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-tattva talk…an announcement

Friends,

I request you all to please visit my new site www.niftywisdom.com from now on. You will find all that was being made available to you here and more. You may , however, keep coming here for referring the material available in archive of this site.

HariOm,

krsnaKhandelwal

panch-tattva/post result

PRISMCEM @51 (071009) may be accumulated for long term and may be sold at above 76/- till next assessment.Need not put stop loss.(Ref1301:60/36:17/21)

PFIZER @870 (290909) may be bought for medium/long term.Stop Loss as advised under guidelines.(Ref 1137:996/435:17/21)

panch-tattva talk…rupee strong,inflows high

Friends,

The rupee (at 47.89/dollar) has become stronger and the capital inflows are high. The RBI chief has started making the expected noise about having to take measures for curbing money supply. I am surprised what makes RBI shiver when the flows are high and there is more money here to work with. What is so scary for them that want to upset the apple cart. If rupee gets stronger and hurts the exporters it may just buy some dollar and help. Afterall China must have doing the smae to keep the Rembini down. Has it not achieved the unthinkable of India type growth rate. We have to shed our still sticking remains of the Hindu Rate of Growth era. It will not yet harm India to cover more ground in short term for we still haven’t taken care of the nutrition and health needs for all, leave apart shelter and education.

The telecom scrips were badly mauled yesterday for no known fault of theirs besides having the courage to compete on strength of market getting larger and being successful at cutting costs. This is a natural outcome of many players in the field that has room for two or three that the fierce competition get underway and eventual consolidation (through mergers of weaker with stronger takes place). Did I not tell you that Bharti is uselessly trying to go global while home turf has to secured. I must appreciate RCOM for boldly initiating price war, India is going to get more integrated as a result and the movement of labour more free because the people away from home may remain more in touch.What a wonderful development is new age telecom, the lowliest have more power to communicate than Akbar had. The wise would buy into both the leaders, RCOM and BHARTI.

You have seen that the rebound here has been dramatic, the Nifty closed higher yesterday at 5027. Europe and US economies have yet not been out of nursing ward but the stocks there have no intention to reflect that situation and scaling up ( Obama is on side of more spending and tax cuts as the jobs are still disappearing).

SAIL has half the slice of Chiria mines and the other half will go to private palyers.This ensures future supply of ore to SAIL (Chiria reserves are about 2 billion tonnes).

Sugar scrips are on wicket at the moment and should form part of your portfolio for the time being.

Steel scrips were up but out of turn, the steel prices are subdued since some time back.

The Hindustan Unilever did a rope trick yesterday which is unlike its character. This was due to the fact unloading of soem part of portfolio generated cash and since the players are in no mood to withdraw cash HINDUNILVR was lapped up. Surely times have changed for the FMCG and Pharma which will have a larger population with more spending power and better awareness about their products to cater to. So this is also a sector to be viewed with some degree of greed.

HariOm,
krsnaKhandelwal

panch-tattva talk…DVR shares

Friends.

The shares with differential voting rights (DVR) are yet not popular in India. Tata Motors had issued them some time back and the issue was not welcomed by public in general which was more on account of the conditions then prevailing rather then due to the aversion for DVR shares. The promoters and arrangers/managers ect had to pick them up. Now the same are selling at some discount (about 30pc) and would be a good pick for the fortunes of Tata Motors have become attractive on back of CV sales picking up and expected to gather momentum and on back of successful launch of ‘nano’ which will be supplied in bulk in future. It commands premium at the moment ie those who have booking may get some premium for trasferring to the interested buyer. I think the DVR shares should be issued by promoters as a routine for this will keep them safe from the requirement of proportion contribution to maintain holding level. Secondly the discount on such shares and higher dividend entitlement makes it attractive for the common investor. He happens to to be safer then otherwise because the manipulative power of promoters goes down. The SEBI has not been permitting issues of DVR shares after the first such issue but I think they will come round after the markets here become more mature.

