<a href="http://4.bp.blogspot.com/_yxDXLyjgmlU/S6Is-5kUt5I/AAAAAAAAKfo/C_fmKp1sTL4/s1600-h/ADR.PNG"><img style="TEXT-ALIGN: center; MARGIN: 0px auto 10px; WIDTH: 400px; DISPLAY: block; HEIGHT: 275px; CURSOR: hand" id="BLOGGER_PHOTO_ID_5449967958188406674" border="0" alt="" src="http://4.bp.blogspot.com/_yxDXLyjgmlU/S6Is-5kUt5I/AAAAAAAAKfo/C_fmKp1sTL4/s400/ADR.PNG" /></a><br />Just a quick post to show you the divergence - rising index, falling breadth.<br /><div></div><div class="blogger-post-footer"><img width='1' height='1' src='https://blogger.googleusercontent.com/tracker/5184850244660132569-3971539296795280105?l=timamo.blogspot.com' alt='' /></div>
Posted by The Rebel (noreply@blogger.com) on March 18, 2010 01:40 PM · permalink
<span style="font-weight:bold;">Many of you have asked to explain these important aspects in detail.I have covered Corporate governance which is one of the most important point that people look at.There has been robust liquidity by the FIIs in our market,are they real or?well check our the latter,PNs & sub-accounts for that.Hope one wud get benefited.<br /><br />What is corporate governance?<br /><br />Ans)Now coming to the listed company, if they have paid-up capital of Rs 3 crore plus, then they have to give a corporate governance report. This report contains various details like, how many board meetings were held during the year, what is the composition of directors, what remuneration they have been paid, when were the last three general meetings of the company held, what committees were formed by the company etc. Three committees are mandatory, these are the audit committee, remuneration committee and investors grievances committee. Then, they need to give the price movement of shares on any one stock exchange, in the last 12 months, as also the shareholding pattern. What needs to be highlighted is, as per the number of shares held, how many shares are dematted. So this entirely covers secretarial information of the company.<br /><br />What are PNs & sub-accounts?.<br /><br />Ans)Participatory notes and sub-accounts are two entry routes for suspect funds. Sub-accounts are generally foreign private companies and individuals on whose behalf a FII is permitted (under Sebi rules) to invest and who would otherwise not be eligible to register asFIIs. Participatory notes are contract notes through which an FII invests in, say, Indian equities, on its proprietary account; but the purchase is funded by an overseas investor on whose behalf the investment is made. The expert group report admitted that "this helps in keeping the investor’s name anonymous" and that such investors "prefer to avoid making disclosures required by various regulators". From data that Sebi shared with the group (but not with the investing public) there are ominous signs visible.Almost half of all FII inflows appear to come through the PN route.<br /><br />Yet the expert group did not ban the use of PNs or sub-accounts by FIIs, though the Reserve Bank held that the issue of PNs should not be permitted. In his dissent note, the RBI representative on the group said, "Trading of these PNs will lead to multi-layering, which will make it difficult to identify the ultimate holder of PNs. Both conceptually and in practice, restriction on suspicious flows enhance the reputation of markets and lead to healthy flows.In fact, the RBI was also of the view that sub-accounts should not exist as a separate class of investors. But the rest of the expert group–two finance ministry representatives and one from Sebi–did not endorse the RBI’s views. And so PNs and FII sub-accounts continue to play a big part in FII inflows.<br /><br /><br />Regards,<br />ARUN<br />I can be recahed at-arunanalyst@rediffmail.com</span><div class="blogger-post-footer"><script type="text/javascript"><!--
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Posted by arun (noreply@blogger.com) on March 18, 2010 12:35 PM · permalink
<span style="font-weight:bold;">Many of you repeatedly in my mail have asked for paid calls and what they will be and all.Now as an amateur and being a social guy I would always safeguard the vested interest of investors than something else.The open blog is a place for me to give guidance..paid blog is for the one who needs those calls and my bigtime guidance desperately.Anyways here"s an example of a paid member call and the type which I provided just 5 days back.<br /><br /><br /><a href="Saturday, March 13, 2010">Saturday, March 13, 2010</a><br />Market outlook and stock idea:-Subex ltd <br /> <br />Scripscan:Subex Ltd.<br />Code 532348<br />cmp:60<br />Target:70<br />Percentage:15%<br />Duration:2-3 months<br /><br />Story:Subex provides fraud management and revenue assurance solutions to global telecom players.It was one of the worst hit companies due to a slump in the telecom sector in the last eight quarters globally. The company struggled to remain afloat as its clients from the telecom sector postponed investments in new projects.Its clientlist includes Bell, Comcast, T Mobile, Telefonica, Verizon, BT, Zain, Vodafone, BSNL, Reliance Communications, and Telstra among others.Now, the worst seems to be over for the sector. Telcos are showing signs of revival, which means that the investments could get back in the sector. This augurs well for Subex.Subex’s ’07 acquisition of services fulfillment player Syndesis went awry as global telcos cut new capex postsubprime crisis. Subex took a big hit because of this since it was betting on selling the next generation deliverables of Syndesis. Given the recovery in the telecom space currently, Subex is hopeful of reviving the Syndesis business.The company is also aggressively expanding its services portfolio, which would generate recurring revenue. With the restructuring of its FCCBs and other debts, its interest costs will fall. This will support its net margin in the future quarters.At present price of 60 its quoting at less than 6 times its 1 year forward earnings.Thats quite cheap considering the valuation enjoyed by its peers.Subex is the same scrip which even couple of years back commanded a price of over 800 in the bourses.With things looking rosy coupled with promoters taking warrants at 80,things can only get better for the counter.A good buy for short to medium to long term horizion. <br /><br />Regards,<br />ARUN<br />9804589299<br />I can be reached at:arunanalyst@rediffmail.com</span><div class="blogger-post-footer"><script type="text/javascript"><!--
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Posted by arun (noreply@blogger.com) on March 18, 2010 12:25 PM · permalink
<p>After trading below the dotted line for most of the session today, Indian markets managed to cross over to positive territory in the final hour. The final hour optimism was on the back of lower food inflation numbers as compared to those in the previous week. While the BSE Sensex closed higher by around 44 points (up 0.2%), the NSE Nifty gained around 3 points (0.3%). The midcap stocks ended the day higher by 0.3%, while those from the small cap index maintained status quo. Stocks from the telecom, commodity and software sectors were the ones that elicited investor interest. <br> <br> As regards global markets, markets across Asia closed lower today. European indices have also opened lower. The rupee was trading at Rs 45.49 to the dollar at the time of writing. </p>
Posted by Equitymaster on March 18, 2010 11:06 AM · permalink
Blockbuster (BBI) shares lost nearly 30% of their value yesterday, as the company suggested that its ability to continue as a going concern remains in doubt. GameStop (GME) and Blockbuster do share some similarities, leaving investors to wonder if Blockbuster is not just a few years ahead of GameStop in the inevitable fall of both companies. Is GameStop also doomed?
A few years ago, Blockbuster had a seemingly viable business model. Since then, however, the world has passed it by. While the company trudged along as a bricks and mortar, other companies allowed movie viewers to download/order movies online or order movies on-demand through their cable boxes from the comfort of their homes.
It is not implausible to believe that a similar fate could befall GameStop. It's not a wild leap to assume that in the future, game consoles will allow gamers to browse online catalogues of games directly on their televisions, and purchase and download these games directly, by-passing the distribution network on which GameStop is so reliant.
Though this points to a grim future for GameStop, there are some important differences which make the GameStop / Blockbuster situations rather dissimilar. First of all, to the surprise of many, Blockbuster has never really made money, even when it should have been able to. From 1996 to 2000, when the company should have been raking it in, it lost over $700 million! The ensuing ten years were even worse, as the company rarely had a profitable year, and managed to lose several hundred million dollars in the process.
GameStop, on the other hand, is dealing from a position of financial strength: the company has made over $900 million over the last five years, and carries just $400 million of debt, while holding $300 million of cash. As such, instead of fighting fires and figuring out how to pay debt and expenses, GameStop can focus on pursuing profitable business opportunities.
GameStop also sells devices that make the software valuable. Without the consoles, and extra hardware in the form of controllers, balance boards, punching gloves, steering wheels, foot pedals and other contraptions, the innovative software is not as interesting. While margins on these items are currently low, as retailers try to make money on the software, these margins may have to rise to entice the retailers to continue to sell them if most of the software is downloaded.
Most importantly of all, however, GameStop is an innovative company. Management has consistently shown an ability to squeeze out profits, even in the face of strong competition from the likes of Wal-Mart and Best Buy. GameStop's successful foray into the used game market, where it essentially created a lucrative niche where no market previously existed, has allowed it to benefit from strong margins from used games as big box retailers have reduced the margins on new software titles. With able management, and dealing from a position of financial strength, with strong cash flow generation, a low debt to equity level, and strong returns on equity, GameStop is in a position to fight to stay around like Blockbuster never could.
But investors have priced the stock as if its death is around the corner. The company's demise, however, is far from a foregone conclusion. With a price to operating cash flow of just over 5 and almost no net debt, GameStop trades at bargain levels. At this price, the downside is priced in; but if the company is able to last a few years longer than expected, investors may find that this stock idea was worth the investment.
Disclosure: Author has a long position in shares of GME
Posted by Saj Karsan (sajid.karsan@barelkarsan.com) on March 18, 2010 10:04 AM · permalink
<p>SEBI has <a href="http://www.sebi.gov.in//circulars/2010/cir-mf182010.pdf" target="_blank">changed the rules</a> for mutual funds again, in support of the small investors.</p> <p>First, for New Fund Offers (NFOs): They will <strong>only be open for 15 days</strong>. (ELSS funds though will continue to stay open for upto 90 days) It will save investors from a prolonged NFO period of being harangued by advisors, advertisements and flyers, nothing else; but the motivation behind the rule seems to be simple – if you can invest anytime, why keep a long NFO period?</p> <p>Another rule is that NFOs <strong>can only be invested at the close of the NFO period</strong>. Mutual funds would keep an NFO open for 30 days, and the minute they received their first cheque, the money would be directly invested in the market; but that creates skewed accounting for those that entered later since they get a fixed NFO price. That is now solved.</p> <p>To ensure that there’s no problem with interest, <strong>the ASBA process (Application Supported by Blocked Amount) is now applicable to Mutual Fund NFOs,</strong> meaning you continue to earn interest in your bank account until the NFO closes (remember there is usually no rejection or “oversubscription” in a mutual fund NFO) </p> <p>These above rules apply for NFOs <strong>after July 01, 2010.</strong></p> <p>Mutual Funds have been known to push dividends as a source of attracting more investors; remember the <a href="http://blog.investraction.com/2007/01/birla-sun-life-tax-relief-96-beware-of.html" target="_blank">Birla Sunlife ELSS scandal</a>, where the Tax Relief fund was pushed to investors saying that a 1000% dividend, or Rs. 100, would be paid out of the fund in four months. The NAV of the fund was Rs. 200, and would drop to Rs. 100 – meaning the fund would pay out half it’s assets as dividend. But Birla Sun Life only had Rs. 59 cr. in assets before this dividend offer, a distributable surplus of around Rs. 30 cr. After the offer, and BEFORE the dividend was to be paid, investors piled on and assets went to over 200 crores – meaning they now had to pay our Rs. 100 crores as dividend! How can a scheme having only 30 crore surplus distribute Rs. 100 crore as dividend? Simple. Take the extra money from the new fellows coming in – who paid over 140 cr. to get in - , and give it right back as dividend. This is useful for investors in a tax saving scheme where your money is locked for three years; you get a tax benefit on the whole investment, and half your money back. Still, wherever new investors are being paid back out of their own money it dilutes the meaning of “dividend”, and the above practice is generally frowned upon. (For instance, companies can only declared dividends from realized profits, not from IPO money stored)</p> <p>SEBI has put a stop to this. <strong>Dividends can now only be paid out of actually realized gains.</strong> Impact: it will reduce both the quantum of dividends announced, and the measures used by MFs to garner investor money using the dividend as a carrot.</p> <p>An important distinction has been made in certain conditions where mutual funds are sold at less than face value (usually Rs. 10). </p> <blockquote> <p>When units of an open-ended scheme are sold, and sale price is less than <br />face value of the unit, the difference between the sale price and face <br />value shall be debited to distributable reserves and the dividend can be <br />declared only when distributable reserves become positive after <br />adjusting the amount debited to reserves as per para 2(a) (ix) of Eleventh <br />Schedule of SEBI (Mutual Funds) Regulations.</p> </blockquote> <p>To cut a long story short: This means if you are looking for dividend, don’t invest in funds that are trading at less than Rs. 10 – the above law screws things up for them. Applies to debt funds and MIPs also.</p> <p>Equity Mutual funds have been asked to play a <strong>more active role in corporate governance </strong>of the companies they invest in. Not just that, they must reveal, in their annual reports from next year, what they did in each “vote” they were required to exercise in governance matters like management compensation, appointment of directors and change in capital structure. This will help mutual funds become more active but it is unlikely to change the course of action – Indian companies are largely promoter controlled and if there is a problem, Mutual Fund managers can be, er, appropriately compensated to vote in their favour. (I make no accusations. It happens, and it’s happening.)</p> <p>Equity Funds were allowed to charge 1% more as management fees if the funds were “no-load”; but since SEBI has banned entry loads, <strong>this extra 1% has also been removed</strong>. All the recent NFOs intended to benefit from the earlier rule, and the clarification busts their chops. </p> <p>SEBI has also asked Mutual Funds to <strong>reveal all commission paid to it’s sponsor or associate companies, employees and their relatives.</strong> </p> <p>Finally, SEBI has <strong>banned revenue-sharing agreements by Fund of Funds investing abroad</strong>. Some FoFs would invest in other funds abroad – like a “World Gold fund” which would invest in Gold Mutual funds in the UK – and ask those funds to kick back a part of the profits or commissions to the Indian AMC. That practice goes out the door. </p> <div class="blogger-post-footer"><p style="border: 1px solid #C888C8">
This post is written by <a href="http://blog.investraction.com">Deepak Shenoy</a>,
at <a href="http://blog.investraction.com">Capital Mind</a>.
</p><img width='1' height='1' src='https://blogger.googleusercontent.com/tracker/18601284-1528323874080780957?l=blog.investraction.com' alt='' /></div>
<p><a href="http://feedads.g.doubleclick.net/~a/rl1QUrcKLZGmMFr288GSvkC1khI/0/da"><img src="http://feedads.g.doubleclick.net/~a/rl1QUrcKLZGmMFr288GSvkC1khI/0/di" border="0" ismap="true"></img></a><br/>
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Posted by Deepak Shenoy (noreply@blogger.com) on March 18, 2010 08:35 AM · permalink
<div align="justify">I'm down with Malaria. This is the craziest kinda disease anybody can have. Somewhere around budget day, I started getting a fever + shivering. So went to the doc. He gave me Cefixime 200 DT, 2 tabs a day for 5 days. Alongwith this he gave me some more pills from his own clinic . Result : zero. So I go back to him and he writes another prescription for Cefixime but from a different company. Again 2 tabs a day for 5 days. (Also he advises to do a blood test for Typhoid.) Result : zero. The medicine was not having any effect and the blood test for typhoid came negative. So I go back to him and this time he tells me to get a chest x-ray! Sweet! The x-ray came ok, except for broncho vascular in the lower right region ( I'm a smoker, so this was expected ). He then gave me Arte Plus CD - which I immediately recognized as a tab for malaria. It's a combo of <a href="http://en.wikipedia.org/wiki/Coartem"><strong>Artemether + Lumefantrine.</strong></a> This immediately had its effect and the fever has gone though not fully and I still have this headache which kinda gives me a zombie like feeling. One more strange thing about this disease is that it kinda puts you in a different dimension where time doesn't exist. :O Anyway, will be back to posting maybe next week or so.</div><div class="blogger-post-footer"><img width='1' height='1' src='https://blogger.googleusercontent.com/tracker/5184850244660132569-5273871547640348786?l=timamo.blogspot.com' alt='' /></div>
Posted by The Rebel (noreply@blogger.com) on March 18, 2010 05:26 AM · permalink
<p><a href="http://feedads.g.doubleclick.net/~a/red0NdJZwzagg0d82J7AtfmHngY/0/da"><img src="http://feedads.g.doubleclick.net/~a/red0NdJZwzagg0d82J7AtfmHngY/0/di" border="0" ismap="true"></img></a><br/>
<a href="http://feedads.g.doubleclick.net/~a/red0NdJZwzagg0d82J7AtfmHngY/1/da"><img src="http://feedads.g.doubleclick.net/~a/red0NdJZwzagg0d82J7AtfmHngY/1/di" border="0" ismap="true"></img></a></p><p>Subhash Projects & Marketing Ltd has informed the market that it has bagged 2 order totalling 475.34 crore.<br />
<strong>Order Info</strong></p>
<blockquote><p>A. From Bangalore Water supply Sewerage Board, Bangalore.<br />
“Bangalore Water Supply and Sewerage Project (II)- Contract W3- Civil and Electromechanical Works for Pumping Stations and Reservoirs at T.K.Halli, Harohalli and Tataguni (Turnkey Contract) under JICA Loan -ID-P165″ for a value of Rs. 439.35 Crores in Joint Venture with M/s Kirloskar Brothers Ltd.<br />
B. From Delhi Jal Board, New Delhi:<br />
“Replacement of existing Jal Vihar & Kailash mains from Rajib Gandhi Smriti Van to Jal Vihar & Kailash reservoirs respectively” for a value of Rs 35.99 crores.</p></blockquote>
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<p><a href="http://www.rupya.com/2010/03/18/subhash-projects-marketing-bags-order-worth-475-34-crore/14276">Subhash Projects & Marketing bags order worth 475.34 Crore</a> is a post from: <a href="http://www.rupya.com">First Blog for Indian Financial Market</a></p>
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Posted by Lalitha on March 18, 2010 04:38 AM · permalink
<p><a href="http://feedads.g.doubleclick.net/~a/snjSQ_aMwjT-rZVcIKChC-hfI_w/0/da"><img src="http://feedads.g.doubleclick.net/~a/snjSQ_aMwjT-rZVcIKChC-hfI_w/0/di" border="0" ismap="true"></img></a><br/>
<a href="http://feedads.g.doubleclick.net/~a/snjSQ_aMwjT-rZVcIKChC-hfI_w/1/da"><img src="http://feedads.g.doubleclick.net/~a/snjSQ_aMwjT-rZVcIKChC-hfI_w/1/di" border="0" ismap="true"></img></a></p><p>Engineers India has informed the market that on the meeting that is going to be held on March 23, 2010 , they will decide on the proposal for Issue of Bonus Shares by capitalizing Free Reserves of the Company and also in the same meeting shall also consider, inter-alia, the proposal of splitting of shares of the Company.</p>
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<p><a href="http://www.rupya.com/2010/03/18/engineers-india-bonus-and-stock-split/14273">Engineers India – Bonus and Stock Split</a> is a post from: <a href="http://www.rupya.com">First Blog for Indian Financial Market</a></p>
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Posted by Subramanian on March 18, 2010 04:34 AM · permalink
<p><a href="http://feedads.g.doubleclick.net/~a/JEJ5slAEYC22lAkA6uautZq0WYc/0/da"><img src="http://feedads.g.doubleclick.net/~a/JEJ5slAEYC22lAkA6uautZq0WYc/0/di" border="0" ismap="true"></img></a><br/>
<a href="http://feedads.g.doubleclick.net/~a/JEJ5slAEYC22lAkA6uautZq0WYc/1/da"><img src="http://feedads.g.doubleclick.net/~a/JEJ5slAEYC22lAkA6uautZq0WYc/1/di" border="0" ismap="true"></img></a></p><p><strong>About SJVN</strong><br />
The SJVN Ltd (formerly Nathpa Jhakri Power Corporation Limited – NJPC ) was incorporated on May 24, 1988 as a joint venture of the Government of India ( GOI ) and the Government of Himachal Pradesh (GOHP) to plan, investigate, organize, execute, operate and maintain Hydro-electric power projects. The present authorized share capital of SJVN is Rs 4500 crores<br />
<img src="http://sjvn.nic.in/images/sjvnlogo.jpg" /><br />
Company : SJVN LTD.<br />
IPO/FPO : IPO<br />
Bookbuilding/Fixed Price Bookbuilding<br />
<strong>Industry</strong> Power Generation & Supply<br />
Instrument Equity<br />
<strong>Issue Amount</strong> (Rs. crore) (Tentative) 1200.00<br />
Date of Filing with SEBI 26/02/2010<br />
<strong>Lead Managers :</strong></p>
<blockquote><p>JM FINANCIAL CONSULTANTS PVT.LTD., MUMBAI<br />
IDFC-SSKI LTD., MUMBAI<br />
IDBI CAPITAL MARKET SERVICES LTD., MUMBAI<br />
SBI CAPITAL MARKETS LTD., MUMBAI</p></blockquote>
<p><strong><a href="http://sjvn.nic.in/" target="new">More About SJVN here.</a></strong></p>
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<p><a href="http://www.rupya.com/2010/03/18/sjvn-ltd-ipo-psu-ipofpo-filed-with-sebi/14271">SJVN LTD IPO – PSU IPO/FPO Filed with SEBI</a> is a post from: <a href="http://www.rupya.com">First Blog for Indian Financial Market</a></p>
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Posted by Subramanian on March 18, 2010 04:27 AM · permalink
The Company's principal activity is to trade and servicing of vehicles. The Company operates in two segments, namely, Showroom and Services and Spares. The Showroom segment deals with purchase and sale of new Maruti Udyog Ltd vehicles. The Service and Spares segment includes servicing and spare parts sale of Maruti Udyog Ltd. It operates through 9 showrooms situated at New Delhi, Haryana and Himachal Pradesh. The Company's workshops are located at Delhi, Haryana and Himachal Pradesh.
The market cap of the company is around 26 crores and has a net current asset value of around 15 crores. The Net Current Asset Value concept involves identifying companies that are trading at below the level of the current assets on the balance sheet less all liabilities. Current assets consist primarily of cash and cash equivalents, trade receivables, and inventories. These are assets that are either cash or convertible into cash within a relatively short timeframe (usually less than a year). From current assets, one subtracts all liabilities on the balance sheet, not just current liabilities. This value is then compared against the market valuation of the company.
Even though the company is not trading bellow the ncav it seems cheap on an earnings basis. Also even if the company is trading below ncav it might end up destroying shareholder value if it has a negative cash flow however this is not the case with competent automobiles. For the financial year 2009 the company produced 9 crores in operating cash flow and incurred capex of around 3 crores resulting in FCF of around 6 crores. So the company trades at 4 times free cash flow.
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Posted by sandy (noreply@blogger.com) on March 18, 2010 03:57 AM · permalink
<p><a href="http://feedads.g.doubleclick.net/~a/d0XsZ7gQDsHpSOjm-0PDxzlaG1k/0/da"><img src="http://feedads.g.doubleclick.net/~a/d0XsZ7gQDsHpSOjm-0PDxzlaG1k/0/di" border="0" ismap="true"></img></a><br/>
<a href="http://feedads.g.doubleclick.net/~a/d0XsZ7gQDsHpSOjm-0PDxzlaG1k/1/da"><img src="http://feedads.g.doubleclick.net/~a/d0XsZ7gQDsHpSOjm-0PDxzlaG1k/1/di" border="0" ismap="true"></img></a></p><table border="0" cellspacing="4" cellpadding="2">
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<td style='background-color:#CADDEC;FONT-FAMILY: Verdana,Arial,San-serif; FONT-SIZE: 8pt; FONT-WEIGHT: bold; Color:#012540;'><b>Mutual Fund</b></td>
<td style='FONT-FAMILY: Verdana,Arial,San-serif; FONT-SIZE: 8pt; Color:#012540;'> Bharti AXA Mutual Fund </td>
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<td style='background-color:#CADDEC;FONT-FAMILY: Verdana,Arial,San-serif; FONT-SIZE: 8pt; FONT-WEIGHT: bold; Color:#012540;'><b>Scheme Type</b></td>
<td style='FONT-FAMILY: Verdana,Arial,San-serif; FONT-SIZE: 8pt; Color:#012540;'> Close Ended </td>
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<td style='background-color:#CADDEC;FONT-FAMILY: Verdana,Arial,San-serif; FONT-SIZE: 8pt; FONT-WEIGHT: bold; Color:#012540;'><b>Scheme Category</b></td>
<td style='FONT-FAMILY: Verdana,Arial,San-serif; FONT-SIZE: 8pt; Color:#012540;'> Income </td>
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<td style='background-color:#CADDEC;FONT-FAMILY: Verdana,Arial,San-serif; FONT-SIZE: 8pt; FONT-WEIGHT: bold; Color:#012540;'><b>Launch Date</b></td>
<td style='FONT-FAMILY: Verdana,Arial,San-serif; FONT-SIZE: 8pt; Color:#012540;'> 18-Mar-2010 </td>
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</table>
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<p><a href="http://www.amfiindia.com/nfo.aspx?intId=4629#123">Bharti AXA Fixed Maturity Plan – Series C – Plan 1</a> is a post from: <a href="http://www.rupya.com">First Blog for Indian Financial Market</a></p>
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Posted by kalyan on March 18, 2010 12:47 AM · permalink
Posted by Deepak Singh on March 18, 2010 12:29 AM · permalink
<p>Oooh there it goes, watch out boy it’ll chew you up…ooh there it goes, its-an r&d expense</p>
<p style="text-align: center;"><strong><a href="http://papers.ssrn.com/sol3/papers.cfm?abstract_id=561602">Click Here To Read: R&D Reporting Biases and their Consequences</a></strong></p>
<p>Abstract: (via Lev, Sarath, Sougiannis)</p>
<p>The immediate expensing of R&D expenditures is often justified by the conservatism principle. However, no accounting procedure consistently applied can be conservative throughout the firm’ life. We ask the following questions: (a) When is the expensing of R&D conservative and when is it aggressive, relative to R&D capitalization? and (b) What are the capital market implications of these reporting biases? To address these questions we construct a model of profitability biases (differences between reported profitability under R&D expensing and capitalization) and show that the key drivers of the reporting biases are the differences between R&D growth and earnings growth (momentum), and between R&D growth and return on equity (ROE). <strong>Companies with a high R&D growth rate relative to their profitability (typically early cycle companies) report conservatively, while firms with a low R&D growth rate (mature companies) tend to report aggressively under current GAAP. </strong>Our empirical analysis, covering the period 1972-2003, generally supports the analytical predictions.</p>
<p>In the valuation analysis <strong>we find evidence consistent with investor fixation on the reported profitability measures: we detect undervaluation of conservatively reporting firms and overvaluation of aggressively reporting firms. </strong>These misvaluations appear to be corrected when the reporting biases reverse from conservative to aggressive and vice versa.</p>
<p style="text-align: center;"><strong><a href="http://papers.ssrn.com/sol3/papers.cfm?abstract_id=561602">Click Here To Read: R&D Reporting Biases and their Consequences</a></strong></p>
<div class="relatedposts"><strong>Other Related Posts From Simoleon Sense:</strong><ol><li><a href='http://www.simoleonsense.com/the-morals-of-the-marketplace-implications-of-corporate-financial-reporting/' rel='bookmark' title='Permanent Link: The Morals of the Marketplace & Implications of Corporate Financial Reporting'>The Morals of the Marketplace & Implications of Corporate Financial Reporting</a></li>
<li><a href='http://www.simoleonsense.com/the-impact-of-private-equity-ownership-on-corporate-tax-avoidance/' rel='bookmark' title='Permanent Link: The Impact of Private Equity Ownership on Corporate Tax Avoidance'>The Impact of Private Equity Ownership on Corporate Tax Avoidance</a></li>
<li><a href='http://www.simoleonsense.com/on-the-relative-independence-of-thinking-biases-and-cognitive-ability/' rel='bookmark' title='Permanent Link: On the Relative Independence of Thinking Biases and Cognitive Ability'>On the Relative Independence of Thinking Biases and Cognitive Ability</a></li>
<li><a href='http://www.simoleonsense.com/how-psychological-biases-can-make-a-mess-of-our-financial-decisions/' rel='bookmark' title='Permanent Link: How psychological biases can make a mess of our financial decisions.'>How psychological biases can make a mess of our financial decisions.</a></li>
</ol></p>
Posted by Miguel on March 17, 2010 09:50 PM · permalink
<p><strong><a href="http://papers.ssrn.com/sol3/papers.cfm?abstract_id=1553935">Click Here To Read: Intuitive Biases in Choice vs. Estimation: Implications for the Wisdom of Crowds</a></strong></p>
<p>Abstract (via Simmons, Nelson, Galak & Frederick):<br />
<strong>Although researchers have documented instances of crowd wisdom, it is important to know whether some kinds of judgments may lead the crowd astray, whether crowds’ judgments improve with feedback over time, and whether crowds’ judgments can be improved by changing the way judgments are elicited.</strong> We investigated these hypotheses in a sports gambling context (predictions against point spreads) believed to elicit crowd wisdom. In a season-long experiment, fans wagered over $20,000 on NFL football predictions. Contrary to the wisdom-of-crowds hypothesis, faulty intuitions led the crowd to predict “favorites” more than “underdogs” against spreads that disadvantaged favorites, even when bettors knew that the spreads disadvantaged favorites. Moreover, the bias increased over time, a result consistent with attributions for success and failure that rewarded intuitive choosing. However, <strong>when the crowd predicted game outcomes by estimating point differentials rather than by predicting against point spreads, its predictions were unbiased and wiser.</strong></p>
<p><strong><a href="http://papers.ssrn.com/sol3/papers.cfm?abstract_id=1553935">Click Here To Read: Intuitive Biases in Choice vs. Estimation: Implications for the Wisdom of Crowds</a></strong></p>
<div class="relatedposts"><strong>Other Related Posts From Simoleon Sense:</strong><ol><li><a href='http://www.simoleonsense.com/are-crowds-wise-when-predicting-against-point-spreads-it-depends-on-how-you-ask/' rel='bookmark' title='Permanent Link: Are Crowds Wise When Predicting Against Point Spreads? It Depends On How You Ask'>Are Crowds Wise When Predicting Against Point Spreads? It Depends On How You Ask</a></li>
<li><a href='http://www.simoleonsense.com/finance-professor-on-the-wisdom-of-crowds/' rel='bookmark' title='Permanent Link: Finance Professor: 2 Videos On The Wisdom Of Crowds'>Finance Professor: 2 Videos On The Wisdom Of Crowds</a></li>
<li><a href='http://www.simoleonsense.com/crowds-are-good-the-kindness-of-crowds/' rel='bookmark' title='Permanent Link: Crowds Are Good? The Kindness Of Crowds'>Crowds Are Good? The Kindness Of Crowds</a></li>
<li><a href='http://www.simoleonsense.com/when-the-wisdom-of-crowds-becomes-the-madness-of-mobs/' rel='bookmark' title='Permanent Link: When the wisdom of crowds becomes the madness of mobs'>When the wisdom of crowds becomes the madness of mobs</a></li>
</ol></p>
Posted by Miguel on March 17, 2010 09:35 PM · permalink
<p>Funny I consistently find myself not wanting to pay taxes…</p>
<p style="text-align: center;"><strong><a href="http://papers.ssrn.com/sol3/papers.cfm?abstract_id=467440">Click Here To Read: Heuristics and Biases in Thinking about Tax</a></strong></p>
<p>Abstract: (via McCaffery & Baron SSRN)<br />
The principal findings of behavioral economics and cognitive psychology over the past several decades have been to show that human beings deviate from ideal precepts of rationality in many settings, showing inconsistent judgment in the face of framing and other formal manipulations of the presentation of problems. This paper summarizes the findings of original experiments about subjects’ perceptions of various aspects of tax-law design. <strong>We show that in evaluating tax systems, subjects are vulnerable to a wide range of heuristics and biases, leading to inconsistent judgment and evaluation. The prevalence of these biases suggests that there is room for skillful politicians or facile political systems to manipulate public opinion, and that tax system design will reflect a certain volatility on account of the possibility of eliciting preference reversals through purely formal rhetorical means. </strong>More troubling, the findings suggest the possibility of a persistent wedge between observed and optimal public finance systems.</p>
<p style="text-align: center;"><strong><a href="http://papers.ssrn.com/sol3/papers.cfm?abstract_id=467440">Click Here To Read: Heuristics and Biases in Thinking about Tax</a></strong></p>
<div class="relatedposts"><strong>Other Related Posts From Simoleon Sense:</strong><ol><li><a href='http://www.simoleonsense.com/on-the-relative-independence-of-thinking-biases-and-cognitive-ability/' rel='bookmark' title='Permanent Link: On the Relative Independence of Thinking Biases and Cognitive Ability'>On the Relative Independence of Thinking Biases and Cognitive Ability</a></li>
<li><a href='http://www.simoleonsense.com/earnings-heuristics-working-for-the-right-reasons/' rel='bookmark' title='Permanent Link: Earnings Heuristics Working For The “Right Reasons”'>Earnings Heuristics Working For The “Right Reasons”</a></li>
<li><a href='http://www.simoleonsense.com/cognitive-biases-affecting-the-judgement-of-global-risk/' rel='bookmark' title='Permanent Link: Cognitive Biases & The Judgement of Global Risk'>Cognitive Biases & The Judgement of Global Risk</a></li>
<li><a href='http://www.simoleonsense.com/the-sweet-smell-of-morality-how-scent-can-shape-our-thinking/' rel='bookmark' title='Permanent Link: The sweet smell of morality- How scent can shape our thinking'>The sweet smell of morality- How scent can shape our thinking</a></li>
</ol></p>
Posted by Miguel on March 17, 2010 09:30 PM · permalink
<p style="text-align: center;"><a href="http://papers.ssrn.com/sol3/papers.cfm?abstract_id=587985"><strong>Click Here To Read: Biases in Perceptions, Beliefs and Behavior</strong></a></p>
<p><strong>Abstract (via Isabelle Brocas & Juan Carrillo)</strong><br />
his paper presents a model where individuals have imperfect information about their preferences (or the environment) and there is an opportunity cost of learning. It shows that the endogenous decision to collect information before taking an action creates a systematic bias in the aggregate behavior of a population of rational, profit-maximizing agents. <strong>More precisely, individuals will favor actions with large payoff-variance, i.e., those which may potentially generate the highest benefits even if they may also generate the biggest losses. </strong>The paper thus concludes that systematically biased choices do not necessarily imply that agents have irrational, systematically biased beliefs. It also provides testable implications about the propensity of individuals to incur different types of errors. Some applications such as biases in judicial decision-making and career choices are discussed.</p>
<p style="text-align: center;"><strong><a href="http://papers.ssrn.com/sol3/papers.cfm?abstract_id=587985"><strong>Click Here To Read: Biases in Perceptions, Beliefs and Behavior</strong></a></strong></p>
<div class="relatedposts"><strong>Other Related Posts From Simoleon Sense:</strong><ol><li><a href='http://www.simoleonsense.com/the-influence-of-affect-on-beliefs-preferences-and-financial-decision/' rel='bookmark' title='Permanent Link: The Influence of Affect on Beliefs, Preferences, and Financial Decision'>The Influence of Affect on Beliefs, Preferences, and Financial Decision</a></li>
<li><a href='http://www.simoleonsense.com/information-disclosure-cognitive-biases-and-payday-borrowing/' rel='bookmark' title='Permanent Link: Information Disclosure, Cognitive Biases and Payday Borrowing'>Information Disclosure, Cognitive Biases and Payday Borrowing</a></li>
<li><a href='http://www.simoleonsense.com/biases-in-casino-betting-the-hot-hand-and-the-gamblers-fallacy/' rel='bookmark' title='Permanent Link: Biases in casino betting: The hot hand and the gambler’s fallacy'>Biases in casino betting: The hot hand and the gambler’s fallacy</a></li>
<li><a href='http://www.simoleonsense.com/observing-others%e2%80%99-behavior-risk-taking-in-decisions-from-experience/' rel='bookmark' title='Permanent Link: Observing Others’ Behavior & Risk Taking In Decisions From Experience'>Observing Others’ Behavior & Risk Taking In Decisions From Experience</a></li>
</ol></p>
Posted by Miguel on March 17, 2010 09:22 PM · permalink
<p><strong><a href="http://papers.ssrn.com/sol3/papers.cfm?abstract_id=1533012">Click Here to Read: Information Disclosure, Cognitive Biases and Payday Borrowing</a></strong><br />
Abstract: (via Bertrand & Morse)</p>
