It is well known that India’s best breed of industrialists Tata (of TISCO and Tata Motors) and Birla (Hindalco) for over 5 decades are in serious trouble while taking up expansion overseas. Yes, they made serious errors and in normal course, they may not have deserved the help for their follies.

Charity begins at home. India as nation must help these two outstanding businessmen. They may not long for Bharat Ratna, Padma Vibhushan, Padma Bhushan or similar khitabs. They need material help at the time of their acute distress.

If Indian Forex Reserve does not come to the help of India’s best industrialists, what is the use? Should we allow our Forex reserve for the use of Americans who have been simply wasting all resources and using them to create toxic waste.

Indian FOREX Reserve belongs to the Indians and must be used for Indians first and others later.

And I do not suggest that you give them free money. Give them the amount required as under after due scrutiny.

1. Assess their requirements and be wetted by top financial institution.
2. Work out how much amount they need
3. Give them @ 5% in foreign currency non subordinated Convertible Bonds secured by the floating pari pasu charge on their respective enterprise.
3.a Such bonds may carry conversion rights at last 6 months average prices of their respective shares, exercisable only after 5 years.
3,b It may have buy back clause at 8% premium per year for the life of 15 years. This will help these guys to buy back the bonds when they are comfortable without diluting their equity stakes when the things improve.
3.c If the Government wishes, it may sell these bonds in the market with huge profit (because current stock prices are very low), after giving respective companies to buy back the bonds.
4. When the things improve, they can raise the capital from the market to buy back these bonds.
5. Give them loans repayable in 15 years due to depression prevailing all over the world.
6. Ask them to pay special tax @ 3% after initial 5 years so as to relieve the interest burden during early phase of management. National exchequer may also be benefited for help rendered.
7. Ask them to give India at least 5 hospitals and 5 Technical Institutes with full management rights vested with the respective group companies on purely voluntary basis. (we can trust them)
8. Ask them to adopt at least 5 villages to make them into model town in next 15 years on voluntary basis. (again, we can trust them)
9. Indian tax payers are not affected with this help. Their advance is fully secured and given to the industrialists they trust most.
for more details, see my blog http: // anilselarka.wordpress. com/

Kalidas, Hong Kong
18-Nov-2008
...

Kalidas Replies to Sagar Ref: 0811-MMB-481 of (Saturday, November 8, 2008)
Debt: equity ratio is always relative, although there are some common rules used by bankers. There are two types of ratio - Long Term Debt: Equity and Short Term Debt: Equity and Total Debt: Equity (which is sum of LT and ST debt: equity)

For Capital intensive industry, like Shipping, Airlines, Construction, Engineering, the debt equity ratio is high. However, in every case, the most important is short term debt which exerts liquidity pressure. Generally, 1:1 is considered ideal in center like Hong Kong

During my time in banks in India, one used to have no more than 3:1 debt equity ratio, that is, if the Asset value is Rs 100, the banks will lend Rs 75 and the borrower will contribute Rs 25 (like in Housing Loan). Short Term Debt to equity should not be more than 1:1.

Normally, for short term debt, the important look is to Current Assets to Current Liability which ratio should be 2: 1. In the event of debtor seeking immediate repayment, the borrower has 2 times more assets to liquidate, so he can realize the current assets event at discount to repay the creditors.

Kalidas, Hong Kong


...

Filtered Stocks - Short & Long Term

What is more Important in stock markets - ENTRY or EXIT time?
This question has been nagging the minds of all investors ever since the stock market was invented. There is no clear answer so far, although hundreds of books have been written on stock markets. The simple answer is as under:

EXIT Time for Bull Market; ENTRY Time for Bear Market

Now that we are in a bear market by all means, the question is whether it is right time to enter in this bear market or bulls are still being slaughtered? Whenever you try to buy, you become a bull and when you try to sell, became a bear.

Whenever the market goes down, they call it "Profit Taking." No one ever says "Loss taking." Right now, the damage is more like Katrina. Rubble, rubble everywhere. You have to find something valuable available virtually free.

In investment, an Investor usually asks the following questions (some they are explicit, some they ask within themselves)

1. Is it right time to Buy?
2. Will not the markets go down further?
3. What should we buy?
4. How long do we have to hold?
5. How much we can possibly gain?
6. What is the downside risk for the stock?

If above questions are answered, the investor loosens the purse and starts investing.

However, during this market collapse, especially in India, the investors have started asking the following questions. Our comments are given immediately below in Blue.

1. Oh my god? How low the SENSEX will go to?
We are in worst ever credit crisis. It is specific to USA, and has spread to Europe and UK. It is limited to a financial sector. No one knows how low will SENSEX go, so let us not involve in prediction game. Further, we are going to invest into individual stocks, so why dwell too much in the big talks like Index movement?

