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Saturday 26 August 2006

Mid-Day Multimedia Ltd.

Company Details: Google Finance, Kotak Research
Company Website: http://middaymultimedia.com

This stock has been on our radar for some time now. The reasons are very simple. This company is in a business that has immense powers of retaining customer loyalty. After tobacco, media is probably the only business where once a cusomter is hooked, he is hooked for life (well, in most cases - some people do quit tobacco). Once some is used to reading a newspaper or listening to a particular radio channel, it is next to impossible that the reader/audeicnce would switch. Readers would not switch if tomorrow it starts publishing "facts" like UFOs and Men with 3 heads.

Mid-day was started as an Urdu newspaper and over the years they have expanded to have a radio channel (with seven more in pipeline), outdoor advertising business (which they have decided to shut down this quarter) and very recently they forayed into the movie business too.

Should we pick stake in Mid-Day?
This is one of those questions that torments every investor on every bid. And sadly there is no correct answer. It is next to impossible to buy at lowest levels and sell at the peaks. If you do it once, you are lucky, if you do it twice, its fate and if you do it more than that - better watch out for SEBI knocking on your doors.

Neutral - Things we should not look at before we buy

Investors like Jhunjhunwala (he is also on the board), BBC, Indian Express have had an interest in this company over the past few months and this goes without saying if they are investing in this company, there should be something good happening. Someone heard of something called Authority Misinfluence?

Negatives - Things that make Mid-Day unattractive
Over the past quarter they have not performed well as compared to previous quarters (this works in our favour - the stock prices would be down because of the negative sentiment and thus can be picked at cheap prices). Then there is too much competition in the market they operate in.

Positives - Things that make Mid-Day attractive
Mid-day has an excellent management (in my PERSONAL opinion) and they are doing right things at right time. They further have plans to increase the market share in the existing markets. They are looking at increasing the radio footprints to seven cities. They already have licenses for that.

Further in our opinion Mid-Day is trading at these levels because of the bad performance in the recent quarters.

Result - Buy/NoBuy
No Buy ! (We shall not talk about the reasons for not picking stake here)

P.S.: When we started tracking Mid Day, it was trading at 33 odd and yesterday it closed at 46.something. I am not even calculating the returns we would have made in the short term. Would like to quote WEB here ...
I never attempt to make money on the stock market. I buy on the assumption that they could close the market the next day and not reopen it for five years.

Comments? PseudoSocial@gmail.com

Tuesday 15 August 2006

PseudoSocial - Introduction

As WEB once said, "We enjoy the process far more than the proceeds." PseudoSocial is our humble attempt to ride the turbulent world of value and growth investing and learn and understand the stock market, decision making and human psychology. Prof. Sanjay Bakshi introduced us to the wonderful world of Graham, WEB and Munger.

We talk about decision-making, psychological mental models, lessons from all walks of life and along the way a bit of investing and stock picking. We also talk about our investment principles (of course influenced by Prof. Bakshi and WEB and Munger and Graham).

Having said who we are and what we aim to do, we would like to highlight what we would not do. We would not give or take advice/tips about specific stocks. We do not want to make quick buck with the stock markets. We do not claim/want to outperform other investors or the index.

Why the name PseudoSocial would be answered in due course of time (as some people would say, "What's in the name?" ... and by the way this article talks about importance of names in short term market gains) and till then we hope you enjoy reading as much as we enjoyed writing on pseudosocial.