<p>If people face cognitive limitations or biases that lead to financial mistakes, what are possible ways lawmakers can help? One approach is to remove the option of the bad decision; another approach is to increase financial education such that individuals can reason through choices when they arise. A third, less discussed, approach is to mandate disclosure of information in a form that enables people to overcome limitations or biases at the point of the decision. This third approach is the topic of this paper. We study whether and what information can be disclosed to payday loan borrowers to lower their use of high-cost debt via a field experiment at a national chain of payday lenders. <strong>We find that information that helps people think less narrowly (over time) about the cost of payday borrowing, and in particular information that reinforces the adding-up effect over pay cycles of the dollar fees incurred on a payday loan, reduces the take-up of payday loans by about 10 percent in a 4 month-window following exposure to the new information.</strong> Overall, our results suggest that consumer information regulations based on a deeper understanding of cognitive biases might be an effective policy tool when it comes to regulating payday borrowing, and possibly other financial and non-financial products.</p>
<p><strong><a href="http://papers.ssrn.com/sol3/papers.cfm?abstract_id=1533012">Click Here to Read: Information Disclosure, Cognitive Biases and Payday Borrowing</a></strong></p>
<div class="relatedposts"><strong>Other Related Posts From Simoleon Sense:</strong><ol><li><a href='http://www.simoleonsense.com/on-the-relative-independence-of-thinking-biases-and-cognitive-ability/' rel='bookmark' title='Permanent Link: On the Relative Independence of Thinking Biases and Cognitive Ability'>On the Relative Independence of Thinking Biases and Cognitive Ability</a></li>
<li><a href='http://www.simoleonsense.com/cognitive-biases-affecting-the-judgement-of-global-risk/' rel='bookmark' title='Permanent Link: Cognitive Biases & The Judgement of Global Risk'>Cognitive Biases & The Judgement of Global Risk</a></li>
<li><a href='http://www.simoleonsense.com/analyst-are-you-overconfident-quantifying-cognitive-biases-in-analyst-earnings-forecasts/' rel='bookmark' title='Permanent Link: Analyst Are You Overconfident ? Quantifying Cognitive Biases in Analyst Earnings Forecasts'>Analyst Are You Overconfident ? Quantifying Cognitive Biases in Analyst Earnings Forecasts</a></li>
<li><a href='http://www.simoleonsense.com/is-parochialism-as-a-result-of-cognitive-biases/' rel='bookmark' title='Permanent Link: Is Parochialism a Result of Cognitive Biases?'>Is Parochialism a Result of Cognitive Biases?</a></li>
</ol></p>
Posted by Miguel on March 17, 2010 06:41 PM · permalink
<p><a href="http://feedads.g.doubleclick.net/~a/R_96YhHZeCVkW2FJjS2MptvDTfo/0/da"><img src="http://feedads.g.doubleclick.net/~a/R_96YhHZeCVkW2FJjS2MptvDTfo/0/di" border="0" ismap="true"></img></a><br/>
<a href="http://feedads.g.doubleclick.net/~a/R_96YhHZeCVkW2FJjS2MptvDTfo/1/da"><img src="http://feedads.g.doubleclick.net/~a/R_96YhHZeCVkW2FJjS2MptvDTfo/1/di" border="0" ismap="true"></img></a></p><p>Supporters gave her the garland to celebrate 25 years of the Bahujan Samaj Party (BSP).The controversial politician – India’s first woman Dalit (formerly “untouchable”) chief minister – champions the cause of the poorest of the poor, and has a huge following among those at the bottom of the Hindu caste system. But she is often criticised for having amassed vast personal wealth.Outrage from opposition parties led to the adjournment of the national parliament in New Delhi on Tuesday.The controversy gives further ammunition to the Congress party-led federal coalition in New Delhi, which is aggressively campaigning to win over the key state of Uttar Pradesh in 2012.<br />
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<p><a href="http://www.rupya.com/2010/03/18/mayawathis-18-lakh-rupees-garland/14268">Mayawathi’s 18 Lakh rupees garland</a> is a post from: <a href="http://www.rupya.com">First Blog for Indian Financial Market</a></p>
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Posted by Ganapathy on March 17, 2010 06:32 PM · permalink
<p><a href="http://feedads.g.doubleclick.net/~a/FgxNHFQM_L_3tuxRGIPr3lS3pDY/0/da"><img src="http://feedads.g.doubleclick.net/~a/FgxNHFQM_L_3tuxRGIPr3lS3pDY/0/di" border="0" ismap="true"></img></a><br/>
<a href="http://feedads.g.doubleclick.net/~a/FgxNHFQM_L_3tuxRGIPr3lS3pDY/1/da"><img src="http://feedads.g.doubleclick.net/~a/FgxNHFQM_L_3tuxRGIPr3lS3pDY/1/di" border="0" ismap="true"></img></a></p><p>Saurabh Sunil Tiwary (born December 30, 1989 in Jamshedpur, Bihar) is an Indian first class cricketer. Tiwary is a left-handed middle order batsman. He was one of the key batsmen in the Indian team that won the 2008 U/19 Cricket World Cup in Malaysia.</p>
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<td> Saurabh Tiwary represents what the Mumbai Indians have to offer in terms of its young talent. But this hard-hitting right handed batsman has more than just age on his side. A powerful stroke maker, Tiwary could be one of the unknowns to excel in the IPL. Having captained Jharkhand at a young age, Tiwary exudes plenty of confidence and leadership skills. The highlight of his career so far has been being a member of the India Under-19 squad that won the World Cup in Malaysia in 2008. His performance in the second IPL season might not have done justice to his talent, but plenty more opportunities in the coming seasons is definitely on the cards.</td>
<td><img src="http://elitesports.co.in/images/saurabh-tiwari.jpg" /></td>
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</table>
<blockquote><p>BORN 30 Dec 1989, Jamshedpur, Bihar, India<br />
TEAMS Mumbai indian,BATS LEFT HANDED</p></blockquote>
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<p><a href="http://www.rupya.com/2010/03/17/saurabh-tiwary-mumbai-indians-team-winner-today/14263">Saurabh Tiwary – Mumbai Indians Team winner today</a> is a post from: <a href="http://www.rupya.com">First Blog for Indian Financial Market</a></p>
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Posted by abhisheak on March 17, 2010 05:55 PM · permalink
<p><a href="http://feedads.g.doubleclick.net/~a/BxHUNMXrdZaXRoe0iopuh1mKpUg/0/da"><img src="http://feedads.g.doubleclick.net/~a/BxHUNMXrdZaXRoe0iopuh1mKpUg/0/di" border="0" ismap="true"></img></a><br/>
<a href="http://feedads.g.doubleclick.net/~a/BxHUNMXrdZaXRoe0iopuh1mKpUg/1/da"><img src="http://feedads.g.doubleclick.net/~a/BxHUNMXrdZaXRoe0iopuh1mKpUg/1/di" border="0" ismap="true"></img></a></p><p></p><p>Now a days, we are seeing a new “Innovative” product in the market. They’re called <strong>Highest NAV Guaranteed Plans .</strong>These products have come in, after the recent crash in the market, and companies are taking advantage of the fact that Investors are looking for some kind of a safe investment equity product. Hence, they’ve launched these<strong> Highest NAV Return ULIP’s </strong>which confuse investors and make them (the investors <img src='http://www.jagoinvestor.com/wp-includes/images/smilies/icon_smile.gif' alt=':)' class='wp-smiley' title="How do Highest NAV Guarantee Plans work ?" /> ), believe that they are going to get the highest return from the Stock market in long run – generally the tenure is 7 yrs, for these plans .<strong> </strong></p>
<p>In this article, we look at how <strong>Highest NAV Guarantee ULIP’s </strong>work, and you will understand, how any Guarantee product can be created by simple methods <strong>. </strong>The simple catch, here is that these schemes, are structured in such a manner, that the collected funds can be invested either in equities, debt instruments or in money-market instruments in proportions varying from zero to 100%</p>
<h2>How Highest NAV Guarantee Policy Works ?</h2>
<p>These plans use strategies like Dynamic Hedging and <a href="http://www.hsbcnet.com/treasury/investor-solutions/learning-center/cppi.html" target="_blank">CPPI</a> (Constant proportion portfolio insurance), which are advanced strategies used in <a href="http://www.jagoinvestor.com/2008/06/what-is-option-option-is-contract-which.html" target="_blank">Derivatives world</a>. But, let me explain a simplified version of the whole process.</p>
<p>Supposing a policy starts today and is guaranteed to give highest NAV in next 7 yrs and we can control how money moves to debt and equity, its pretty simple.</p>
<p>In the beginning, let’s assume a NAV of Rs 10, and the <a href="http://www.jagoinvestor.com/2009/07/power-of-asset-allocation-and-portfolio.html" target="_blank">Asset allocation</a> is 100% in equity and 0% in debt . Now suppose, the market moves up and NAV goes upto Rs 15 by the end of the first year, at this point, try to understand what Insurance company has to provide – they have to make sure, that they provide at least Rs 15 as the return after 6 yrs . Now in order to achieve this, all they have to do is keep X amount in debt instruments which will mature in next 6 years and provide Rs 15 at the end of 6 yrs, so assuming the debt return at 7%, they need to put around Rs 10 in Bonds , so that the maturity of the bond is Rs 15 at the end of 6 yrs .</p>
<div>
<p style="padding-left: 60px;">=> 10 * (1.07)^6<br />
=> 15.007</p>
</div>
<p>They can now invest the rest Rs 5 in Equity as Rs 10 is allocated to Debt . So, now they’ve made sure that whatever happens to the market, they get Rs 15 for sure at the end of 6 yrs. Now, there are two possibilities</p>
<p style="padding-left: 30px;"><strong>Case 1 : Market Goes down :</strong> If market goes down, the NAV will go down correspondingly, but as per the strategy, the maturity value will be at least Rs 15.</p>
<p style="padding-left: 30px;"><strong>Case 2 : Market Goes up again : </strong>If market goes up at this point and the NAV rises above 15, for example say to Rs. 18, now again they will pull out money from Equity and allocate such an amount to debt, that the maturity at the end of total 7 yrs would be Rs 18 and so on…</p>
<p><strong>Note :</strong></p>
<ul>
<li>These highest guaranteed schemes do not provide wide range of product categories, such as equity-oriented growth funds, balance funds and <a href="http://www.jagoinvestor.com/2009/11/list-of-best-debt-oriented-mutual-funds-for-2009-2010.html" target="_blank">debt funds</a>.</li>
<li>Guarantee on highest NAV is available only if you survive the term. If you die during the term, your nominees will get the prevailing value of the fund. This is inferior to even a <a href="http://www.jagoinvestor.com/2008/11/difference-between-equity-debt-and.html">regular debt product</a> because of the high cost structure involved.</li>
</ul>
<p><strong>Following is a pictorial description of how the Guaranteed NAV plan works with assumption of a 7 year tenure.</strong></p>
<p><img class="aligncenter" src="http://www.jagoinvestor.com/images/How%20Highest%20NAV%20works.jpg" alt="How does a Highest NAV guarantee plan works " width="608" height="2217" title="How do Highest NAV Guarantee Plans work ?" /></p>
<h2><span style="color: #000000;">How Investors get Confused</span></h2>
<p>You have to read in between the lines; Investors need to understand that these schemes guarantee the “Highest NAV”, <strong>READ AGAIN!</strong> , it’s <em>Highest NAV and not “Highest Returns”</em> . Normal Investors don’t give much thought before buying these products and normally assume that the returns will be linked to the<a href="http://www.jagoinvestor.com/2008/10/7-tips-to-loose-all-money-in-stock.html"> Equity Markets</a> .</p>
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<h2>Returns from Highest NAV Guarantee Plans</h2>
<p>So, what are the <a href="http://www.jagoinvestor.com/2008/06/evaluating-returns-which-return-is.html">return expectations</a> of these funds? We know, that <a href="http://www.jagoinvestor.com/2009/10/4-charts-which-will-change-your.html" target="_blank">long-term equity returns</a>, are normally in the 12-15% range while, debt returns turn out to be 6-7%. So, considering the fact, that these products will shift most of their money to debt, by the end of the tenure , we can expect the returns to be in range of 9-10%. We do get some equity upside in these products, but that will be limited. After a point, this product will turn into a debt oriented fund with a major portion in debt . Also if you factor in costs, like premium allocation charges , fund management charges and other yearly charges, the returns will not be what you actually expect.</p>
<p>You will be amazed to know, that the returns expected from these schemes, may be lower than the returns offered by equity-oriented Ulips. The reason being, that the basic objective of protecting the previous high NAV of the fund, may constrain the fund manager’s ability to take risks while allocating funds. So if the market has fallen down, the fund manager can’t take the risk of shifting the money from Debt to Equity to gain from the potential upsides in future , because they have to provide the <em>“Guarantee.”</em></p>
<p><strong>Read</strong> : <a href="http://www.jagoinvestor.com/2009/05/most-important-questions-you-should-ask.html">Important Questions you should Ask an ULIP Agent ?</a><em><br />
</em></p>
<h2>
<p style="text-align: center;"><img class="aligncenter" src="http://www.jagoinvestor.com/images/Return%20comparision%20of%20Regular%20and%20Guaranteed%20ULIPs.png" alt="Return%20comparision%20of%20Regular%20and%20Guaranteed%20ULIPs How do Highest NAV Guarantee Plans work ?" width="561" height="364" title="How do Highest NAV Guarantee Plans work ?" /></p>
</h2>
<p style="text-align: center;"><strong>Source</strong> : <a href="http://www.livemint.com/2010/01/10211459/50911187-DF49-41E7-B796-CA37016D53C3ArtVPF.pd4" class="broken_link" target="_blank">LiveMint Research</a></p>
<h2>Current Products in Market with Highest NAV Guarantee</h2>
<ul>
<li>ICICI’s Pinnacle</li>
<li>Birla Sun Life Platinum Plus-III</li>
<li>Bajaj Allianz Max Gain</li>
<li>SBI Life Smart Ulip</li>
<li>Tata AIG Apex Invest Assure</li>
<li>LIC Wealth Plus</li>
<li>Reliance Highest NAV Guarantee Plan.</li>
<li>AEGON Religare Wealth Protect Plan</li>
</ul>
<h2>Controlling your emotions with these products</h2>
<p>Let’s talk about mistakes from the investors point of view. We, as investors, don’t think with inquisitive, susceptive minds. Getting good returns from stock markets is anyways a tough thing in itself. So when these companies come up with plans like these, which say “highest NAV in 7 yrs”, we have to ask, “How is this possible?” . Dont say it’s not possible at all, just ask how? How do they achieve it? Stop seeing dreams of getting <a href="http://www.jagoinvestor.com/2010/02/how-to-look-beyond-short-term-returns-in-mutual-funds.html">high returns</a> without looking at the risk involved, and try to find out – what is the strategy they’re using , Is there something in between the lines ?</p>
<p>We all want to get great returns, but we have to shed this belief that, companies come up with plans specially for us. All the companies out there exist to earn money, and their motive behind every product is to make money, & generate profits for their companies, so that they keep their shareholders happy. So next time a product like this comes up , you have to control your emotions before getting in and <em>first investigate.</em> The worst part of this whole business, (of guaranteed highest NAV products) is the timing and how it gives naive investors, high illusions about the product. Products like these, take major advantage of psychology of the ordinary saver. Many Investors in smaller towns have broken their Fixed Deposits and taken some loan to invest in products like these, especially<strong> SBI Life Smart Ulip and LIC Wealth Plus</strong> because of the trust factor with LIC and SBI . See <a href="http://www.jagoinvestor.com/2010/03/review-of-lics-wealth-plus-how-agents-are-miselling-it.html" target="_blank">How Agents are Misselling LIC Wealth Plus </a></p>
<h2>Why you should be “Pissed off” At these Insurance Companies</h2>
<ul>
<li>Do you Know that, The Securities & Exchange Board of India (SEBI) , the <a href="http://www.jagoinvestor.com/2009/07/small-guide-for-newcomers-in-stock.html">stock market</a> and mutual fund regulator, does not allow mutual funds to guarantee returns. Therefore Mutual funds can not provide guaranteed products which are related to stock markets, but IRDA can approve things like these and all these insurance companies come under the ambit of Insurance Regulatory and Development Authority of India (IRDA). So any Insurance Company can come up with a new Plan , link it with market and start providing<strong> “Guaranteed products</strong>” . You have to understand that “equity markets” and “guarantees” are a very risky idea together , so please stay away.</li>
</ul>
<ul>
<li>Do you observe when do all these “Innovative” products come up in Market ? The answer is around end of the year, which is a premier Tax Investment time (Jan , Feb , Mar) . Is innovation in Finance space limited to End of the year ? Why dont these products come through out the year? Why ? The answer is simple , if it comes after anytime other than last 4-5 months of the Financial Year (ie Dec , Jan , Feb , Mar) , no body will bother to invest in these, because no body is bothered to “invest” at all . Companies very well understand <a href="http://www.jagoinvestor.com/category/categories/psychology-building">investors psychology</a> and their helpless ness at the end of the year because they have to <a href="http://www.jagoinvestor.com/2009/11/do-not-invest-just-for-tax-saving.html" target="_blank">provide investment proofs for Tax exemption</a> as soon as possible . This is not just limited to these products , its true for NFO’s , IPO’s in booming markets , More Sales calls at the end of the year, and other new products .</li>
</ul>
<ul>
<li>The so-called “Guarantee” is a marketing gimmick and is implicitly a result of the way the investment is structured . what it means is that the strategy they use itself is such that it will provide you the highest NAV , even we can create our own Plan and do what they are doing . But they make sure that Investors feel like they have done years of research and came up with these amazing plans .</li>
</ul>
<ul>
<li>Why The Tenure is 7 yrs ? I am not very sure on this , but here are <a href="http://www.jagoinvestor.com/2010/03/how-do-highest-nav-guarantee-plans-work.html#comment-6636">my thoughts on comments area</a></li>
</ul>
<ul>
<li>You have to understand that there is nothing “Innovative” in this product , the fact that 7 companies have come up with the same product proves that its not “innovation” because Innovation is unique . Aegon Religare has gone ahead in this stupidity and introduced their Guaranteed Plan which guaranteed 80% of the Highest NAV , Looks like they think that it makes them look different from others .</li>
</ul>
<h2><strong>Who should Invest in These Products ?</strong></h2>
<p>If you are looking for modest returns, like 8-10%, you can invest in these policies. The return of these policies may be high in the beginning, if market does well; but when market starts performing badly, the returns can take a hit and then be in a tight range. Your NAV will be protected for sure, but the returns wont be, since over time the CAGR return will go down. Remember, if your NAV is 10 today and you highest NAV is 20, for a 2 year period, the return is a good enough 41%, but by the 4th year it’s just 18.9% and by the end of 7th year it’s a measly 10.4%. So what you really need, is protection of returns, not the NAV which is just a fixed number.</p>
<p></p>
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Posted by Manish Chauhan on March 17, 2010 02:53 PM · permalink
<p><em>By Chris McKhann</em></p> <p><img src="http://static.seekingalpha.com/uploads/2010/3/17/saupload_epipre17.png" alt="EPI Chart" /></p><p>An exchange-traded fund that tracks Indian stocks had 10 times the average options volume yesterday, all in one trade.</p>
Posted by optionMONSTER on March 17, 2010 01:46 PM · permalink
<p><span>Although ending well above the dotted line, the Indian markets shed a portion of their afternoon session gains during the final two hours of trade. The overall market breadth however remained negative as the number of losers outnumbered the gainers by a ratio of 1.3 to 1 on the BSE. While the BSE Sensex closed higher by around 110 points (up 0.6%), the NSE Nifty gained around 35 points (or 0.7%). While midcap stocks ended the day on a firm note (BSE-Midcap Index ended higher by about 0.2%), those from the small cap space saw some pressure as the BSE-Smallcap Index ended lower by about 0.1%. on an overall basis, stocks from the healthcare, metal and capital goods sectors ended higher while those from the realty and auto spaces were among the key losers. <br><br>As regards global markets, Asian indices closed in the positive today. European indices have opened firm. The rupee was trading at Rs 45.36 to the dollar at the time of writing. </span></p>
Posted by Equitymaster on March 17, 2010 11:34 AM · permalink
Before writing off the preceding statement as preposterous, consider the following: Nu Horizons trades for just over $60 million, while its net current asset value is over $100 million. Most of its current assets (approximately $225 million worth) are in the form of inventory and receivables, and so this negative announcement may actually be a catalyst for cash generation.
The company's Xilinx inventory is more than $40 million, so as the company either works through it or returns it (with expenses paid for by Xilinx), cash will be generated. If Nu Horizons' sales are reduced because it cannot replace Xilinx's products, further cash will be generated thanks to a reduction in the accounts receivable. Of course, if replacement products cannot be found, the severed relationship between Nu Horizons and Xilinx will reduce Nu Horizons' earnings. But when one is buying assets for a fraction of their worth, it's never a bad thing when those assets are converted to cash.
On the other hand, if the company can replace the Xilinx products quickly and easily, there will be little in the way of cash generation, but revenues and future earnings may also not change materially. In this case, the company will be able to continue to try and grow its profitability, and shareholders buying at this price are still minimizing downside risks, thanks to the discount the company trades at relative to its liquid assets.
Nu Horizons has not exactly been generating excellent returns for shareholders over the last few years; a shrinking of the business (and the cash that is generated along with that) is not necessarily a negative! As solely a distribution business, Nu Horizons should be able to adjust its cost structure to a level commensurate with lower revenues, if need be.
Disclosure: Author has a long position in shares of NUHC
Posted by Saj Karsan (sajid.karsan@barelkarsan.com) on March 17, 2010 10:59 AM · permalink
<strong>Scripscan:Ispat Industries Ltd<br />cmp:22<br />TRaded in:Nse-bse<br /><br />Story:Ispat Industries ia a part in F & O category. Almost everyone in India will agree that there may be very very few parallels in Indian corporate sector to match wretched track-record of this company. At a time, when steel industry was witnessing best ever buoyancy, Ispat was still not showing profits. Although it is not easy to prove but there have been many many allegations about siphoning off the funds heavily by promoters and loss-making record is also a pointer in that direction.There have been many whispers in the market that company has been selling big quantities of sponge iron in cash (without bill). Moreover, there have been reports about inflating project costs.Liquidity/floating stock should be a big criterion for eligibility in F & O section. However, should it be the only criterion? Is it not moral duty of decision-making authorities to give some weightage to promoters/company's track-record? It appears that Govt's intentions are to encourage speculative activities in stock market.And, protection of investors' from fraudulent promoters( thru pre-emptive measures) is never in Govt's mind.Moreover, it reeks of double-standard mentality of Babus.Could there bigger travesty?? If a small-cap (for that matter any other co which is listed at BSE) company wants to list at NSE, company must have 2 year dividend-paying track-record.There are many cases where BSE listed companies have already paid 1 dividend but NSE refusing to list them. Such companies are willing to declare interim dividend (so that criterion of 2 dividends are met) However, reportedly, NSE dont recognize interim dividend and insisting that Final dividend will be considered to meet criterion of 2 dividends. Does it mean that in the eyes of regulatory authorities,BIG IS HONEST AND SMALL IS DISHONEST? However, more frighteneing is that there is more than what meets the eye.Bringing new scrips in F & O appears a big scam.It is a pointer that promoters/big FIIs/stock exchange authorities may be hand-in-glove that "a particular scrip will be transferred to F & O after 2-3 months" which gives ample time for these institutions/individuals to buy such scrip at very low levels to make quick killing.Anyways as far ISPAT is concerned I was the one who recomneded a bigtime sell on it at last year level of 70 odd.I stick with my views and suggests you folks to go for a better growth oriented stock backed by a solid and visionary commited pedigree team. </strong><br /><br /><span style="font-weight:bold;">Regards,<br />ARUN<br />I can be reached at:-arunanalyst@rediffmail.com </span><div class="blogger-post-footer"><script type="text/javascript"><!--
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Posted by arun (noreply@blogger.com) on March 17, 2010 07:35 AM · permalink
<p><a href="http://feedads.g.doubleclick.net/~a/KFrtqs6cCRhsOb_Ud_8-UmDfcC0/0/da"><img src="http://feedads.g.doubleclick.net/~a/KFrtqs6cCRhsOb_Ud_8-UmDfcC0/0/di" border="0" ismap="true"></img></a><br/>
<a href="http://feedads.g.doubleclick.net/~a/KFrtqs6cCRhsOb_Ud_8-UmDfcC0/1/da"><img src="http://feedads.g.doubleclick.net/~a/KFrtqs6cCRhsOb_Ud_8-UmDfcC0/1/di" border="0" ismap="true"></img></a></p><p>Pradip Overseas Ltd IPO which entered capital markets with an IPO of 10,600,000 Equity Shares of Rs. 10 for cash,was open from March 11, 2010, and closed on March 15, 2010. They had the issue price from Rs. 100 – Rs. 110 Per Equity Share .The issue was oversubscribed by 14 times or so and surprisingly on the retail side it was oversubscribed by 10 times or so .<br />
<strong>Over subscription Times</strong></p>
<blockquote><p>Total Issue Size 10600000<br />
Total Bids Received 149261280<br />
Total Bids Received at Cut-off Price 33391560<br />
No. of times issue is subscribed 14.08</p></blockquote>
<p><strong>Subscription by Category</strong></p>
<blockquote><p>>Qualified Institutional Buyers (QIBs) 8.5740<br />
>Non Institutional Investors 45.3523<br />
>Retail Individual Investors (RIIs) 10.5262<br />
>Employee Reservation 0.0874</p></blockquote>
<p><a href="http://www.linkintime.co.in/site/ipo.asp" target="new">Pradip Overseas IPO Allotment can be seen here.</a></p>
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<p><a href="http://www.rupya.com/2010/03/17/pradip-overseas-ipo-allotment-will-be-sure-lottery/14261">Pradip Overseas IPO Allotment Will be sure Lottery</a> is a post from: <a href="http://www.rupya.com">First Blog for Indian Financial Market</a></p>
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Posted by abhisheak on March 17, 2010 03:51 AM · permalink
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<li><span class="Mild down2"><a href="http://www.google.co.in/trends/hottrends?q=ipl+live+score+card&date=2010-3-17&sa=X">ipl live score card</a></span></li>
<li><span class="Mild down2"><a href="http://www.google.co.in/trends/hottrends?q=iete+result&date=2010-3-17&sa=X">iete result</a></span></li>
<li><span class="Mild up13"><a href="http://www.google.co.in/trends/hottrends?q=raasi+phalalu+2010+in+telugu&date=2010-3-17&sa=X">raasi phalalu 2010 in telugu</a></span></li>
<li><span class="Mild up11"><a href="http://www.google.co.in/trends/hottrends?q=ipl+standings&date=2010-3-17&sa=X">ipl standings</a></span></li>
<li><span class="Mild down4"><a href="http://www.google.co.in/trends/hottrends?q=coal+india&date=2010-3-17&sa=X">coal india</a></span></li>
<li><span class="Mild new"><a href="http://www.google.co.in/trends/hottrends?q=chennai+super+kings&date=2010-3-17&sa=X">chennai super kings</a></span></li>
<li><span class="Mild down5"><a href="http://www.google.co.in/trends/hottrends?q=shane+bond&date=2010-3-17&sa=X">shane bond</a></span></li>
<li><span class="Mild down5"><a href="http://www.google.co.in/trends/hottrends?q=arteeindia&date=2010-3-17&sa=X">arteeindia</a></span></li>
<li><span class="Mild new"><a href="http://www.google.co.in/trends/hottrends?q=cheti+chand+sms&date=2010-3-17&sa=X">cheti chand sms</a></span></li>
<li><span class="Mild down6"><a href="http://www.google.co.in/trends/hottrends?q=manvinder+bisla&date=2010-3-17&sa=X">manvinder bisla</a></span></li>
</ol>
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<p><a href="http://www.rupya.com/2010/03/17/csk-vs-kkr-iete-katherine-jenkins-wardrobe-malfunction/14260">csk vs kkr, iete, katherine jenkins wardrobe malfunction, …</a> is a post from: <a href="http://www.rupya.com">First Blog for Indian Financial Market</a></p>
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Posted by Ganapathy on March 17, 2010 12:37 AM · permalink
<p>Words we should remember <strong>“Psychological research on cognitive fluency shows why easy to understand = more profitable, more pleasurable, more intelligent and safer.”</strong></p>
<p><strong>H/T Peter Seligman </strong></p>
<p style="text-align: center;"><a href="http://www.spring.org.uk/2010/03/8-studies-demonstrating-the-power-of-simplicity.php?utm_source=feedburner&utm_medium=email&utm_campaign=Feed%3A+PsychologyBlog+%28PsyBlog%29"><strong>Click Here To Read: 8 Studies Demonstrating the Power of Simplicity</strong></a></p>
<p><strong>Findings (Via PsyBlog)</strong></p>
<blockquote>
<h3>1. Complex writing makes you look stupid</h3>
<p>Many of us did it in school: tried to impress teachers with fancy language and convoluted sentences, assuming it would make us look clever. As we soon discovered, though, most people can’t carry it off.</p>
<h3>2. Difficult names are dangerous</h3>
<p>As we’ve already seen, people assume that things which are difficult to pronounce are also risky. Song and Schwarz (2009) found that the fictional food additive Hnegripitrom was considered 1 point more dangerous on a 1 to 7 scale than Magnalroxate.</p>
<h3>3. Foreigners are more difficult to think about</h3>
<p>So names that are difficult to pronounce seem to have negative connotations? That doesn’t bode well for migrants whose names are unfamiliar in their adopted countries.</p>
<h3>4. Buy shares with fluent names</h3>
<p>Before we leave names behind, check out this neat study which suggests a way to increase your stock market profits. Alter and Oppenheimer (2006) wondered if companies with pronounceable ticker codes, like GOOG for Google, will benefit from the fluency effect by trading more profitably.</p>
<h3>5. But…hesitate and they’ll remember</h3>
<p>Right, enough fantasising about using fluency for stock market riches. Perhaps in some areas there is an advantages to be had from a lack of fluency?</p>
<h3>6. People buy fluent products</h3>
<p>Needless to say people have wondered if this cognitive fluency lark could be used to make people part with their cashola. It can. Novemsky et al. (2007) manipulated the fluency of a product by listing its features in either an easy or hard to read font. Easy to read fonts doubled the number of people willing to purchase the product.</p>
<h3>7. Fluency gives us pleasure</h3>
<p>Things that are easy to process give us a momentary burst of pleasure. When people look at objects which are easy to pick up, they produce tiny smiles compared with when they are shown objects which are difficult to pick up (Cannon et al., 2009—measured using electromyography). Sensorimotor fluency gives people a tiny twinge of pleasure.</p>
<h3>8.Fluency allows effortless thinking</h3>
<p>Fluency also affects the way we make decisions.</p>
<p>Broadly speaking our brains have two systems for reasoning. The system we are consciously aware of is slow and analytical, while the one that operates below the level of conscious awareness is quick, effortless and automatic. That’s our intuition.</p>
<p style="text-align: center;"><a href="http://www.spring.org.uk/2010/03/8-studies-demonstrating-the-power-of-simplicity.php?utm_source=feedburner&utm_medium=email&utm_campaign=Feed%3A+PsychologyBlog+%28PsyBlog%29"><strong>Click Here To Read: 8 Studies Demonstrating the Power of Simplicity</strong></a></p>
</blockquote>
<div class="relatedposts"><strong>Other Related Posts From Simoleon Sense:</strong><ol><li><a href='http://www.simoleonsense.com/simplicity-as-a-strategy/' rel='bookmark' title='Permanent Link: Simplicity As A Strategy'>Simplicity As A Strategy</a></li>
<li><a href='http://www.simoleonsense.com/psychology-of-power-statuspower-makes-the-hypocrite-bolder-and-smugger/' rel='bookmark' title='Permanent Link: Psychology Of Power & Status:Power Makes the Hypocrite Bolder and Smugger'>Psychology Of Power & Status:Power Makes the Hypocrite Bolder and Smugger</a></li>
<li><a href='http://www.simoleonsense.com/review-of-risk-perception-studies-in-behavioral-finance/' rel='bookmark' title='Permanent Link: Review of Risk Perception Studies in Behavioral Finance'>Review of Risk Perception Studies in Behavioral Finance</a></li>
<li><a href='http://www.simoleonsense.com/our-bias-for-going-with-the-flow-familiarity-and-risk-if-it%e2%80%99s-easy-to-read-it%e2%80%99s-easy-to-do-pretty-good-and-true/' rel='bookmark' title='Permanent Link: Our Bias For Going With The Flow, Familiarity and risk : If it’s easy to read, it’s easy to do, pretty, good, and true'>Our Bias For Going With The Flow, Familiarity and risk : If it’s easy to read, it’s easy to do, pretty, good, and true</a></li>
</ol></p>
Posted by Miguel on March 17, 2010 12:22 AM · permalink
<p>From data on the NSE, the last month or so has seen continuous selling in the cash market by Dmestic Istitutional Inestors (DIIs) and continuous buying by the Foreign Institutional Investors (FIIs).</p> <p><a href="http://lh3.ggpht.com/_cwHfePkadc4/S5_UZ_9oW1I/AAAAAAAAAlM/Deiv5CVF9AQ/s1600-h/image%5B5%5D.png" target="_blank"><img title="image" style="border-right: 0px; border-top: 0px; display: inline; border-left: 0px; border-bottom: 0px" height="291" alt="image" src="http://lh6.ggpht.com/_cwHfePkadc4/S5_UbBA-6LI/AAAAAAAAAlQ/tMhiea_Uvdw/image_thumb%5B1%5D.png?imgmax=800" width="483" border="0" /></a> </p> <p>This hardly says anything bad – the last time the DIIs were continuous net sellers was Sep-Oct 2007 when the index moved 20%. </p> <p><a href="http://lh3.ggpht.com/_cwHfePkadc4/S5_UcHs7AOI/AAAAAAAAAlU/RMfq2XbytEw/s1600-h/image%5B8%5D.png" target="_blank"><img title="image" style="border-right: 0px; border-top: 0px; display: inline; border-left: 0px; border-bottom: 0px" height="291" alt="image" src="http://lh3.ggpht.com/_cwHfePkadc4/S5_UdSh-6cI/AAAAAAAAAlY/gjqOMyecnRc/image_thumb%5B2%5D.png?imgmax=800" width="483" border="0" /></a> </p> <p>Of course it went on to go up another 15% before it collapsed. </p> <p>In a way it’s a sign – if the indices drop a lot suddenly, there’s someone with cash sitting to provide a floor. But that could be very temporary – if there’s a crisis, there’s not enough to support a steep fall. Even so, it’s a short term bullish indicator.</p> <div class="blogger-post-footer"><p style="border: 1px solid #C888C8">
This post is written by <a href="http://blog.investraction.com">Deepak Shenoy</a>,
at <a href="http://blog.investraction.com">Capital Mind</a>.
</p><img width='1' height='1' src='https://blogger.googleusercontent.com/tracker/18601284-7482023688600221403?l=blog.investraction.com' alt='' /></div>
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Posted by Deepak Shenoy (noreply@blogger.com) on March 16, 2010 06:56 PM · permalink
<p>Bharti has issued terms for the the Zain acquisition (<a href="http://blog.investraction.com/2010/02/bharti-zain-deal-analysis.html" target="_blank">read more here</a>). <a href="http://www.livemint.com/2010/03/16163928/Bharti-issues-terms-for-85-b.html?h=A1" target="_blank">From Mint</a>:</p> <blockquote> <p>India’s Bharti Airtel, in talks to buy the African mobile operations of Kuwait’s Zain for $9 billion, has issued a term sheet to banks to raise up to $8.5 billion in offshore loans to fund the deal, banking sources said.</p> <p>The six-year offshore facility has four tranches and carries a blended average life of 4.75 years, with a margin ranging from 176 basis points (bps) to 179 bps over Libor, the sources said.</p> <p>Previously, Bharti was said to be looking for a $9 billion facility, which also included an onshore rupee tranche.</p> <p>Bankers familiar with the deal said that the all-in pricing is below all expectations, which ranged from <strong>200 bps to 250 bps above Libor.</strong></p> </blockquote> <p>We don’t know what Libor they speak of, but current 1-year Libor rates are 0.87%. So this will be a really cheap loan.</p> <p>Additionally, some of this loan may actually replace existing loans taken by Zain, upto $4bn of it, <a href="http://www.livemint.com/2010/03/07210953/Bharti8217s-market-cap-reco.html" target="_blank">so says Mint</a>. That means the new loan is only $5bn, which at the 3% rate they are getting above, will translate to $150 million – no great shakes. EBIDTA is at $1.2 bn currently – all they have to do is improve EBIDTA by 10% and they’re home. </p> <p>Bharti is bidding for 3G spectrum too in India, and that will also need to get funded. </p> <p>This might just be it. I mean a trigger for a great story going ahead too – the fundamentals look very good in the medium term. But they are fundamentals – by that I mean we don’t know the details, and the devil is there. Even with all this news – and a new relative market high today – Bharti didn’t move up; does that mean the institutions know something you and I don’t? Why doesn’t price follow? </p> <p>In the short term, Bharti is a buy. In the medium term, on fundamentals alone, it’s a buy. The price-action needs to follow through and show some serious volume. I don’t even know how to begin predicting for the long term so I won’t bother. </p> <p><a href="http://lh5.ggpht.com/_cwHfePkadc4/S5_KtWXgtPI/AAAAAAAAAlE/dyTA7cKMVMM/s1600-h/image%5B5%5D.png" target="_blank"><img title="image" style="border-right: 0px; border-top: 0px; display: inline; border-left: 0px; border-bottom: 0px" height="480" alt="image" src="http://lh5.ggpht.com/_cwHfePkadc4/S5_KvJHpkuI/AAAAAAAAAlI/uikmoOzE9Bo/image_thumb%5B1%5D.png?imgmax=800" width="502" border="0" /></a> </p> <p>The chart shows some consolidation with low volume – that is usually a sign of a breakout or breakdown waiting to happen. That big bar towards the end is what happens if you rely purely on NSE data. There was probably a freak tick at 230. </p> <div class="blogger-post-footer"><p style="border: 1px solid #C888C8">
This post is written by <a href="http://blog.investraction.com">Deepak Shenoy</a>,
at <a href="http://blog.investraction.com">Capital Mind</a>.