2. Are we finished or washed out with the market?
The market never gets finished or washed out completely. The market lives on. So use steep correction as suitable investment opportunity

3. When will the market revive? Will it go to 21000 again?
Again, predictions game. Whether the market goes up or down, we are concerned whether the stocks that we have invested in will give us suitable return. Yes, any sizable gain in a short term will be a bonus. Focus on one to two year`s horizon. The target of 21000 is not achievable in a medium term (next five years or so). The losses are so much, that the investors will be keen to take profit, if the stock makes a gain of 10% to 30%. No one has more patience now.

4. Will the market go to 5000?
When the market was at 21,000, the brokers were talking about the index going to 50,000 to 60000. Now that, the same brokers are talking about 5000, and if it goes to 5000, they will talk about 3000. There is no end to it. To be quite honest, individual stocks do not necessarily track indices.

For instance, when the market was near 12000, Hotel Leela comes down to Rs. 21.85 and with the present index of 8500 (35% down), same stock is trading at Rs 26.50. You therefore better worry about the stock you are going to invest in rather than talking about markets that will lead you nowhere.

How much we should invest? Should we invest all now?

It depends on your risk taking abilities. Do not invest more than you cannot afford to lose is the principle of stock market investment. Not everything is going to zero. There are values in the stocks when they are battered. The present opportunity is on a golden platter. So use it.

To give you an example, take Arvind Mill that has collapsed into Rs 13.10 today. Even a yard of Arvind Mill fabric cost over Rs 30 to 45 per meter, or one shirt cost over Rs 150 to Rs 300. With this amount one can buy about 10 to 20 shares of same Arvind Mill.

(Note: This article is long. Some contents can`t be reproduced here due to text only format. Kindly read the full text on http: //anilselarka.wordpress. com)

Kalidas, Hong Kong
29/10/2008 ...

This post stands withdrawn due to typo error in the caption. Please refer another post with same content but under the title " Action Time to Buy...Filtered Stocks - Kalidas...

for Malayli
It was typo error, it should be read "Action Time to Buy" - There was no way on MMB to edit the error. I tried to withdraw the message with no result. - Kalidas, Hong Kong (30/10/2008)...

Filtered Stocks - Short & Long Term

What is more Important in stock markets - ENTRY or EXIT time?
This question has been nagging the minds of all investors ever since the stock market was invented. There is no clear answer so far, although hundreds of books have been written on stock markets. The simple answer is as under:

EXIT Time for Bull Market; ENTRY Time for Bear Market

Now that we are in a bear market by all means, the question is whether it is right time to enter in this bear market or bulls are still being slaughtered? Whenever you try to buy, you become a bull and when you try to sell, became a bear.

Whenever the market goes down, they call it "Profit Taking." No one ever says "Loss taking." Right now, the damage is more like Katrina. Rubble, rubble everywhere. You have to find something valuable available virtually free.

In investment, an Investor usually asks the following questions (some they are explicit, some they ask within themselves)

1. Is it right time to Buy?
2. Will not the markets go down further?
3. What should we buy?
4. How long do we have to hold?
5. How much we can possibly gain?
6. What is the downside risk for the stock?

If above questions are answered, the investor loosens the purse and starts investing.

However, during this market collapse, especially in India, the investors have started asking the following questions. Our comments are given immediately below in Blue.
1. Oh my god? How low the SENSEX will go to?
We are in worst ever credit crisis. It is specific to USA, and has spread to Europe and UK. It is limited to a financial sector. No one knows how low will SENSEX go, so let us not involve in prediction game. Further, we are going to invest into individual stocks, so why dwell too much in the big talks like Index movement?
2. Are we finished or washed out with the market?
The market never gets finished or washed out completely. The market lives on. So use steep correction as suitable investment opportunity
3. When will the market revive? Will it go to 21000 again?
Again, predictions game. Whether the market goes up or down, we are concerned whether the stocks that we have invested in will give us suitable return. Yes, any sizable gain in a short term will be a bonus. Focus on one to two year`s horizon. The target of 21000 is not achievable in a medium term (next five years or so). The losses are so much, that the investors will be keen to take profit, if the stock makes a gain of 10% to 30%. No one has more patience now.
4. Will the market go to 5000?
When the market was at 21,000, the brokers were talking about the index going to 50,000 to 60000. Now that, the same brokers are talking about 5000, and if it goes to 5000, they will talk about 3000. There is no end to it. To be quite honest, individual stocks do not necessarily track indices. For instance, when the market was near 12000, Hotel Leela comes down to Rs. 21.85 and with the present index of 8500 (35% down), same stock is trading at Rs 26.50. You therefore better worry about the stock you are going to invest in rather than talking about markets that will lead you nowhere.