There is no question about India spending ever larger amounts on infrastructure. Rakesh Kumar Chaudhary says in an article in FE (5/10/09) that ‘for every 1pc less spending on infrastructure, there is 1pc loss in GDP. Now point is how to generate resources of high order and not destablise the fiscal and financial balances otherwise aimed at. I gave the solution only a fews back and that was to somehow bring the capital in Indian hand out in the open which is stashed away in form of precious metals. The govt should give some incentives in form of saving on taxes and in form of returning the equal quantity of gold/silver at some time in future. The resource so generated will be without burden of interest but the spending of so raised money has to be 100pc for the purpose of creating infrastructure of the type which may pay back enough returns to take care of the liability created. Thus the need would be fulfilled, the worth will be back in publics hands and the nation will be left with useful infrastructure for a long long time in future.

We had Nifty advancing by more than 2.5pc over the three trading sessions in last week. The cues form Asia this morning are not positive and the mood may rub off on traders in India when the market opens. Some correction was even otherwise due and does not mean end of world, the resumption of upside moves will again be noticed after some time.

HariOm,
krsnaKhandelwal

panch-tattva talk…our legacy

Friends,

State Bank of India has for the umpteenth time reduced the interest rates on retail deposit. This is simple extension in line with the lower credit off take and risks in doling out retail credit to all and sundry. I have been at pain explaining all the while that the high interest (real rate)  phenomenon is afflicting Indian businesses most. Since there is higher return on investment in India, it was being absorbed. Every passing day we are heading in the direction of a freer movement of capital but the govt has still not formally opened the doors by keeping useless but detrimetal curbs. The portfoio investments are rising and making rupee strong. Our businessmen are still not being allowed to think big and conceive mega projects. The result has been that the high profitabilty of operations is giving lot of cash back in hand and the enterpreneures are trying just to put the same back in business by expansion etc. The whole scenario has therefore kept us at a level of growth which is far lower than the potential. The west is not fully competent to take advantage of the invitation extended for entering Indian business arena for lack of managerial personell of their own. The groups in China and Japan have problem of trust and language and the later also  has the aging population of its people as a deterent.

There is another angle which does not let India grow at break-neck speed. We have been an agrarian society and have been seeing effort bear fruit over time at natural pace and aided by nature itself. We plant seeds and let it convert in to a tree, so do we do in case of our business enterprises. We find it foolhardy to bring growth through aggression. We are aggressive only when we have to defend livelihood, we have never been aggressive to aquire means of livelihood. Our patience and the practice of saving todays output in form of seeds for tommorrow is reflection of the same. It is therefore not our grain to borrow too heavily and conceive mega projects. We would never order the building of underground rail networks simultaneously although it is the requirement in at least a dozen cities ( the capital is waiting to come from all over). We can develop railway network by adding another track, connecting a few remote regions, introducing more trains, adding a few platforms on busy stations etc but when it comes to creating dedicated freight corridor or a special track for superfast trains between two stations, we begin to faulter or downrightly demur. We keep amending our archaic laws but an entirely new set of law is found to be difficult to put in place. We have never ever tried to solve the problem viz a viz Pakistan in a decisive manner inspite of having such might and support. The Chinese and the Americans and the Japanese have no such restraint. They would go all out when moment is opportune for them. We are loved for being so and laughed at too.

I would not say that we should lose our inviduality because losing indiviality is like losing all. I would however stress that raising pace of our progress in accordance with the times is by no means bad. Its time we ask our people to bring out in the open the shy capital (resting in our vaults as gold and silver) and with some additional borrowing from outside, do take care of water-resource mangement, power availability etc and pull out of the recess of poverty the entire population that is living in subhuman conditions in one single sweep.

Today is a special day for us Indians. The father of our nation was born today. He did what was difficult for an army to do ( by army I mean army of social servents, army of political activists, army of relious preachers and the army of soldiers as well). Gandhi, the Mahatma does belong to catagory of ‘Buddha’,'Mahavir’,'Nanak’ and ‘Adi Shankara’.

HariOm,
krsnaKhandelwal

panch-tattva contest…predict nifty closing on 9th 0ct

You are invited to take part in this contest and win prizes. All you have to do is to put your entry in the comment box of this post by 8th Oct 09 about your level of expected Nifty closing on 9th Oct 09.

First Prize: The entry that comes  nearest to Nifty’s actual closing but within a range of +/- 5 points will win a prize of Rs 200/- .

Second Prize: The entry that is exact to the extent of whole number will win a prize of Rs 500/- .

Third Prize: The entry that is correct to the extent of  first decimal point will win a prize of Rs 2000/- .