</p><img width='1' height='1' src='https://blogger.googleusercontent.com/tracker/18601284-8896958739626165967?l=blog.investraction.com' alt='' /></div>
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Posted by Deepak Shenoy (noreply@blogger.com) on March 16, 2010 06:15 PM · permalink
Posted by Deepak Singh on March 16, 2010 02:11 PM · permalink
<span style="font-weight:bold;">Hers the sejal glass note.Recomended at levels of 20,29,32 periodically for target of 70rs.<br /><br />Scripscan:Sejal Architectural Glass Ltd<br />Cmp:29<br />target:70<br />Duration:6-9 months<br />Traded in:Nse-bse<br /><br />Story:Sejal Architectural Glass is into processing of insulating, toughened and laminated glass. The company also has a trading division which supports various in-house brands and products of other manufacturers. The products include tiles, sanitary-ware, mirrors, glass, etc. for home and commercial interiors.Going forward, the company expects acceleration in its revenue and profit growth, as it continues to book new orders. Its float glass facility will be completed by FY09. Its perday capacity at 100% utilisation is 550 tonnes per day. For the first year, capacity utilisation will be around 65% and by FY11, it will be fully operational.Recently, the company ventured into retailing and has opened a 30,000-square feet showroom to sell high-end glass articles used in house interiors.The Indian glass industry has immense potential to grow as the long term growth story in the construction and automotive industries in India remains intact.The introduction of low-cost cars and the changing focus of real estate developers to semi-urban cities due to high land prices can be major growth drivers.During FY11, the company expects to clock revenues of Rs 350 crore and profit of nearly 50crs.With confirmed orders from Amritsar Airport, Reliance Industries, L&T and Brigade Enterprises among others, the company's growth in the next few quarters seems certain. The stock is currently trading at 6 times its estimated FY10 EPS.It also would be prudent to note that the company just some months ago came with its IPO at a price of 115 and the issue was highly oversubscribed to the tune of 7 odd times.Its now at a 86 rs discount to its ipo price of 115rs.With market sentiments improving now the stock may just shoot up a hell lot from present level of 29rs.A great buy at present levels.<br /><br />Update:Sejal glass was recomended some months back for a target of 70 bucks which got acheived today.Its in a momentum and may hit new heighs. </span><div class="blogger-post-footer"><script type="text/javascript"><!--
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Posted by arun (noreply@blogger.com) on March 16, 2010 02:00 PM · permalink
<span style="font-weight:bold;">If anyone of you wish to get associated with me for lifetime do come up fast to get the motilal oswal online trading account done at the earliest.Account opening procedure is very easy and hassle free.Just courier me the below mentioned documents and your account would get done in 3-4 days.No matter where you stay in India or in any part of the world you can always have an account with my firm.All tips and guidance would be provided free for lifetime.Membership for the happening brokerage blog would be alloted too.<br /><br />The account would be in motilal oswal.Check the demo at<br /><a href="onlinetrade.motilaloswal.com">onlinetrade.motilaloswal.com</a><br /><br />1)Charges would be around 1000rs for onetime including the demat+amc+account opening charges.From 2nd year the charges would be 400rs.<br />2)No need to send any margin cheq for the charges.Once the account gets done you can do online fund transfer from your bank to your trading account.<br /><br /><br />btw:The account can act as your portfolio management account too where all transactions would be done from my end on your behalf,If you wish at all.<br /><br />So here is what you need to courier me for an online trading account:-<br /><br />1.PAN Card zerox <br />2.Address proof(Voter card/Passport/telephone bill/Ration card/driving license/Latest Bank Statement with Bank seal) <br />3.Two Photos <br />4.One cancel cheque(A cheq which you need to criss-cross or simple write cancelled)<br /><br />In a piece of paper do write your:-<br />1)Qualification<br />2)Occupation<br />3)email id<br />4)Cell number<br />5)If you work for a company,its name and address.<br /><br />btw:Please self attest/sign the xerox copies of the documents and the cancelled cheq.<br /><br /><br />Address where you will courier:-debjyoti is the broking partner of mine.<br /><br />Debjyoti Gupta <br />Flat No-E,Ground Floor <br />1/1,Dover Lane,Garia hut <br />Kolkata-700 029 Phone: (office)0091-033-24630125/64506292 (Res)0091-033-24643793<br />Cell No-9830352795/9230529459,9230529459<br /><br />For any clarification regarding these,mail me at:-arunanalyst@rediffmail.com<br /><br />Hope to have your active support folks.Sent these to me and I assure all of you would have a gala time.Rock on.<br /><br />Regards,<br />ARUN<br />9804589299<br />I can be reached at:<a href="arunanalyst@rediffmail.com ">arunanalyst@rediffmail.com </a></span><div class="blogger-post-footer"><script type="text/javascript"><!--
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Posted by arun (noreply@blogger.com) on March 16, 2010 01:08 PM · permalink
<p>Everything you need to know about CDO’s and more.</p>
<p>H/T Josh Wolfe</p>
<p style="text-align: center;"><a href="http://bit.ly/9sGrWb"><strong>Click Here To Read: The Story of the CDO Market Meltdown: An Empirical Analysis</strong></a></p>
<p><strong>Abstract</strong>(Anna Katherine Barnett-Hart @ Harvard)</p>
<p>Collateralized debt obligations (CDOs) have been responsible for $542 billion in write-downs at financial institutions since the beginning of the credit crisis. In this paper, I conduct an empirical investigation into the causes of this adverse performance, looking specifically at asset-backed CDO’s (ABS CDO’s). Using novel, hand-collected data from 735 ABS CDO’s, I document several main findings. First, poor CDO performance was primarily a result of the inclusion of low quality collateral originated in 2006 and 2007 with exposure to the U.S. residential housing market. Second, CDO underwriters played an important role in determining CDO performance. Lastly, the failure of the credit ratings agencies to accurately assess the risk of CDO securities stemmed from an overreliance on computer models with imprecise inputs. Overall, my findings suggest that the problems in the CDO market were caused by a combination of poorly constructed CDOs, irresponsible underwriting practices, and flawed credit rating procedures.</p>
<p><strong>Findings</strong> (vai Anna Katherine Barnett-Hart @ Harvard)</p>
<p>The signs of the coefficients for Moody’s and S&P are consistent with the conflict of interest problem: bigger underwriters were associated with a higher initial % AAA, resulting in a subsequent higher level of downgrades, AAA Loss, and an overall higher level of prediction mistakes as calculated by the difference in predicted and actual levels of Default. However, these results could just as easily be caused by the fact that the most prolific underwriters were producing worse CDOs, and that rather than receive preferential treatment by the rating agencies, the problem was merely that these originators were treated the same as other underwriters, although in reality they were producing worse CDOs. Given the striking uniformity of initial CDO credit ratings and the fact that the prediction value of the asset credit ratings depended mainly on the quality of the underwriter, the latter explanation seems more likely, suggesting that the conflicts of interest is not as much to blame as simply a failure to distinguish among underwriter quality.</p>
<p style="text-align: center;"><a href="http://bit.ly/9sGrWb"><strong>Click Here To Read: The Story of the CDO Market Meltdown: An Empirical Analysis</strong></a></p>
<div class="relatedposts"><strong>Other Related Posts From Simoleon Sense:</strong><ol><li><a href='http://www.simoleonsense.com/prem-watsa-looks-back-at-the-meltdown/' rel='bookmark' title='Permanent Link: Prem Watsa looks back at the meltdown'>Prem Watsa looks back at the meltdown</a></li>
<li><a href='http://www.simoleonsense.com/empirical-finance-newsletter-on-managerial-ownership-and-equity-prices/' rel='bookmark' title='Permanent Link: Empirical Finance Newsletter on Managerial Ownership and Equity Prices'>Empirical Finance Newsletter on Managerial Ownership and Equity Prices</a></li>
<li><a href='http://www.simoleonsense.com/higher-order-beliefs-among-professional-stock-market-forecasters-some-first-empirical-tests/' rel='bookmark' title='Permanent Link: Higher-Order Beliefs among Professional Stock Market Forecasters: Some First Empirical Tests'>Higher-Order Beliefs among Professional Stock Market Forecasters: Some First Empirical Tests</a></li>
<li><a href='http://www.simoleonsense.com/value-creation-in-middle-market-buyouts-a-transaction-level-analysis/' rel='bookmark' title='Permanent Link: Value Creation in Middle-Market Buyouts: A Transaction-Level Analysis'>Value Creation in Middle-Market Buyouts: A Transaction-Level Analysis</a></li>
</ol></p>
Posted by Miguel on March 16, 2010 01:07 PM · permalink
<span style="font-weight:bold;">1)Sentiments change overnight as people are emotional.<br /><br />2)If analysis really workd all the time market would have become very boring.They are interesting because we cannot predict human behaviour.<br /><br />3)When you get information on a stock find out if market already knows it.Know your level ofinformation ladder.<br /><br />4)Life is never fair.You may find incompetent people being highly successful.Dont feel bad,they are reaping the rewards of their past karma,lolz.<br /><br />5)You cannot get investment opportunities everyday.5-6 of them in a quarter would be great<br />.<br />6)Patience is always rewarded.The law of firm is applicable in walks of life.<br /><br />7)Control your emotions.Do not follow the herd blindly.<br /><br />8)You never miss the buss in the markets.If you have the money opportunities would always come.Preserve your money and don't forget "cash is the king".<br /><br />9)Bear markets offer better investment opportunities than bull markets.<br /><br />10)Avoid margin trading.You are only enriching your broker.Ask your margin trading friends how they are treated in the present market situation.<br /><br />11)Derivatines are good hedging instruments.Unfortunately they are used as speculative instruments.They only enrich the intermediary at the expense of the investor.Avoid them.<br /><br />"The devils would never listen to the scriptures of arun, isnt it?hehehhe..."<br /><br /><br />Regards,<br />ARUN<br />I can be reached at:-arunanalyst@rediffmail.com</span><div class="blogger-post-footer"><script type="text/javascript"><!--
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Posted by arun (noreply@blogger.com) on March 16, 2010 01:05 PM · permalink
<span style="font-weight:bold;">Waste Management,We all know would be the next big thing for sure.We have so many listed companies giving such great thrusts to it.I was searching details and features on biological waste treatment, collection and transport, recycling and waste minimization, sanitary landfill and thermal treatment of waste etc about the sector and fortunately went through a great magazine to have most of the details about my mentioned stuff.It not only covered them but also had coverage report on international projects, best practices, technological developments, trends and legislation.It effectively promotes all aspects of Waste Management in the worldwide marketplace.Waste Management World delivers the latest news and global developments from across the industry.Its a complte package to fullfill your knowledge needs.I am sure just like me It would benefit all of you folks a great deal.So move on fast and book yourself a free copy.The magazine is available to the people of U.S.A,India and other asian and european countries.The link is given below.<br /><br /><a href="http://arunthestocksguru.tradepub.com/c/pubRD.mpl?sr=oc&_t=oc:&pc=wmw">http://arunthestocksguru.tradepub.com/c/pubRD.mpl?sr=oc&_t=oc:&pc=wmw</a><br /><br /><br />To get more amazing free magazines glance through:-<br /><a href="http://arunthestocksguru.tradepub.com/?pt=cat&page=_INTL">http://arunthestocksguru.tradepub.com/?pt=cat&page=_INTL</a><br /><br />Regards,<br />ARUN<br />9804589299<br />I can be reached at:arunanalyst@rediffmail.com </span><div class="blogger-post-footer"><script type="text/javascript"><!--
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Posted by arun (noreply@blogger.com) on March 16, 2010 01:00 PM · permalink
<p><a href="http://feedads.g.doubleclick.net/~a/KwQDebXenMGzkwI3yZf7z38G9YM/0/da"><img src="http://feedads.g.doubleclick.net/~a/KwQDebXenMGzkwI3yZf7z38G9YM/0/di" border="0" ismap="true"></img></a><br/>
<a href="http://feedads.g.doubleclick.net/~a/KwQDebXenMGzkwI3yZf7z38G9YM/1/da"><img src="http://feedads.g.doubleclick.net/~a/KwQDebXenMGzkwI3yZf7z38G9YM/1/di" border="0" ismap="true"></img></a></p><p>Worlds Shortest Man He Pingping dies at 21.He was admitted to hospital two weeks ago after suffering a chest complaint and died on Saturday, but his death has only just been announced.Guinness World Records said he had made a “huge impact around the world”.<br />
<strong>Biograhy from Wikipedia</strong></p>
<blockquote><p>He Pingping (Chinese: 何平平;Wulanchabu, China July 13, 1988 – Rome, Italy March 13, 2010[1]) was, according to the Guinness World Records, the world’s shortest man who was able to walk.[2][3]</p>
<p>He measured 73 cm (2 ft 5 in) tall,[4] and was the third child of a family in Huade county, in the city of Wulanchabu in northern China’s Inner Mongolia Autonomous Region. He had two sisters, both of whom developed at normal rates. According to his father, He Yun, at birth He Pingping was small enough to fit in the palm of his parent’s hands. When it became apparent the child was growing very slowly, doctors diagnosed the cause as the bone deformity Osteogenesis imperfecta, which hinders normal bone growth and bodily height.</p></blockquote>
<p><img src="http://d.yimg.com/a/p/afp/20100315/capt.photo_1268680495194-1-0.jpg?x=400&y=266&q=85&sig=MW5.DLCO0aNKiqYV6OPPPQ--" /><br />
<object width="440" height="295"><param name="movie" value="http://www.youtube.com/v/WFEFP5x2Gy0&hl=en_US&fs=1&color1=0x006699&color2=0x54abd6"></param><param name="allowFullScreen" value="true"></param><param name="allowscriptaccess" value="always"></param><embed src="http://www.youtube.com/v/WFEFP5x2Gy0&hl=en_US&fs=1&color1=0x006699&color2=0x54abd6" type="application/x-shockwave-flash" allowscriptaccess="always" allowfullscreen="true" width="480" height="295"></embed></object></p>
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<p><a href="http://www.rupya.com/2010/03/16/worlds-shortest-man-dies/14257">Worlds Shortest Man Dies</a> is a post from: <a href="http://www.rupya.com">First Blog for Indian Financial Market</a></p>
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Posted by Ganapathy on March 16, 2010 12:44 PM · permalink
<p><a href="http://feedads.g.doubleclick.net/~a/0U40rQoNkhhEGNMc5jDBoqrKcLs/0/da"><img src="http://feedads.g.doubleclick.net/~a/0U40rQoNkhhEGNMc5jDBoqrKcLs/0/di" border="0" ismap="true"></img></a><br/>
<a href="http://feedads.g.doubleclick.net/~a/0U40rQoNkhhEGNMc5jDBoqrKcLs/1/da"><img src="http://feedads.g.doubleclick.net/~a/0U40rQoNkhhEGNMc5jDBoqrKcLs/1/di" border="0" ismap="true"></img></a></p><p>United Bank of India IPO has announced the market that it will list on on Thursday, February 25, 2010.They had Issue price fixed at Rs 240/- per share.</p>
<blockquote><p>Listing Date: Thursday, March 18, 2010<br />
BSE Script Code: 533171<br />
ISIN: INE695A01019<br />
Issue Price: Rs. 66.00 Per Equity Share<br />
Face Value: Rs. 10.00 Per Equity Share</p></blockquote>
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<p><a href="http://www.rupya.com/2010/03/16/united-bank-of-india-ipo-listing-date/14255">United Bank of India IPO Listing Date</a> is a post from: <a href="http://www.rupya.com">First Blog for Indian Financial Market</a></p>
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Posted by abhisheak on March 16, 2010 12:33 PM · permalink
<p><a href="http://feedads.g.doubleclick.net/~a/wxkgnBB9-WukK5isHXWid7Mmf9E/0/da"><img src="http://feedads.g.doubleclick.net/~a/wxkgnBB9-WukK5isHXWid7Mmf9E/0/di" border="0" ismap="true"></img></a><br/>
<a href="http://feedads.g.doubleclick.net/~a/wxkgnBB9-WukK5isHXWid7Mmf9E/1/da"><img src="http://feedads.g.doubleclick.net/~a/wxkgnBB9-WukK5isHXWid7Mmf9E/1/di" border="0" ismap="true"></img></a></p><p>IL&FS Transportation IPO which closed yesterday had the issue open from Mar 11, 2010 – Mar 15, 2010 , they raised Rs. 700.00 Crore for Issue Price: Rs. 242 – Rs. 258 Per Equity Share .<br />
<strong>The issue had subscription figure of</strong></p>
<blockquote><p>Total Issue Size 23719009<br />
Total Bids Received 792670275<br />
Total Bids Received at Cut-off Price 35803425<br />
No. of times issue is subscribed 33.42 </p></blockquote>
<p><strong>Subscription by Category</strong></p>
<blockquote><p>> Qualified Institutional Buyers (QIBs) 52.6077<br />
> Non Institutional Investors 39.3943<br />
> Retail Individual Investors (RIIs) 4.5636 </p></blockquote>
<p><a href="http://www.linkintime.co.in/site/ipo.asp" target="new">IL&FS Transportation IPO Allotment can be seen here.</a></p>
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<p><a href="http://www.rupya.com/2010/03/16/ilfs-transportation-ipo-allotment-will-be-lottery-based/14253">IL&FS Transportation IPO Allotment will be Lottery Based</a> is a post from: <a href="http://www.rupya.com">First Blog for Indian Financial Market</a></p>
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Posted by abhisheak on March 16, 2010 12:30 PM · permalink
<p>While markets traded close to the dotted line during the morning session and even briefly dipped into the red on occasion, strong buying activity in the ensuing hours pushed the indices well above the dotted line. Towards the end of the session, the markets closed well into the positive. While the BSE Sensex closed higher by around 218 points, the NSE Nifty gained around 73 points. Midcap and small cap stocks also did well, gaining around 1% and 1.3% respectively. The oil & gas and metal and capital goods spaces saw the highest gains today. <br><br>As per a leading business daily, <a href="javascript:DMI(" rel="nofollow">Tata Steel</a> (<a href='http://seekingalpha.com/symbol/tatly.pk' alt='Tata Steel ' title='Tata Steel '>TATLY.PK</a>) may increase prices of its products in the coming months on account of rising raw material costs. According to the company’s management, raw material prices are likely to rise by around US$ 140 to US$ 150 per tonne in FY11. However, it is not yet sure how much will be passed on to its customers. </p>
Posted by Equitymaster on March 16, 2010 12:26 PM · permalink
Consider Alpha Pro Tech (APT), maker of a slew of protective products, from medical masks to roof underlay. The following chart depicts the company's revenues over the last several years:
Not only does the company's revenue growth appear unsustainable, but so does its revenue level. The company benefited in 2009 from responses to the H1N1 virus, which resulted in sales growth of its medical masks of 283%! This alone boosted sales by $13 million in 2009, and is not likely to continue, as the company's president noted that "...face mask sales started to slow down in the latter part of the fourth quarter and are expected to return to pre-H1N1 levels in 2010, unless concerns relating to the global H1N1 Influenza A pandemic resume."
That's not to say APT does not have a bright future. It's building products (underlayment and house wrap) are gaining share and growing distribution in an otherwise poor building environment. Furthermore, mask sales represent only a portion of the company's total sales, and the company's other protective products show potential to continue to grow.
But the lesson is that investors should not blindly incorporate a company's latest revenue figures as a company's new normal. Instead, investors should attempt to understand the nature of a company's products in order to arrive at a more accurate normalized revenue figure for valuation purposes. Otherwise, the investor's attempt to identify undervalued stocks may prove fruitless.
Disclosure: None
Posted by Saj Karsan (sajid.karsan@barelkarsan.com) on March 16, 2010 10:25 AM · permalink
<p><a href="http://feedads.g.doubleclick.net/~a/ehBnWv1kq6rx_Z6gCCkJncEVM5k/0/da"><img src="http://feedads.g.doubleclick.net/~a/ehBnWv1kq6rx_Z6gCCkJncEVM5k/0/di" border="0" ismap="true"></img></a><br/>
<a href="http://feedads.g.doubleclick.net/~a/ehBnWv1kq6rx_Z6gCCkJncEVM5k/1/da"><img src="http://feedads.g.doubleclick.net/~a/ehBnWv1kq6rx_Z6gCCkJncEVM5k/1/di" border="0" ismap="true"></img></a></p><p>PBA Infrastructure informed the market today that it has bagged order from Sadbhav Engineering and the order is for construction related works at Insuli, Omerga and Nandani check posts in Maharashtra , and the order is almost 3 orders for Rs 95 crore from Sadbhav Engineering for construction related works.</p>
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<p><a href="http://www.rupya.com/2010/03/16/pba-infrastructure-bags-order-worth-95-crore-from-sadbhav-engineering/14251">PBA Infrastructure bags order worth 95 crore from Sadbhav Engineering</a> is a post from: <a href="http://www.rupya.com">First Blog for Indian Financial Market</a></p>
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Posted by Subramanian on March 16, 2010 05:05 AM · permalink
<p><a href="http://feedads.g.doubleclick.net/~a/GTYDZzFbXgRMk10JrB2lbpLew9M/0/da"><img src="http://feedads.g.doubleclick.net/~a/GTYDZzFbXgRMk10JrB2lbpLew9M/0/di" border="0" ismap="true"></img></a><br/>
<a href="http://feedads.g.doubleclick.net/~a/GTYDZzFbXgRMk10JrB2lbpLew9M/1/da"><img src="http://feedads.g.doubleclick.net/~a/GTYDZzFbXgRMk10JrB2lbpLew9M/1/di" border="0" ismap="true"></img></a></p><p>Larsen & Toubro (L&T) has informed the market yesterday that it has bagged orders worth Rs 2,035 crore from ONGC Mangalore Petrochemicals Ltd , The order is for setting up of an aromatics complex at Mangalore special economic zone.It will help produce products like Paraxylene & Benzene as well as other by products like Hydrogen and LPG.The Execution has to be done by December 2012.</p>
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<p><a href="http://www.rupya.com/2010/03/16/larsen-toubro-bags-order-worth-2035-crore/14249">Larsen & Toubro bags order worth 2035 crore</a> is a post from: <a href="http://www.rupya.com">First Blog for Indian Financial Market</a></p>
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Posted by Subramanian on March 16, 2010 04:58 AM · permalink
<p><a href="http://feedads.g.doubleclick.net/~a/grXwDP1AwMIZeIvrUp38qw9TEv8/0/da"><img src="http://feedads.g.doubleclick.net/~a/grXwDP1AwMIZeIvrUp38qw9TEv8/0/di" border="0" ismap="true"></img></a><br/>
<a href="http://feedads.g.doubleclick.net/~a/grXwDP1AwMIZeIvrUp38qw9TEv8/1/da"><img src="http://feedads.g.doubleclick.net/~a/grXwDP1AwMIZeIvrUp38qw9TEv8/1/di" border="0" ismap="true"></img></a></p><p>Chromatic India Ltd has informed the market that it has fixed record date for the proposed Bonus Issue , The company told it has fixed March 23, 2010 as the Record Date for for the proposed Bonus issue in the proportion of Five new fully paid equity shares of Rs. 10/- each for every Two equity shares of Rs. 10/- each held as on the record date.</p>
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<p><a href="http://www.rupya.com/2010/03/16/chromatic-india-bonus-issue-record-date-fixed/14247">Chromatic India Bonus Issue – Record Date Fixed</a> is a post from: <a href="http://www.rupya.com">First Blog for Indian Financial Market</a></p>
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Posted by Lalitha on March 16, 2010 04:51 AM · permalink
<p><a href="http://feedads.g.doubleclick.net/~a/plhXFT7j_zkmrbYXq5cWp-KNGx4/0/da"><img src="http://feedads.g.doubleclick.net/~a/plhXFT7j_zkmrbYXq5cWp-KNGx4/0/di" border="0" ismap="true"></img></a><br/>
<a href="http://feedads.g.doubleclick.net/~a/plhXFT7j_zkmrbYXq5cWp-KNGx4/1/da"><img src="http://feedads.g.doubleclick.net/~a/plhXFT7j_zkmrbYXq5cWp-KNGx4/1/di" border="0" ismap="true"></img></a></p><p>Empower Industries India Ltd has informed the market that the company has fixed record date for the Bonus issue , the record date is set as March 25, 2010 for the purpose of Issue of Bonus Shares in the Ratio of 23:2 (Twenty three new Equity Shares for every 2 existing Equity shares held) to the existing Shareholders of the Company.</p>
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<p><a href="http://www.rupya.com/2010/03/16/empower-industries-bonus-issue-record-date-fixed/14245">Empower Industries Bonus Issue – Record Date Fixed</a> is a post from: <a href="http://www.rupya.com">First Blog for Indian Financial Market</a></p>
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Posted by Lalitha on March 16, 2010 04:49 AM · permalink
The report on Lehman Brothers' collapse is out, and it apparently includes a smoking gun against the auditor. Prison Planet alleges that "The firm’s auditor, Ernst & Young, one of the four biggest auditing firms in the world, failed in its oversight role:" In May 2008, a Lehman Senior Vice President, Matthew Lee, wrote a letter to management alleging accounting improprieties; in the course of investigating the allegations, Ernst & Young was advised by Lee on June 12, 2008 that Lehman used $50 billion of Repo 105 transactions to temporarily move assets off balance sheet and quarter end.The next day -- on June 13, 2008 -- Ernst & Young met with the Lehman Board Audit Committee but did not advise it about Lee’s assertions, despite an express direction from the Committee to advise on all allegations raised by Lee. Ernst & Young took virtually no action to investigate the Repo 105 allegations. Ernst & Young took no steps to question or challenge the non-disclosure by Lehman of its use of $50 billion of temporary, off-balance sheet transactions. Colorable claims exist that Ernst & Young did not meet professional standards, both in investigating Lee’s allegations and in connection with its audit and review of Lehman’s financial statements. Now, I haven't read it in depth. But, on first blush, that looks directly analogous to the conditions that wiped out Arthur Andersen. (Agreement on Business Insider.) The Audit industry will now feel the old Chinese curse: to live in interesting times......
Posted by iang on March 16, 2010 02:25 AM · permalink
Posted by Deepak Singh on March 16, 2010 12:35 AM · permalink
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<a href="http://feedads.g.doubleclick.net/~a/JNzYY6B_6MPDE2QGZofcx7xqJX8/1/da"><img src="http://feedads.g.doubleclick.net/~a/JNzYY6B_6MPDE2QGZofcx7xqJX8/1/di" border="0" ismap="true"></img></a></p><ol>
<li><span class="Mild up3"><a href="http://www.google.co.in/trends/hottrends?q=mayawati&date=2010-3-16&sa=X">mayawati</a></span></li>
<li><span class="Mild up9"><a href="http://www.google.co.in/trends/hottrends?q=ugadi+2010+panchangam&date=2010-3-16&sa=X">ugadi 2010 panchangam</a></span></li>
<li><span class="Mild down2"><a href="http://www.google.co.in/trends/hottrends?q=ugadi+sms&date=2010-3-16&sa=X">ugadi sms</a></span></li>
<li><span class="Mild down1"><a href="http://www.google.co.in/trends/hottrends?q=gudi+padwa+sms&date=2010-3-16&sa=X">gudi padwa sms</a></span></li>
<li><span class="Mild new"><a href="http://www.google.co.in/trends/hottrends?q=ugadi+pachadi&date=2010-3-16&sa=X">ugadi pachadi</a></span></li>
<li><span class="Mild down4"><a href="http://www.google.co.in/trends/hottrends?q=dd+vs+rr&date=2010-3-16&sa=X">dd vs rr</a></span></li>
<li><span class="Mild down2"><a href="http://www.google.co.in/trends/hottrends?q=ugadi+scraps&date=2010-3-16&sa=X">ugadi scraps</a></span></li>
<li><span class="Mild up1"><a href="http://www.google.co.in/trends/hottrends?q=mayawati+garland&date=2010-3-16&sa=X">mayawati garland</a></span></li>
<li><span class="Mild down3"><a href="http://www.google.co.in/trends/hottrends?q=marathi+sms&date=2010-3-16&sa=X">marathi sms</a></span></li>
<li><span class="Mild down3"><a href="http://www.google.co.in/trends/hottrends?q=navratri+sms&date=2010-3-16&sa=X">navratri sms</a></span></li>
<li><span class="Mild down3"><a href="http://www.google.co.in/trends/hottrends?q=ugadi+messages&date=2010-3-16&sa=X">ugadi messages</a></span></li>
<li><span class="Mild equal"><a href="http://www.google.co.in/trends/hottrends?q=vikruti+nama+year+panchangam&date=2010-3-16&sa=X">vikruti nama year panchangam</a></span></li>
<li><span class="Mild equal"><a href="http://www.google.co.in/trends/hottrends?q=delhi+daredevils+vs+rajasthan+royals&date=2010-3-16&sa=X">delhi daredevils vs rajasthan royals</a></span></li>
<li><span class="Mild down4"><a href="http://www.google.co.in/trends/hottrends?q=antivirus+free+download&date=2010-3-16&sa=X">antivirus free download</a></span></li>
<li><span class="Mild new"><a href="http://www.google.co.in/trends/hottrends?q=ugadi+recipes&date=2010-3-16&sa=X">ugadi recipes</a></span></li>
<li><span class="Mild down2"><a href="http://www.google.co.in/trends/hottrends?q=ugadi+greetings&date=2010-3-16&sa=X">ugadi greetings</a></span></li>
<li><span class="Mild down1"><a href="http://www.google.co.in/trends/hottrends?q=ugadi+subhakankshalu&date=2010-3-16&sa=X">ugadi subhakankshalu</a></span></li>
<li><span class="Mild down3"><a href="http://www.google.co.in/trends/hottrends?q=happy+ugadi&date=2010-3-16&sa=X">happy ugadi</a></span></li>
<li><span class="Mild down1"><a href="http://www.google.co.in/trends/hottrends?q=ugadi+wishes&date=2010-3-16&sa=X">ugadi wishes</a></span></li>
<li><span class="Mild up2"><a href="http://www.google.co.in/trends/hottrends?q=metacafe+18+only&date=2010-3-16&sa=X">metacafe 18 only</a></span></li>
</ol>
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<p><a href="http://www.rupya.com/2010/03/16/mayawati-ugadi-2010-panchangam-ugadi-sms-gudi-padwa-sms/14244">mayawati, ugadi 2010 panchangam, ugadi sms, gudi padwa sms, …</a> is a post from: <a href="http://www.rupya.com">First Blog for Indian Financial Market</a></p>
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Posted by Ganapathy on March 16, 2010 12:03 AM · permalink
<p>Interesting series on emotions with Dan Gilbert</p>
<p style="text-align: center;"><a href="http://www.pbs.org/thisemotionallife/series"><strong>Click Here To See: Learn About Emotions With PBS: Watch This Emotional Life With Dan Gilbert</strong></a></p>
<p><strong>About The Series(via PBS)</strong></p>
<blockquote><p>The Emmy Award-winning team of Vulcan Productions and the producers of NOVA have created a three-part series that explores improving our social relationships, learning to cope with depression and anxiety, and becoming more positive, resilient individuals.The series was produced by Kunhardt McGee Productions.</p>
<p>Harvard psychologist and best-selling author of <em>Stumbling on Happiness</em>, Professor Daniel Gilbert, talks with experts about the latest science on what makes us “tick” and how we can find support for the emotional issues we all face.</p>
<p>Each episode weaves together the compelling personal stories of ordinary people and the latest scientific research along with revealing comments from celebrities like Chevy Chase, Larry David, Alanis Morissette, Robert Kennedy, Jr., and Richard Gere.</p></blockquote>
<p><strong>Episode Guide (via PBS)</strong></p>
<blockquote><p><strong>Episode 1: Family, Friends & Lovers</strong></p>
<p>The first episode, <em>Family, Friends & Lovers</em>, looks at the importance of relationships and why they are central to our emotional well-being.</p>
<p>We meet a young boy adopted from a Russian orphanage, whose story illustrates how a lack of attachment in infancy fundamentally shapes his ability to build relationships for years to come. We meet the young parents of newborn twins, a couple in therapy for a troubled marriage, a teenager who was bullied with tragic consequences, two women grappling with the stress of workplace conflicts and other characters. Through their stories we achieve a better understanding of the importance of social</p>
<p><strong>Episode 2: Facing Our Fears</strong></p>
<p>In the second episode, <em>Facing Our Fears</em>, we look at emotions that are commonly regarded as obstacles to happiness — such as anger, fear, anxiety, and despair.</p>
<p>Our brains are designed for survival, and the negative emotions they create are vital to that mission. But those negative emotions can spiral out of control with debilitating effects. We meet a woman whose inability to control her temper is jeopardizing her relationships, a college student whose fear of flying is limiting her life and a teenager who is struggling to overcome clinical depression on the eve of attending college. We also meet veterans with post-traumatic stress disorder and follow their journeys to find effective treatment.</p>
<p>Across the episode, science reminds us that we are of two minds — a rational brain that’s relatively new and an emotional brain that’s older than time. Sometimes emotion overwhelms reason, sometimes reason outwits emotion, and it is the endless struggle that makes our lives so painful, so joyous and so interesting.</p>
<p><strong>Episode 3: Rethinking Happiness</strong></p>
<p>The last episode, <em>Rethinking Happiness</em>, explores happiness. It is so critical to our well-being, and, yet, it remains such an elusive goal for many of us.</p>
<p>We meet individuals facing major turning points in their lives — a job loss, a cancer diagnosis, the death of a child, an accident — as well as those facing more common struggles. We learn from the latest research that we often incorrectly predict what will bring us greater happiness, leading us to look for it in the wrong places.</p>
<p>As the study of behavior turns more toward positive emotions, we explore the latest research on the activities and qualities that foster them, such as meditation, compassion, forgiveness and altruism. We also share the remarkable stories of resilient individuals that scientists are studying to learn more about us all, including a man who overcame an abusive childhood to become a renowned surgeon and a Vietnam veteran who survived torture, solitary confinement and seven years as a POW, yet emerged emotionally unscathed. Understanding why some people have the ability to bounce back after disaster strikes, while others do not, sheds light on how all of us can lead happier, more fulfilling lives.</p>
<p>The film ends by coming full circle to the understanding that it is the quality of our relationships — with friends, family and the larger community — that ultimately defines our happiness.</p>
<p style="text-align: center;"><a href="http://www.pbs.org/thisemotionallife/series"><strong>Click Here To See: Learn About Emotions With PBS: Watch This Emotional Life With Dan Gilbert</strong></a></p>
</blockquote>
<div class="relatedposts"><strong>Other Related Posts From Simoleon Sense:</strong><ol><li><a href='http://www.simoleonsense.com/dan-gilbert-why-our-inability-to-predict-emotions-may-be-beneficial/' rel='bookmark' title='Permanent Link: Dan Gilbert-Why Our Inability To Predict Emotions May Be Beneficial!'>Dan Gilbert-Why Our Inability To Predict Emotions May Be Beneficial!</a></li>
<li><a href='http://www.simoleonsense.com/interview-with-daniel-gilbert/' rel='bookmark' title='Permanent Link: Interview with Daniel Gilbert'>Interview with Daniel Gilbert</a></li>
<li><a href='http://www.simoleonsense.com/what-grunts-reveal-the-universal-recognition-of-basic-emotions-through-nonverbal-emotional-vocalizations/' rel='bookmark' title='Permanent Link: What Grunts Reveal! The universal recognition of basic emotions through nonverbal emotional vocalizations'>What Grunts Reveal! The universal recognition of basic emotions through nonverbal emotional vocalizations</a></li>
<li><a href='http://www.simoleonsense.com/famous-psychologist-daniel-gilbert-why-the-brain-talks-to-itself-sources-of-error-in-emotional-prediction/' rel='bookmark' title='Permanent Link: Famous Psychologist Daniel Gilbert: Why The Brain Talks To Itself: Sources Of Error In Emotional Prediction'>Famous Psychologist Daniel Gilbert: Why The Brain Talks To Itself: Sources Of Error In Emotional Prediction</a></li>
</ol></p>
Posted by Miguel on March 15, 2010 11:53 PM · permalink
<p>Time to get curious about companies.</p>
<p style="text-align: center;"><a href="http://papers.ssrn.com/sol3/papers.cfm?abstract_id=1308286"><strong>Click Here To Read: Curiosity Improves Memory</strong></a></p>
<p><strong>Abstract (via SSRN)</strong></p>
<p>Curiosity has been described as the “wick in the candle of learning” but its underlying mechanisms are not well-understood. We scanned subjects with fMRI while they read trivia questions. The level of curiosity when reading questions is correlated with activity in caudate regions previously suggested to be involved in anticipated reward or encoding prediction error. This finding led to a behavioral study showing that subjects spend more scarce resources (either limited tokens, or waiting time) to find out answers when they are more curious. The fMRI also showed that curiosity increases activity in memory areas when subjects guess incorrectly, which suggests that curiosity may enhance memory for surprising new information. <strong>This prediction about memory enhancement is confirmed in a behavioral study- higher curiosity in the initial session is correlated with better recall of surprising answers 10 days later.</strong></p>
<p style="text-align: center;"><a href="http://papers.ssrn.com/sol3/papers.cfm?abstract_id=1308286"><strong>Click Here To Read: Curiosity Improves Memory</strong></a></p>
<div class="relatedposts"><strong>Other Related Posts From Simoleon Sense:</strong><ol><li><a href='http://www.simoleonsense.com/curiosity-is-a-matter-of-life-and-death/' rel='bookmark' title='Permanent Link: Curiosity Is a Matter of Life and Death'>Curiosity Is a Matter of Life and Death</a></li>
<li><a href='http://www.simoleonsense.com/video-neurobiology-of-memory-how-do-we-acquire-consolidate-and-recall-memory/' rel='bookmark' title='Permanent Link: Video Neurobiology of Memory: How Do We Acquire, Consolidate and Recall Memory'>Video Neurobiology of Memory: How Do We Acquire, Consolidate and Recall Memory</a></li>
<li><a href='http://www.simoleonsense.com/is-expert-memory-better-than-non-expert-memory/' rel='bookmark' title='Permanent Link: Is Expert Memory Better Than Non-Expert Memory'>Is Expert Memory Better Than Non-Expert Memory</a></li>
<li><a href='http://www.simoleonsense.com/our-memory-of-time-is-shortened-when-we-believe-products-and-events-are-related/' rel='bookmark' title='Permanent Link: Our memory of time is shortened when we believe products and events are related'>Our memory of time is shortened when we believe products and events are related</a></li>
</ol></p>
Posted by Miguel on March 15, 2010 11:46 PM · permalink
<p><strong>Qualcomm Inc.</strong> (<a href='http://seekingalpha.com/symbol/qcom' alt='QUALCOMM Inc.' title='QUALCOMM Inc.'>QCOM</a>), the largest mobile chipset developer of the world for CDMA technology, is planning to bid for upcoming broadband wireless access (BWA) spectrum in India. The auction is likely to take place in 2011. The Ministry of Telecommunication of the Indian Government is exploring several options to auction the available spectrum for next-generation high-speed 3G networks.</p><p>Growing market traction of 3G wireless devices in India is likely to spur growth at Qualcomm. At present, India has more than 150 million CDMA wireless subscribers; out of which half a million are 3G subscribers.</p>
Posted by Zacks.com on March 15, 2010 08:26 PM · permalink
<span style="font-weight:bold;">"Investing is not a game where the guy with the 160 IQ beats the guy with the 130 IQ.Once you have ordinary intelligence,what you need is the temperament to control the urges that get other people into trouble in investing"-Warren Buffet.<br /><br />Coming from the legendary investor,this piece of advice should serve as the guiding post for all those who want to be successful investors in equities.The world"s most successful investor believes that emotions play a major role in influencing investors into making grave errors which are then compounded by taking further rash actions.This creates the kind of market fluctuation that we are now witnessing.<br /><br />Sometimes back i read an article, I assume its a couple of years ago when i was 19,it struck me a lot.It was by Whitney Tilson,which said "Peter bernstein in "Against the Gods" states that evidence reveals repeated patterns of irrationality,inconsistency and incompetence in the ways human beings arrives at a decisions and choices when faced with uncertainty.<br /><br />It means that when we are faced with uncertainty,like in the stock markets where different opinions exists,the decision making is often irrational and inconsistent and such errors are most likely repeated by individuals. While after every debacle most investors seems to believe that they have now learnt their lesson,but many of them repeats the same mistakes.<br /><br />Almost everyone in the equity markets makes huge mistakes.They often buy dud stocks,Invests on rumours despite knowing that it is not advisable,refuse to sell when prices fall etc.Examples are in numberable check in our very own orkut stocks community itself.However only those who are able to avoid repeating their mistakes are ones who succeeds.Such individuals are very,very few.This also reinforces the buffet advice that it does not need extra brilliance to make profitable investment decisions but it needs a lot of discipline.<br /><br />I know these article of mine would find a lot of people who would be influenced after going through the full coverage.But to be very frank and honest most would find it like an ind ultion.Still I am making these points because i believe that we are headed for volatile times in equity markets over the next few months.Even a bit of discipline and caution may prove to be a world of good for all.Times would come where investors would be torn between fundamentals and strong newsflow.Crude prices,expensive valuations,FII trend will create uncertainty.The indices could swing wildly as bulls and bears will slug it out according to their faith.<br /><br />Amidst all this,investors could swing between extremes of panic buying and selling.In such times,it would be important to remember Buffets"s advice."Avoid herd mentality and keep your own counsel.<br /><br />Extra labouring over market volatility,diverse analyst opinions and unsolicited broker advice would confuse investors.It would be important that they maintain balance and avoid panic reactions while buying or selling.<br /><br /><br />Regards,<br />ARUN<br />I may be reached at-arunanalyst@rediffmail.com </span><div class="blogger-post-footer"><script type="text/javascript"><!--
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Posted by arun (noreply@blogger.com) on March 15, 2010 02:40 PM · permalink
<p><span>It was a highly volatile trading session on the bourses today. While markets traded in the red in the morning session, strong buying activity in the ensuing hours pushed the indices above the dotted line. Since then they oscillated to either side of yesterday's close before closing marginally into the red. While the BSE Sensex closed lower by around 2 points, the NSE Nifty lost around 8 points. Midcap and small cap stocks were not spared either as they lost around 1% each. Losses were largely seen in capital goods and banking stocks. <br><br>As regards global markets, Asian indices closed mixed today while European indices have opened on a weak note. The rupee was trading at Rs 45.64 to the dollar at the time of writing. </span></p>
Posted by Equitymaster on March 15, 2010 11:26 AM · permalink
The company trades for $96 million, but has no debt and cash and marketable securities of $64 million. The company has been consistently profitable over the last several quarters, and it finished 2009 with operating income of $12 million, which results in a return on equity of 15%!
