Do Not Undervalue Luck

Too many people attribute their success to their own skill. At some point, when everyone is working their asses off, you begin to wonder if success has quite as much to do with talent, effort and skill, as it does with being in the right place at the right time.

People like Samir Arora of Helios have done incredibly well in the markets. However his tone in this piece named "Do not invest in Indian equities" at outlook has me wondering. The note is arrogant and sarcastic (both aren’t bad qualities by the way), telling us ignorant retail folk that:

  • Look, I invested
  • You didn’t
  • I made money
  • Now you keep on not investing, okay?

Which, you have to admit, at Nifty 6000, is true (point #3 at least).

Lucky in choosing when to invest

He extols the […]

By |January 24th, 2013|Demystify, Education, WTF|40 Comments

WTF: Reading Too Much Into Bulk Deals

Firstly, apologies for the small hiatus in posting. I am consulting with ICreate, a company that does banking BI (and is founded by two close friends, so excuse my glorification), and we’re trying to do great things in a compressed time-frame. And then I have the young V and the younger Z that demand my attention at home, since they are largely confused about what this whole "going to office" business is, what with my working from home for nearly all the time since V was born 5 years ago. So writing has taken a back seat, which is why I deeply apologize.

To come to the meat of this rant, which is a WTF. While data has become more widely available, such data can lead to abysmal reporting if people do not attempt to understand the data properly. Recently I have been noticing that journalists, when they want to report on a company, take bulk-deal data from […]

By |July 12th, 2012|WTF|Comments Off

WTF: Sintex Promoters Didn’t Buy After All

I noted last quarter – on October 13, 2011 – that :

The promoters of Sintex “plan” to buy 4.78% and take their stake up to 40%, says MD Amit Patel in a post-earnings conference call.

I don’t really get this. Why would you announce a purchase BEFORE you buy? The stock will run away. Typical promoter buys are announced about 10-15 days after the acquisition of shares. There needs to be a SEBI restriction that needs them to announce within a week, but that’s a different story.

It’s been a quarter from then, and two things have happened:

a) The promoters have NOT bought a single share. Not a single announcement has come from Sintex to the exchanges post October 2011 – and they have to announce any promoter buys.

b) The stock price has fallen over 42%, from 115 then […]

By |January 9th, 2012|Sintex, WTF|6 Comments

The Fringe Impact of the RIL-TV18 Deal

Reliance Industries (RIL) has sold its stake in media entity Eenadu to TV18, in a convoluted complicated deal quite characteristic of RIL and TV18. Let me help you decode.

First, the more recognized sources:

What is the deal?

1. RIL owns stake in Eenadu TV. 100% in regional news and entertainment channels, and 49% in telugu channels of ETV. This was purchased for 2600 cr.

2. RIL is selling part of this to TV18 – the full 100% of the regional news channels, but only half of their stake in the entertainment and Telugu channels. (TV18 will still get the […]

By |January 4th, 2012|Network18, Reliance, WTF|10 Comments

BSE Cancels All Mahurat Trades

The BSE cancelled all futures trades in its recently introduced derivatives segment, on Mahurat Trading on 26 Oct.

It was rumoured that using algolrithm trading methods-high frequency intra-day trades using software-a Delhi-based broker had played havoc with sensex futures. While the low for the day in sensex futures was 14,000, compared to the sensex close of 17,289 in the cash segment, the average price for the broker was about 15,000. It was said on the Street that if the trades in derivatives were not annulled, the loss to this broker alone could have run up to as high as Rs 100 crore. The segment’s turnover was rumoured to have been Rs 27,000 crore, compared to BSE’s recent high figure of about Rs 500 crore.

You can bet your derriere that if you or I had done something silly like this, no one would have come to our rescue. But yes, if a broker […]

By |October 28th, 2011|WTF|5 Comments

WTF: Network 18 Pledges Holdings To Help Promoters Increase Stake?

Network 18 has something funny going on. According to me, the company is helping its own promoters buy more shares.

Let me put forth some evidence. […]

By |October 17th, 2011|Network18, Stocks, WTF|10 Comments

WTF: 34 million “Poorer” Indians due to the Recession

A tweet from @inquestioner went “Scary,34 million joined the ranks of the poor in India because of the recession that everyone was in denial of.UNDESA figurs.” [sic]

I usually find these figures very global-warming type – meaning, highly suspect and jugaad methodology – so I thought I’d investigate. In the “World Economic Situation and Prospects, 2010” report, Page 35, they say:

The reduction in employment and income opportunities [due to the slowdown] has led to a considerable slowdown in the progress towards poverty reduction and the fight against hunger. Estimates by the Department of Economic and Social Affairs of the United Nations (UN/
DESA) suggest that, in 2009, between 47 and 84 million more people have remained poor or will have fallen into poverty in developing countries and economies in transition than would have been the case had pre-crisis growth continued its course (table I.3). This […]

By |February 10th, 2010|WTF|2 Comments

WTF: Returns from the lows, or from the highs?

Rediff’s article: Stay calm, don’t panic by Anil Rego try to mollify investors who got in at the peak of a bull run that it’s all ok, the Sensex recovered really fast after that.

As one can see, someone who invested in peaks, saw troughs, but if s/he had waited patiently would have gained significantly from the stipulated levels at which s/he had bought. Another key point to note is that the deeper the cut, longer it took to heal.

Unfortunately, this makes little sense for those that got in at the peak of the bull run.

Look at the results one or three years later. In two instances (1992 and 2000), even after three years, the returns were negative from the peak. In 1996, the returns after three years was even – only in 1990 did it grow substantially. (But remember, three years after 90 was the end-game of a very dramatic bull run too, and the […]

By |January 14th, 2009|WTF|3 Comments

WTF: Satyam buys its mirror image, loses 50% in share price, backs off

Late yesterday Satyam’s founder Ramalinga Raju, who has been looking at the company’s war chest sitting idle when there are good uses of the damn money, decided to take action. The best thing to do, he and his board decided, was to buy companies named the mirror-inverse of Satyam, i.e. Maytas.

For $1.6 billion, Satyam would buy Maytas Properties ($1.3 bn) and Maytas Infra ($0.3 bn) and get into the “infrastructure” space, building ports and roads and buildings and all that. You might wonder why a software and IT company would do this, but Raju’s personal input was helped by the Satyam questionnaire for new recruits:

1. Can you code Java or C# or C++ or indeed any programming language? (Check all that apply)

2. If there is no programming project available, can you:

  • Lay bricks in an orderly fashion
  • Oversee cement blocks
  • Paint a wall (or a ceiling)

(Check all that apply)

Presumably most people had checked all, effectively giving him a multi-skilled workforce, […]

By |December 17th, 2008|Satyam, WTF|23 Comments

WTF: Business World on RBI

Business World has an article on the RBI: “Lost in Minutiae“. I find glaring inconsistencies in the article, like:

The latest measures of the reserve bank of India (RBI) giving banks access to more cash at lower interest rates will no doubt be welcomed by the market; a market does not exist which does not love handouts. What is important about the measures, however, is what they tell us about the points of weakness in the market.

First, there is the obscurely worded permission given to foreign financial institutions to borrow abroad. These institutions are at home in a foreign country, and do not need RBI’s permission to borrow there. It seems to be suddenly worried that so many foreign investment institutions are dumping Indian shares and shipping the proceeds abroad, and to be telling them that they can borrow abroad to continue holding the shares.

DOes this refer to RBI’s
RBI allows Non-Deposit taking NBFCs to raise Short Term […]

By |November 8th, 2008|WTF|2 Comments