Fourth Prize: The entry that comes correct to the extent of upto second decimal point will win a prize of Rs 10000/-. 

 Only one entry can be made be by one person.

No disputes will be entertained and our decision will be final and binding. There is no entry fee.

krsnaKhandelwal

Mobile:+919724313034

Email:krsnakhandelwal@yahoo.com

panch-tattva talk…the gambit pays off

Friends,

How remarkably the Sensex has crossed the 17000 mark. It took just 15 session for it to acheive this feat. However, last time when it performed the coverage of 1000 pts between 16000 and 17000, the time taken was just 5 sessions of trade. Why does the pace advance between 16000 and 17000, the answer lies in the fact that 1000 devided by 17000 is a figure under 0.6 (or say under 6pc). This can be taken to be as nearly five percentage and this much percentage movement does not make one sit up and gasp. A movement at over 6pc is rounded to 10pc in popular perception and is taken to be some thing extraordinery. You will notice that movements hereafters on the upside will be rather fast in terms of time taken to cross the next 1000 points. An other pointis that upto the level of previous highs, the groove exists and it does not need to excavate to move ahead. Beyond the previous high level it would have to be trying hard or let us say it would take a spate of high potential news at that point in time to enable it to move further ahead.

Bharti-MTN deal has been aborted. They say it was the insistance of SA about duel listing, may be so but I haven’t heard any body say that the statute there does not bar it and what SA is insisting is extraneous. If the later is the case then why should an Indian company expose itself to risks in an irrational and unhealthy place. As I told you earlier, I do not find much of substance in the deal for the stake holders other than the comfort to Mittal himself as promoter to be able to withstand the local political pressures by posing to represent international interests. India’s potetial is still not exploited to the hilt then why spread thin the effort and resource. It was themistake committed by Tatas, the Birlas and few others and they had to face tough times. Also I say that the business rules in India should be firmer and less prone to changes every now and then. The businessmen here should be taken to task for breaking rules but should not be subjected to either please the establishment or face (harsh) music. Again, if the deal failed because India has still not graduated to having full/free convertibility of rupee, it is an occassion to do it and just not have fearful attitude. You can’t have a grim face and smile too.

The IPO by Oil India commands 9.3pc premium over issue price. Can’t just yet whether its good for investment. I have to have a track record of some quarters to be able to do so. That’s why you do find coverage of newor small companies in the ‘panch-tattva/post result’ catagory. I am pleased to say that my system has gained credence and a few of my readers have informed about having made money, relying on the advice.

The Nifty PE (at 20.59) is still not in danger zone because the profitability has kept pace with the market. If the second quarter does the same than rosier times are ensured in future too. The only hick up is that those who bought equities between Oct 08 and Mar 09 would like to encash chips without subjecting themselves to capital gains. Even other old holding would find way in to market for similar concern. The new tax code is a bad omen for the market.

There is some weakness in the Asian markets today and so was the case in USA and Europe yesterday. We may be impacted to some extent today but not much. The result season holds the key in our case.

The China is celebrating its foundation day. What an irony, the foundations of that time have no trace now and still the foundation day is being celebrated. China turn into a market economy from a economy under shackles has been dramatic. What is more surprising that it has still heard the noises about democracy even though the stomachs there have been more than full for quite some time now.

HariOm,
krsnaKhandelwal

panch-tattva talk…advantage india

Friends,

The Indian stocks have performed best during last twelve months. The Indian stocks will be the leaders as far as returns go, for the next 12 months at least. Now, after some confirmation you would be able to take my suggestion that the previous all time high is not difficult to be breached by leading Indices here.

There has been an explosive sort of reaction in world’s leading markets during last twenty four hour when we were closed. This may be on account of the positive vibes coming out of the G-20 meet at Pittsburg where the dissenting voice is quite feable. I had occassion to tell you that China may not see the stock price movement in line with rest and particularly India. Today that happens to be the sole market in the red. The Nifty is trading past 5000 mark in Singapore this morning, gaining more than 40pts. I would still say that the investors here should be maintaining their equity investment at between 50 to 70pc of investible whole. This is necessary to keep the fear element out and the to remain ready for buying just in case there is some extra-ordinery movement on down side by way of knee-jerk reaction. The fundamentals of Indian economy will not be dented in a short time because of its unique positioning.