So how does the company manage to turn in such stellar results while most companies out there are struggling to cut costs to avoid large blots of red ink? The company saw large increases in public notice placements, due to the large number of foreclosures in California and Arizona. Public notice advertising for foreclosures is mandated by law, and so this company is likely to continue to benefit from the foreclosures that are continuing to occur in this tough labour market.
Worried about how the company is investing its large stable of marketable securities? How about its corporate governance structure, or how it allocates its retained earnings? We've recently seen a few companies that are not so shareholder friendly, could this be another one of them? Value investors and fans of corporate governance will be pleased to know that the company's chairman is none other than Charlie Munger, Warren Buffett's right-hand man at Berkshire Hathaway.
Disclosure: None
Posted by Saj Karsan (sajid.karsan@barelkarsan.com) on March 15, 2010 10:17 AM · permalink
<p><a href="http://feedads.g.doubleclick.net/~a/Cnxg5JTf8j6CVovMbxMlrekmDSM/0/da"><img src="http://feedads.g.doubleclick.net/~a/Cnxg5JTf8j6CVovMbxMlrekmDSM/0/di" border="0" ismap="true"></img></a><br/>
<a href="http://feedads.g.doubleclick.net/~a/Cnxg5JTf8j6CVovMbxMlrekmDSM/1/da"><img src="http://feedads.g.doubleclick.net/~a/Cnxg5JTf8j6CVovMbxMlrekmDSM/1/di" border="0" ismap="true"></img></a></p><p>Gate 2010 Results are announced and it can be seen here through this link.<br />
<strong>Gate 2010 Results – <a href="http://www.gate.iitb.ac.in/gate2010_website/result1.php" target="new">http://www.gate.iitb.ac.in/gate2010_website/result1.php</a><br />
</strong><br />
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<strong><br />
Graduate Aptitude Test in Engineering (GATE) </strong>is an all India examination administered and conducted jointly by the Indian Institute of Science and seven Indian Institutes of Technology on behalf of the National Coordination Board – GATE, Department of Higher Education, Ministry of Human Resource Development (MHRD), Government of India.<br />
The GATE committee, which comprises of representatives from the administering institutes, is the sole authority for regulating the examination and declaring the results.</p>
<p>GATE is conducted through the constitution of eight zones. The zones and the corresponding administrative institutes are:<br />
Zone-1: Indian Institute of Science Bangalore<br />
Zone-2: Indian Institute of Technology Bombay<br />
Zone-3: Indian Institute of Technology Delhi<br />
Zone-4: Indian Institute of Technology Guwahati<br />
Zone-5: Indian Institute of Technology Kanpur<br />
Zone-6: Indian Institute of Technology Kharagpur<br />
Zone-7: Indian Institute of Technology Madras<br />
Zone-8: Indian Institute of Technology Roorkee<br />
The overall coordination and responsibility of conducting GATE 2010 lies with Indian Institute of Technology Guwahati, designated as the Organising Institute for GATE 2010 . </p>
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<p><a href="http://www.rupya.com/2010/03/15/gate-2010-results/14240">Gate 2010 Results</a> is a post from: <a href="http://www.rupya.com">First Blog for Indian Financial Market</a></p>
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Posted by Lalitha on March 15, 2010 06:47 AM · permalink
<p><a href="http://feedads.g.doubleclick.net/~a/STvz1o8OO7ZCo19LF-JkSGbp3kM/0/da"><img src="http://feedads.g.doubleclick.net/~a/STvz1o8OO7ZCo19LF-JkSGbp3kM/0/di" border="0" ismap="true"></img></a><br/>
<a href="http://feedads.g.doubleclick.net/~a/STvz1o8OO7ZCo19LF-JkSGbp3kM/1/da"><img src="http://feedads.g.doubleclick.net/~a/STvz1o8OO7ZCo19LF-JkSGbp3kM/1/di" border="0" ismap="true"></img></a></p><p>ARSS Infrastructure Projects informed the market that the company has bagged orders worth 207.86 crore m the list of order secured is ranging from jan 1 2010 to this month.<br />
<a href="http://www.rupya.com/wp/wp-content/uploads/2010/03/arss-infra-order-news.jpg"><img src="http://www.rupya.com/wp/wp-content/uploads/2010/03/arss-infra-order-news-254x299.jpg" alt="" title="arss infra order news" width="254" height="299" class="alignnone size-medium wp-image-14238" /></a></p>
<blockquote><p>On the Financial side ARSS Infrastructure Projects reported a net profit of Rs 51.04 crore on sales of Rs 624.38 crore in the year ended March 2009.which puts its EPS at 34.40 with equity capital at Rs 14.84 crore and Face value per share is Rs 10.The current share price of Rs 757.10, give a PE multiple of 22.01. </p></blockquote>
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<p><a href="http://www.rupya.com/2010/03/15/arss-infra-bags-order-worth-207-86-crores/14237">ARSS Infra bags order worth 207.86 Crores</a> is a post from: <a href="http://www.rupya.com">First Blog for Indian Financial Market</a></p>
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Posted by Lalitha on March 15, 2010 06:41 AM · permalink
<p><strong>I spend 8 hours every Sunday putting this together…If you like this roundup kindly include a reference to <a href="http://www.simoleonsense.com">SimoleonSense.com</a> .Thanks!</strong></p>
<p style="text-align: center;">
<p style="text-align: center;">
<strong> Weekly Cartoon </strong></p>
<p style="text-align: center;"><a title="Dilbert.com" href="http://dilbert.com/strips/comic/2010-03-13/"><img class="aligncenter" src="http://dilbert.com/dyn/str_strip/000000000/00000000/0000000/000000/80000/4000/500/84510/84510.strip.gif" border="0" alt="Dilbert.com" width="512" height="157" /></a></p>
<p style="text-align: center;"><strong>Joke Of The Week – via <a href="http://www.netfunny.com/rhf/jokes/87/stocks.html">Net Funny</a> </strong></p>
<p style="text-align: left;">
These two women were walking through the forest when they hear this voice from under a log. Investigating, the women discovered the voice was coming from a frog:</p>
<p>“Help me, ladies! I am an investment banker who, through an evil witch’s curse, has been transformed into a frog. If one of you will kiss me, I’ll be returned to my former state!”</p>
<p>The first woman took out her purse, grabbed the frog, and stuffed it inside her handbag. The second woman, aghast, screamed, “Didn’t you hear him? If you kiss him, he’ll turn into an investment banker?”</p>
<p>The second woman replied, “Sure, but these days a talking frog is worth more than an investment banker!”</p>
<p style="text-align: center;"><strong>Most Important Articles of The Week</strong></p>
<p><strong><a href="http://pss.sagepub.com/content/early/2010/03/09/0956797610364958.full.pdf+html?rss=1">Choice Overload: How Humans Cognitively Manage an Abundance of Mate Options </a></strong>- via PsychScience – To contribute to researchers’ understanding of how humans choose mates, we examined how the number of mate options influenced the dating decisions made by 1,868 women and 1,870 men across 84 speed-dating events. Multilevel modeling of these decisions revealed that when faced with abundant choice, choosers paid less attention to characteristics requiring more time to elicit and evaluate (e.g., occupational status and educational attainment) and more attention to characteristics that are quickly and easily assessed (e.g., height and weight). Human mate choice sits squarely within the domain of general cognition, as this study shows it to be constrained by bounds on cognitive resources.</p>
<p><strong><a href="http://online.barrons.com/article/SB126843866021061329.html?mod=BOL_hps_mag">Words of wisdom from Seth Klarman & How Lehman Screwed Up</a></strong> – via Barrons – HOCUS-POCUS. THAT, IT EMERGES, SANK LEHMAN Brothers and damn near the entire financial system, to say nothing of the economy as a whole. So charged a court-appointed examiner named Anton Valukas, may his tribe increase, in a 2,200-page bombshell of a report made public on Thursday by U.S. Bankruptcy Judge James Peck.</p>
<p><strong><a href="http://www.nsf.gov/discoveries/disc_summ.jsp?cntn_id=116497&WT.mc_id=USNSF_1">Much of U.S. Water Safe, But Problems Remain</a> </strong>- via NSF – The United States has benefitted from centuries of improvements in drinking water safety, and most Americans can trust that clean water comes from their taps. Yet, closer inspection is showing that on a house-by-house basis, water quality is not guaranteed–even in communities with high marks for water safety.<br />
<a href="http://www.voxeu.org/index.php?q=node/4742"><strong><br />
Do higher cigarette prices deter smoking?</strong>-</a> via Voxeu- Do higher cigarette prices deter smoking? This column finds that policymakers in developing countries could reduce cigarette consumption by youths by raising taxes. A 10% increase in the price will reduce youth cigarette demand by 18.3%<br />
<a href="http://math.nyu.edu/faculty/avellane/BMadoff5.pdf"><strong><br />
What do Quants have to do with Bernard Madoff?</strong> </a>- via Money Sciene – The collapse of the phenomenal Ponzi scheme perpetrated by Bernard Madoff will hurt those who were gullible enough to trust him. It should be noted, however, that many investors were directed to Bernard Madoff Investment Securities by intermediaries – the so-called funds of hedge funds — who now will have to answer for not doing proper due diligence on behalf of their clients.</p>
<p><strong><a href="http://www.cognitionandculture.net/index.php?option=com_content&view=article&id=612:how-many-minutes-does-it-take-for-social-norms-to-inhibit-survival-instinct&catid=3:publications&Itemid=3">Group Think: How many minutes does it take for social norms to inhibit survival instinct?-</a></strong> via Cognition & Culture – This study explores the interaction of natural survival instincts and internalized social norms using data on the sinking of the Titanic and the Lusitania. We show that time pressure appears to be crucial when explaining behavior under extreme conditions of life and death. Even though the two vessels and the composition of their passengers were quite similar, the behavior of the individuals on board was dramatically different. On the Lusitania, selfish behavior dominated (which corresponds to the classical homo economicus); on the Titanic, social norms and social status (class) dominated, which contradicts standard economics. This difference could be attributed to the fact that the Lusitania sank in 18 min, creating a situation in which the short-run flight impulse dominated behavior. On the slowly sinking Titanic (2 h, 40 min), there was time for socially determined behavioral patterns to reemerge. Maritime disasters are traditionally not analyzed in a comparative manner with advanced statistical (econometric) techniques using individual data of the passengers and crew. Knowing human behavior under extreme conditions provides insight into how widely human behavior can vary, depending on differing external conditions.”</p>
<p><strong><a href="http://mulley.ie/googlesearch/">People do not pay much attention to more than three results on a Google search result page</a> </strong>- via Mulley – Also that the ads on the right hand side of the results page are barely looked at.</p>
<p style="text-align: center;"><strong>Miguel’s Weekly Favorites</strong></p>
<p><strong><a href="http://www.nytimes.com/2010/03/14/weekinreview/14giridharadas.html">Africa’s Gift to Silicon Valley: How to Track a Crisis </a></strong>- via NYT – Imagine if any Pakistani could send an anonymous text message to the authorities suggesting where to look. Each location could be plotted on a map. The dots would be scattered widely, perhaps, with promising leads indistinguishable from rubbish. But on a given day, a surge of dots might point to the same village, in what could not be coincidence. Troops could be ordered in.</p>
<p><strong><a href="http://www.spring.org.uk/2010/03/psychology-of-alcohol-attentional-myopia.php?utm_source=feedburner&utm_medium=feed&utm_campaign=Feed%3A+PsychologyBlog+%28PsyBlog%29">What Alcohol Does to Your Mind: Attentional Myopia </a></strong>- via PsyBlog – Similarly psychologists have found that alcohol can have all sorts of counter-intuitive effects. Studies have even shown that after drinking people can become less aggressive and less likely to engage in risky sexual behaviours. Doesn’t sound like alcohol does it? So, how can we understand and explain all these different states?</p>
<p><strong><a href="http://greenbackd.com/2010/03/12/performance-of-darwins-darlings/">Performance of Darwin’s darlings </a></strong>- via Greenbackd – Yesterday I highlighted an investment strategy I first read about in a Spring 1999 research report called Wall Street’s Endangered Species by Daniel J. Donoghue, Michael R. Murphy and Mark Buckley, then at Piper Jaffray and now at Discovery Group, a firm founded by Donoghue and Murphy. The premise, simply stated, is to identify undervalued small capitalization stocks where a catalyst in the form of a merger or buy-out might emerge to close the value gap. I believe the strategy is a natural extension for Greenbackd, and so I’m going to explore it in some depth over the next few weeks.</p>
<p><strong><a href="http://valueinvestingworld.blogspot.com/2010/03/ted-talk-bob-thurman-says-we-can-be.html?utm_source=feedburner&utm_medium=feed&utm_campaign=Feed%3A+ValueInvestingWorld+%28Value+Investing+World%29">Video: Bob Thurman says we can be Buddhas </a></strong>- via Value Investing World -</p>
<p><strong><a href="http://pss.sagepub.com/content/early/2010/03/11/0956797610364968.full.pdf+html?rss=1">Self-Control Without a ”Self”? : Common Self-Control Processes in Humans and Dogs </a></strong>- via Psych Science – Self-control constitutes a fundamental aspect of human nature. Yet there is reason to believe that human and nonhuman selfcontrol processes rely on the same biological mechanism—the availability of glucose in the bloodstream. Two experiments tested this hypothesis by examining the effect of available blood glucose on the ability of dogs to exert self-control. Experiment 1 showed that dogs that were required to exert self-control on an initial task persisted for a shorter time on a subsequent unsolvable task than did dogs that were not previously required to exert self-control. Experiment 2 demonstrated that providing dogs with a boost of glucose eliminated the negative effects of prior exertion of self-control on persistence; this finding parallels a similar effect in humans. These findings provide the first evidence that self-control relies on the same limited energy resource among humans and nonhumans. Our results have broad implications for the study of self-control processes in human and nonhuman species.</p>
<p><strong><a href="http://greenbackd.com/2010/03/11/hunting-endangered-species/">Hunting endangered species</a> -</strong> via Greenbackd – Back in the spring of 1999, when the world was enamored of dot coms and not much else, three guys at Piper Jaffray, Daniel J. Donoghue, Michael R. Murphy and Mark Buckley*, produced a superb research report called Wall Street’s Endangered Species. The thesis of the paper was that there were a large number of undervalued companies with strong fundamentals and solid growth prospects in the small cap sector (defined as stocks with a market capitalization between $50M and $250M) lacking a competitive auction for their shares. Donoghue, Murphy and Buckley argued that the phenomenon was secular, and only mergers or buy-outs would ”close their value gap:”</p>
<p><a href="http://thefallibleinvestor.com/2010/03/12/my-quantitative-valuation-model-part-2/"><strong>Why my valuation model assumes a business will only have profitable asset growth for five years </strong> </a>- via Fallible Investor – I think the most difficult part of valuing a business is deciding what value, if any, to attach to the business’s earnings growth prospects. In this post, I discuss how I value a business’s potential growth. This post is unavoidably quite technical.</p>
<p><strong><a href="http://www3.interscience.wiley.com/journal/123315733/abstract?CRETRY=1&SRETRY=0">Trajectory of risky decision making for potential gains and losses from ages 5 to 85 </a>-</strong> via JBDM – The ability to make advantageous decisions in the face of uncertainty is an essential human skill, yet the development of such abilities over the lifespan is still not well understood. In the current study, from childhood through older adulthood, we tracked the developmental trajectory of risk taking for gains and losses, and expected value (EV) sensitivity in risky choices. In the gain domain, risk-taking decreased consistently across the lifespan. In the loss domain, risk-taking was relatively constant across ages, a result we attribute to the pervasiveness of loss aversion. EV sensitivity showed an inverted-U-shaped function, increasing from childhood to adulthood but then decreasing for the elderly, which occurred for both risky gains and risky losses. This finding is consistent with neuropsychological and neuroanatomical evidence concerning the role of the frontal lobe in decision making, which is relatively late to develop during childhood but may degrade earlier in the later years</p>
<p style="text-align: center;"><strong>Exclusive Features (The Must Reads) </strong></p>
<p style="text-align: left;">
<strong><a href="http://economiclogic.blogspot.com/2010/02/posting-calories-in-restaurants-is.html">Posting calories in restaurants is Pareto improving </a>- </strong>via Economi Logic – With increasing frequency, it is proposed that restaurants should post on their menus nutritional information. The restaurants resist this because they think it may shoo customers away, or at least make them eat less (assuming they underestimated the calories, which may not be always true). But if they eat less, why not make portions smaller and thus reduce costs and possibly increase profits?<br />
<a href="http://bostonreview.net/BR35.2/spitzer.php"><br />
<strong>The Rules: Government’s proper role in the market Eliot Spitzer </strong></a>- via Boston Review – Every day we read the headlines, feel the tensions, observe the consequences of the recent failures of market and government. Having a serious conversation about how to remedy these failures lies at the heart of current American politics.</p>
<p><strong><a href="http://mindblog.dericbownds.net/2010/03/thoughts-of-randomness-enhance.html">Thoughts of randomness enhance supernatural beliefs. </a></strong>- via Deric Bownds – They take their data to suggest:<br />
…that belief in supernatural sources of control, such as God and karma, may function, in part, to defend against distress associated with randomness, even when the perception of randomness is not related to traumatic events.</p>
<p><strong><a href="http://blogs.hbr.org/schrage/2010/03/moneyball-geeks-and-the-new-er.html?utm_source=feedburner&utm_medium=feed&utm_campaign=Feed%3A+harvardbusiness+%28HBR.org%29">Moneyball, Geeks, and the New Era of Human Performance Analytics </a></strong>- via Harvard – Even if you loathe sports and think pro-athletes are selfish morons, you couldn’t find a better discussion about what it really takes to get the best out of competitive, highly-paid high performers than the “What Geeks Don’t Get: The Limits of Moneyball” all-star panel at this past weekend’s MIT Sloan’s Sports Analytics conference. Management committees at Goldman Sachs, General Electric, and Toyota could do worse than snag a transcript of the spirited session for their own personnel policy and planning efforts. For people owning, leading, or managing talented teams of temperamental super-performers, the future of hiring, on-boarding, pay-for-performance, and firing will look shockingly similar to what confronts the NFL, NBA, MLB, and Champions League soccer. Just win, baby.<br />
<a href="http://papers.ssrn.com/sol3/papers.cfm?abstract_id=1566067"><strong><br />
Patinformatics – An Emerging Scientific Discipline</strong> </a> – via SSRN – Patinformatics is the application of informatics methods to provide the solution to the patent information and the analysis related problems. Although this term was introduced only a few years ago, but its applications can be in a wide range of scientific and business related fields. Method and techniques of different origins have now merged into one discipline that is full of interesting and informative activities. This paper primarily focuses on presenting a general overview of patinformatics and their application in business and various scientific fields including chemicals and pharmaceuticals with special reference to India. Although all the areas of science and technology can benefit from patinformatics methods, still there are many challenging patent information and analysis related problems waiting for solutions through further development of patinformatics.</p>
<p><strong><a href="http://freakonomics.blogs.nytimes.com/2010/03/08/how-to-become-an-insta-expert-a-confession/?utm_source=feedburner&utm_medium=feed&utm_campaign=Feed%3A+FreakonomicsBlog+%28Freakonomics+Blog%29">How to Become an Insta-Expert: A Confession</a></strong> – via Freakonomics – It’s time for me to confess: I’ve barely seen any movies this year, and know little about the industry. But I didn’t want to get left out of the water-cooler conversations about the Oscars. And so these forecasts were simply a fun application of prediction markets. By quickly scanning the latest market prices, I managed to become an insta-expert. In fact, I managed to become such an insta-expert that I’ll be returning to the water cooler today to gloat about my successful picks in all the major award categories.</p>
<p><strong><a href="http://www.theatlantic.com/business/archive/2010/03/where-wall-street-and-hollywood-collide/37451/?rss=37451">Where Wall Street and Hollywood Collide</a> </strong>- via The Atlantic – Are you a film buff who can’t seem to find a way to put your excessive knowledge of movies to good use? Do you think: “Gosh, if I knew as much about stocks as I do about Hollywood, I’d be rich!”? Well, your time may have finally come. Investment firm Cantor Fitzgerald will be starting an online service in April that will allow users to bet on the success (or failure) of movies.<br />
<a href="http://www.washingtonpost.com/wp-dyn/content/article/2010/03/12/AR2010031204127.html?hpid=topnews"><br />
<strong>Corporate Candidates Running For Office? Campaign stunt launches a corporate ‘candidate’ for Congress</strong></a><strong>-</strong> via Washington Post – Murray Hill might be the perfect candidate for this political moment: young, bold, media-savvy, a Washington outsider eager to reshape the way things are done in the nation’s capital. And if these are cynical times, well, then, it’s safe to say Murray Hill is by far the most cynical.</p>
<p><strong><a href="http://www.newyorker.com/online/blogs/johncassidy/2010/03/the-second-mortgage-conundrum.html">The Second-Mortgage Conundrum </a></strong>- via The New Yorker – Since putting up my last post, I’ve been doing some more research into the vexed question of whether big banks are hiding enormous losses on home equity loans and other second mortgages. The Roosevelt Institute’s Mike Konczal reckons that is what is happening. He argues that this practice makes a mockery of last year’s “stress tests,” which the Treasury and Fed carried out to assure investors of banks’ solvency. Finding reliable data on this issue isn’t easy, but after speaking to industry experts and government officials, as well as reading various reports, this is what I’ve found out.</p>
<p style="text-align: center;"><strong>Finance & Investing</strong></p>
<p><a href="http://manualofideas.com/blog/2010/03/bloomberg_financial_middlemen.html"><br />
<strong>Financial Middlemen Can Cost Up To 6% Annually </strong></a>- via Manual Of Ideas – Financial Middlemen Can Cost Up To 6% Annually<a href="http://paul.kedrosky.com/archives/2010/03/michael_lewis_o_7.html?utm_source=feedburner&utm_medium=feed&utm_campaign=Feed%3A+InfectiousGreed+%28Paul+Kedrosky%27s+Infectious+Greed%29"></a></p>
<p><strong><a href="http://paul.kedrosky.com/archives/2010/03/michael_lewis_o_7.html?utm_source=feedburner&utm_medium=feed&utm_campaign=Feed%3A+InfectiousGreed+%28Paul+Kedrosky%27s+Infectious+Greed%29"><br />
Video: Michael Lewis on 60 Minutes </a></strong>- Writer Michael Lewis got a bonanza of press for his new book this weekend. The television show 60 Minutes profiled him and his “The Big Short” in a piece called “Inside the Collapse”.</p>
<p><strong><a href="http://www.informationarbitrage.com/2010/03/its-time-to-end-the-fasb-and-shake-up-the-sec.html?utm_source=feedburner&utm_medium=feed&utm_campaign=Feed%3A+InformationArbitrage+%28Information+Arbitrage%29">It’s time to end the FASB (and shake up the SEC)</a> – </strong>via Information Arbitrage – Recent “revelations” concerning the Lehman debacle highlighted a very important point: media and regulators alike have had their heads in the sand for decades. The headline of a recent New York Times article plainly makes the point: “Findings on Lehman Take Even Experts by Surprise.” If this is really true, it is quite an indictment on either the lack of intelligence or truthfulness of our regulators. Sadly, either one could be the case.</p>
<p><strong><a href="http://www.voxeu.org/index.php?q=node/4749">How important was the worldwide use of wholesale funds for the international transmission of the US subprime crisis? </a></strong>- via Voxeu- How did a seemingly small shock to the US financial markets manage to spread so far, so quickly? This column argues that the heavy reliance on short-term wholesale funding is to blame. It follows that the discussions of regulatory reform should focus on the risks associated with the liability structure of banks.</p>
<p><strong><a href="http://manualofideas.com/blog/2010/03/bains_global_private_equity_re.html">Bain’s Global Private Equity Report 2010 </a></strong>- via MOI – Bain & Company has released an interesting report for those with an interest in private equity.<br />
<strong><a href="http://www.moneyscience.com/Finance_Focus/Marco_Avellaneda_-_Risk_Magazine%27s_Quant_of_the_Year_2010.html"><br />
Marco Avellaneda – Risk Magazine’s Quant of the Year 2010 – via MoneyScience </a></strong>- His paper, “A dynamic model for hard to borrow stocks”, co-authored with Mike Lipkin of Katama Trading, was published in Risk in June last year (pages 92–97), and has quickly become a classic of market microstructure literature. “Marco addresses complicated issues in his characteristic style, with simplicity and clarity,” says Alex Lipton, co-head of the global quantitative group at Bank of America Merrill Lynch and visiting professor of mathematics at Imperial College London.</p>
<p><strong><a href="http://www.distressed-debt-investing.com/2010/03/shareholder-activism-and-distressed.html">Shareholder Activism and Distressed Debt </a>-</strong> via DDI – Earlier in the week, I discussed some interesting details and facets about the bankruptcy of Visteon. Well today, Davidson Kempner, Brigade, and Plainfield Asset Management (all places I thoroughly respect and where I know analysts) filed a 13D on Visteon. According to the document, shares were bought between 2/26/2010 and 3/8/2010 meaning some of the lots were purchased in mid 20 cent range.</p>
<p><a href="http://www.nakedcapitalism.com/2010/03/frank-partnoy-lehman-examiner-punted-on-valuation.html?utm_source=feedburner&utm_medium=feed&utm_campaign=Feed%3A+NakedCapitalism+%28naked+capitalism%29"><strong>Frank Partnoy: Lehman Examiner Punted on Valuation</strong> </a>- via Naked Capitalism – The buzz on the Lehman bankruptcy examiner’s report has focused on Repo 105, for good reason. That scheme is one powerful example of how the balance sheets of major Wall Street banks are fiction. It also shows why Congress must include real accounting reform in its financial legislation, or risk another collapse. (If you have 8 minutes to kill, here is my recent talk on the off-balance sheet problem, from the Roosevelt Institute financial conference.)</p>
<p><a href="http://www.roubini.com/roubini-monitor/258528/the_rise_of_sovereign_risk_in_advanced_economies?utm_source=feedburner&utm_medium=feed&utm_campaign=Feed%3A+NourielRoubinisGlobalEconomonitor+%28Nouriel+Roubini%27s+Global+EconoMonitor%29"><strong>Roubini: The Rise of Sovereign Risk in Advanced Economies</strong> </a>- via RGE – The Great Recession of 2008-09 was triggered by the excessive debt accumulation and leverage of private agents – households, financial institutions and even a fat tail of the corporate sector – in many advanced economies. And while there is a lot of talk about deleveraging, the reality is that private sector debt ratios have stabilized at very high levels while, as a consequence of the fiscal stimulus to get economies out of a severe recession and the socialization of part of private losses, there is now a massive re-leveraging of the public sector with deficits in excess of 10% of GDP in many advanced economies and debt to GDP ratios expected to sharply rise and in some cases double in the next few years.</p>
<p style="text-align: center;"><strong>Videos & Media</strong></p>
<p><strong><a href="http://www.ted.com/talks/gary_vaynerchuk_do_what_you_love_no_excuses.html">Gary Vaynerchuk: Do what you love (no excuses!) </a>-</strong> via TED – At the Web 2.0 Expo, entrepreneur Gary Vaynerchuk gives a shot in the arm to dreamers and up-and-comers who face self-doubt. The Internet has made the formula for success simpler than ever, he argues. So there’s now no excuse not to do what makes you happy.</p>
<p style="text-align: center;"><strong>Academic Papers </strong></p>
<p style="text-align: left;"><strong><br />
</strong> <a href="http://papers.ssrn.com/sol3/papers.cfm?abstract_id=1556382"><strong>Equity Risk Premiums (ERP): Determinants, Estimation and Implications – The 2010 Edition</strong> </a> – via SSRN – Equity risk premiums are a central component of every risk and return model in finance and are a key input into estimating costs of equity and capital in both corporate finance and valuation. Given their importance, it is surprising how haphazard the estimation of equity risk premiums remains in practice. We begin this paper by looking at the economic determinants of equity risk premiums, including investor risk aversion, information uncertainty and perceptions of macroeconomic risk. In the standard approach to estimating equity risk premiums, historical returns are used, with the difference in annual returns on stocks versus bonds over a long time period comprising the expected risk premium. We note the limitations of this approach, even in markets like the United States, which have long periods of historical data available, and its complete failure in emerging markets, where the historical data tends to be limited and volatile. We look at two other approaches to estimating equity risk premiums – the survey approach, where investors and managers are asked to assess the risk premium and the implied approach, where a forward-looking estimate of the premium is estimated using either current equity prices or risk premiums in non-equity markets. We also look at the relationship between the equity risk premium and risk premiums in the bond market (default spreads) and in real estate (cap rates) and how that relationship can be mined to generated expected equity risk premiums. We close the paper by examining why different approaches yield different values for the equity risk premium, and how to choose the “right” number to use in analysis.</p>
<p><strong><a href="http://arxiv.org/abs/1003.1153">Quantum Dating Market</a></strong> – via Arxiv – We consider the dating market decision problem under the quantum mechanics point of view. Quantum states whose associated amplitudes are modified by men strategies are used to represent women. Grover quantum search algorithm is used as a playing strategy. Success is more frequently obtained by playing quantum than playing classic.</p>
<p><a href="http://www.bis.org/review/r100311b.pdf"><strong>Brief history of the Reserve Bank of Australia</strong> </a>- via BIS – Fifty years ago, the Reserve Bank of Australia commenced operations as Australia’s central bank. That occasion, though, was the end of a long journey.</p>
<p style="text-align: center;"><strong>Other Very Interesting Articles</strong></p>
<p><strong><a href="http://www.thepsychfiles.com/2010/03/episode-118-are-you-really-listening-sanford-meisner-acting-and-psychology/">Are You REALLY Listening? Sanford Meisner, Acting and Psychology</a></strong> – via Psych Files – A lot of people get into psychology because they think they have good listening skills, but are you really a good listener? What does it mean to be a good listener? In this episode I look at a fascinating acting exercise created by Sanford Meisner called the “repetition exercise” which trains actors how to truly listen. Are you as good a listener as these trained actors?</p>
<p><strong><a href="http://www.scientificamerican.com/article.cfm?id=science-of-love">Keeping Love Alive: Scientific American Does Its Part </a></strong>- via SciAm – With half of all first marriages ending in divorce, how can we build lasting relationships? A Scientific American event explores the science of love.</p>
<p><strong><a href="http://www.overcomingbias.com/2010/03/ancestor-worship-is-efficient.html">Ancestor Worship is Efficient </a></strong>- via Overcoming Bias – Maybe not “worship” exactly, but at least great respect and deference. By “efficient” I mean that it increases economists’ standard “cost-benefit” concept of welfare. That is: as usually estimated, the benefits of deferring greatly to distant ancestors far outweigh its costs. And while this does suggest that we should defer more to ancestors, it also shows just how much distorted prices can break economists’ favorite tools.</p>
<p><strong><a href="http://gearybehaviourcenter.blogspot.com/2010/03/drinking-and-studying-they-dont-mix.html">Drinking and studying: they don’t mix</a></strong> – via Geary Behavior Center – This paper examines the effect of alcohol consumption on student achievement by exploiting the discontinuity in drinking at age 21 at a college in which the minimum legal drinking age is strictly enforced. We find that drinking causes significant reductions in academic performance, particularly for the highest-performing students. This suggests that the negative consequences of alcohol consumption extend beyond the narrow segment of the population at risk of more severe, low-frequency, outcomes. Thus, our results indicate policies that combat drinking—particularly binge drinking that occurs around age 21—may well have large positive effects that are broader than previously known.</p>
<p style="text-align: center;"><strong>Infographics (Click On Images For Larger Versions)</strong></p>
<h3><a href="http://chartporn.org/2010/03/12/understand-health-reform/">Understand Health Reform</a> – via Chart Porn</h3>
<p><a href="http://chartporn.org/wp-content/uploads/2010/03/image71.png"><img class="alignnone" src="http://chartporn.org/wp-content/uploads/2010/03/image71.png" alt="" width="286" height="206" /></a></p>
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<li><a href='http://www.simoleonsense.com/weekly-wisdom-roundup-61-weekly-readings-for-smarter-types/' rel='bookmark' title='Permanent Link: Weekly Wisdom Roundup #61 (Weekly Readings For Smarter Types)'>Weekly Wisdom Roundup #61 (Weekly Readings For Smarter Types)</a></li>
<li><a href='http://www.simoleonsense.com/weekly-wisdom-roundup-62-weekly-readings-for-smarter-types/' rel='bookmark' title='Permanent Link: Weekly Wisdom Roundup #62 (Weekly Readings For Smarter Types)'>Weekly Wisdom Roundup #62 (Weekly Readings For Smarter Types)</a></li>
<li><a href='http://www.simoleonsense.com/weekly-wisdom-roundup-65-links-you-should-read-but-won%e2%80%99t%e2%80%a6lazy/' rel='bookmark' title='Permanent Link: Weekly Wisdom Roundup #65 (Links you should read, but won’t…lazy!)'>Weekly Wisdom Roundup #65 (Links you should read, but won’t…lazy!)</a></li>
</ol></p>
Posted by Miguel on March 15, 2010 03:21 AM · permalink
<p style="text-align: center;"><a href="http://www.sciencedaily.com/releases/2010/03/100314150924.htm"><strong>Psychopaths’ Brains Wired to Seek Rewards, No Matter the Consequences</strong></a></p>
<p><strong>Introduction – via ScienceDaily —</strong></p>
<p><strong></strong> The brains of psychopaths appear to be wired to keep seeking a reward at any cost, new research from Vanderbilt University finds. The research uncovers the role of the brain’s reward system in psychopathy and opens a new area of study for understanding what drives these individuals.</p>
<p>“This study underscores the importance of neurological research as it relates to behavior,” Dr. Francis S. Collins, director of the National Institutes of Health, said. “The findings may help us find new ways to intervene before a personality trait becomes antisocial behavior.”</p>
<p>The results were published March 14, 2010, in <em>Nature Neuroscience</em>.</p>
<p>“Psychopaths are often thought of as cold-blooded criminals who take what they want without thinking about consequences,” Joshua Buckholtz, a graduate student in the Department of Psychology and lead author of the new study, said. “We found that a hyper-reactive dopamine reward system may be the foundation for some of the most problematic behaviors associated with psychopathy, such as violent crime, recidivism and substance abuse.”</p>
<p style="text-align: center;"><a href="http://www.sciencedaily.com/releases/2010/03/100314150924.htm"><strong>Psychopaths’ Brains Wired to Seek Rewards, No Matter the Consequences</strong></a></p>
<p></p>
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<li><a href='http://www.simoleonsense.com/video-how-do-we-predict-the-future-brains-rewards-and-addiction/' rel='bookmark' title='Permanent Link: Video: How Do We Predict the Future: Brains, Rewards and Addiction'>Video: How Do We Predict the Future: Brains, Rewards and Addiction</a></li>
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</ol></p>
Posted by Miguel on March 15, 2010 02:05 AM · permalink
Posted by Deepak Singh on March 15, 2010 01:21 AM · permalink
<p style="text-align: center;"><a href="http://www.project-syndicate.org/commentary/shiller70/English"><strong>Click Here To Read: Robert Shiller: A Crisis of Understanding</strong></a></p>
<p><strong>Introduction (Via Robert Shiller @ Project Syndicate)</strong></p>
<p>Few economists predicted the current economic crisis, and there is little agreement among them about its ultimate causes. So, not surprisingly, economists are not in a good position to forecast how quickly it will end, either.</p>
<p>Of course, we all know the proximate causes of an economic crisis: people are not spending, because their incomes have fallen, their jobs are insecure, or both. But we can take it a step further back: people’s income is lower and their jobs are insecure because they were not spending a short time ago – and so on, backwards in time, in a repeating feedback loop.</p>
<p>It is a vicious circle, but where and why did it start? Why did it worsen? What will reverse it? It is to these questions that economists have been unable to offer clear answers.</p>
<p>The state of economic knowledge was just as bad in the Great Depression that followed the 1929 stock market crash. Economists did not predict that event, either. In the 1920’s, some warned about an overpriced stock market, but they did not predict a decade-long depression affecting the entire economy.</p>
<p>Late in the Great Depression, in August 1938, an article by Ralph M. Blagden in <em>The Christian Science Monitor</em> reported an informal set of interviews with US “professors, banking experts, union leaders, and representatives of business associations and political factions,” all of whom were given the same question: “What causes recessions?” The multiplicity of answers seemed bewildering, and did not inspire confidence that anyone knew what was causing the deepest crisis of capitalism.</p>
