Wednesday, May 26, 2010


In 2010, the rally in the USD has coincided with a rally in the Gold.
The USD & Gold, normally share an inverse relationship. Gold has also managed to detach itself from the correction in the CRB commodity Index.

Currency instability, market volatility and concerns over mounting government debt have been considerable tailwinds supporting this rally in Gold.

Year to date, Gold has also outperformed the S&P 500 by a wide margin.

Saturday, May 22, 2010

MICROMAX MOBILES INDIA - Challenging the giants!

The unfolding mobile phone revolution in India has created numerous opportunities and markets for companies operating in the Telecom space.

Even as the Apple iPad & iPhone & BlackBerry smart phones continue to dominate news as far as mobile technology goes - here is a story of an Indian company that has dared to challenge MNC giants in the mobile phone handset business.

The entry level mobile handset is tough ->first time buyers, cut throat competition, wafer thin margins and every changing technology.

Take a look -

Wednesday, May 12, 2010


Here's David Rosenberg again, this time with a chart from Prof. Robert Shiller's data.

Mean reversion is one sticky concept, that a debt addicted economy is going to have to come to terms with.
As the inventory of unsold homes and the shadow inventory of foreclosed homes continues to build, the downward pressure on home prices in the U.S.A. looks all set to continue.

Lastly, here is a link from Main Street that the guys on Wall Street should take a look at.

Food-stamp tally nears 40 million, sets record Reuters

""""""""Food stamps are the primary federal anti-hunger program, helping poor people buy food. Enrollment is highest during times of economic distress. The jobless rate was 9.9 percent, the government said on Friday.

The Agriculture Department said 39.68 million people, or 1 in 8 Americans, were enrolled for food stamps during February, an increase of 260,000 from January. USDA updated its figures on Wednesday.""""""""""""

Tuesday, May 11, 2010

$962 Billion : Bailout of Club Med or the BANKS !!!

The markets certainly loved the mega ECB show of force.

Equity markets in Spain, Portugal and Greece soared, but did anyone notice how the financial stocks in France and Germany reacted yesterday!

AXA +21.87 %

BNP Paribas +20.90 %

Société Générale +23.89 %

Commerzbank + 8.97 %

Deutsche Bank +12.62 %

Here's an interesting take from Socio - Economics History Blog

Europe's Exposure To 'PIGS' Problem! « Socio-Economics History Blog

Friday, May 7, 2010

MANIC MARKETS - 6 May, 2010 !

Well, here we go again.
I don't know what happened, or why, or who, or whom!!
Let' s wait for more clarifications...
Nice move in Gold...........over $1,200 again!
As I said recently, this is just not the time to be taking on any undue risks.

Wednesday, May 5, 2010


Below is a chart of the financial performance of Insurance companies in India.

Public sector behemoths like L.I.C. & New India Assurance have continued to maintain their stranglehold over the Indian Insurance sector.

ICICI Prudential, HDFC Standard Life & Bajaj Allianz have continued to gain market share, but have yet to make profits.

Equity market analysts are always trying to value the above above three insurance companies - to calculate the sum of parts valuation of their listed parent companies.

At this stage it's worth pointing out, that it may take a while for these guys to be profitable.
Cut throat competition and well established incumbents are delaying their break even dates.

Warren Buffett is rumored to be interested in the Indian Insurance sector.
In the long run, this sunrise industry is set for many decades of exponential growth, given the low penetration of insurance products in the Indian economy.

In the near term, we may be headed for a shake out or consolidation, as weak hands throw in the towel or sell out to larger players.

Watch this space.


Over the last couple of years, I've grown wary, well almost fearful when anyone says that any financial mess or crisis is '''contained'''.

Now, whenever I hear that the damage has been contained, I have come to expect the eventual cost of the crisis to be a whole lot more than initially estimated.

Some say that the crisis in Club Med is contained and that there is no risk of contagion.
Still others say that the finances of some states in the U.S.A., are not as terrible as pessimists may fear.

The prudent reader must read between the lines and ignore the noise in financial news as he makes his/her investment decisions.

The US is not immune to the current crisis in the Eurozone. A weak Euro will hurt US exports to Europe and subsidize European exports to the U.S.A.

Emerging market exporters are not immune to a slowdown in developed markets in the west.

As I've said in recent posts, it's not a time to be taking unnecessary risks.
Gold prices in the meantime have held up really well, despite a rally in the USD and a sudden sell off in global equity markets.