As for the sectors, I would say that ‘auto sector’ has entered risky waters in terms of pricing of stocks. The cement sector remains a good bet for investment and so is banking sector. About capital sector I would say that those who have nerves of steel and would not be disturbed for any small loses, may surely invest in leading infrastructure companies like L n T, BHEL,ABB and a few other construction companies. The IT sector is now fit for moving out on rises and entry on declines. Realty should be shunned unless you have specific knowledge about some company expected to do better in near future, these stocks should not be looked at for investment of long term nature. The Pharma sector in OK and should form part of portfolio without over-weightage. The telecome sector has big promise but entails some risk due to ongoing price war. I feel rather uncapable of speaking surely for refineries and petroleum but stocks like ONGC have potential of going up, may be substatially too. Steel remains my favourite sector for some more time till the full price potential is achieved. The present day P/E ratios are around 26 for Auto,around 10 for Banking,around 10 for Cement, around 30 for Cap-Goods, around 20 for IT, around 25 for Pharma, around 10 for Steel and around 15 for Telecom.

So, please be ready to take part in action.

HariOm,
krsnaKhandelwal

panch-tattva talk…taxing times

Friends,

The Swiss Banks have offered to collect ‘universal withholding tax’ on earnings from the deposits of foreigners. They would still not like to disclose identities of depositors which is core to their business. This, atleast,  may be preferred by those in power for it will be seen as an excercise helping the exchequer . It  would , however, still suit the possessors of not disclosable income. The ‘mighty rich’ will always find their way. The proceeds of  tax collected will be trasferred by Swiss Banks to client’s country of domicile. This first step should adopted by India by putting in place the necessary laws and treaty. The Swiss banks hold about Rs hundred lac crores worth of such deposits from all over the world.

The govt is trying while the LIC is resisting ; the matter is about the percentage of profits to be distributed to the policy holders by LIC. It distributes 95pc of profits at present and the govt is trying to fix it at 90pc. The LIC’s policy holders may suffer a lot if this is done by changing the statute.

Only three days from now, the gifts received by you will be taxed as income, without any exception. The exception on the gifts received from relatives on the 0ccassion of marriage will still qualify for tax relief. This is good and bad too for it will do away with cumbersome tax calculating excercise and also will stop fictitious gifting but it will subject the same income to tax in two hands where the gifts are genuin.

ONGC was required to deposit its surplus cash ( Rs 18000 crs ) in only the nationalised banks. The fall out is that the nationalised banks are offering it not even an interest rate equal to retail deposits. The govt’s fingure is never ready to take rest and the ONGC will suffer interest loss of Rs 200-300crs and  is naturally cribbing about it.

G-20 have commonly felt the need to curb Banks’ pay-packages. The matter of pay-packages is in fact due for some curbs and ceilings in all areas of organised business. I think there should be ceiling on the times(multiple) of the lowest salary a company can pay the top salary earner in the company. A further ceiling should be placed in terms of the same executive not drawing salaries/perks from more than one company as an whole time executive or even as a part time executive in one company and whole time in another. This in fact involves share holders interests and also disallows the management to skimming the company beforehand, if there are danger clouds on the horizon.

The gold bottomed out at $250/oz some nine years ago. It is now knocking at the ceiling of $1000 which may eventually turn floor for it. The golden staircase, however, has one point of discomfort ie its last two steps in ladder have been very high (the last one even higher than the earlier). To understnd it better please note that gold prices took took more than six years to decisively cross $500/OZ in 2006 and took about two years more to cross $700/OZ decisively and it is trying to scale past $1000/Oz decisively in a matter of just one year. Now should you be with gold or without gold, I think it is time to shun it and prefer equity investment , at least in case of India.

HariOm,
krsnaKhandelwal

panch tattva contest…predict nifty closing on 1st oct 09

Earn Money For Being Right

Please predict Nifty closing on 1st Oct 09 . You may post your entry by 30th Sept  09 in the comment box of this post. The entry closest to actual closing will win a prize of Rs. 200/- (Rs two hundred). There will be a special prize Rs 10000 (Rs ten thounsand) to an entry hitting the bulls eye (ie exact figure to the decimal points). No disputes will be entertained and our decision will be final and binding.

HariOm,

krsnaKhandelwal

(Phone No. +919724313034)

N.B. There should be only one entry by an individual. There is no entry fee.