<p>The causes given were “distributed widely among government, labor, industry, international politics and policies.” They included misguided government interference with markets, high income and capital gains taxes, mistaken monetary policy, pressures towards high wages, monopoly, overstocked inventories, uncertainty caused by the reorganization plan for the Supreme Court, rearmament in Europe and fear of war, government encouragement of labor disputes, a savings glut because of population shrinkage, the passing of the frontier, and easy credit before the depression.</p>
<p>Although economic theory today is much improved, if we ask people about the cause of the current crisis, we will mostly get the same answers. We would certainly hear some new ones, too: unprecedented real-estate bubbles, a global savings glut, international trade imbalances, exotic financial contracts, sub-prime mortgages, unregulated over-the-counter markets, rating agencies’ errors, compromised real-estate appraisals, and complacency about counterparty risk.</p>
<p style="text-align: center;"><a href="http://www.project-syndicate.org/commentary/shiller70/English"><strong>Click Here To Read: Robert Shiller: A Crisis of Understanding</strong></a></p>
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</ol></p>
Posted by Miguel on March 15, 2010 01:17 AM · permalink
<p>Found this via the excellent<a href="http://manualofideas.com/blog/2010/03/a_conversation_with_george_sor.html"> Manual of Ideas Blog. </a></p>
<p><strong><a href="http://vimeo.com/9177742">Watch The Video Below Or Click Here For Our Subscribers</a></strong><br />
<object classid="clsid:d27cdb6e-ae6d-11cf-96b8-444553540000" width="400" height="320" codebase="http://download.macromedia.com/pub/shockwave/cabs/flash/swflash.cab#version=6,0,40,0"><param name="allowfullscreen" value="true" /><param name="allowscriptaccess" value="always" /><param name="src" value="http://vimeo.com/moogaloop.swf?clip_id=9177742&server=vimeo.com&show_title=1&show_byline=1&show_portrait=0&color=&fullscreen=1" /><embed type="application/x-shockwave-flash" width="400" height="320" src="http://vimeo.com/moogaloop.swf?clip_id=9177742&server=vimeo.com&show_title=1&show_byline=1&show_portrait=0&color=&fullscreen=1" allowscriptaccess="always" allowfullscreen="true"></embed></object></p>
<p><a href="http://vimeo.com/9177742"><br />
</a></p>
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Posted by Miguel on March 15, 2010 01:01 AM · permalink
<p><a href="http://feedads.g.doubleclick.net/~a/YsHa_wZVNIZ4f0TdhECTPvNcmHc/0/da"><img src="http://feedads.g.doubleclick.net/~a/YsHa_wZVNIZ4f0TdhECTPvNcmHc/0/di" border="0" ismap="true"></img></a><br/>
<a href="http://feedads.g.doubleclick.net/~a/YsHa_wZVNIZ4f0TdhECTPvNcmHc/1/da"><img src="http://feedads.g.doubleclick.net/~a/YsHa_wZVNIZ4f0TdhECTPvNcmHc/1/di" border="0" ismap="true"></img></a></p><table border="0" cellspacing="4" cellpadding="2">
<tr>
<td style='background-color:#CADDEC;FONT-FAMILY: Verdana,Arial,San-serif; FONT-SIZE: 8pt; FONT-WEIGHT: bold; Color:#012540;'><b>Mutual Fund</b></td>
<td style='FONT-FAMILY: Verdana,Arial,San-serif; FONT-SIZE: 8pt; Color:#012540;'> HDFC Mutual Fund </td>
</tr>
<tr>
<td style='background-color:#CADDEC;FONT-FAMILY: Verdana,Arial,San-serif; FONT-SIZE: 8pt; FONT-WEIGHT: bold; Color:#012540;'><b>Scheme Type</b></td>
<td style='FONT-FAMILY: Verdana,Arial,San-serif; FONT-SIZE: 8pt; Color:#012540;'> Close Ended </td>
</tr>
<tr>
<td style='background-color:#CADDEC;FONT-FAMILY: Verdana,Arial,San-serif; FONT-SIZE: 8pt; FONT-WEIGHT: bold; Color:#012540;'><b>Scheme Category</b></td>
<td style='FONT-FAMILY: Verdana,Arial,San-serif; FONT-SIZE: 8pt; Color:#012540;'> Income </td>
</tr>
<tr>
<td style='background-color:#CADDEC;FONT-FAMILY: Verdana,Arial,San-serif; FONT-SIZE: 8pt; FONT-WEIGHT: bold; Color:#012540;'><b>Launch Date</b></td>
<td style='FONT-FAMILY: Verdana,Arial,San-serif; FONT-SIZE: 8pt; Color:#012540;'> 15-Mar-2010 </td>
</tr>
</table>
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<p><a href="http://www.amfiindia.com/nfo.aspx?intId=4610#123">HDFC FMP 367D March 2010 (1)</a> is a post from: <a href="http://www.rupya.com">First Blog for Indian Financial Market</a></p>
<div class="feedflare">
<a href="http://feeds.feedburner.com/~ff/Stocks?a=iSngSdgLKV4:k5s7-HMTMFY:yIl2AUoC8zA"><img src="http://feeds.feedburner.com/~ff/Stocks?d=yIl2AUoC8zA" border="0"></img></a>
</div><img src="http://feeds.feedburner.com/~r/Stocks/~4/iSngSdgLKV4" height="1" width="1"/>
Posted by kalyan on March 15, 2010 12:21 AM · permalink
<p style="text-align: center;"><strong><a href="http://www.voxeu.org/index.php?q=node/4743"><strong>Click Here To Read: Are married women less risk-averse? If so, why? </strong></a></strong></p>
<p><strong>Summary (Via Voxeu)</strong><br />
Does marriage make people less averse to risk? This column argues that this is the case for women, but not for men. But married women’s different attitude towards risk has fallen over time as the prevalence of marriage in society has faded. For women who work, marriage makes no difference.</p>
<p><strong>Introduction & Excerpts (Via Voxeu)</strong></p>
<p>A growing literature has explored gender differences in making financial decisions. At the same time, there is a parallel literature on the implications of marital status. This research generally reveals a higher degree of risk aversion among women and single people. Studies such as Sundén and Surette (1998), Jianakoplos and Bernasek (1998), and Barber and Odean (2001) consider marital status and gender jointly and conclude that single women exhibit the most cautious attitude.</p>
<p>A common explanation for these findings is that different choices directly reflect innate risk aversion, i.e., an exogenous personal characteristic that exhibits little time variation. With a focus on gender, Crozon and Gneezy (2009) survey the experimental literature and confirm that the stereotype that women are more risk-averse is supported by a robust and significant body of evidence which also points to nature, rather than nurture, as the driving force. But they also notice that gender differences in risk preferences are attenuated, and even disappear, when the subjects of the investigation are appropriately selected; particularly among managers and professional business persons, women no longer behave differently than men. They conclude by suggesting that different subsamples of the workforce may reveal similar patterns.</p>
<p>In a recent paper (Bertocchi et al. 2010), we focus on the impact of marital status on portfolio decisions, investigating the presence, determinants, and evolution of gender differences. In order to address these questions, we have two hypotheses.</p>
<p><strong>Marriage as a risk-free asset</strong></p>
<p>Our first hypothesis is that married women should become less risk-averse because marriage itself can be considered a fairly “safe asset”, especially for women. The idea of marriage as a source of financial security comes from the fact that women tend to have a more insecure societal role. Imagine there are two components of wealth: financial assets and the present value of labour earnings. By getting married, a woman becomes entitled to at least a portion of the gender gap in labour earnings. When no risks are associated with marriage status and the gender earnings gap, or when such risks are uncorrelated with the risks on financial returns, marriage can indeed be viewed as a sort of safe asset that decreases the overall variance of a married woman’s asset position. From this position of relative “safety”, the propensity to invest in risky financial assets should be higher for a married woman. Moreover, the difference between single and married women should be more pronounced than the difference between single and married men, originating a gender gap for the impact of marital status.</p>
<p style="text-align: center;"><a href="http://www.voxeu.org/index.php?q=node/4743"><strong>Click Here To Read: Are married women less risk-averse? If so, why? </strong><br />
</a></p>
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Posted by Miguel on March 14, 2010 09:48 PM · permalink
<p>Ahhh I love me a very good detective story..</p>
<p style="text-align: center;"><a href="http://www.boston.com/bostonglobe/ideas/articles/2010/03/14/who_steals_art/?rss_id=Boston+Globe+--+Ideas+section"><strong>Click Here To Read: The Psychology of Art Thieves </strong></a></p>
<p><strong>Introduction (Via Boston)</strong></p>
<p>Twenty years ago this week, two men dressed as police officers duped the guards at the Isabella Stewart Gardner Museum and took off with three Rembrandts, a Vermeer, and a handful of other works. It remains the largest theft in the history of the art world, and the daring midnight heist still captures our imagination: Who stole them? Was it for money, or to trade for an IRA prisoner? What kind of black market netherworld did the stolen paintings vanish into?</p>
<p>Charles Hill, a former Scotland Yard detective who has followed the world of art theft closely for decades, says that world doesn’t deserve the air of glamour and mystery that books or movies give it. To steal great works like the Gardner paintings, he says, is less a daring act than a sign of an unimaginative thief, since it’s nearly impossible to sell a stolen iconic work for anywhere near its true value. A far bigger problem for the art world is the peddling of fakes, or the outright destruction of art.</p>
<div>
<p>Hill, who has helped recover a museum’s worth of stolen art over the years — including paintings by Vermeer, Goya, and the iconic “The Scream” by Munch — says he expects the Gardner paintings to turn up again someday. But he’s skeptical about the newfangled, CSI-inspired techniques that are being pitched as the ultimate art crime solver. When art vanishes, it doesn’t leave helpful hairs or bloodstains. And to track it down, he said, there’s no match for the old-style work of the traditional gumshoe.</p>
</div>
<div>
<p>“What I do is I talk to people,” says Hill. “I seek out criminals in a one-to-one manner. Just talk to them straight.”</p>
</div>
<div>
<p>Hill spoke to Ideas by phone from his home office in southwest London.</p>
</div>
<div>
<p><strong>IDEAS: </strong>How is the psychological makeup of an art thief different from, say, that of a bank robber?</p>
</div>
<div>
<p><strong>HILL: </strong>You’ve got to distinguish what I think are three categories of art thief. The first is the one who makes the money. That’s the thief who steals by deception, frauds, and fake forgeries. The people who do that, and there are a lot of them, make money. They’re also reasonably highly sophisticated and exceptionally bright.</p>
</div>
<div>
<p>Then there’s the trophy-hunting art thieves. They don’t make much money at all and cause themselves endless aggravation. But they enjoy doing it. It gives them a buzz.</p>
</div>
<p>There’s a third category now. These are thieves with purpose. Roughly six months before 9/11, in Afghanistan, Mullah Omar ordered the destruction of the Bamyan statues. A few years ago, his chief acolyte in Pakistan destroyed others. Again, he just destroyed it for the sake of destroying it. They’re prepared to steal by destroying art. The problem with this war on terror we’re fighting is that people look at the fighting. They don’t realize that underneath it is destructiveness of anybody else’ s way of thinking. That theft by destruction is a serious problem and will grow.</p>
<p style="text-align: center;"><a href="http://www.boston.com/bostonglobe/ideas/articles/2010/03/14/who_steals_art/?rss_id=Boston+Globe+--+Ideas+section"><strong>Click Here To Read: The Psychology of Art Thieves </strong></a></p>
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Posted by Miguel on March 14, 2010 09:31 PM · permalink
<p><strong>Introduction (via Big Think)</strong></p>
<p>Our legal system is based on a fallacious view of the human individual that does little to account for how we actually make decisions. Jon Hanson explains his project to change the law to fit with how humans—who can rarely explain their reasoning behind a decision—really think.<br />
<a href="http://bigthink.com/ideas/19008"><br />
<strong>Watch The Video Below Or Click Here For Our Subscribers</strong></a><br />
<script src="http://video.bigthink.com/player.js?autoplay=0&height=288&deepLinkEmbedCode=V1aTk5MTozWefL0wTSp56m1SoW2BCVEV&width=512&embedCode=V1aTk5MTozWefL0wTSp56m1SoW2BCVEV"></script></p>
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Posted by Miguel on March 14, 2010 09:06 PM · permalink
<p>Very cool article via WSJ</p>
<p>H/T <a href="http://paul.kedrosky.com/archives/2010/03/readings_water.html?utm_source=feedburner&utm_medium=feed&utm_campaign=Feed%3A+InfectiousGreed+%28Paul+Kedrosky%27s+Infectious+Greed%29">Paul Kedrosky </a></p>
<p style="text-align: center;"><a href="http://online.wsj.com/article/SB10001424052748703447104575118070057646044.html?mod=WSJ_latestheadlines"><strong>Click Here To Read: Didier Sornette: The Professor Who Chases Financial Bubbles </strong></a></p>
<p><strong>Introduction (Via WSJ)</strong></p>
<p>Didier Sornette has immersed his life in risk. He rides motorcycles, windsurfs and water skis long stretches of a 120-mile route between Nice and Corsica. Now comes a daunting professional challenge: “The Financial Bubble Experiment.”</p>
<p>Mr. Sornette, 52 years old, is the director of the Financial Crisis Observatory at the Swiss Federal Institute of Technology in Zurich, or as he calls it, “the MIT of Europe.” Late last year, he launched the bubble experiment by identifying four developing bubbles and forecasting when they’ll peak. His predictions are locked away in encrypted files that can’t be altered, to be revealed only when the forecasted bubble peaks have passed, on May 1.</p>
<p><strong>This sounds like reflexivity!!! (via WSJ)</strong></p>
<p>And he continued to flex his forecasting muscles, looking for certain “fingerprints” in market prices that help him identify bubbles. While there’s lots of complex math behind it, one key pattern is essentially this:<strong> periods of unsustainable growth, in which the growth rate is itself accelerating, punctuated by waves of panicky selling. Key elements are the “positive feedback” generated by optimistic investors pushing the price ever higher into bubble territory even as more pessimistic investors produce waves of selling. In the midst of this tug of war, there’s an accelerated development of the bubble.</strong></p>
<p>Only about two-thirds of bubbles end in a crash, Mr. Sornette says. But in his view, as the bubble develops, it becomes increasingly unstable so that any number of small disturbances could cause it to pop. (He uses the analogy of a ruler held vertically on a finger. Any small movement will cause it to fall.) So while market-watchers often seek the causes of a crash in the events immediately preceding it, he believes the fundamental origin is in the longer-term build-up of instability.</p>
<p style="text-align: center;"><a href="http://online.wsj.com/article/SB10001424052748703447104575118070057646044.html?mod=WSJ_latestheadlines"><strong>Click Here To Read: Didier Sornette: The Professor Who Chases Financial Bubbles </strong></a></p>
<div class="relatedposts"><strong>Other Related Posts From Simoleon Sense:</strong><ol><li><a href='http://www.simoleonsense.com/didier-sornette-diagnosis-and-prediction-of-tipping-points-in-financial-markets-crashes-and-rebounds/' rel='bookmark' title='Permanent Link: Didier Sornette -Diagnosis and Prediction of Tipping Points in Financial Markets: Crashes and Rebounds'>Didier Sornette -Diagnosis and Prediction of Tipping Points in Financial Markets: Crashes and Rebounds</a></li>
<li><a href='http://www.simoleonsense.com/the-psy-fi-blog-wrestles-with-austrian-economics-financial-bubbles/' rel='bookmark' title='Permanent Link: The Psy-Fi Blog Wrestles With Austrian Economics & Financial Bubbles'>The Psy-Fi Blog Wrestles With Austrian Economics & Financial Bubbles</a></li>
<li><a href='http://www.simoleonsense.com/financial-bubbles-excess-cash-momentum-and-incomplete-information/' rel='bookmark' title='Permanent Link: Financial Bubbles: Excess Cash, Momentum, and Incomplete Information'>Financial Bubbles: Excess Cash, Momentum, and Incomplete Information</a></li>
<li><a href='http://www.simoleonsense.com/mebane-fabers-top-books-on-investment-bubbles-and-stock-distributions/' rel='bookmark' title='Permanent Link: Mebane Faber’s: Top Books On Investment Bubbles and Stock Distributions'>Mebane Faber’s: Top Books On Investment Bubbles and Stock Distributions</a></li>
</ol></p>
Posted by Miguel on March 14, 2010 09:03 PM · permalink
<p>That’s right, an update on Dan Gilbert, author of “Stumbling on Happiness”…</p>
<p>H/T Persaud</p>
<p style="text-align: center;"><strong><a href="http://harvardmagazine.com/2010/03/pleasure-by-proxy">Click Here To Read: Pleasure by Proxy: The Latest Happines Research by Dan Gilbert </a></strong></p>
<p style="text-align: center;"><strong></strong></p>
<p><strong>Introduction (Via Craig Lambert@ Harvard Magazine)</strong></p>
<p>Your parents recommend taking a Caribbean cruise and tell you about a discount deal. You’ve never taken a cruise and aren’t so sure you’d enjoy it, so you dig up some information on the Web and even watch a couple of videos. You recollect the times you’ve been on ships, and your past visits to Caribbean islands—rum drinks, aqua waters. But will you really enjoy an eight-day cruise? Turns out there is a better way to answer this question: ask anyone who has just gotten off a cruise boat—a total stranger is fine. That way, you’ll be 30 to 60 percent more likely to accurately predict your own experience than by basing your decision on painstaking research and inner speculations.</p>
<p><strong>Excerpts : (via Craig Lambert @ Harvard Magazine)</strong></p>
<p>They discovered that the direct experience of another person trumps the conjecturing of our own minds.</p>
<p><strong>The surrogate’s verdict is a useful guide because we are far more similar to each other than we realize. “</strong>If you look at other human beings, we seem amazingly varied,” Gilbert explains. “What we forget is that if a Martian came and looked at us, he wouldn’t be able to tell any of us apart.” The same holds for our inner reactions. “One of the ways we’re quite similar is in our hedonic or emotional reactions to events,” he continues. “Yes, it’s true that you may like strawberry ice cream more than chocolate, whereas I prefer chocolate. But that shouldn’t obscure the much bigger point: <em>everybody</em> likes ice cream more than they like gall-bladder surgery. Everybody prefers a weekend in Paris to being hit over the head with a two-by-four.” Economic markets exist for this very reason: to a large degree, people like the same things.</p>
<p><strong>Key Finding (via Craig Lambert @ Harvard Magazine)</strong></p>
<p>This suggests that ideas trump reality. But in predicting your <em>likings,</em> even someone else’s direct experience trumps mental hypotheses—which is why surrogation works. But to be helpful, the surrogate’s experience must be <em>recent</em>.</p>
<p style="text-align: center;"><strong><a href="http://harvardmagazine.com/2010/03/pleasure-by-proxy">Click Here To Read: Pleasure by Proxy: The Latest Happines Research by Dan Gilbert</a></strong></p>
<div class="relatedposts"><strong>Other Related Posts From Simoleon Sense:</strong><ol><li><a href='http://www.simoleonsense.com/interview-with-daniel-gilbert/' rel='bookmark' title='Permanent Link: Interview with Daniel Gilbert'>Interview with Daniel Gilbert</a></li>
<li><a href='http://www.simoleonsense.com/dan-gilbert-how-to-predict-what-youll-like-ask-a-stranger/' rel='bookmark' title='Permanent Link: Dan Gilbert: How to Predict What You’ll Like? Ask a Stranger'>Dan Gilbert: How to Predict What You’ll Like? Ask a Stranger</a></li>
<li><a href='http://www.simoleonsense.com/famous-psychologist-daniel-gilbert-why-the-brain-talks-to-itself-sources-of-error-in-emotional-prediction/' rel='bookmark' title='Permanent Link: Famous Psychologist Daniel Gilbert: Why The Brain Talks To Itself: Sources Of Error In Emotional Prediction'>Famous Psychologist Daniel Gilbert: Why The Brain Talks To Itself: Sources Of Error In Emotional Prediction</a></li>
<li><a href='http://www.simoleonsense.com/dan-gilbert-why-our-inability-to-predict-emotions-may-be-beneficial/' rel='bookmark' title='Permanent Link: Dan Gilbert-Why Our Inability To Predict Emotions May Be Beneficial!'>Dan Gilbert-Why Our Inability To Predict Emotions May Be Beneficial!</a></li>
</ol></p>
Posted by Miguel on March 14, 2010 08:55 PM · permalink
<p><a href="http://feedads.g.doubleclick.net/~a/-HM9WA610uX7ydc4SqOCa-uNnkU/0/da"><img src="http://feedads.g.doubleclick.net/~a/-HM9WA610uX7ydc4SqOCa-uNnkU/0/di" border="0" ismap="true"></img></a><br/>
<a href="http://feedads.g.doubleclick.net/~a/-HM9WA610uX7ydc4SqOCa-uNnkU/1/da"><img src="http://feedads.g.doubleclick.net/~a/-HM9WA610uX7ydc4SqOCa-uNnkU/1/di" border="0" ismap="true"></img></a></p><span style="font-family:arial;font-size:85%;">Some of you, on reading the title must be wondering – Rohit is again on his options trip ! this dude is going to get kicked big time, one of these days :)</span><br /><span style="font-family:arial;font-size:85%;"><br />Well, in the spirit of learning and experimenting lets look at an options strategy, that I think marries the value investing approach with options quite well.<br /><br /><strong>What are covered calls?<br /></strong>You can read about call options </span><a href="http://en.wikipedia.org/wiki/Call_option"><span style="font-family:arial;font-size:85%;">here</span></a><span style="font-family:arial;font-size:85%;">. Selling covered calls mean selling a call option in the market while holding the underlying stock. Selling a call option without holding the underlying stock is naked selling (no its not selling without wearing your clothes :), but you could lose them if the naked selling bet goes wrong).</span><br /><span style="font-family:arial;"><br /><span style="font-size:85%;"><strong>How does it work with value investing ?<br /></strong>The logic is as follows – Suppose you hold a stock which is a mid to long term holding. Lets say you bought the stock for 60 Rs and think the fair value is 100. Now let’s assume that the stock is selling for 95 and you plan to start exiting at 100-105 as you really do not want to hold above fair value. In such as case, one can sell a call on the stock for a strike price above the current quote, say around 110-115.<br /></span><br /><span style="font-size:85%;">If the stock continues to climb, the call will get exercised and you will get the 110 exercise price + the premium amount. If the stock drops back and if you had planned to hold on to the stock for the long term as long as the price was below fair value and the fundamentals are good, then you pocket the premium and continue holding the stock.<br /></span><br /><span style="font-size:85%;"><strong>An example<br /></strong>Lets take the example of a favorite of mine – Infosys technologies. My own estimates of fair value for the stock are around 2700-3000. The stock is currently selling for around 2700 which is close to fair value.<br /></span><br /><span style="font-size:85%;">The first option for me is to sell the stock once the price crosses 2700 and be done with it. The other option is to start selling covered calls with a strike price of 3000 or higher. If the stock keeps rising and the call gets exercised, then I will end up exiting at 3000 + premium as planned. On the contrary if the stock drops from here, I can pocket the premium for free. The flip slide is that I will lose money on the stock as it drops.<br /></span><br /><span style="font-size:85%;"><strong>The risks<br /></strong>If someone ever tells you that there is no risk in an investing strategy, ask him what he is smoking or drinking.<br /></span><br /><span style="font-size:85%;">There are several risks in the above plan and it works only for a very specific situation. I would sell a covered call on a stock which I think is selling close to fair value and I would not mind holding it if it dropped below this price – the second part of the statement being the key. As a corollary, the reason I would not mind holding if the price dropped is because I think the company will continue to do well and will increase its intrinsic value at a good rate.<br /></span><br /><span style="font-size:85%;">A valid question would be – why not sell and move on? . One reason for trying this approach is plain experimentation – with limited amounts of the stock. The second reason is that I would continue to hold on to the stock for the long term as the company is still doing fine and selling covered calls increases my returns. At the same time if the stock gets too overvalued, I would exit it by selling via the covered call.<br /></span><br /><span style="font-size:85%;">If you do not want to hold the stock for the long term and would regret holding it if the price drops, then one should just sell the stock and move on. In summary this is a strategy of trying to be a bit too clever and squeezing out a few percentage points of returns.<br /></span><br /><span style="font-family:arial;font-size:85%;">As an aside which options should one sell in this case ? – I would prefer to sell the ones with the longest duration (May 2010 exercise) as I would also benefit from the </span></span><a href="http://www.investopedia.com/terms/t/timedecay.asp"><span style="font-family:arial;font-size:85%;">time decay</span></a><span style="font-family:arial;font-size:85%;"> and the premium is also worth the effort.</span><div class="blogger-post-footer"><img width='1' height='1' src='https://blogger.googleusercontent.com/tracker/7004453-4596028080201231487?l=valueinvestorindia.blogspot.com' alt='' /></div><div class="feedflare">
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Posted by Rohit Chauhan (noreply@blogger.com) on March 14, 2010 08:30 PM · permalink
<p><a href="http://feedads.g.doubleclick.net/~a/g7rq7rOqtbrtW-8qpEZ1C0G0NL8/0/da"><img src="http://feedads.g.doubleclick.net/~a/g7rq7rOqtbrtW-8qpEZ1C0G0NL8/0/di" border="0" ismap="true"></img></a><br/>
<a href="http://feedads.g.doubleclick.net/~a/g7rq7rOqtbrtW-8qpEZ1C0G0NL8/1/da"><img src="http://feedads.g.doubleclick.net/~a/g7rq7rOqtbrtW-8qpEZ1C0G0NL8/1/di" border="0" ismap="true"></img></a></p><p></p><p>With the tax-planning season about to end, most individuals are rushing around to make investments to <a href="http://www.jagoinvestor.com/2009/03/are-losses-friendly.html">minimise their tax liability</a>. And although, the last date for filing income tax returns is just a few months away (July 31), some of us are still unaware about the procedure and guidelines. Chartered accountant Rishabh Parakh, who is the director of <a href="http://moneyplantconsulting.net/index.html" target="_blank">Money Plant Consulting</a>, explains the do’s and don’ts about filing returns & doing your tax planning. Have a look at recent changes in the<a href="http://www.jagoinvestor.com/2010/02/impact-of-new-tax-slab-on-common-man.html"> Income tax slab and how it affects the common man.</a></p>
<h2><strong>Q. I have a Permanent Account Number (PAN). Do I still need to file my tax returns?</strong></h2>
<p>A. Just having a PAN number does not mean that you have to compulsorily file your tax return. As per the Income Tax Act (1961), you are required to file a “Return of Income”, if your taxable income exceeds Rs 1.60 lakh for the financial year 2009-10 (Rs1.90 lakh in case of women and Rs2.40 lakh in case of senior citizens). However, you need to have a PAN in order to file income tax returns. <a href="http://www.jagoinvestor.com/2009/07/when-to-file-your-tax-return.html">Read more </a></p>
<h2><strong>Q. What are the benefits of filing income tax returns (ITR)?</strong></h2>
<p>A. Filing ITR is really beneficial for an individual. Apart from the<em><strong> legal obligation</strong></em>, it is mostly required for purposes like:</p>
<ul type="disc">
<li class="MsoNormal">Availing any kind of loan, like home, personal or education.</li>
<li class="MsoNormal">Visa and immigration processing</li>
<li class="MsoNormal">Income proof / net worth certification</li>
<li class="MsoNormal">Refund claims (in case of excess taxes paid)</li>
<li class="MsoNormal">Applying for a higher insurance cover</li>
<li class="MsoNormal">and ultimately, <em><strong>“Peace of mind!”</strong></em><em> </em></li>
</ul>
<h2><strong>Q. How does one plan for better investments under section 80C ?</strong></h2>
<p>A. Section 80C is the most important provision under the Income Tax Act (1961). Making use of the available tax deductions can go a long way in helping individuals accumulate wealth.</p>
<p><strong>Benefits of tax planning (for FY 2008-09)</strong><br />
<center><br />
<table style="border: medium none;" border="1" cellspacing="0" cellpadding="0">
<tbody>
<tr>
<td style="border: 1pt solid windowtext; background-color: #cccccc; text-align: center; width: 85.2pt;" width="114" valign="top"><strong><span style="font-size: small;">Income (Rs)</span></strong></td>
<td style="background-color: #cccccc; text-align: center; width: 85.2pt;" width="114" valign="top"><strong><span style="font-size: small;">Tax Rate (%)</span></strong></td>
<td style="background-color: #cccccc; text-align: center; width: 85.2pt;" width="114" valign="top"><strong><span style="font-size: small;">Maximum tax savings </span></strong></p>
<p><strong><span style="font-size: small;">after 80C deductions (Rs)</span></strong></p>
<p><strong> </strong></td>
<td style="background-color: #cccccc; text-align: center; width: 85.25pt;" width="114" valign="top"><strong><span style="font-size: small;">Savings invested </span></strong></p>
<p><strong><span style="font-size: small;">@ 8% pa for 20 years (Rs)</span></strong></p>
<p><strong> </strong></td>
<td style="background-color: #cccccc; text-align: center; width: 85.25pt;" width="114" valign="top"><strong><span style="font-size: small;">Savings invested </span></strong></p>
<p><strong><span style="font-size: small;">@ 15% pa for 20 years (Rs)</span></strong></td>
</tr>
<tr>
<td style="background-color: #eeeeee; width: 85.2pt;" width="114" valign="top"><strong><span style="font-size: small;">Upto Rs 1.50 lakh</span></strong></p>
<p><strong> </strong></td>
<td style="text-align: center; width: 85.2pt;" width="114" valign="top"><span style="font-size: small;">Nil </span></td>
<td style="text-align: center; width: 85.2pt;" width="114" valign="top"><span style="font-size: small;">–</span></td>
<td style="text-align: center; width: 85.25pt;" width="114" valign="top"><span style="font-size: small;">–</span></td>
<td style="text-align: center; width: 85.25pt;" width="114" valign="top"><span style="font-size: small;">–</span></td>
</tr>
<tr>
<td style="background-color: #eeeeee; width: 85.2pt;" width="114" valign="top"><strong><span style="font-size: small;">Rs 1.50 lakh to Rs 3 lakh</span></strong></td>
<td style="text-align: center; width: 85.2pt;" width="114" valign="top"><span style="font-size: small;">10</span></td>
<td style="text-align: center; width: 85.2pt;" width="114" valign="top"><span style="font-size: small;">10300</span></td>
<td style="text-align: center; width: 85.25pt;" width="114" valign="top"><span style="font-size: small;">48008</span></td>
<td style="text-align: center; width: 85.25pt;" width="114" valign="top"><span style="font-size: small;">168575</span></td>
</tr>
<tr>
<td style="background-color: #eeeeee; width: 85.2pt;" width="114" valign="top"><strong><span style="font-size: small;">Rs 3 lakh to Rs 5 lakh</span></strong></td>
<td style="text-align: center; width: 85.2pt;" width="114" valign="top"><span style="font-size: small;">20</span></td>
<td style="text-align: center; width: 85.2pt;" width="114" valign="top"><span style="font-size: small;">20600</span></td>
<td style="text-align: center; width: 85.25pt;" width="114" valign="top"><span style="font-size: small;">96016</span></td>
<td style="text-align: center; width: 85.25pt;" width="114" valign="top"><span style="font-size: small;">337151</span></td>
</tr>
<tr>
<td style="background-color: #eeeeee; width: 85.2pt;" width="114" valign="top"><strong><span style="font-size: small;">Rs 5 lakh and above </span></strong></td>
<td style="text-align: center; width: 85.2pt;" width="114" valign="top"><span style="font-size: small;">30</span></td>
<td style="text-align: center; width: 85.2pt;" width="114" valign="top"><span style="font-size: small;">30900</span></td>
<td style="text-align: center; width: 85.25pt;" width="114" valign="top"><span style="font-size: small;">144024</span></td>
<td style="text-align: center; width: 85.25pt;" width="114" valign="top"><span style="font-size: small;">505726</span></td>
</tr>
</tbody>
</table>
<p></center><br />
The amount saved in turns can be invested in various, in order to gain maximum benefits. Prime examples:</p>
<ul type="disc">
<li class="MsoNormal"><a href="http://www.jagoinvestor.com/2009/12/returns-of-real-estate-in-india.html" target="_blank">Real Estate</a></li>
<li class="MsoNormal">Gold</li>
<li class="MsoNormal"><a href="http://www.jagoinvestor.com/2008/11/we-will-today-discuss-some-of-best.html" target="_blank">Insurance</a></li>
<li class="MsoNormal"><a href="http://www.jagoinvestor.com/2010/02/how-to-look-beyond-short-term-returns-in-mutual-funds.html" target="_blank">Mutual Funds</a></li>
<li class="MsoNormal">Fixed Deposits</li>
<li class="MsoNormal">Equities</li>
</ul>
<p><strong>Case in point</strong>: Consider an individual, in the highest tax bracket, with a gross total income of Rs 6 lakh. If he chooses to ignore the tax sops available under Section 80 C, his tax liability will amount to Rs 87,550 (for AY 2009-10). Conversely, if he chooses to make eligible investments/contributions of Rs 1, 00,000 under Section 80 C, his tax liability will be Rs56,650 i.e. a saving of Rs 30,900.</p>
<p><strong><em><br />
<em>Look before you leap </em></em></strong><strong>- Tips</strong> <strong>for better and effective planning of your investments:</strong></p>
<p>Every tax saving investment scheme has inherent advantages and disadvantages; & each individual has to decide his investment strategy based on:</p>
<ul type="disc">
<li class="MsoNormal">Lock-in period and safety of the investment</li>
<li class="MsoNormal">Return, before Tax / Return, Post Tax / Tax Free returns</li>
<li class="MsoNormal">Whether interest will be treated as fresh investment under Income Tax Act</li>
<li class="MsoNormal">Age and <a href="http://www.jagoinvestor.com/2009/12/ability-to-take-risk-vs-willingness-to-take-risk.html" target="_blank">risk appetite</a></li>
<li class="MsoNormal">Liquidity, surrender charges etc.</li>
</ul>
<p><strong>Some tips to plan your finances better:</strong></p>
<ul type="disc">
<li class="MsoNormal">One should by default set aside 10% of his/her income; <a href="http://www.jagoinvestor.com/2009/06/can-you-live-with-90-of-your-salary.html" target="_blank">Start living with your 90% of salary</a></li>
<li class="MsoNormal">Avoid waiting to invest a lump sum, at the last minute, as most of the times we tend to run short of money, resulting in a loss of tax benefit, besides the savings and long-term capital appreciation.</li>
<li class="MsoNormal"><a href="http://www.jagoinvestor.com/2009/04/why-to-plan-your-taxes-at-start-of-year.html" target="_blank">Last minute decisions</a> mostly result in investing in unwanted and futile schemes</li>
<li class="MsoNormal">Use ECS / Direct Debit facility offered by the bank for investments; this will help you invest, without fail, regularly.</li>
<li class="MsoNormal">Invest monthly or quarterly as it provides long term capital appreciation</li>
<li class="MsoNormal"><a href="http://www.jagoinvestor.com/2009/03/sip-magic-part-1.html" target="_blank">Monthly or systematic investments</a> also provide a check against market volatility</li>
</ul>
<p></p>
<h2><strong>Q. Since tax is already deducted from the salary well in advance as a TDS, then why does one need to file Income Tax Return?</strong></h2>
<p>A. Although tax has been deducted and there is no further liability to pay tax, an employee has to compulsorily file his/her income tax return if he/she exceeds the maximum amount, not chargeable to tax. It is, in essence, a declaration to the income tax department that you have derived only income from salary and not any other source (if you do have income from other sources, then the same needs to be incorporated).</p>
<p><strong>Note. </strong>Many a times, employees do not include the interest that they receive on their savings bank account. The entire interest earned on the savings bank account is taxable.</p>
<h2><strong>Q. Can you please explain the complete procedure to file ITR?</strong></h2>
<h3><strong>Step 1</strong>: Gather all the necessary documents.</h3>
<p><span style="text-decoration: underline;">These are:</span></p>
<ol type="1">
<li class="MsoNormal"><strong>Form No. 16</strong>: This is issued by the employer, stating your income from salary, and tax deducted by your employer from salary income.</li>
<li class="MsoNormal"><strong>Form No. 16A</strong>: This is received from all the payers, who have deducted tax, while making payment to you, during the year. For e.g. banks and companies.</li>
</ol>
<p><strong>Summary of all bank accounts operated during the year:</strong> This summary will give an idea about all the interest income earned during the year.</p>
<p><strong>Details of property owned during the year:</strong> If you have bought some property during the year and put it on rent, then you will need details of rent received and receipts of municipal tax paid during the year. In addition to this, if you have bought such property through a loan, do carry the loan details and a copy of certificate of interest paid during the year.</p>
<p><strong>Sale & purchase bill/documents/contract note in respect of shares transactions during the year:</strong> You will also need purchase documents corresponding to the sales made during the year. In case of a large number of transactions, it is advisable that you prepare a statement of sale and corresponding purchase of these investments and arrive at the amount of profit or loss, before actually calculating your taxable income.</p>
<p><strong>Details of tax payment</strong>s made during the year: This is required only if you have made advance tax or self assessment payment during the year.</p>
<h3><strong>Step 2:</strong> Select the proper income tax return form i.e. ITR, which is based on the nature of income earned.</h3>
<p><strong>FOR INDIVIDUALS:</strong> Form No. Applicability</p>
<p>ITR 1 Meant for Individuals, who have</p>
<p>a) Income from salary<br />
b) Interest income<br />
c) Family pension</p>
<ul type="disc">
<li class="MsoNormal">ITR 2 Individuals/HUF not having any income on account of business or profession</li>
<li class="MsoNormal">ITR 4 Individuals/HUF having income from a proprietary business or profession</li>
</ul>
<h3><strong>Step 3:</strong> To file your tax returns:</h3>
<p>You can file your returns either <strong>Manually</strong> <strong>or Electronically</strong>.</p>
<p><strong>Electronically</strong>: The Income Tax Department has introduced a convenient way to file these returns online. The process of electronically filing your Income tax returns, through the Internet, is known as e-filing of returns. This is a really convenient facility, since it saves you the hassle of traveling all the way to the IT office. This facility is available round the clock and returns could be filed from any place in the world. It also eliminates reduces ‘friction’ between the assessee and tax officials.</p>
<p><strong>Manually</strong>: For manual/physical filing, the individual takes a print out of the respective ITR form , from the income tax site, along with the acknowledgment form, and after duly filling it, files it with the respective income tax office. Forms are available free of cost too</p>