How much we should invest? Should we invest all now?
It depends on your risk taking abilities. Do not invest more than you cannot afford to lose is the principle of stock market investment. Not everything is going to zero. There are values in the stocks when they are battered. The present opportunity is on a golden platter. So use it. To give you an example, take Arvind Mill that has collapsed into Rs 13.10 today. Even a yard of Arvind Mill fabric cost over Rs 30 to 45 per meter, or one shirt cost over Rs 150 to Rs 300. With this amount one can buy about 10 to 20 shares of same Arvind Mill.

(Note: This article is very long. It contains tables which can not be reproduced in this text only format. Kindly therefore read the full text on blog http: //anilselarka.wordpress. com)

Kalidas, Hong Kong
29/10/2008...

India’s disastrous policy measures in past, its effects and how that can be reversed with ease?
India’s de facto Central Bank – Reserve Bank of India – similar to FED in USA or Bank of England in UK, is a most revered institution in India. So also, Security and Exchange Board of India known as SEBI, equivalent of SEC in other countries, and stock exchanges like Bombay Stock Exchange – BSE and National Stock Exchange (NSE). They are given the status of demi-god by the admiring and ignorant semi educated urban class in India. The result is that these institutions, with possible exception of NSE in some cases, have become monolithic and inefficient organizations, with RBI leading the pack.

The officials of these bodies do not have experience in global money market, how certain powers manipulate the word market with ease, and therefore are very dogmatic in their views. They blindly follow the theories and practices of western and eastern world. As result, the economic, monetary and social policies fell far short of desired goals in last 50 years.

They do not realize that if certain standards with reference to which their policies are tailored are not yielding desired result, the standard itself must be wrong. As result, the measures initiated to adjust the imbalance often fail. Let us see the measures that failed India:
Belief, Policy Measures, Expectations and Final Result with Causes

Actuator: Finance Ministry, Reserve Bank of India, SEBI
Policy: Exchange Rate

BELIEF & PARADOX (In small prints)
1. Weaker Rupee helps exports and earns FOREX
2. Domestic Industries are protected against excessive and expensive imports
3. Jobs in domestic industries are protected and also promoted
4. Foreign Debt reduces due to FOREX earnings out of exports
POLICY MEASURES: Switch ON
Weaken Rupee by all means
1. RBI: Reduce NRE deposit rates – pay them much less than domestic deposit rates (6% less)
Even if NRI came to the country’s rescue in 1992 FOREX crisis, when India had to pledge Gold to Bank of England. NRI were treated like disposable towel
2. RBI: Do not let FII to buy Rupee from the market. Let them come to RBI directly to reward them with much higher rupee rate as enticement not to go to the market.
Even if it costs national exchequer hundreds of crores of rupees
3. FM, RBI: Sterilize any rise in the market by buying back dollar against rupee
Even at the cost of higher money supply leading to inflation
4. FM, RBI: Allow Indian Businessmen to invest overseas so that they buy dollars and sell rupee to cause it weaker and weaker.
While Foreign Investors were keen to invest in India, India was telling its businessmen NOT to invest in India but invest overseas, as though India had become one of the richest countries in the world. Even China after receiving almost $500 billion never thought of stopping the inward money flow and permitted Chinese to invest overseas
5. FM, RBI: Allow Indian citizens to remit overseas US$ 100,000 without RBI approval, so that pressure on rupee is reduced by letting them sell rupee and buy dollars.
While permission was not given to individual foreign investor to invest into Indian stock market as logical step further to widen the Indian markets or for direct investment, domestic Indians were asked to invest overseas, even when India was facing dearth of capital for building power plants, ports, Airports, national artery roads, sewerage, water filtration plants to reach every nook and corner of the country

Continued

I have publised my latest article (part 1) on India`s On and Off Policy that damages the economy. visit my blog since the article is very long. http ://anilselarka.wordpress .com Article Ref: 08-010 of 24/10/2008

Kalidas, Hong Kong
24/10/2008
...

Congratulations and best wishes! 51,601 hits ...

I will wait and watch till December quarterly numbers are out....

hi can you give me your filtered list of stocks....

Sensex will definitely get to 21000 before the dow or Hang Sang or Nikkei or Dax or futsi or cacs How long - the answer is OGK - Only God Knows....lol...

dear sir, u told to buy IOC some time back. but it has posted huge 7,000 crores of loss. what is your advice. buy or sell? ...

All well informed investors know that the brothers are not renowned for their transparency. For instance, Mukesh gave back the shares in Rel Comm alloted as sweat equity when a lot of hue and cry was made. The infusion of promoter capital into Reliance Power was also not without its share of controversy. Anil did not directly invest money but merged another company after giving a high valuation to it. In this way, he gained whereas every small investor lost heavily. These are some of the reasons why none of the brothers will list any of their companies on NASDAQ or NYSE. The amount of transparency demanded there is impossible for them....

kalidas, As a banker you forgotton one point. bankers never lend on book debt older than 6 months....