 

HariOm,

krsnaKhandelwal 

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pancha-tattva talk…as on 21st Sept 2001

Friends,

Some of you would take interest in what I have to report to you and some will laugh it away or laugh at it. What I am reproducing is a piece of writing dtd 21/09/01 and was titled ‘Nifty Down To Almost 8 Year Low’. This was naturally after 9/11. I was then slightly upset by Nifty’s weak behavior although the environment seemed to conducive for growth. This was an impression I was carrying about the economy and market but had not tried to see it specifically why or what formed the basis for the feel good factor. To look at the whole matter I decided to see the tenor/import of each of the matters that form a nearly wholesome macro environment (India related). This is what you are going to read below now and you would be amazed that the whole talk seems to be related to the day today :

‘The unintended fall out of NY Twin Tower strike has been for the Indian Stock Markets to dip to almost eight year low. During these eight years a lot of improvement in trading system has been brought about. It is almost at par with the best in the world. Also during last eight years ultimate measures carrying immense value for the Indian economic system and industrial sector have been taken. Leaving apart what has happened in specific industrial sectors and companies, if we simply recount the macro level major reforms a scene, so beautiful, emerges that can only spell bound.

The list will unfold like this:

I) Interest rates domestically have been brought down to quite reasonable level when good companies may raise money from open market for medium and long term @9pc including costs.

II) VRS of white collar and blue collar workers have been popular.

III) Licencing and quota restrictions have completely been removed.

IV) The weaker players have been wiped out leaving economies of scale and technology orientation to take front seat in development of industry.

V) Mergers and aquisitions and out right sale of facilities have become  quite feasible and popular.

VI) Capital account movement of Foreign Exchange is now possible.

VII) Listing of shares in US and UK bourses is on, besides, raising of capital in equity as well as debt form, from overseas markets is routine.

VIII) Exposure of our technical personell to technologies prevelent in other advanced countries is also quite common.

IX) Communication network is working at 90pc efficiency compared to developed countries.

X) Roads are getting better by the day and commercial vehicles of every capacity for long hauls and short distance movement are all being produced within the country.

XI) Octroi and Sales Tax reforms have gone at least to the half extent.

XII) Language barriers have come down due to exposure of  large population to Hindi and English.

XIII) Privatisation of education ensures spread of training in new fields and relevent subjects.

XIV) Governance is lesser.

XV) Inflation is within bounds.

XVI) Distribution costs have come down.

XVII) Agriculture is taking care of food needs and cash-crops are aplenty to provide feed stock to industry.

XVIII) Efficiency of capital is improving and in turn labour has also become more productive.

XIX) Population is growing at a slower rate (actually India requires at least some growth in population for faster economic growth).

XX) Urban land is no more under cieling laws.

XXI) Women are getting in to larger economic activity as their time is freed from domestic chores due to gadgets being cheaply available.

XXII) Consumption is no more a sin and adds to demand.

XXIII) Property prices are reasonable.

XXIV) Terrorism is restricted to fringes of the country.

XXV) Deprecialtion of Rupee has brought about automatic shelter for the domestic industry.

XXV) Personal Income Tax and Corporate Tax are at reasonable level, dividends are tax free in hands of receipients.

XXVI) Excise Duties. Are no more prohibitive.

XXVII) Air-ports and sea-ports are quite modern now.

XXVIII) Venture capital is available and 100pc foreign ownership is permissible in listed companies (select sectors) besides FDI route.

With twenty eight counts of positive development over last eight years why should the index suffer so much is any body’s guess. There are some dark areas and require urgent attention like our railways are failing to deliver, the power sector is in a mess and the corruption is eating into developmental resources of govt besides making things difficult for foreign party to do business in India. We can well estimate the positives far outweigh the negatives yet our berometer is showing that the times are worst for industry and investor.

By way of explanation I may suggets that what the barometer (stock-markets) is showing is wrong ie actually the health is in pink. The reading should show it at 1700 mark, if the reality has to prevail. I may admit that for this to happen a moderately better dose of inflation is required. Better still will be a stiff dose but only in a short run. If we want to quantify upping of inflationery pressure to around 12pc per year for two years, would be healthiest. This is necessary for two reasons, one that last decade has been tough for borrowers and wonderful for lenders, the other is that wheels of economy require some lubrication through monetary expension which will take care of easing the pressure on banks and development finance institutions.

Our industrial future is quite secure, come what may, no gain saying that democracy has to keep standing eract.’

The above reads as it is for today, the only thing is that democracy does stand more firmly now. So this is another good thing. It was the time after 9/11 incident in US and now is the time after big US financial crisis. This means that when US is in trouble we get scared of investing in market as well as do the FIIs and this makes markets plunge unduly. When the fear is gone the return brings more money in than had moved out. This paves way for markets scaling higher hights as was the case between 2001 and 2007 (six times gain). Facts are stranger than fiction, if we assume it is a fiction the market will rise beyond the previous peak than fact may see it go high beyond 10000 Nifty mark or 30000 Sensex mark. Whatever way we look at it, it becomes imperative that we remain invested. Budget event on Monday may temporarily give different color but basic strength remians.

HariOm,
krsnaKhandelwal

panch-tattva talk…DOW plummets

Friends,

Our markets did a wonderful job of keeping the Nifty in green on a day when the DOW and other US indices lost heavily. There were some gliches and the trading hours had to be extended by NYSE.

The US job data are bad and worse in the sense that fewer hours are spent at jobs even by those who have employment. The wages are not rising either. The Obama administration has not been too successful at putting the economy back on track. The US economic weakness has affected us in the sense that our exports are going down continuously for last eight months. The Chinese scenario is no different.

The economic engagement does not here, it goes further in terms of capital flows and currency/interest rates parity. So the there is a connection and there is reverberation of what happens in one part of the world in the other parts of the world. The moot point is how far that should reverse the course of the economies as large as India’s by impact.

Going by the ways and means by which the US took strides in the economic development, I find many a parallels today here. And then the size and composition of population is on our side. Our industrial units can afford to have economic/optimum size of operations based on local demand. We have the road map ready for the highways, railways and airways. Bulk movement of commodities through rationalised routes/means would reduce transportaion costs.

Our savings rates is robust and can take care of investment needs but some how artificially high rates of interest have been keeping the risk capital mop up slightly strenuous. It still is coming due to high returns in case of most of the established business houses. Further liberalisation and opening up with due care that the people at the bottom of piramid do not get upset, is the need of hour.

The railway budget would be presented today, if only the minister sees the need to outsource the inputs, maintenance and passenger services, a tremendous change can be brought about at speed in the quality of journeys that we undertake. There would be certain sections where private enterprise would not be able to provide quality service at reasonable cost. To take care of such sections, the railways can offer subsidy or undertake to provide itself the needed service.

I am against the dilution of overall control and resposibility of govt in the field of railways. The competition is necessary for keeping the costs and prices down and that competition is faced by railways from the alternative means like road and air.

So, let’s wait, with fingures crossed, for Mamata’s touches on the raiways’ budget as any further contribution is not expected.

HariOm,
krsnaKhandelwal

panch-tattva/post result…jbfind,electcast,daawat,indhotel

JBFIND @80 (010709) gets 1159 panch-tattva points and you may buy this for medium term.

ELECTCAST @32 (010709) gets 1216 panch-tattva points and you amy buy this for medium term.

DAAWAT @1075 panch-tattva points and buy it for medium term.

INDHOTEL @66 (010709) gets 816 panch-tattva points and you may accumulate this on days of declines.