<h2><strong>Q. What are the documents required, which has to be attached with returns of income?</strong></h2>
<p>A. Under the new procedure, be it is electronic or physical filing, individuals do not have to attach any documents or enclosures with the return of income. However, one should preserve the supporting documents as they can be called for, at a later stage by an income tax officer to check the accuracy of the claims made. Some of the documents are:</p>
<ul type="disc">
<li class="MsoNormal">Detailed calculation of taxable income and amount of tax payable/refundable</li>
<li class="MsoNormal">Form No. 16/16A (original)</li>
<li class="MsoNormal">Counterfoil of all the tax payments made during the year</li>
<li class="MsoNormal">Copy of documents, concerning sale of investments and properties</li>
<li class="MsoNormal">Copy of bank statements</li>
<li class="MsoNormal">Copy of proof for all the deductions and exemptions claimed in the return of income</li>
</ul>
<p>In case of a refund, the bank account details needs to be filled in accurately. In case the refund is opted to be received via ECS direct into the bank account, adequate care should be taken to correctly fill in the MICR code.</p>
<p><strong>PRECAUTIONS THAT ONE NEEDS TO TAKE</strong></p>
<p>Filing returns at the eleventh hour often lead to a lot of inconvenience. Filing online, very close to the last day, is risky, as the peak load on the servers of the e-filing website during the last few days may make the whole online filing quite frustrating, causing needless delay. Filing return after the due date, may lead to empty the pockets of the taxpayer who have incurred losses; which he wants to carry-forward to future years. Under the tax laws, some losses are not allowed to be carried forward for being set-off against future income, unless the return has been filed by the due date, even though all the taxes have been pre-paid. Similarly, if a paper return is filed, the acknowledgement slip should be preserved carefully.</p>
<p><strong>SOME TIPS TO AVOID LAST MINUTE RUSH</strong></p>
<ul type="disc">
<li class="MsoNormal"><strong>Step 1</strong>: Select and get the appropriate forms from the Income Tax site or offices</li>
<li class="MsoNormal"><strong>Step 2:</strong> If a professional is handling your taxes, meet him and make an appointment early before your accountant’s schedule gets completely booked. If you’re preparing your own taxes, set a day aside on your calendar for preparing taxes.</li>
<li class="MsoNormal"><strong>Step 3</strong>: Review your tax documentation before submission</li>
<li class="MsoNormal"><strong>Step 4</strong>: You can file your returns offline or online. However, before doing so, check whether you still have a tax liability. If you are still to pay taxes, do so through Internet banking or through cash/cheque at any bank along with Form 280. In both cases, you have to furnish challan details in the income tax return (ITR) form.</li>
<li class="MsoNormal"><strong>Step5:</strong> Prepare your taxes. Now that you have all of the necessary forms and documentation, you can prepare your taxes without waiting for the last minute.</li>
</ul>
<p><strong>PENALTY FOR FILING RETURNS LATE</strong></p>
<p>For details , you should look at the article <a href="http://www.jagoinvestor.com/2010/01/how-to-miss-your-income-tax-returns-itr-deadline-and-still-enjoy.html" target="_blank">“How to miss your tax return filing deadline and still Enjoy”</a></p>
<p><strong>Conclusion: </strong></p>
<p>A little extra care, planning & precaution on the part of taxpayers can help them avoid committing mistakes, while filing the tax return and keep away, unwelcome visits from the taxman.</p>
<p><strong>Comments please</strong> , Share your views about the article and how it helped you ?</p>
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Posted by Manish Chauhan on March 14, 2010 05:24 PM · permalink
<p><em>By Sarah Lacy</em></p><div><div><p><a href="http://static.seekingalpha.com/uploads/2010/3/14/saupload_india_vnl.jpg"><img src="http://static.seekingalpha.com/uploads/2010/3/14/saupload_india_vnl_1.jpg" align="right" class="alignleft size-medium wp-image-165061" hspace="6" vspace="6" width="200" height="133" /></a>Last time I was in India I wrote about the amazing business model innovation that had allowed telecom operators to make money on a paltry $6 a month per average user. That compares to a desired average monthly payment of $50 or more in the U.S.</p></div></div>
Posted by TechCrunch on March 14, 2010 12:00 PM · permalink
<p><a href="http://feedads.g.doubleclick.net/~a/E9Ul29AkjFh4zPbyKi-TR41RwOI/0/da"><img src="http://feedads.g.doubleclick.net/~a/E9Ul29AkjFh4zPbyKi-TR41RwOI/0/di" border="0" ismap="true"></img></a><br/>
<a href="http://feedads.g.doubleclick.net/~a/E9Ul29AkjFh4zPbyKi-TR41RwOI/1/da"><img src="http://feedads.g.doubleclick.net/~a/E9Ul29AkjFh4zPbyKi-TR41RwOI/1/di" border="0" ismap="true"></img></a></p><p>Apple iPhone 3GS finally to be launched in India.Thne rumpour was there for almost a year or so , and still we will not be sure until the phone is getting officially released in india , There is also news that they will have extra mobile players coming in like aircel and also reliance with addition to already exisiting airtel and vodafone , but the funny thing is both MTNL and BSNL doesnt seem to come in picture at all as they are the only one who is offering 3G presently in india.Will give more info when the news is official.<br />
<img src="http://www.devicemag.com/wp-content/uploads/2009/11/apple-iphone-3g1.jpg" /></p>
<table border="1" bordercolor="#C0C0C0" bordercolordark="#FFFFFF" cellspacing="0" cellpadding="2">
<tr>
<td rowspan="4" bgcolor="#FFFFCC"><font face="Tahoma" size="1" color="#333333"><b>General</b></font></td>
<td bgcolor="#FFFFFF"><font face="Tahoma" size="1" color="#0000FF"><u>2G Network</u></font></td>
<td bgcolor="#FFFFFF"><font face="Tahoma" size="1" color="#000000">GSM 850 / 900 / 1800 / 1900</font></td>
</tr>
<tr>
<td bgcolor="#FFFFFF"><font face="Tahoma" size="1" color="#0000FF"><u>3G Network</u></font></td>
<td bgcolor="#FFFFFF"><font face="Tahoma" size="1" color="#000000">HSDPA 850 / 1900 / 2100</font></td>
</tr>
<tr>
<td bgcolor="#FFFFFF"><font face="Tahoma" size="1" color="#0000FF"><u>Announced</u></font></td>
<td bgcolor="#FFFFFF"><font face="Tahoma" size="1" color="#000000">2009, June</font></td>
</tr>
<tr>
<td bgcolor="#FFFFFF"><font face="Tahoma" size="1" color="#0000FF"><u>Status</u></font></td>
<td bgcolor="#FFFFFF"><font face="Tahoma" size="1" color="#000000">Available. Released 2009, June</font></td>
</tr>
<tr>
<td rowspan="2" bgcolor="#FFFFCC"><font face="Tahoma" size="1" color="#333333"><b>Size</b></font></td>
<td bgcolor="#FFFFFF"><font face="Tahoma" size="1" color="#0000FF"><u>Dimensions</u></font></td>
<td bgcolor="#FFFFFF"><font face="Tahoma" size="1" color="#000000">115.5 x 62.1 x 12.3 mm</font></td>
</tr>
<tr>
<td bgcolor="#FFFFFF"><font face="Tahoma" size="1" color="#0000FF"><u>Weight</u></font></td>
<td bgcolor="#FFFFFF"><font face="Tahoma" size="1" color="#000000">135 g</font></td>
</tr>
<tr>
<td rowspan="6" bgcolor="#FFFFCC"><font face="Tahoma" size="1" color="#333333"><b>Display</b></font></td>
<td bgcolor="#FFFFFF"><font face="Tahoma" size="1" color="#0000FF"><u>Type</u></font></td>
<td bgcolor="#FFFFFF"><font face="Tahoma" size="1" color="#000000">TFT capacitive touchscreen, 16M colors</font></td>
</tr>
<tr>
<td bgcolor="#FFFFFF"><font face="Tahoma" size="1" color="#0000FF"><u>Size</u></font></td>
<td bgcolor="#FFFFFF"><font face="Tahoma" size="1" color="#000000">320 x 480 pixels, 3.5 inches</font></td>
</tr>
<tr>
<td rowspan="4" bgcolor="#FFFFFF"><font face="Tahoma" size="1" color="#808080"><b></b></font></td>
<td bgcolor="#FFFFFF"><font face="Tahoma" size="1" color="#000000">- Multi-touch input method</font></td>
</tr>
<tr>
<td bgcolor="#FFFFFF"><font face="Tahoma" size="1" color="#000000">- Accelerometer sensor for auto-rotate</font></td>
</tr>
<tr>
<td bgcolor="#FFFFFF"><font face="Tahoma" size="1" color="#000000">- Proximity sensor for auto turn-off</font></td>
</tr>
<tr>
<td bgcolor="#FFFFFF"><font face="Tahoma" size="1" color="#000000">- Scratch-resistant surface</font></td>
</tr>
<tr>
<td rowspan="3" bgcolor="#FFFFCC"><font face="Tahoma" size="1" color="#333333"><b>Sound</b></font></td>
<td bgcolor="#FFFFFF"><font face="Tahoma" size="1" color="#0000FF"><u>Alert types</u></font></td>
<td bgcolor="#FFFFFF"><font face="Tahoma" size="1" color="#000000">Vibration; Downloadable polyphonic, MP3 ringtones</font></td>
</tr>
<tr>
<td bgcolor="#FFFFFF"><font face="Tahoma" size="1" color="#0000FF"><u>Speakerphone</u></font></td>
<td bgcolor="#FFFFFF"><font face="Tahoma" size="1" color="#000000">Yes</font></td>
</tr>
<tr>
<td bgcolor="#FFFFFF"><font face="Tahoma" size="1" color="#808080"><b></b></font></td>
<td bgcolor="#FFFFFF"><font face="Tahoma" size="1" color="#000000">- 3.5 mm headset jack</font></td>
</tr>
<tr>
<td rowspan="4" bgcolor="#FFFFCC"><font face="Tahoma" size="1" color="#333333"><b>Memory</b></font></td>
<td bgcolor="#FFFFFF"><font face="Tahoma" size="1" color="#0000FF"><u>Phonebook</u></font></td>
<td bgcolor="#FFFFFF"><font face="Tahoma" size="1" color="#000000">Practically unlimited entries and fields, Photocall</font></td>
</tr>
<tr>
<td bgcolor="#FFFFFF"><font face="Tahoma" size="1" color="#0000FF"><u>Call records</u></font></td>
<td bgcolor="#FFFFFF"><font face="Tahoma" size="1" color="#000000">100 received, dialed and missed calls</font></td>
</tr>
<tr>
<td bgcolor="#FFFFFF"><font face="Tahoma" size="1" color="#0000FF"><u>Internal</u></font></td>
<td bgcolor="#FFFFFF"><font face="Tahoma" size="1" color="#000000">16 GB/ 32 GB storage, 256 MB RAM</font></td>
</tr>
<tr>
<td bgcolor="#FFFFFF"><font face="Tahoma" size="1" color="#0000FF"><u>Card slot</u></font></td>
<td bgcolor="#FFFFFF"><font face="Tahoma" size="1" color="#000000">No</font></td>
</tr>
<tr>
<td rowspan="7" bgcolor="#FFFFCC"><font face="Tahoma" size="1" color="#333333"><b>Data</b></font></td>
<td bgcolor="#FFFFFF"><font face="Tahoma" size="1" color="#0000FF"><u>GPRS</u></font></td>
<td bgcolor="#FFFFFF"><font face="Tahoma" size="1" color="#000000">Yes</font></td>
</tr>
<tr>
<td bgcolor="#FFFFFF"><font face="Tahoma" size="1" color="#0000FF"><u>EDGE</u></font></td>
<td bgcolor="#FFFFFF"><font face="Tahoma" size="1" color="#000000">Yes</font></td>
</tr>
<tr>
<td bgcolor="#FFFFFF"><font face="Tahoma" size="1" color="#0000FF"><u>3G</u></font></td>
<td bgcolor="#FFFFFF"><font face="Tahoma" size="1" color="#000000">HSDPA, 7.2 Mbps</font></td>
</tr>
<tr>
<td bgcolor="#FFFFFF"><font face="Tahoma" size="1" color="#0000FF"><u>WLAN</u></font></td>
<td bgcolor="#FFFFFF"><font face="Tahoma" size="1" color="#000000">Wi-Fi 802.11b/g</font></td>
</tr>
<tr>
<td bgcolor="#FFFFFF"><font face="Tahoma" size="1" color="#0000FF"><u>Bluetooth</u></font></td>
<td bgcolor="#FFFFFF"><font face="Tahoma" size="1" color="#000000">Yes, v2.1 with A2DP, headset support only</font></td>
</tr>
<tr>
<td bgcolor="#FFFFFF"><font face="Tahoma" size="1" color="#0000FF"><u>Infrared port</u></font></td>
<td bgcolor="#FFFFFF"><font face="Tahoma" size="1" color="#000000">No</font></td>
</tr>
<tr>
<td bgcolor="#FFFFFF"><font face="Tahoma" size="1" color="#0000FF"><u>USB</u></font></td>
<td bgcolor="#FFFFFF"><font face="Tahoma" size="1" color="#000000">Yes, v2.0</font></td>
</tr>
<tr>
<td rowspan="4" bgcolor="#FFFFCC"><font face="Tahoma" size="1" color="#333333"><b>Camera</b></font></td>
<td bgcolor="#FFFFFF"><font face="Tahoma" size="1" color="#0000FF"><u>Primary</u></font></td>
<td bgcolor="#FFFFFF"><font face="Tahoma" size="1" color="#000000">3.15 MP, 2048×1536 pixels, autofocus</font></td>
</tr>
<tr>
<td bgcolor="#FFFFFF"><font face="Tahoma" size="1" color="#0000FF"><u>Features</u></font></td>
<td bgcolor="#FFFFFF"><font face="Tahoma" size="1" color="#000000">Touch focus, geo-tagging</font></td>
</tr>
<tr>
<td bgcolor="#FFFFFF"><font face="Tahoma" size="1" color="#0000FF"><u>Video</u></font></td>
<td bgcolor="#FFFFFF"><font face="Tahoma" size="1" color="#000000">Yes, VGA@30fps, video geo-tagging</font></td>
</tr>
<tr>
<td bgcolor="#FFFFFF"><font face="Tahoma" size="1" color="#0000FF"><u>Secondary</u></font></td>
<td bgcolor="#FFFFFF"><font face="Tahoma" size="1" color="#000000">No</font></td>
</tr>
<tr>
<td rowspan="14" bgcolor="#FFFFCC"><font face="Tahoma" size="1" color="#333333"><b>Features</b></font></td>
<td bgcolor="#FFFFFF"><font face="Tahoma" size="1" color="#0000FF"><u>OS</u></font></td>
<td bgcolor="#FFFFFF"><font face="Tahoma" size="1" color="#000000">iPhone OS (based on Mac OS)</font></td>
</tr>
<tr>
<td bgcolor="#FFFFFF"><font face="Tahoma" size="1" color="#0000FF"><u>CPU</u></font></td>
<td bgcolor="#FFFFFF"><font face="Tahoma" size="1" color="#000000">ARM Cortex A8 600 MHz, PowerVR SGX graphics</font></td>
</tr>
<tr>
<td bgcolor="#FFFFFF"><font face="Tahoma" size="1" color="#0000FF"><u>Messaging</u></font></td>
<td bgcolor="#FFFFFF"><font face="Tahoma" size="1" color="#000000">SMS (threaded view), MMS, Email</font></td>
</tr>
<tr>
<td bgcolor="#FFFFFF"><font face="Tahoma" size="1" color="#0000FF"><u>Browser</u></font></td>
<td bgcolor="#FFFFFF"><font face="Tahoma" size="1" color="#000000">HTML (Safari)</font></td>
</tr>
<tr>
<td bgcolor="#FFFFFF"><font face="Tahoma" size="1" color="#0000FF"><u>Radio</u></font></td>
<td bgcolor="#FFFFFF"><font face="Tahoma" size="1" color="#000000">No</font></td>
</tr>
<tr>
<td bgcolor="#FFFFFF"><font face="Tahoma" size="1" color="#0000FF"><u>Games</u></font></td>
<td bgcolor="#FFFFFF"><font face="Tahoma" size="1" color="#000000">Downloadable, incl. motion-based</font></td>
</tr>
<tr>
<td bgcolor="#FFFFFF"><font face="Tahoma" size="1" color="#0000FF"><u>Colors</u></font></td>
<td bgcolor="#FFFFFF"><font face="Tahoma" size="1" color="#000000">Black, White</font></td>
</tr>
<tr>
<td bgcolor="#FFFFFF"><font face="Tahoma" size="1" color="#0000FF"><u>GPS</u></font></td>
<td bgcolor="#FFFFFF"><font face="Tahoma" size="1" color="#000000">Yes, with A-GPS support</font></td>
</tr>
<tr>
<td bgcolor="#FFFFFF"><font face="Tahoma" size="1" color="#0000FF"><u>Java</u></font></td>
<td bgcolor="#FFFFFF"><font face="Tahoma" size="1" color="#000000">No</font></td>
</tr>
<tr>
<td rowspan="5" bgcolor="#FFFFFF"><font face="Tahoma" size="1" color="#808080"><b></b></font></td>
<td bgcolor="#FFFFFF"><font face="Tahoma" size="1" color="#000000">- Digital compass</font></td>
</tr>
<tr>
<td bgcolor="#FFFFFF"><font face="Tahoma" size="1" color="#000000">- Google Maps</font></td>
</tr>
<tr>
<td bgcolor="#FFFFFF"><font face="Tahoma" size="1" color="#000000">- Audio/video player</font></td>
</tr>
<tr>
<td bgcolor="#FFFFFF"><font face="Tahoma" size="1" color="#000000">- TV-out</font></td>
</tr>
<tr>
<td bgcolor="#FFFFFF"><font face="Tahoma" size="1" color="#000000">- Voice command/dial</font></td>
</tr>
<tr>
<td rowspan="4" bgcolor="#FFFFCC"><font face="Tahoma" size="1" color="#333333"><b>Battery</b></font></td>
<td bgcolor="#FFFFFF"><font face="Tahoma" size="1" color="#808080"><b></b></font></td>
<td bgcolor="#FFFFFF"><font face="Tahoma" size="1" color="#000000">Standard battery, Li-Ion</font></td>
</tr>
<tr>
<td bgcolor="#FFFFFF"><font face="Tahoma" size="1" color="#0000FF"><u>Stand-by</u></font></td>
<td bgcolor="#FFFFFF"><font face="Tahoma" size="1" color="#000000">Up to 300 h</font></td>
</tr>
<tr>
<td bgcolor="#FFFFFF"><font face="Tahoma" size="1" color="#0000FF"><u>Talk time</u></font></td>
<td bgcolor="#FFFFFF"><font face="Tahoma" size="1" color="#000000">Up to 12 h (2G) / Up to 5 h (3G)</font></td>
</tr>
<tr>
<td bgcolor="#FFFFFF"><font face="Tahoma" size="1" color="#0000FF"><u>Music play</u></font></td>
<td bgcolor="#FFFFFF"><font face="Tahoma" size="1" color="#000000">Up to 30 h</font></td>
</tr>
<tr>
<td rowspan="2" bgcolor="#FFFFCC"><font face="Tahoma" size="1" color="#333333"><b>Misc</b></font></td>
<td bgcolor="#FFFFFF"><font face="Tahoma" size="1" color="#0000FF"><u>SAR US</u></font></td>
<td bgcolor="#FFFFFF"><font face="Tahoma" size="1" color="#000000">0.26 W/kg (head)     0.79 W/kg (body)    </font></td>
</tr>
<tr>
<td bgcolor="#FFFFFF"><font face="Tahoma" size="1" color="#0000FF"><u>SAR EU</u></font></td>
<td bgcolor="#FFFFFF"><font face="Tahoma" size="1" color="#000000">0.45 W/kg (head)     0.40 W/kg (body)    </font></td>
</tr>
</table>
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<p><a href="http://www.rupya.com/2010/03/14/apple-iphone-3gs-finally-to-be-launched-in-india/14232">Apple iPhone 3GS – Finally to be launched in India</a> is a post from: <a href="http://www.rupya.com">First Blog for Indian Financial Market</a></p>
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Posted by abhisheak on March 14, 2010 11:16 AM · permalink
People have a need to act in a manner consistent with their beliefs, values, and prior commitments. This automatic behaviour serves a useful purpose: consistent conduct reduces the need to repeat the processing of information when an individual is faced with similar situations. Consistency provides a beneficial approach to daily life and is a trait that is valued by society.
However, this behaviour can also be exploited by others. Exploiters first seek to get individuals to take stands on issues. They will then use those "commitments" to elicit the behaviour that they seek. For example, home owners are much more likely to agree to having large "DRIVE CAREFULLY" signs on their lawns if a few weeks earlier they agreed that safe driving is desirable. The initial commitments lead to consistent behaviour most when they are active, public (e.g. a petition), require effort (e.g. a fraternity hazing ritual), and are viewed as internally motivated.
This need to be consistent can even "grow legs", as when people take a stand on a position, they tend to incorporate new information only if it strengthens their original position. This results in salesman tactics that offer more than they intend to give. In this manner, such tactics are based on the idea that once the buyer has decided that he wants the product/service, he will create more reasons to like the product, such that the initial offer can be reduced and the buyer will still be interested.
Recognizing that such exploitation is taking place is the best means by which to avoid falling prey to this automatic behavioural response. However, because people will often come up with justifications to proceed with certain courses of action, their line of thinking must be proactive to avoid being exploited. As such, Cialdini suggests that readers ask themselves this question when faced with a situation where one feels compelled to do something against one's wishes: "Knowing what I now know, if I could go back in time, would I make the same commitment?"
Posted by Saj Karsan (sajid.karsan@barelkarsan.com) on March 14, 2010 10:32 AM · permalink
<p>Using a quantitative approach to investing (not just trading, investing) can be better than “expert” judgements, says James Montier. <a href="http://greenbackd.com/2009/12/22/james-montiers-painting-by-numbers/" target="_blank">This article explains</a>: (Hat Tip: <a href="http://singularityventures.in/" target="_blank">Tejus Sawjiani</a>)</p> <blockquote> <p>In his 2006 research report <a href="http://www.thehedgefundjournal.com/magazine/200609/research/james-montier-discusses-the-superiority-of-models-over-human-judgement.php">Painting By Numbers: An Ode To Quant</a> (via <a href="http://www.thehedgefundjournal.com/index.php">The Hedge Fund Journal</a>) James Montier presents a compelling argument for a quantitative approach to investing. Montier’s thesis is that simple statistical or quantitative models consistently outperform expert judgements. This phenomenon continues even when the experts are provided with the models’ predictions. Montier argues that the models outperform because humans are overconfident, biased, and unable or unwilling to change.</p> <p>…</p> <p>Montier goes on to give diverse examples of the application of his theory, ranging from the detection of brain damage, the interview process to admit students to university, the likelihood of a criminal to re-offend, the selection of “good” and “bad” vintages of Bordeaux wine, and the buying decisions of purchasing managers. He then discusses some “meta-analysis” of studies to demonstrate that “the range of evidence I’ve presented here is not somehow a biased selection designed to prove my point:”</p> </blockquote> <p>It’s an interesting read; an example displayed is using statistical generators to figure out if a patient is neurotic or psychotic - “experts” seem to get it wrong more often than the statistical generation of the result.</p> <p>Montier argues the concept applies to investing as well – using quantitative models might remove all these crazy biases we have as humans. I have at many points cursed myself for not following a model, even if the result was beneficial to me; the point being, on average my discretion does nothing. Yet, I feel the need to prove my intelligence over the computer every once in a while, and for that I create a separate “education” fund – every time I override the system, the trade goes into my education and currently I’ve paid over a lakh for my education. There.</p> <p>How does one invest in a “quant” way? Different time frames. Stocks have fundamentals – you must trust these fundamentals, so you first screen stocks where you believe there’s a reasonable element of trust in the declared results. Then you use a ‘formula’ to invest – buy stocks where EPS growth is higher than P/E, or buy stocks where 5 year profit growth is over 2x the Industry average, or where a combination of EV/EBIDTA, replacement value and book value is substantially better at current prices than comparable companies. It’s a pain to get all the data organized but once it is, writing such screens is not difficult. In fact, most of quant is not rocket science – and what might appear complex might actually be seriously flawed in the real world (eg. Black-Scholes). </p> <p>Another aspect of quant investing is automated position sizing. It’s debatable that humans will beat computers on entries and exits – you could have either one win. But the power of computing is also in appropriate sizing of positions – do you buy 100 shares of this stock, or a 1000? Humans tend to focus on round numbers and on whatever they earlier traded. A person who would buy 1 lakh worth of every stock – say 5% of his portfolio – will buy the same 1 lakh worth even if his portfolio doubles. Worse, he’ll buy the same level when the portfolio is DOWN 30%. It’s human nature – we find a comfort level and stay with it. An algorithm, though, can throw out quantities based on stop loss risk, portfolio size percentage, strength of the entry/exit, pyramiding etc. In the long run, position sizing contributes substantially to returns. </p> <p>I find that I’m more comfortable with a formula and back-test behind my investing. Since I like to stay human I still do some discretionary trading too, which has done well in stages and horribly in others. But I find the discretion harms me mentally far more than a losing position in a quant strategy. </p> <div class="blogger-post-footer"><p style="border: 1px solid #C888C8">
This post is written by <a href="http://blog.investraction.com">Deepak Shenoy</a>,
at <a href="http://blog.investraction.com">Capital Mind</a>.
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Posted by Deepak Shenoy (noreply@blogger.com) on March 14, 2010 06:02 AM · permalink
<p>Wanna get smart? Keep learning about influence.</p>
<p style="text-align: center;"><a href="http://papers.ssrn.com/sol3/papers.cfm?abstract_id=1145884"><strong>Click Here To Read: Thought and Behavior Contagion in Capital Markets </strong></a></p>
<p><strong>Abstract (via SSRN)</strong></p>
<p>Prevailing models of capital markets capture a limited form of social influence and information transmission, in which the beliefs and behavior of an investor affect others only through market price, information transmission and processing is simple (without thoughts and feelings), and there is no localization in the influence of an investor on others. <strong>In reality, individuals often process verbal arguments obtained in conversation or from media presentations, and observe the behavior of others.</strong> We review here evidence concerning how these activities cause beliefs and behaviors to spread, affect financial decisions, and affect market prices; and theoretical models of social influence and its effects on capital markets.<strong> Social influence is central to how information and investor sentiment are transmitted, so thought and behavior contagion should be incorporated into the theory of capital markets</strong></p>
<p style="text-align: center;"><a href="http://papers.ssrn.com/sol3/papers.cfm?abstract_id=1145884"><strong>Click Here To Read: Thought and Behavior Contagion in Capital Markets </strong></a></p>
<div class="relatedposts"><strong>Other Related Posts From Simoleon Sense:</strong><ol><li><a href='http://www.simoleonsense.com/contagion-of-unethical-behavior-the-effect-of-one-bad-apple-on-the-barrel/' rel='bookmark' title='Permanent Link: Contagion of Unethical Behavior: The effect of one bad apple on the barrel.'>Contagion of Unethical Behavior: The effect of one bad apple on the barrel.</a></li>
<li><a href='http://www.simoleonsense.com/liquidity-risk-and-contagion/' rel='bookmark' title='Permanent Link: Liquidity Risk and Contagion'>Liquidity Risk and Contagion</a></li>
<li><a href='http://www.simoleonsense.com/herd-behavior-in-financial-markets/' rel='bookmark' title='Permanent Link: Herd Behavior in Financial Markets'>Herd Behavior in Financial Markets</a></li>
<li><a href='http://www.simoleonsense.com/the-crisis-of-1763-liquidity-and-contagion/' rel='bookmark' title='Permanent Link: The Crisis of 1763 Liquidity and Contagion'>The Crisis of 1763 Liquidity and Contagion</a></li>
</ol></p>
Posted by Miguel on March 13, 2010 04:30 PM · permalink
<p>My friend <a href="http://www.psyfitec.com/">Tim Richards is the master blogger responsible for the PsyFi blog</a>. He has crafted a wonderful piece for us….I feel blessed – Tim’s writing reminds me of James Montier.</p>
<p><strong>An Investor’s Behavioral Guide To Inefficient Markets: The Opportunity of a Lifetime – Again</strong><br />
In 1907 there was a nasty credit crunch. Then there was a financial crisis during the World War I and its aftermath, followed by the Wall Street Crash and the Great Depression. After World War II there was another market slump as everyone expected a repeat of the crashes after the US Civil War and World War I. This was followed by the rise and fall of the Nifty Fifty, an eighteen year long market hiatus with an oil supply crisis thrown in, the unexplained crash of 1987, the Asian Crisis, the Long Term Capital debacle, the dot com crash and, with neat symmetry, another credit crunch. With clockwork precision an investing opportunity of a lifetime has arisen once a decade, if not more often.</p>
<p>This sequence of calamities has happened regardless of the current political orientation, the state of regulatory controls, the dominant investment theory or the world’s latest set of popular Armageddon scenarios. Lots of people come up with explanations in hindsight, a few people get to go to gaol (jail), others legislate to prevent the last crisis and lots of government money gets burnt very quickly. About the only constant is human nature, greedy and fearful by turn.</p>
<p><strong>Efficiency and Uncertainty</strong><br />
From the early 1970’s onwards the main investment ideology was of the efficient markets flavour – the idea being that all market information is reflected in the current price of a security. For a long while this seemed to have solved most of our investing problems but was, in fact, merely a product of a very long bull market run during which pretty much everyone became complacent about tail-end risk – so-called Black Swan events.<br />
Yet stockmarkets have always been a dish characterised by ambiguity, leavened by uncertainty and flavoured with a pinch of irrationality. The world of investment is a swirling mass of contradictory ideas and opinions, most of which are untroubled by any requirement for a relationship to reality, some companionship with evidence or an association with logical thought processes. Anyone trying to make sense of anything is a victim of hope over expectation.</p>
<p><strong>Unprofessional Investing</strong><br />
Most of us spend our lives acquiring certain skills in pursuit of a career. We become plumbers, chefs, cab-drivers, baristas, surfers, doctors, etc, etc. By and large we undergo some form of education program (politicians excepted, of course), develop experience through work, undergo some chastening failures and achieve a few glorious moments of success on the way to attaining the skills we need to succeed in our chosen professions.</p>
<p>Quite why any of this entitles us to think we should be good at investing, a world of mysterious acronyms, undetectable frauds and incomprehensible jargon is one of life’s great mysteries. Yet it’s clear that millions of people take exactly this approach to one of the most difficult environments known to humanity: the perfectly unnatural, mean regressing world of the securities markets.</p>
<p><strong>Cognitive Biases Rule</strong><br />
The standard explanation for this type of bizarre behaviour comes from research into behavioral finance: the study of human psychology at work in the field of investments. The list of behavioral biases that have been shown to underpin people’s irrational investing inclinations is now very long indeed: overconfidence, hindsight, recency, confirmation bias, anchoring, money illusion, mental accounting … the list goes on and on. <a href="http://papers.ssrn.com/sol3/papers.cfm?abstract_id=265132"> This paper by David Hirschleifer</a> gives a reasonable overview of the topic.</p>
<p>Despite the wealth of evidence that cognitive biases damage investor returns there’s not yet much follow through into the wider reaches of investment management. To a large extent this is because behavioral finance points us in exactly the opposite direction to the way that the securities industry has been determinedly moving for the last half century: away from a concern with the individual to a mass-market approach that wants to fit everyone into a mental and fiscal straightjacket.<br />
<strong>Perfectly Wrong</strong></p>
<p>So, in recent decades the industry’s approach has been to develop mathematical models which can relegate human behaviour to a set of probability equations, thus allowing profitability and risk to be actuarially managed: fraud is no longer unacceptable – it’s now just a number to be factored into earnings forecasts. This is simply the latest in a long line of industry fads, using the ideas of efficient market theories to design approaches which are right quite a lot of the time and then very, very wrong all at once.</p>
<p>Given the amount of money that’s been spent developing these models it’s unlikely that they’ll fade gently away, despite the fact that behavioral finance tells us to a degree of certainty, that only a generation of economists whose next port of call is the grave can now ignore, that individual human biases play a huge role in the unpredictable, uncertain and ambiguous nature of markets. They’re not remotely efficient and it’s just a shame the world had to be brought the edge of financial meltdown before anyone started listening.</p>
<p><strong>Risk Today, and Tomorrow</strong><br />
However, although behavioral finance tells us what’s wrong it doesn’t really tell us what to put in its place. So everyone muddles along, hoping that something better will appear without really knowing what to do. Of course, efficient markets theorists point out that behavioral finance offers no solution to the problems of market prediction and risk management.</p>
<p>Take, for instance, the idea that advisors should ascertain how risk adverse or otherwise their clients are, in order to decide on the type of investments to select for them. Such a simple idea is, under behavioral finance, replete with difficulties. Consider the concept of “risk”. Does anyone really believe that the idea of risk to the person on Main Street is the same as the idea of risk to the person on Wall Street? Even making sure that someone understands the concept is a Herculean task before you start. Pan and Statman cover a lot of this ground in their paper <a href="http://papers.ssrn.com/sol3/papers.cfm?abstract_id=1549912">Beyond Risk Tolerance: Regret, Overconfidence, and Other Investor Propensities</a>:</p>
<blockquote><p>“… investors’ risk tolerance varies by circumstances and associated emotions. High past stock returns endow stocks with positive affect and inflate investors’ exuberance, misleading them into the belief that the future holds high stock returns coupled with low risk. Risk tolerance questions asked after periods of high stock returns are likely to elicit answers exaggerating investors’ risk tolerance. Conversely, low past stock returns burden stocks with negative affect and inflate investors’ fear, misleading them into the belief that the future holds low stock returns coupled with high risk. Risk tolerance questions asked following periods of low stock returns are likely to elicit answers underestimating investors’ risk tolerance”</p></blockquote>
<p>Of course, the answer given in these two cases will, in hindsight, be perfectly wrong. When everyone thinks that markets can’t fail is the time to be very risk adverse, when no-one wants to invest is the time to be greedy. Yet what’s an advisor to do when the know-your-customer questionnaire tells them to do exactly the opposite of what’s in the customer’s best interests?</p>
<p><strong>No Certainty in an Algorithm</strong><br />
Just because behavioral finance says efficient market theories are wrong doesn’t mean that it can replace the spurious accuracy of the latter’s models. What psychology tells us is that life and markets are unpredictable – which may be uncomfortable for people who want to see certainty in an equation but is nonetheless a truth that needs to be universally acknowledged.</p>
<p>Still, the securities industry is attempting to co-opt behavioral finance to its own ends. Quantitative models being developed along behavioral lines and work on neuroeconomics is attempting to pull economic behaviour out of our brains. There are even a range of behavioral funds which supposedly use behavioral psychology.</p>
<p>For people willing to take the time and effort to get to grips with behavioral finance in the markets this is terrifically good news because, as it stands, it’s impossible to see how the real lessons of psychology in the markets can ever be mastered in this manner. So the opportunities generated from time to time by mass market delusions or crazy industry trends won’t go away.<br />
<strong><br />
The Opportunity for Investors</strong><br />
The study of behavioral finance makes available to a much wider group of people than ever before the psychology behind investment approaches and the tools to learn how to control our biases whether it’s through contrarian strategies based on using mass psychology against the crowds or passive investing approaches that allow the craziness to be safely ignored.</p>
<p>Few things in life are predictable so it’s nice that we can rely on investment markets to go completely mad at least once a generation. If you can take comfort in that thought then you’re a proper investor. That’s Simoleon Sense.</p>
<p><strong>To read more from Tim please <a href="http://www.psyfitec.com/">visit The PsyFi Blog</a></strong></p>
<div class="relatedposts"><strong>Other Related Posts From Simoleon Sense:</strong><ol><li><a href='http://www.simoleonsense.com/inefficient-markets-the-new-finance/' rel='bookmark' title='Permanent Link: Inefficient Markets & The New Finance'>Inefficient Markets & The New Finance</a></li>
<li><a href='http://www.simoleonsense.com/the-special-theory-of-behavioral-finance-why-you-should-read-the-psy-fi-blog/' rel='bookmark' title='Permanent Link: The Special Theory Of Behavioral Finance & Why You Should Read The Psy Fi Blog'>The Special Theory Of Behavioral Finance & Why You Should Read The Psy Fi Blog</a></li>
<li><a href='http://www.simoleonsense.com/goals-based-investing-integrating-traditional-and-behavioral-finance-by-dan-nevins/' rel='bookmark' title='Permanent Link: Goals-based Investing: Integrating Traditional and Behavioral Finance by Dan Nevins'>Goals-based Investing: Integrating Traditional and Behavioral Finance by Dan Nevins</a></li>
<li><a href='http://www.simoleonsense.com/so-what-is-behavioral-finance-all-about/' rel='bookmark' title='Permanent Link: So What Is Behavioral Finance All About?'>So What Is Behavioral Finance All About?</a></li>
</ol></p>
Posted by Miguel on March 13, 2010 04:19 PM · permalink
<p>A video definitely worth watching. Frank Partnoy – who wrote the excellent book “Infectious Greed” which I will review on another day – talks about how off-balance sheet transactions in derivatives have managed to pull wool over our eyes, not because of their size, but because they are allowed to be hidden as “off balance sheet”. The biggest culprits now are countries – Greece hid debt in a swap, the US is hiding debt under multiple headings, and even India has hidden it as “market stabilization bonds” and such.</p> <object width="400" height="300"><param name="allowfullscreen" value="true" /><param name="allowscriptaccess" value="always" /><param name="movie" value="http://vimeo.com/moogaloop.swf?clip_id=9963640&server=vimeo.com&show_title=1&show_byline=1&show_portrait=0&color=&fullscreen=1" /><embed src="http://vimeo.com/moogaloop.swf?clip_id=9963640&server=vimeo.com&show_title=1&show_byline=1&show_portrait=0&color=&fullscreen=1" type="application/x-shockwave-flash" allowfullscreen="true" allowscriptaccess="always" width="400" height="300"></embed></object> <p><a href="http://vimeo.com/9963640">Frank Partnoy on Off-Balance Sheet Transactions (MMBM)</a> from <a href="http://vimeo.com/rooseveltinst">Roosevelt Institute</a> on <a href="http://vimeo.com/">Vimeo</a>.</p> <p>Partnoy makes a compelling case for disclosure. Any attempts to bring about disclosure, however, will result in major public consternation about some of the financial biggies. Some will instantly appear bankrupt (which they are, they’ve just been able to hide it well). Others will suffer from extreme leverage and thus will need to curtail themselves. And the few institutions that have done the right thing will also suffer from the general damage that deleveraging causes. That will impact everyone, everywhere; perhaps that’s why we aren’t seeing such disclosure requirements being pushed. If everything stays ok, we can continue to party, until the next, bigger crisis. But what if it doesn’t?</p> <p>Partnoy also makes the point that the world is close to what it was in 1929. The markets most of their losses in 1930 (tick). We are speaking of resuming the party and that the recession is finally behind us. (tick) The figures show that recovery is indeed visible. (tick) Yet, the US markets crashed more than 80% after the 1930 highs. But then, a similar situation happened in 1987 when markets crashed a lot, and within a year, recovered. It stayed so-so for four years and then continued one of the biggest bull runs in history, till 1999. The formula used in the 2000 crisis (and even 1987) was to keep credit cheap, interest rates low, fudge figures and do “off balance sheet” business to the hilt. Today is no different, and everyone’s doing it including governments. Same table, higher stakes. But will we do 1987, or will we do 1929? Or is the 21st century going to be something else entirely? I wish I could tell.</p> <div class="blogger-post-footer"><p style="border: 1px solid #C888C8">
This post is written by <a href="http://blog.investraction.com">Deepak Shenoy</a>,
at <a href="http://blog.investraction.com">Capital Mind</a>.
</p><img width='1' height='1' src='https://blogger.googleusercontent.com/tracker/18601284-5898616961527588166?l=blog.investraction.com' alt='' /></div>
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Posted by Deepak Shenoy (noreply@blogger.com) on March 13, 2010 12:38 PM · permalink
This chapter contains a discussion of the reciprocity and perceptual contrast theories, and how they are successfully used against unsuspecting individuals in order to derive abnormal profits. The human concept of reciprocation makes us more likely to do something for someone when they have done something for us. "Perceptual contrast" makes us more willing to agree to something when presented in comparison with something that appears worse.
We've already seen both of these human tendencies (here and here) when we looked at Charlie Munger's discussion of human tendencies, but in Influence, Cialdini demonstrates them a bit more clearly with examples and shows more thoroughly how they are used as weapons against us by those who exploit these tendencies.
The concept of reciprocity is deeply ingrained in all human cultures. Cialdini argues that this trait has been a major contributor to human evolution, as it has allowed humans to give favours and resources to others with the knowledge that they will be returned. This has created a "network of obligation" that has allowed humans to share goods and services in a manner that has allowed the group to prosper.
Cialdini delves into a large number of odd historical occurrences and purposeful psychological experiments that demonstrate how powerful these tendencies are. Under ordinary circumstances, there is a strong correlation between how much we like a person, and what favours we are willing to do for them. But once a favour has been done for us, the correlation between how much we like a person and what we'll do for them goes out the window: Cialdini shows that whether we like a person or not, we will do a favour for them if we have accepted one from them.
Furthermore, the favours do not have to be of the same magnitude, and the receiver of the initial favour need not even want the favour in order to feel the sense of obligation. This is a powerful tool that is exploited by salespeople, charities, and religions, all of whom offer gifts in order to instill a sense of obligation in the receiver. In this way, the initiator is choosing the gift, and then asking for a larger return, also of the choosing of the initiator, resulting in a very profitable outcome!
Exploiters achieve the highest profits, however, when reciprocity is combined with perceptual contrast. For example, if one is asked to volunteer one hour per week for a year, one may see a high rejection rate. But following this question, if one is asked to volunteer just once for one hour, one is likely to see much higher acceptance rates than if the first question was never asked. This is because the second request is seen as much more reasonable than the first request (perceptual contrast), and because the initiator has accepted the initial rejection, thereby instilling a sense of obligation in the subject.
Everyone from politicians (accepting campaign financing and then returning favours to the donors, voting for bills because they are sponsored by members to whom favours are owed) to consumers (receiving small gifts which lead to purchases, trying out samples which instill an obligation to purchase) to scientists (receiving funding from special interests that tend to influence experiment conclusions) are susceptible to being influenced by these factors. Understanding how these tendencies are being used is the best defense to feeling a sense of obligation to the exploiter.
Posted by Saj Karsan (sajid.karsan@barelkarsan.com) on March 13, 2010 11:27 AM · permalink
<span style="font-weight:bold;">Scripscan:Beckons Industries Ltd<br />BSE code:531937<br />cmp:11<br /><br />Story:Lot of people suddenly are going gung-ho in the above mentioned counter.So is it worth paying all the attention?Lets check out folks.<br /><br />a)The company presently undertakes the manufacturing of computer stationary<br />and other peripheral items on commercial basis.This business of the company is still passing through and acute recessionary state due to the change in technology and decrease in demand of continuous computer stationary.Due to the change in the use from Continuous Computer Stationary to that of cut sheets and as introduction of modes of computer peripherals,the existing business of the Company is being continuously effected since last many years.The company has been trying its best to explore the alternative use of the available plant and machinery but no positive results are up-coming.Since the company has entered into long term contracts and arrangements with Government sectors whereat for billing and other purposes the continuous computer stationary is being used, it has become compulsion to continue with the existing business even though with no margin.<br /><br />b)The other segment i.e. Bio fuel (The renewable energy), the 1st Phase of research and development work on Algal Technology i.e. prototype has been completed and work on II nd phase of its Demonstration and validation is still going.Its production stuff and algae has been frequently discussed so am not penning about it but my issues are:-<br /><br />1)Some people are hyping about the great growth story another reason being Deutsche bank which owns a lot of stake in the company thanks to conversion of its GDR.It should be prudent to note that the same bank is the leader in P-notes segment and am pretty sure the investment in beckons relates to that.Theres no point about such a gigantic bank taking stake in a tiny company which is yet to evolve.As we all know black money moves out from our country gets channelised only to come back using this participatory notes as a vehicle.<br /><br />2)Am told the management own 7-11% stake in the company.Huuh,11% stake is a pity.The management would get salary whether they holds any stake or not,with higher stake they works harder as price increases they would be the biggest beneficiary.With such a meagre stake they may not care to work that diligently.Also,Under India`s companies law, an entity holding 26% plays a crucial role in influencing board decisions and virtually enjoys management control.So if the company has such a great future why other companies are not coming to acquire it?So many cash rich companies are hungry for small companies with robust future.Honestly,beckons is an easy acquisition candidate anybody can acquire it,But why would they?I am not bullish about it,neither convinced about the management as they came in this algae arena just few years ago.The core business has been stagnant for years,they couldn't make it big.So many reasons to refrain from making an investment in it. <br /><br />Regards,<br />ARUN<br />I can be reached at:-arunanalyst@rediffmail.com </span><div class="blogger-post-footer"><script type="text/javascript"><!--
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Posted by arun (noreply@blogger.com) on March 13, 2010 07:00 AM · permalink
<div style="text-align: justify;"></div><div style="text-align: justify;"><br /></div><div style="text-align: justify;">The case hearing has finally concluded :-). We should hopefully have the judgement within a week bringing to close a long drawn saga. The link to the earlier post is given below </div><div style="text-align: justify;"><br /></div><div style="text-align: justify;"><a href="http://investingvalues.blogspot.com/2010/01/zenotech-update.html">http://investingvalues.blogspot.com/2010/01/zenotech-update.html</a></div><div style="text-align: justify;"><br /></div><div style="text-align: justify;">From the Supreme Court site</div><div style="text-align: justify;"><span style="color: blue;">UPON hearing counsel the Court made the following</span></div><div style="text-align: justify;"><span style="color: blue;"></span></div><span style="color: blue;"></span><span style="color: blue;">O R D E R</span><br /><div style="text-align: justify;"></div><div style="text-align: justify;"><span style="color: blue;">Mr. F.S.Nariman, learned senior counsel, made his submissions from 10.35 a.m. to 12.40 p.m. Mr.Ashok Desai, learned senior counsel, thereafter, made his submissions for fifteen minutes. Mr.C.A.Sundaram, learned senior counsel, thereafter, advanced his arguments upto 3.05 p.m. Learned Attorney General made his submissions for about fifteen minutes.</span></div><span style="color: blue;"></span><span style="color: blue;">Hearing concluded. Judgment reserved.</span><br /><div style="text-align: justify;"></div><span style="color: blue;"></span><span style="color: blue;">Liberty to parties to file written submissions within one week.</span><br /><div style="text-align: justify;"></div><div class="blogger-post-footer"><img width='1' height='1' src='https://blogger.googleusercontent.com/tracker/3120517700412488632-815240295391480113?l=investingvalues.blogspot.com' alt='' /></div><img src="http://feeds.feedburner.com/~r/ValueInvestingToInvestingValues/~4/_v48OLy58-o" height="1" width="1"/>
Posted by Ninad Kunder (noreply@blogger.com) on March 13, 2010 04:56 AM · permalink
I have been involved in multiple delisting opportunities where I work closely with my friends <a href="http://valueinvestorindia.blogspot.com/">Rohit Chauhan </a>and <a href="http://arpitranka.blogspot.com/">Arpit Ranka</a>. <br /><br /><br />Rohit had written on his blog about one of the delisting opportunities that we had analysed and were involved together. The company involved was Elantas Beck. The link to it is attached here<br /><br />First post <br /><a href="http://valueinvestorindia.blogspot.com/2010/01/arbitrage-case-study-elantas-beck.html">http://valueinvestorindia.blogspot.com/2010/01/arbitrage-case-study-elantas-beck.html</a><br /><br />Follow up post <br /><a href="http://valueinvestorindia.blogspot.com/2010/01/clarifications-on-previous-post.html">http://valueinvestorindia.blogspot.com/2010/01/clarifications-on-previous-post.html</a><br /><br />I had subsequently written a guest post on Rohit’s blog talking about the framework that is employed by us to look at evaluating delisting and other special situation opportunities. The link to that post is attached below. <br /><a href="http://valueinvestorindia.blogspot.com/2010/02/special-opportunity-framework.html">http://valueinvestorindia.blogspot.com/2010/02/special-opportunity-framework.html</a><br /><br />Subsequent to these posts we also analysed / invested in the delisting of Micro Inks and I plan to put out a separate post on how this particular opportunity was evaluated and the returns it generated.<div class="blogger-post-footer"><img width='1' height='1' src='https://blogger.googleusercontent.com/tracker/3120517700412488632-8459323087348122551?l=investingvalues.blogspot.com' alt='' /></div><img src="http://feeds.feedburner.com/~r/ValueInvestingToInvestingValues/~4/ZbYkNZQFzjQ" height="1" width="1"/>
Posted by Ninad Kunder (noreply@blogger.com) on March 13, 2010 04:54 AM · permalink
<a href="http://2.bp.blogspot.com/_yxDXLyjgmlU/S5sP3NE07sI/AAAAAAAAKfY/wh4B9wcVi98/s1600-h/SCOMP_MAR12.PNG"><img style="MARGIN: 0px 10px 10px 0px; WIDTH: 200px; FLOAT: left; HEIGHT: 136px; CURSOR: hand" id="BLOGGER_PHOTO_ID_5447965615311875778" border="0" alt="" src="http://2.bp.blogspot.com/_yxDXLyjgmlU/S5sP3NE07sI/AAAAAAAAKfY/wh4B9wcVi98/s200/SCOMP_MAR12.PNG" /></a><br /><div>Here's the sectoral performance this week.</div><div class="blogger-post-footer"><img width='1' height='1' src='https://blogger.googleusercontent.com/tracker/5184850244660132569-2035355654196005143?l=timamo.blogspot.com' alt='' /></div>
Posted by The Rebel (noreply@blogger.com) on March 13, 2010 04:10 AM · permalink
<a href="http://3.bp.blogspot.com/_yxDXLyjgmlU/S5p-8c4pDTI/AAAAAAAAKfQ/i7sl3Nf7Fko/s1600-h/ATR.PNG"><img style="TEXT-ALIGN: center; MARGIN: 0px auto 10px; WIDTH: 400px; DISPLAY: block; HEIGHT: 264px; CURSOR: hand" id="BLOGGER_PHOTO_ID_5447806276269051186" border="0" alt="" src="http://3.bp.blogspot.com/_yxDXLyjgmlU/S5p-8c4pDTI/AAAAAAAAKfQ/i7sl3Nf7Fko/s400/ATR.PNG" /></a><br /><div align="justify">Back in January this year when the index was at 5275 (arrow above), the 20 day ATR was at 61 making it 1.15% of the close. The current reading is 65 @ 5137 or 1.26%. So we're close to the bottom and can expect an explosive move - downward - next week. Low volatility begets high volatility and so on...</div><div align="justify"> </div><div align="justify"></div><div align="justify">BTW, I've read <a href="http://www.amazon.com/Bollinger-Bands-John/dp/0071373683"><strong>John Bollinger's book</strong> </a>at least 15 times, and the more I read it, the more I discover something new! And not to forget the great <a href="http://www.amazon.com/New-Concepts-Technical-Trading-Systems/dp/0894590278"><strong>Welles Wilder</strong> </a>for the ATR - it's a beauty! :p </div><div class="blogger-post-footer"><img width='1' height='1' src='https://blogger.googleusercontent.com/tracker/5184850244660132569-5915159308834388994?l=timamo.blogspot.com' alt='' /></div>
Posted by The Rebel (noreply@blogger.com) on March 12, 2010 06:22 PM · permalink
<a href="http://1.bp.blogspot.com/_yxDXLyjgmlU/S5pGT_r5yrI/AAAAAAAAKfI/oninIY1du3E/s1600-h/0312.PNG"><img style="TEXT-ALIGN: center; MARGIN: 0px auto 10px; WIDTH: 400px; DISPLAY: block; HEIGHT: 264px; CURSOR: hand" id="BLOGGER_PHOTO_ID_5447744008585071282" border="0" alt="" src="http://1.bp.blogspot.com/_yxDXLyjgmlU/S5pGT_r5yrI/AAAAAAAAKfI/oninIY1du3E/s400/0312.PNG" /></a><br /><div align="justify">Although the 10 day a/d ratio is above 1.7, the breadth hasn't been good for the last four sessions : 385/953, 505/822, 442/899 and today it is 451 / 872. Today's reading has dipped the ratio. The failure of the index to trade above 5150 and the many small bodies around the upper Bollinger band are sure signs of topping out.<br /></div><a href="http://1.bp.blogspot.com/_yxDXLyjgmlU/S5pGQBEoNbI/AAAAAAAAKfA/C2dlPjMKxKw/s1600-h/ADR.PNG"><img style="TEXT-ALIGN: center; MARGIN: 0px auto 10px; WIDTH: 400px; DISPLAY: block; HEIGHT: 273px; CURSOR: hand" id="BLOGGER_PHOTO_ID_5447743940237735346" border="0" alt="" src="http://1.bp.blogspot.com/_yxDXLyjgmlU/S5pGQBEoNbI/AAAAAAAAKfA/C2dlPjMKxKw/s400/ADR.PNG" /></a><br /><br /><div></div><div class="blogger-post-footer"><img width='1' height='1' src='https://blogger.googleusercontent.com/tracker/5184850244660132569-5772669796823934147?l=timamo.blogspot.com' alt='' /></div>
Posted by The Rebel (noreply@blogger.com) on March 12, 2010 02:00 PM · permalink
But determining the market value of certain assets can be rather difficult, as in many cases a company's balance sheet will state the assets at cost, even if they were purchased decades ago. This issue is particularly pertinent for companies that hold a lot of real estate, as while land values have appreciated over time, the gains have gone unrecognized on company balance sheets. As a result, investors can put hours or days of effort into attempts to value a company's portfolio of real-estate holdings. When you consider that there may be several investors putting in this type of effort for companies with large land-holdings, it is not inconceivable that years of effort (in the aggregate) are put into valuing such assets.
One company that is making life easier for the investor is Genesis Land Development (GDC), a real-estate development company that plans to have its properties independently appraised and subsequently publish the results! I considered this company as an investment several months ago, but due to the fact that I did not feel confident in determining the value of the company's real-estate assets in combination with the company's debt level, I did not feel I could put a value on the company with any certainty.
What Genesis is doing, however, is beneficial to both investors and the company. Investors, in the aggregate, save time (that can better be spent scouting other investments) and the company makes it widely known what its assets are worth, which should help bring a stock price towards its net asset value. Presumably, Genesis management feels the stock is trading at an undervalued level, but investors don't know the properties as well as does management, so this is a way to bridge that gap.
This is a route more companies should go, even those that are not pure real-estate plays. Often, a company's headquarters may be worth far more than its stated value, but the information is not well-disseminated and shareholders that can't put a value on the real-estate may shy away. By providing up-to-date information on company asset values, companies that trade at discounts would likely to see stock price rises.
Disclosure: None
Posted by Saj Karsan (sajid.karsan@barelkarsan.com) on March 12, 2010 11:57 AM · permalink
<p><a href="http://www.openthemagazine.com/article/living/jhunjhunwala-s-real-bull-run" target="_blank">A story about the (almost) billionaire</a> talks about all of the stuff beyond the trading room. His children, an 18,000 sq. ft. holiday home, how his wife had to be on total bed-rest for three months before delivering their daughter, the Mumbai blue-bloods who tried to make it difficult for the middle-class rooted tycoon buying into their society and the best part – that he has no customer, no clients except Rekha, his wife, who’s a captive customer. Very impressive, and very inspiring.</p> <blockquote> <p>The latest Forbes India rich list counts 49-year-old Jhunjhunwala as the 58th richest man in the country, with a fortune of $915 million (Rs 4,209 crore). “I have far less than people think, far more than I need. My wealth fluctuates by 5 per cent every week,” he says. But even an amateur guesstimate of listed and unlisted investments, private equity interests and cash holdings safely puts the former chartered accountant’s net worth at over a billion dollars. “Whatever is known publicly is underestimated,” says a source close to him.</p> </blockquote> <p>On a different note, This is an interview I’m sure he appreciated:</p> <p> <div class="wlWriterEditableSmartContent" id="scid:5737277B-5D6D-4f48-ABFC-DD9C333F4C5D:263d2a70-0d4a-4e7e-bbb5-2d41cd07e9d8" style="padding-right: 0px; display: inline; padding-left: 0px; float: none; padding-bottom: 0px; margin: 0px; padding-top: 0px"><div id="20d87e33-1479-4d8c-b560-8202ae3820be" style="margin: 0px; padding: 0px; display: inline;"><div><a href="http://www.youtube.com/watch?v=E4NnqYSwc_Y&hl=en_US&fs=1&color1=0x006699&color2=0x54abd6" target="_new"><img src="http://lh5.ggpht.com/_cwHfePkadc4/S5oBhAYyj-I/AAAAAAAAAlA/5ftT9j7qVsk/video4400290743aa%5B2%5D.jpg?imgmax=800" style="border-style: none" galleryimg="no" onload="var downlevelDiv = document.getElementById('20d87e33-1479-4d8c-b560-8202ae3820be'); downlevelDiv.innerHTML = "<div><object width=\"425\" height=\"355\"><param name=\"movie\" value=\"http://www.youtube.com/v/E4NnqYSwc_Y&hl=en_US&fs=1&color1=0x006699&color2=0x54abd6&hl=en\"><\/param><embed src=\"http://www.youtube.com/v/E4NnqYSwc_Y&hl=en_US&fs=1&color1=0x006699&color2=0x54abd6&hl=en\" type=\"application/x-shockwave-flash\" width=\"425\" height=\"355\"><\/embed><\/object><\/div>";" alt=""></a></div></div></div></p> <div class="blogger-post-footer"><p style="border: 1px solid #C888C8">
This post is written by <a href="http://blog.investraction.com">Deepak Shenoy</a>,
at <a href="http://blog.investraction.com">Capital Mind</a>.
</p><img width='1' height='1' src='https://blogger.googleusercontent.com/tracker/18601284-3291379594067886117?l=blog.investraction.com' alt='' /></div>
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Posted by Deepak Shenoy (noreply@blogger.com) on March 12, 2010 08:55 AM · permalink
<ul> <li>WSJ: <a href="http://online.wsj.com/article/SB10001424052748703625304575115963009594440.html" target="_blank">Lehman Torpedoed Lehman</a> – A bankruptcy court examiner investigates and finds that senior Lehman executives fudged its balance sheet, kept the board uninformed and bumped up asset values. </li> <li>ICICI Bank stops <a href="http://www.livemint.com/2010/03/11233333/ICICI-Bank-stops-selling-lifet.html?h=A1" target="_blank">giving out free lifetime cards</a>. What’s happening in there? They recently sold their <a href="http://economictimes.indiatimes.com/news/news-by-industry/banking/finance/banking/Cost-cutting-ICICI-sells-Prabhadevi-property/articleshow/5661134.cms" target="_blank">CEO’s house</a>. Insiders have started selling – two of them, including an ED, have sold between 70-100% of their holding in the last week. Building up fee income and clearing out assets? The stock has been doing amazingly well, up over 15% in the last month. </li> <li>The Index of Industrial Production (IIP) data for Jan 2010 <a href="http://mospi.nic.in/t2.pdf" target="_blank">shows a 16.7% increase</a> since Jan 2009. The data is unreliable, because the revisions are huge. Example: The December release last month showed an index value of 331.7 – it has been revised to 334. Similar revisions on the downside happen all the time. Better, perhaps to look at seasonally adjusted figures, <a href="http://www.mayin.org/cycle.in/tracking.html" target="_blank">available online</a> through Ajay Shah’s blog, will probably get updated with Jan figures next week. In December the headline was over 16%, but the SAAR was 11%. <br /><a href="http://lh4.ggpht.com/_cwHfePkadc4/S5ntzNhWORI/AAAAAAAAAk4/CnAPy3Tbqo0/s1600-h/image%5B3%5D.png" target="_blank"><img title="image" style="border-right: 0px; border-top: 0px; display: inline; border-left: 0px; border-bottom: 0px" height="209" alt="image" src="http://lh5.ggpht.com/_cwHfePkadc4/S5nt0f_KfvI/AAAAAAAAAk8/nF4y-cpM9So/image_thumb%5B1%5D.png?imgmax=800" width="240" border="0" /></a> </li> <li>Sugar seems to be in the news, and for a change because <a href="http://www.livemint.com/2010/03/11224754/Outlook-for-sugar-industry-unc.html" target="_blank">prices are going down</a>. Perceptions of scarcity are changing, it seems, with ex-mill prices falling to Rs. 34 from Rs. 40. Sugar is a highly political industry and Maharashtra/UP are the big players. Sugar companies make money – 3-4 rupees a kg – from by-products like mollasses or co-generated power, but both have political controls like how much you can store, who gets paid for excess power etc. Global prices are also on the way down, but nowhere near the cycle lows. </li> <li>China might increase rates, from accelerating inflation, <a href="http://www.bloomberg.com/apps/news?pid=20601087&sid=aZk7HcoeEmB4&pos=4" target="_blank">says Bloomberg</a>. Inflation in China has reached 3.5%, which to India will seem like a fantastically low figure for a country growing, er, faster than us. But the fudging in China is of gargantuan proportions – when the data is bad, the response is usually to keep data hidden, or massage it appropriately. Yes, everyone’s doing it nowadays but China is the master of the art. </li> <li>Forbes releases the list of <a href="http://www.forbes.com/2010/03/09/worlds-richest-people-slim-gates-buffett-billionaires-2010-intro_slide_2.html?partner=blog" target="_blank">worldwide billionaires</a>, and Marketfolly <a href="http://www.marketfolly.com/2010/03/forbes-billionaire-list-hedge-fund.html" target="_blank">highlights the “hedgies”</a> (fund managers) on the list.</li> </ul> <div class="blogger-post-footer"><p style="border: 1px solid #C888C8">
This post is written by <a href="http://blog.investraction.com">Deepak Shenoy</a>,
at <a href="http://blog.investraction.com">Capital Mind</a>.
</p><img width='1' height='1' src='https://blogger.googleusercontent.com/tracker/18601284-6491661660912992868?l=blog.investraction.com' alt='' /></div>
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Posted by Deepak Shenoy (noreply@blogger.com) on March 12, 2010 07:31 AM · permalink
Posted by Deepak Singh on March 12, 2010 01:29 AM · permalink
Basics - type 1 and type 2 errors >>> <a href="http://en.wikipedia.org/wiki/Type_I_and_type_II_errors"><strong>wiki</strong></a><br /><br />:)<div class="blogger-post-footer"><img width='1' height='1' src='https://blogger.googleusercontent.com/tracker/5184850244660132569-1807985060835140591?l=timamo.blogspot.com' alt='' /></div>
Posted by The Rebel (noreply@blogger.com) on March 11, 2010 04:50 PM · permalink
<span style="font-weight:bold;">Scripscan:Globus Corporation Ltd<br />cmp:1.75<br />Code:531904<br /><br />Story:Recently I have been getting a lot of mails from people whether they should buy "Globus Corporation " since it “was now seeing a good momentum”.I knew little about the stock,except that its a penny stock quoting at 1-2 bucks.Since last few days,research reports on globus corporation flooded in from several "knowledgable investors" also claiming insider knowledge of some interesting developments.As a matter of policy I ignore all tips.Sometimes you lose a good opportunity as in this case;equally, though, you may be among the last to be tipped off.Then,as early buyers offload their stock,you are left holding the baby.I prefer to trust my own judgement no matter I win or loose.I have a particular distrust of rumours relating to promoters stuffs and all.<br /><br />So with so many great people behind it I finally decided to have a glance through the company,who knows maybe the long awaited golden goose is there waiting for me.So with sheer excitement and trembling hands I finally stand infront of the golden goose,i.e,Globus Corporation Ltd.So here we go:-<br /><br />Globus Corporation Ltd engages in the manufacture of ACSR and AAAC power conductors, and AAA wires primarily in India. It also trades electrical and electronics items, copper scrap cables/switch gears, cotton fabrics, metal items, paper products, GI wires/cables/metal wires/bars/coils/sheets/rods, and PVC wrappers.There you go:power related stuff-the present sizzling flavour of our stock markets,wah wah.<br /><br />Oops.......stock splitted.Its a "FV 2" paid up company...dhatt tariki...equity blotted.Hmm let see whats more is in store of us.<br /><br />Oh my god the company changed its name from karuna cables to Globus coporation.Maybe globus signifies global and company with "chawaani auwkaat" is all set to start its global operations.Chalo sahi bat hain.<br /><br />Recently the company approved Postal Ballot for changing the business line,Object Clause(Power Equipement).Couldnt make it big with the existing line of products in the last decade now diversifying into newer areas for?No idea guys. <br /><br />No loss in book too infact it earned a PAT Of nearly 14 lakhs with 20crs turnover.Pitiable profit margin and no hopes of bettering it.In march 2004 it delivered a profit of 2crs since then the journey has been 'pathetically superb' I guess to say the least. <br /><br />So what is left to talk about?maybe they have got some land,maybe something hidden is there, aree kuch to hoga?Nothing has been clarified...tiny topline no botomline.Promoters holding barely 12-13%.Its quite certain folks,"The stunt is going on in the open gallery."Do u wanna be a part of it?<br /><br />AB TUMHARE HAWALE "GLOBUS" SATHIYO...............................<br /><br /><br />Regards,<br />ARUN<br />I can be reached at:-arunanalyst@rediffmail.com</span><div class="blogger-post-footer"><script type="text/javascript"><!--
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Posted by arun (noreply@blogger.com) on March 11, 2010 12:23 PM · permalink
<p><span>Some late hour buying pulled the Indian markets high into the positive territory from what was otherwise looking like a lacklustre close to the day. Strength was seen in stocks from the IT and banking sectors. However, auto and FMCG stocks continued to trade weak. On the broader BSE, there were two losers for every stock that closed in the positive today. <br><br>The BSE Sensex and NSE Nifty closed with marginal gains of around 70 points (0.4%) and 30 points (0.6%) respectively. Mid and small cap stocks however closed in the red. The BSE Midcap and BSE Smallcap indices closed down by 0.2% and 0.5% respectively. At the time of writing this, the rupee was trading at 45.57 to the US dollar. </span></p>
Posted by Equitymaster on March 11, 2010 12:01 PM · permalink
On rare occasion, however, the target management and board will actually agree to a takeover price below the current market price! This may sound unbelievable, but it happened this week when Jones Soda (JSDA) agreed to be acquired for under $10 million. On the day before the announcement, however, the market cap of the stock was over $20 million!
Even after the announcement, shares of Jones Soda continue to trade above the value of the take-under price: the company still trades for over $14 million, even though Jones' board has agreed to the transaction!
So what is going on here? Has the market gone crazy, or does the market see potential in the share price that the board is missing? Shareholders must approve the take-under transaction before it can go through; but at the current price, you'd have to think buyers would be nuts to pick up these shares unless they can defeat the merger. Nevertheless, almost three million shares traded hands immediately following the announcement.
So are these buyers nuts, or can they defeat the merger? I can't really tell. However, a cursory look at the financial statements of Jones appears to suggest it is selling itself for less than its liquidation value. The filing of lawsuits appears imminent.
If you spend enough time watching the markets, you will come across rare, shocking stories every once in a while. But I haven't seen anything as weird as this take-under offer since this occurred in September of 2008.
Posted by Saj Karsan (sajid.karsan@barelkarsan.com) on March 11, 2010 11:08 AM · permalink
<p><a href="http://feedads.g.doubleclick.net/~a/q6KBBol0IlHEPVlPEv2RhvoC9L4/0/da"><img src="http://feedads.g.doubleclick.net/~a/q6KBBol0IlHEPVlPEv2RhvoC9L4/0/di" border="0" ismap="true"></img></a><br/>
<a href="http://feedads.g.doubleclick.net/~a/q6KBBol0IlHEPVlPEv2RhvoC9L4/1/da"><img src="http://feedads.g.doubleclick.net/~a/q6KBBol0IlHEPVlPEv2RhvoC9L4/1/di" border="0" ismap="true"></img></a></p><p></p><p>Credit cards are becoming increasingly common in India, and while they come with a lot of convenience, the high interest rates and other charges mean that you have to be careful about how you use them.</p>
<p>In this post, we look at 5 tips on wise credit card usage, and how following them, can save you a whole lot of financial heartache. These 5 tips are pretty logical & self-evident; we have to understand that the free credit we get from a credit card is not really free. It’s actually a business for Credit card companies and hence somewhere in the whole process, they have to have a way to make money .</p>
<p><strong>1. Pay your balance in full:</strong> This one is so basic, I was not going to point it out at all, but on second thought – I realized that this should <em>really </em>be the first point. Of all the loans you take, credit cards come with the highest interest rates. If you run a credit card balance every month, then the interest charges add up really quickly. If you have a balance on your credit card, pay it off in full before the next due date. This ensures that you don’t pay interest on your balance, which really is extra money you can keep to invest and build savings for yourself.</p>
<p>Curiously enough, I know of people who don’t pay off their credit card balance in full, but at the same time, put their money in low yield investments. This is <em>really bad math</em>. If you have a credit card balance that is charged at about 30% per annum and an investment that gives you just an 8% return – you are much better off paying the entire credit card balance before you even think of investing your money. The extra interest you pay on your outstanding balance offsets any interest income you receive from your investment. If you run a balance, realize, it normally is a strong indication that you are spending beyond your means. This is a bad financial habit that you should get rid of as soon as possible.<br />
<strong><br />
<strong>2. Avoid credit cards with annual fee:</strong></strong> Unless you have a specific benefit in mind, from the credit card, don’t get a card that has an annual fee. It is always good, to get a credit card with no annual fee, because then the only expense you have on it, is the interest payment; and if you pay off your balance in full every month – you don’t pay any interest and your credit card will, in effect, <em>be free!</em> Add to that, the fact, that even most free credit cards have some sort of a reward program, you can benefit from. Why pay for something when you can get it free?</p>
<p>The other thing to keep in mind, while evaluating the fee, is how likely you are to benefit on it, based on your usage. I reviewed the <a href="http://www.onemint.com/2009/10/29/hdfc-value-plus-credit-card-cash-back-credit-card/" target="_blank">HDFC Value Plus Cash Back credit card</a> a few months ago, which had an annual fee of Rs. 700 and up to 5% cash back. At a cursory glance, it seemed to me that Rs.700 may not be very high due to the cash back, but a deeper look at the terms and conditions told me, that the cash back will only be credited to your account if the monthly balance is over Rs.10,000. I realized the card was not meant for people like me, who aren’t likely to run up such a balance on their credit card every month.</p>
<p><em>Bottom-line:</em> If you are going for a credit card that has an annual fee – make sure you go through the fine print and are certain it will be worth the cost to you.</p>
<p style="text-align: center;"><img class="aligncenter" src="http://www.frogview.com/uploadimages3/4948e2e1985728.51689850frogview-gallery.jpg" alt="4948e2e1985728.51689850frogview gallery 5 Logical Tips about Credit Cards" width="400" height="373" title="5 Logical Tips about Credit Cards" /><a href="http://www.frogview.com/uploadimages3/4948e2e1985728.51689850frogview-gallery.jpg" target="_blank">Credit</a><br />
<strong> </strong></p>
<p><strong>3. Get a credit card that is easy to pay off:</strong> I used to have an ICICI credit card and a SBI credit card. Both of them had similar features, but the ICICI card was really easy for me to pay off, as I had an existing ICICI Bank account, and the credit card was linked to it online. All I had to do, was go online, and pay off the credit card balance, through my ICICI login. As a result, I ended up using the ICICI credit card a lot more than the SBI one. Ease of payment, means that I can pay off the balance very often, very easily, and rarely run the risk of late fees or interest charges. While thinking of which credit card to apply for – consider just how easy it is, to make a payment on it.</p>
<p>This might sound like a trivial thing now, but you’d kick yourself later, if you had to pay late fees just because you lost your cheque book, or were too busy with your work to go to the bank and deposit the cheque. In fact, I’d go on to suggest that you add payment reminders on your email, phone or even a little post it on your refrigerator. Life gets busy sometimes, and a little help can go a long way in saving you late fee and interest payments.</p>
<p><strong><br />
<strong>4. Keep a track of your statement:</strong></strong> A few years ago I went through my credit card statement online and saw that there were some charges from an unknown merchant. I was pretty sure, I had not bought anything from them, and I called up customer care to know what the charges were all about. I was put on hold for a long time, and couldn’t get through. However, the next day, I noticed that the merchant had reversed the transaction, and I even had a small credit from them.</p>
<p>While I was lucky in this case, there is no guarantee that credit cards won’t get abused. Always keep track of your monthly statement. If you can go online and check your transactions – that is even better, because you don’t have to wait until the end of the billing period. I go online every week or so and check up on my credit card statement to make sure no unauthorized use is happening.<br />
<strong><br />
<strong>5. Don’t use your credit card as an ATM: </strong></strong>By this, I don’t mean that you shouldn’t use your credit card at the ATM, (although you should <em>really, really avoid it</em> as far as possible). What I mean is, there’s a tendency to withdraw cash from your credit card (since it’s so convenient) and that’s pretty addictive. Treating your credit card as an easy, reliable, access to cash will not help you in the long run. For one, the interest rates on cash withdrawals are generally much higher, and if you get into this habit, – you <em>will</em> run up high outstanding balances pretty quickly.</p>
<p>The cash advance limit, is also generally, a lot less, than the overall credit limit, so it won’t get you very far, anyway. The interest will keep adding up and grow very quickly. Withdrawing cash from your credit card should really be <em>the last option</em>. Usually, cash withdrawals come with some sort of cash advance charges, and more than that if you regularly withdraw cash from your credit card – again, it indicates a tendency to overspend and go beyond your means. This really means, that your personal finances are going down-hill.</p>
<p></p>
<p><span style="text-decoration: underline;"><strong>Read a Customer review on Mouthshut</strong></span></p>
<blockquote><p>I have saved all my friends by sharing my horrible experiences with ICICI Credit Cards.The customer care people are polite only till the greetings other wise they behave and speak like a criminal and very sarcastically. I have been using it for 2 years. But the customer care behavior problem is consistent. Normally I have been paying them always on time and the bill is normally above RS 5000. But once (3 months back) I had to go outstation suddenly and missed the pay date for first time for a day or two. The amount this time was also very low (maybe 1500 or 1800) as compared to other months bills. I suddenly started getting calls from a HORRIBLY SPEAKING customer care lady. When I mentioned I am travelling and will not be able to pay for another 2 days as my journey is a 3 day journey she started abusing and threatening me. She even mentioned that by tomorrow morning if I will not arrange for the payment she will send some one to my home for payment, when I said this is rubbish and she should not speak like this she started shouting and said “I will send someone and can do anything if not payed by tomorrow and reminded me that if I will not pick this call after seeing her number further she will be worse”. Is this is the way a bank should treat a long time and good customer? I have stopped using the card from that day. [<a href="http://www.mouthshut.com/review/ICICI_Credit_Card-179525-1.html" target="_blank">LINK</a>]</p></blockquote>
<p><strong>Credit Card Mistakes [Video]</strong></p>
<p><object classid="clsid:d27cdb6e-ae6d-11cf-96b8-444553540000" width="500" height="405" codebase="http://download.macromedia.com/pub/shockwave/cabs/flash/swflash.cab#version=6,0,40,0"><param name="allowFullScreen" value="true" /><param name="allowscriptaccess" value="always" /><param name="src" value="http://www.youtube.com/v/pOR9C4IafRk&hl=en_US&fs=1&color1=0x402061&color2=0x9461ca&border=1" /><param name="allowfullscreen" value="true" /><embed type="application/x-shockwave-flash" width="500" height="405" src="http://www.youtube.com/v/pOR9C4IafRk&hl=en_US&fs=1&color1=0x402061&color2=0x9461ca&border=1" allowscriptaccess="always" allowfullscreen="true"></embed></object></p>
<p><strong>Conclusion</strong></p>
<p>The overarching theme of these tips is, <em>“Get the convenience of credit cards for free.”</em> That’s what it really boils down to.</p>
<p>To me, credit cards make shopping convenient and that is a big benefit, but at the same time, they also tempt me to go beyond my means, and then pay extra by way of interest. The key is to get the benefit of convenience but not have to pay anything for it. The above tips will help you do both, or at the very least – strike a balance between the two. What do you think? Have I missed out any obvious tips or is there something you’d like to add, based on your experiences?</p>
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Posted by Manish Chauhan on March 11, 2010 09:10 AM · permalink
<a href="http://2.bp.blogspot.com/_yxDXLyjgmlU/S5h3PMj_xRI/AAAAAAAAKeY/S2VzOlymHqw/s1600-h/10.PNG"><img style="TEXT-ALIGN: center; MARGIN: 0px auto 10px; WIDTH: 400px; DISPLAY: block; HEIGHT: 264px; CURSOR: hand" id="BLOGGER_PHOTO_ID_5447234852258563346" border="0" alt="" src="http://2.bp.blogspot.com/_yxDXLyjgmlU/S5h3PMj_xRI/AAAAAAAAKeY/S2VzOlymHqw/s400/10.PNG" /></a><br /><div align="justify">The bind on the Nifty continues. We'd a similar stretch before the markets broke out on the budget day. Something is gonna break sooner or later.</div><br /><br /><a href="http://3.bp.blogspot.com/_yxDXLyjgmlU/S5h3IrUO6yI/AAAAAAAAKeQ/TbwCfKDDgu4/s1600-h/RC.PNG"><img style="TEXT-ALIGN: center; MARGIN: 0px auto 10px; WIDTH: 367px; DISPLAY: block; HEIGHT: 206px; CURSOR: hand" id="BLOGGER_PHOTO_ID_5447234740254862114" border="0" alt="" src="http://3.bp.blogspot.com/_yxDXLyjgmlU/S5h3IrUO6yI/AAAAAAAAKeQ/TbwCfKDDgu4/s400/RC.PNG" /></a><br /><br /><div></div><div class="blogger-post-footer"><img width='1' height='1' src='https://blogger.googleusercontent.com/tracker/5184850244660132569-9098065004096732607?l=timamo.blogspot.com' alt='' /></div>
Posted by The Rebel (noreply@blogger.com) on March 11, 2010 04:56 AM · permalink
<a href="http://4.bp.blogspot.com/_yxDXLyjgmlU/S5hwlE112eI/AAAAAAAAKd4/_SEFZ8oYBo4/s1600-h/ADR.PNG"><img style="TEXT-ALIGN: center; MARGIN: 0px auto 10px; WIDTH: 400px; DISPLAY: block; HEIGHT: 272px; CURSOR: hand" id="BLOGGER_PHOTO_ID_5447227531561654754" border="0" alt="" src="http://4.bp.blogspot.com/_yxDXLyjgmlU/S5hwlE112eI/AAAAAAAAKd4/_SEFZ8oYBo4/s400/ADR.PNG" /></a><br /><div align="justify">The advance decline ratio now stands at 1.7 and rising. The overbought level comes in around 2 to 2.5. We are seeing a bit of topping out on the % of stocks above the short term 10, 20 day averages.</div><div align="justify"><br /> </div><a href="http://3.bp.blogspot.com/_yxDXLyjgmlU/S5hwh0clkmI/AAAAAAAAKdw/RKG7UFoWyvI/s1600-h/AVGS.PNG"><img style="TEXT-ALIGN: center; MARGIN: 0px auto 10px; WIDTH: 400px; DISPLAY: block; HEIGHT: 270px; CURSOR: hand" id="BLOGGER_PHOTO_ID_5447227475621155426" border="0" alt="" src="http://3.bp.blogspot.com/_yxDXLyjgmlU/S5hwh0clkmI/AAAAAAAAKdw/RKG7UFoWyvI/s400/AVGS.PNG" /></a><br /><br /><div></div><div class="blogger-post-footer"><img width='1' height='1' src='https://blogger.googleusercontent.com/tracker/5184850244660132569-6314775842749215653?l=timamo.blogspot.com' alt='' /></div>
Posted by The Rebel (noreply@blogger.com) on March 11, 2010 04:30 AM · permalink
Posted by Deepak Singh on March 11, 2010 01:00 AM · permalink
<p>Read Manish Chauhan’s excellent post on Agents <a href="http://www.jagoinvestor.com/2010/03/review-of-lics-wealth-plus-how-agents-are-miselling-it.html" target="_blank">misselling LIC Wealth Plus</a>. The product promises the highest NAV in the next seven years, and some agents are trying to sell this by using the NAV of a different policy (that does not have such a guarantee) and thus offering ridiculous rates like 40%!</p> <p><img height="480" src="http://www.jagoinvestor.com/images/HIndi Template for Wealth Plus from LIC 2.jpg" width="363" /> </p> <p>This is hardly surprising for ULIPs – a substantial amount of misselling happens there. But is the highest NAV product not worth it anyhow? Deepti Bhaskaran in Mint says that you may get the highest NAV, but <a href="http://www.livemint.com/2010/01/10211459/Highest-NAV-guaranteed-but-no.html" target="_blank">not the best returns</a>. </p> <p>The way it’s done is straightforward. Let’s say you have Rs. 100, which you have to guarantee highest NAV for seven years. I can put Rs. 63 in a seven year bond yielding 7%, and the remaining 37 can go into equity. (The Rs. 63, in seven years will grow to Rs. 100, so even if the equity portion goes to zero, you’re ok). After a year, assume the equity portion increases to Rs. 67. The New NAV will now become Rs. 135 or so (some returns will happen on the debt portion as well). Now you must guarantee 135 – so you move more money into debt – perhaps now it’s Rs. 100 debt, rest equity. </p> <p>What happens if the market goes down? The allocation to equity does not increase, because that will introduce risk to the guarantee. Yet, the right thing to do for a product that is supposed to yield high returns is to keep a healthy equity portion. </p> <p>With guaranteed products, that is simply not going to happen. So you might get a stroke of luck and a decent return, but in a market that goes down a lot and then revives, chances are you will seriously underperform. LIC’s wealth plus and other insurance company ULIPs won’t tell you this; unfortunately most buyers will find out only the hard way. It could be a useful product, though, for someone who understands the risk and still wants the guarantee; but the costs are fairly high. </p> <div class="blogger-post-footer"><p style="border: 1px solid #C888C8">
This post is written by <a href="http://blog.investraction.com">Deepak Shenoy</a>,
at <a href="http://blog.investraction.com">Capital Mind</a>.
</p><img width='1' height='1' src='https://blogger.googleusercontent.com/tracker/18601284-8208361839606839623?l=blog.investraction.com' alt='' /></div>
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Posted by Deepak Shenoy (noreply@blogger.com) on March 10, 2010 08:22 PM · permalink
<span style="font-weight:bold;">Plenty of doomsayers who are predicting markets to crash to 10000 level would prove wrong and as I anticipate markets would stabilize at 16300-17500 levels before making a decisive upmove.However,investors should lower their expectations and should not expect same bumper returns.Moreover,there may be profit booking at every rise.Partly, investors are also to be blamed for picking stocks at any price (upon hearsay) without looking at fundamentals of the company or at the valuations.This time, investors should try to avoid following mistakes:<br /><br />1)It will double in 1 month:If it were so, why tipster will tell you to make so much money?Instead, he himself will beg,borrow or steal to have enough money and buy entire quantity of such scrip for himself.<br /><br />2)Looks good on the chart:Intraday or short term traders may sometimes make money on this basis.However,it is a strict No No for long term investors.One should remember that no business enterprise runs on charts.Hence, how business of share investing can run on charts?<br /><br />3)Company has got an order:One should verify what is the execution period of such an order, when and how much it will contribute to company's topline and bottomline? Sometimes,bigger the order,lower the profit margin.<br /><br />4)They are planning an expansion:Expansion of production capacity necessarily does not mean expansion of bottomline also.Whether big investment in new capacity will yield judicious returns?Whether there is enough demand to meet expanded capacity? In the past,many big companies became BIFR case after their mad expansion.<br /><br />5)Won some export orders:Such order will constitute how much of total turnover in percentage terms?Did management clarify whether export orders are more remunerative or less remunerative?Export orders do not necessarily translate into higher profits.<br /><br />6)Big Bull is buying:Did they ever tell you what big bull is selling?<br /><br />7)Big Operator is buying:By the time such news reaches you,such operator has already turned into a seller and most probably,you are buyer of his sold quantities.<br /><br />8)CDR/OTS:In many many cases,companies became significant due to siphoning off funds by the promoters.What is the guarantee that promoters will not again siphon off the funds after CDR?Many companies became CDR case due to inefficiencies and they will continue to remain inefficient even after CDR.CDR means better future for those companies which were genuinely suffering due to bad market conditions and promoters have genuine reputation.However, investors tend to pick any CDR case company without realizing that perhaps this was the only CDR case in that industry in which most other companies were faring well.<br /><br />9)Going for GDR/FCCB: Most of the company's stock price falls sharply after GDR/FCCB issue.It clearly shows that share price was being ramped up before such issue.Hence, investors should avoid to buy such scrips at peak valuations just before GDR.<br /><br />10)Brokers tells you to average the scrip.It is advisable to average the scrip only if price has come down due to bad sentiment.However, in many cases, price is coming down due to expected lower performance in view of which lay investor is not aware.It is like betting again and again, more and more on a losing horse.Instead, investors can make up for their mistakes by investing additional money only in some other companies which are doing better.<br /><br />No one can exactly say whether market has bottomed or not? Investors should see whether the market will be higher than current level 6 to 12 month hence. If answer is yes, start investing.Equity is a long term instrument and if there is nothing wrong with the Indian companies you want to invest in, or the Indian economy and country as a whole, and if market is going down due to technical factors, investors should not panic, and wait.If, some FII are selling today,tomorrow, other FII will come to buy. There is no problem for long term investors.We should change our views only if fundamentals change.Finally, if, Indian economy is doing well and if Indian Equities are attractive,I feel that it is not due to Rahu-Ketu (politicians-bureaucrats) but INSPITE of them. Things are happening due to perseverance, intelligence, tolerance, hardwork and ambition of Indian citizens who deserve the real credit for nation building.Please correct me if I am wrong folks.<br /><br /><br />Regards,<br />ARUN<br />I can be reached at:-arunanalyst@rediffmail.com</span><div class="blogger-post-footer"><script type="text/javascript"><!--
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Posted by arun (noreply@blogger.com) on March 10, 2010 12:46 PM · permalink
<p><span>Although off the day’s lows, the markets could muster only small gains during the closing hours of trade and thus end the day marginally in the green. While the Sensex edged higher by around 40 points (0.3%), NSE Nifty closed with small gains of around 10 points (up 0.3%). BSE Midcap and Small cap indices traded weak today and recorded marginal declines. On the Sensex, three stocks gained for every two that ended lower. <br><br>Most Asian markets closed in the green today and Europe too is showing a fair degree of buoyancy right now. As regards the exchange rate, the rupee was seen trading at Rs 45 per dollar at the time of writing. </span></p>
Posted by Equitymaster on March 10, 2010 11:51 AM · permalink
He has compiled and aggregated past forecasts for a number of popular financial metrics. The following chart illustrates how well forecasts of inflation have approximated actual inflation over the last several decades:
Note that the forecasts of the deflator actually lag the actual deflator! This forecast is telling you what happened, rather than what is about to happen!
Note that the forecasts of the deflator actually lag the actual deflator! This forecast is telling you what happened, rather than what is about to happen! 
Once again, the same thing seems to be occurring, where the forecast is simply telling us what has already happened! Finally, a similar phenomenon occurs when forecasts of the S&P 500 are considered:
Of course, it should be noted that these forecasts are considered in the aggregate, whereas some forecasters may be able to consistently outperform others. However, there does appear to be a lack of supporting evidence that some forecasters are clearly superior.
Sixth-century BC poet Lao Tzu remarked that "those who have knowledge don't predict" while "those who predict don't have knowledge". So if forecasts are so useless, why do we spend so much time making them and reading about them? This topic will be explored in a future post.
Posted by Saj Karsan (sajid.karsan@barelkarsan.com) on March 10, 2010 11:42 AM · permalink
<p>RBI provides the <a href="http://www.rbi.org.in/scripts/BS_PressReleaseDisplay.aspx?prid=22168" target="_blank">latest credit release.</a> Scheduled bank credit is now at Rs. 30.89 lakh cr. (trillion) which is a gain of 38,000 cr. over two weeks back. <a href="http://lh6.ggpht.com/_cwHfePkadc4/S5eBqHAKBOI/AAAAAAAAAko/tBogFQPA-y4/s1600-h/image%5B8%5D.png" target="_blank"><img title="image" style="border-top-width: 0px; display: inline; border-left-width: 0px; float: left; border-bottom-width: 0px; margin: 5px 5px 0px 0px; border-right-width: 0px" height="113" alt="image" src="http://lh6.ggpht.com/_cwHfePkadc4/S5eBrnJQQMI/AAAAAAAAAks/ulbreq4VX50/image_thumb%5B4%5D.png?imgmax=800" width="240" border="0" /></a>This is a credit rise of 15.79% from the same time last year, taking the average growth in Feb 2010 to 15.5%. </p> <p>(Click the images for larger graphs)</p> <p>To put things in perpective, we are still lower than May 2009, all the way up to 2007 and probably earlier as well. </p> <p>Credit growth is great for banks and in general the economy, but helps promote inflation. Typically credit will grow at 2-3x the GDP growth rate if the assets thus bought are put to productive use. If credit is given to bubble assets – like real estate has been, or sometimes stocks – it tends to create default risk as well. <a href="http://lh3.ggpht.com/_cwHfePkadc4/S5eBuTdacSI/AAAAAAAAAkw/4meznxkdJTE/s1600-h/image%5B13%5D.png" target="_blank"><img title="image" style="border-top-width: 0px; display: inline; border-left-width: 0px; float: left; border-bottom-width: 0px; margin: 5px 0px 0px; border-right-width: 0px" height="164" alt="image" src="http://lh3.ggpht.com/_cwHfePkadc4/S5eBv6Wc46I/AAAAAAAAAk0/9nF9T6pH3Vw/image_thumb%5B7%5D.png?imgmax=800" width="240" align="left" border="0" /></a> </p> <p>Unfortunately we don’t yet have a handle on how much loans are given to which sectors, but 16% is not “over-heated” growth, just a move back to the good old times. </p> <div class="blogger-post-footer"><p style="border: 1px solid #C888C8">
This post is written by <a href="http://blog.investraction.com">Deepak Shenoy</a>,
at <a href="http://blog.investraction.com">Capital Mind</a>.
</p><img width='1' height='1' src='https://blogger.googleusercontent.com/tracker/18601284-8401313662793061700?l=blog.investraction.com' alt='' /></div>
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Posted by Deepak Shenoy (noreply@blogger.com) on March 10, 2010 11:25 AM · permalink
<p><em>In our first edition of</em><em> </em><em><strong>Expert Interview</strong></em><em>, Y&I is very excited to bring you the insights of Puru Saxena, founder of <a href="http://www.purusaxena.com/" rel="nofollow">Puru Saxena Wealth Management</a>. Based in Hong Kong, Puru has his finger on the pulse of the East markets, and provides investment advice and asset management for numerous clients. As a highly regarded member of the finance community, Puru is a regular guest on various media such as CNN, BBC, Bloomberg TV, CNBC, RTHK, NDTV, TVB Pearl … need we say more?</em></p><p><em> </em></p>
Posted by Daniel Eskin on March 10, 2010 10:23 AM · permalink
<p>I’ve been asked about the NMDC IPO  - a follow on public offer that involves a sale by the Government of India, of 33 crore shares. The price band is between 300 and 350 for the mining company. Retail investors get a 5% discount on the discovered price.</p> <p>Note that the current market price is 377. But that has come down from 425 in two days so expect more fireworks; plus in a very illiquid stock, the price doesn’t give you much information.</p> <p>Okay so how do we value this business?</p> <ul> <li><font color="#4c4c4c">You have to compare NMDC to the (much) smaller companies of Sesa Goa, or the (much) larger players of Rio Tinto, BHP and Vale.</font></li> <li><font color="#4c4c4c">The FY10 P/E of the above players is 13 to 28. Averages are around the 20 range.</font></li> <li><font color="#4c4c4c">NMDC has an EPS of about Rs. 11 last year (FY09) and in the nine months of FY10 they’ve got an EPS of 6.03. Assuming an EPS of 10 for FY10, the P/E is 30-35, in the price band. Comparatively, very high.</font></li> <li><font color="#4c4c4c">In the first nine months of the year, the profits are about 2,400 cr. That doesn’t compare well with the last full year (FY09) profit of 4,350 cr. Expect a negative growth in EPS unless they have a mindblowing quarter.</font></li> <li><font color="#4c4c4c">There’s a shortage of shares because of the huge govt. holding – that will indicate a premium of some sort. Also this is the largest mining co. in India. Added up, though, I wouldn’t pay a premium of more than 25% for these advantages.</font></li> <li><font color="#4c4c4c">NMDC has cash of nearly 10,000 cr. on the books. That’s less than Rs. 30 per share; not very significant. But if they can deploy it well they could juice up EPS substantially – unfortunately nearly everything they can buy is expensive because it’s the up-cycle in commodities.</font></li> <li><font color="#4c4c4c">Commodities are highly cyclical, and the company makes most of it’s money in iron ore. They plan to increase output to 50m tonnes after a drop to 24 tons this year from last year’s 29. That’s just doubling output over five years, a CAGR of 15%. Can one expect demand to grow at that rate – for products like steel? The price of ore will depend on prices abroad as well since steel producers will import ore if it is at a big difference to local prices.</font></li> <li><font color="#4c4c4c">EBIDTA: Consider 7,000 cr. (FY09 was 6700 and this year will be lower) At the lower band price of 300, the company is valued at 120,000 cr. That’s EV/EBIDTA of 17. In comparison, other players are around 12. </font></li> <li><font color="#4c4c4c">EV per ton of reserve: They have 1.2 bn of reserves, with about 65% iron. Worldwide EV to metal reserves is about $19-20 per ton. At that rate and a Rupee to $ price of 46, the valuation’s just 170. </font></li> <li>Valuation wise – if you look at comparative P/E, EV/EBIDTA, or valuation based per ton of reserves the lower band price of Rs. 300 looks ultra expensive. You’d probably pay 200 for this given the premiums, if you wanted to pay “fair price”. (But who wants to pay fair price, we all want a bargain)</li> <li>I’m personally not interested in this IPO. I’ve decided that if I want to buy stocks they should be so ridiculously cheap that it feels like a fantastic deal. “Shooting ducks in a barrel”. NMDC is like shooting a fish from 3 miles away in the ocean, with a bow and arrow. You might hit it, but how lucky is that. </li> </ul> <p>Comparative charts: BHP and Rio Tinto</p> <p><a href="http://lh4.ggpht.com/_cwHfePkadc4/S5cd4edHS5I/AAAAAAAAAkI/910wUrYO4lM/s1600-h/image%5B3%5D.png" target="_blank"><img title="image" style="border-right: 0px; border-top: 0px; display: inline; border-left: 0px; border-bottom: 0px" height="182" alt="image" src="http://lh3.ggpht.com/_cwHfePkadc4/S5cd5xHA6TI/AAAAAAAAAkM/G2xQyOyQpGg/image_thumb%5B1%5D.png?imgmax=800" width="240" border="0" /></a> <a href="http://lh5.ggpht.com/_cwHfePkadc4/S5cd696qOEI/AAAAAAAAAkQ/-XNK_sSsfuQ/s1600-h/image%5B7%5D.png" target="_blank"><img title="image" style="border-right: 0px; border-top: 0px; display: inline; border-left: 0px; border-bottom: 0px" height="182" alt="image" src="http://lh4.ggpht.com/_cwHfePkadc4/S5cd8dmT6sI/AAAAAAAAAkU/J1N_qOmbJ7c/image_thumb%5B3%5D.png?imgmax=800" width="240" border="0" /></a> </p> <p>and Vale and Sesa Goa:</p> <p></p> <p><a href="http://lh4.ggpht.com/_cwHfePkadc4/S5cd9buH7UI/AAAAAAAAAkY/ND6mhDM1BVQ/s1600-h/image%5B11%5D.png" target="_blank"><img title="image" style="border-right: 0px; border-top: 0px; display: inline; border-left: 0px; border-bottom: 0px" height="182" alt="image" src="http://lh4.ggpht.com/_cwHfePkadc4/S5cd-obqBsI/AAAAAAAAAkc/xs3uKimClN0/image_thumb%5B5%5D.png?imgmax=800" width="240" border="0" /></a> <a href="http://lh3.ggpht.com/_cwHfePkadc4/S5cd_9n86UI/AAAAAAAAAkg/Jy-fwyKkKEU/s1600-h/image%5B15%5D.png" target="_blank"><img title="image" style="border-right: 0px; border-top: 0px; display: inline; border-left: 0px; border-bottom: 0px" height="160" alt="image" src="http://lh4.ggpht.com/_cwHfePkadc4/S5ceBOIsLWI/AAAAAAAAAkk/0ClKj_-a2dM/image_thumb%5B7%5D.png?imgmax=800" width="240" border="0" /></a></p> <div class="blogger-post-footer"><p style="border: 1px solid #C888C8">
This post is written by <a href="http://blog.investraction.com">Deepak Shenoy</a>,
at <a href="http://blog.investraction.com">Capital Mind</a>.
</p><img width='1' height='1' src='https://blogger.googleusercontent.com/tracker/18601284-704646995375507725?l=blog.investraction.com' alt='' /></div>
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Posted by Deepak Shenoy (noreply@blogger.com) on March 10, 2010 04:20 AM · permalink
Posted by Deepak Singh on March 10, 2010 12:58 AM · permalink
<a href="http://4.bp.blogspot.com/_yxDXLyjgmlU/S5ZVNylMvtI/AAAAAAAAKdQ/O2NGse64L9g/s1600-h/id_2009.PNG"><img style="TEXT-ALIGN: center; MARGIN: 0px auto 10px; WIDTH: 201px; DISPLAY: block; HEIGHT: 400px; CURSOR: hand" id="BLOGGER_PHOTO_ID_5446634494755651282" border="0" alt="" src="http://4.bp.blogspot.com/_yxDXLyjgmlU/S5ZVNylMvtI/AAAAAAAAKdQ/O2NGse64L9g/s400/id_2009.PNG" /></a><br /><div>In 2009 we had 25 inside days. The above table shows the next day % change. Average absolute % change on the next day is 1.45%. </div><div class="blogger-post-footer"><img width='1' height='1' src='https://blogger.googleusercontent.com/tracker/5184850244660132569-2400104043368498638?l=timamo.blogspot.com' alt='' /></div>
Posted by The Rebel (noreply@blogger.com) on March 09, 2010 02:08 PM · permalink
<a href="http://3.bp.blogspot.com/_yxDXLyjgmlU/S5ZC47z7VPI/AAAAAAAAKdI/IIfaFRjR284/s1600-h/ID.PNG"><img style="TEXT-ALIGN: center; MARGIN: 0px auto 10px; WIDTH: 400px; DISPLAY: block; HEIGHT: 264px; CURSOR: hand" id="BLOGGER_PHOTO_ID_5446614345246790898" border="0" alt="" src="http://3.bp.blogspot.com/_yxDXLyjgmlU/S5ZC47z7VPI/AAAAAAAAKdI/IIfaFRjR284/s400/ID.PNG" /></a><br /><div align="justify">We have an inside day pattern. Since it has occured after a prolonged uptrend, the pattern has bearish undertones. Coupled with this we have a range contraction. Watchout for the break of yesterday's low @ 5092.<br /></div><div class="blogger-post-footer"><img width='1' height='1' src='https://blogger.googleusercontent.com/tracker/5184850244660132569-8842548401659630997?l=timamo.blogspot.com' alt='' /></div>
Posted by The Rebel (noreply@blogger.com) on March 09, 2010 01:01 PM · permalink
<span style="font-weight:bold;">Waste Management,We all know would be the next big thing for sure.We have so many listed companies giving such great thrusts to it.I was searching details and features on biological waste treatment, collection and transport, recycling and waste minimization, sanitary landfill and thermal treatment of waste etc about the sector and fortunately went through a great magazine to have most of the details about my mentioned stuff.It not only covered them but also had coverage report on international projects, best practices, technological developments, trends and legislation.It effectively promotes all aspects of Waste Management in the worldwide marketplace.Waste Management World delivers the latest news and global developments from across the industry.Its a complte package to fullfill your knowledge needs.I am sure just like me It would benefit all of you folks a great deal.So move on fast and book yourself a free copy.The magazine is available to the people of U.S.A,India and other asian and european countries.The link is given below.<br /><br /><a href="http://arunthestocksguru.tradepub.com/c/pubRD.mpl?sr=oc&_t=oc:&pc=wmw">http://arunthestocksguru.tradepub.com/c/pubRD.mpl?sr=oc&_t=oc:&pc=wmw</a><br /><br /><br />To get more amazing free magazines glance through:-<br /><a href="http://arunthestocksguru.tradepub.com/?pt=cat&page=_INTL">http://arunthestocksguru.tradepub.com/?pt=cat&page=_INTL</a><br /><br />Regards,<br />ARUN<br />9804589299<br />I can be reached at:arunanalyst@rediffmail.com </span><div class="blogger-post-footer"><script type="text/javascript"><!--
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Posted by arun (noreply@blogger.com) on March 09, 2010 12:21 PM · permalink
<span style="font-weight:bold;"><a href="http://www.arunthestocksguru.com/2010/03/concurrent-india-infrastructure-ltd.html">http://www.arunthestocksguru.com/2010/03/concurrent-india-infrastructure-ltd.html</a><br /><br />People who missed the story click on the above link to get aware of it.<br /><br />1)Concurrent india as expected ended the day at 21.50rs circuit locked with over 1 lakh odd shares pending to be bought at circuit.This are the guys who exited at 12-13 bucks getting gung-ho to re-enter at present levels.Its a known scenario in stock markets you sell at low only to re-buy it at higher levels,So I dont blame those for their acts.<br /><br />2)From 8 to 21.50 within a couple of months makes a return of 170%.Pms members,broking members,paid members and blog readers all raking in the moolah bigtime.More exciting stuff are expected people.<br /><br />3)Concurrent is all set to appoint a great Padamsree guy in the board.That fellow is such a genious that his name is enough to create waves.Once the appointment gets done and announcement comes in the market, concurrent should roar.<br /><br />4)The aviation details too are awaited by the market which can help cause.Many of you may recollect my 'AXIS IT&T" call which moved from the recommended level of 11 to 99 within a very short span of time.Who knows maybe our concurrent would follow suit too.<br /><br />5)Lastly each and everyone of you who bought it are having tremednous amount of profit.Please exit the counter fully if you are not convinced about the story.It can also happen that concurrent moves down to 16 odd levels only to consolidate for a vexing period.I would hate to see mail or msg from you folks about getting stuck in it.Tomorrow too it would hit a circuit so open your screen and exit out completely.<br /><br />btw:I am having it at 8 levels and I plan to cling on it for the coming couple of years.<br /><br />Regards,<br />ARUN<br />9804589299<br />I can be reached at:<span style="font-weight:bold;">arunanalyst@rediffmail.com </span></span><div class="blogger-post-footer"><script type="text/javascript"><!--
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Posted by arun (noreply@blogger.com) on March 09, 2010 12:03 PM · permalink
<table border="0" cellpadding="0" cellspacing="0"><tr></tr><tr> <td colspan="2">A fresh round of profit booking towards the end of the day led to the benchmark indices once again slipping into the red and eventually ending the day below the dotted line. Thus, while Sensex closed with a decline of around 50 points (down 0.3%), NSE Nifty edged lower by around 20 points (down 0.4%). Declines in BSE Midcap and Small cap indices were slightly higher, with both indices losing in the range of 0.7%. On the Sensex, two stocks fell for every one that closed higher. <br><br>While Asian indices closed mixed today, Europe was seen trading largely negative today. The rupee was seen trading Rs 45.5 to the dollar at the time of writing. </td></tr></table>
Posted by Equitymaster on March 09, 2010 12:02 PM · permalink
As an example, consider ITEX Corporation (ITEX), which offers a marketplace for businesses to exchange goods and services. ITEX boasts two major value shareholders, including Sardar Biglari and The Polonitza Group, who own a combined 21% of the company. Unfortunately, the company is not currently structured to succeed, with an extremely poor governance structure that tilts the balance of the company's power towards management at the expense of shareholders.
First of all, there are only three board members, one of which is the CEO. Neither of the remaining two board members can reasonably be considered independent, having received compensation from the company in return for consultatory services. Furthermore, there has been no turnover at the director position in almost 8 years! When one of the aforementioned shareholder groups suggested a change at director due to a lack of independence, it appears the company responded that "they are not very close friends and maintain independent thoughts and ideas" and that "they do not frequent each other’s houses or family events". Unfortunately, this hardly assuages shareholder fears, as the issue is not how buddy-buddy these guys are, but how the board's incentives (due to the fact that they provide executive and consulting services to the company) are not aligned with those of shareholders.
As a result, the CEO sits on the audit committee! The other two directors, who receive or have received payment for consulting services from the company, sit on the compensation committee! For all we know, the board is doing a terrific job, but the structure reeks of conflict of interest. But is there any evidence that this might be hurting shareholders?
Well, as these value investors began buying up shares, it appears the board/management went into defensive mode. In 2009, the company protected the CEO from a buyout by guaranteeing some payments to him of a few hundred thousand in the event of a change of control. Furthermore, they recently amended company by-laws that restrict the rights of outside shareholders.
Finally, the company appears rather generous in handing out shares to management, which dilutes existing ownership. The company only has 18 million shares outstanding, but consider the following handouts:
- In 2001, Mr. White received 250,000 shares for services rendered to ITEX as an independent consultant.
- For services as a director of ITEX from 2003 through 2007, Mr. White was compensated by an annual grant of 40,000 shares of common stock.
- For services as a director of ITEX in 2008 and 2009, Mr. White was compensated by an annual grant of 30,000 shares of common stock.
- On May 3, 2004, and again on July 6, 2006, Mr. White was awarded 300,000 shares of common stock for services rendered ITEX as Chief Executive Officer.
- On December 13, 2005, Mr. White was awarded 50,000 shares of common stock as consideration for his collateralized personal guarantee of ITEX obligations incurred in order to fund a corporate acquisition.
- On October 8, 2009, Mr. White was awarded 195,000 shares of restricted common stock for services rendered ITEX as Chief Executive Officer.
Even though value investors may be major shareholders of a corporation, they may still face an uphill battle. Before jumping on board, potential shareholders would be wise to investigate whether management is playing nice, or entrenching themselves.
Disclosure: None
Posted by Saj Karsan (sajid.karsan@barelkarsan.com) on March 09, 2010 11:18 AM · permalink
<a href="http://3.bp.blogspot.com/_yxDXLyjgmlU/S5YfaOruJMI/AAAAAAAAKdA/QM2KMBCymFU/s1600-h/HLR.PNG"><img style="TEXT-ALIGN: center; MARGIN: 0px auto 10px; WIDTH: 400px; DISPLAY: block; HEIGHT: 270px; CURSOR: hand" id="BLOGGER_PHOTO_ID_5446575334829728962" border="0" alt="" src="http://3.bp.blogspot.com/_yxDXLyjgmlU/S5YfaOruJMI/AAAAAAAAKdA/QM2KMBCymFU/s400/HLR.PNG" /></a><br /><div align="justify">Here's a look at the daily high low range for the Nifty. The cyan line is the 20 day average. We've b