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Saturday 13 October 2007

Monday 8 October 2007

IFCI Ltd. - How NOT to Invest In Indian Stock Markets

IFCI Ltd. - Company Details

SA and SG write Pseudosocial. This is an conversation they had today in the afternoon.

Please read. A very good example on how are people moved by greed and are blinded by lure of quick gains.

**** refers to names that we dint want to disclose.

SG: market 18k ho gayi?
SA: kya lena hai?
SG: IFCI
SA: :) woh to leh hi raha hoon. uske alawa aur kya lena hai. IFCI ki bid kitne par hai?
SG: maloom nahin. lekin log bol rahe hai 200 ho jaaega.
SA: :) yeh log kaun hai?
SG: pata nahi. main soch raha hoon ki 100 ho to bech doon :D
SA: who is log? :)
SG: random people yaar
SA: abe mein soch raha hoon 15-20% return mile to bech doo. Kher aur kya lena hai?
SG: maloom nahin. IGL dekh raha tha main. maza nahin aaya
SA: IGL kaun hai? indraprastha gas?
SG: haan
SA: Ok. IFCI aur kitna girega? Mujhe lowest pe lena hia :)
SG: mera lowest **** hai !
SG: Abhi kitna hai? Mera nse nahin khul raha.
SA: 77
SG: 77 fuk .. ?
SA: :). Aur kitna girega?
SG: maloom nahin. Lekin itna to nahin girna chahiye yaar
SA: mujhe lowest pe lena hai
SG: it should not go below 85. Ruk lemme see. Koi news aayi hai kya?
SA: haan thoda overreaction hai shayad
SG: 85 pay sab logon nay bid kiya hai
SA: (log bol rahe hai) minimum bid is for 120
SG: yaar mujhe 85 maloom hai kyonki it was documented in paper. Agar 77 hai to khareed sakte hain 500 share!
SA: 85 kisne document kiya tha? Or rather which document?
SG: 85 pay **** nay akhbaar main bola tha
SA: oh ok
SG: paper main tha ki they have given open offer to acquire at 85. Uskay baad hi IFCI wale so kay uthe aur bid ki naubat aayi
SA: **** ne hi bola hai minimum bid for 120
SG: ok ok. 77 pay hai to khareedna shuru kar sakte hain thoda thoda but don’t know the bottom. Lekin margin of safety nahin hai
SA: **** ke "untrustworthy" sources ne. But at 77 it is a buy for around 10 - 15 %
SG: abey FnO main we can go for killing
SA: it is banned in FnO
SG: aaj neeche hai, kal badega, tereko maloom hain FnO kaise khelte hain?
SA: jaise jua khelte hai waise hi fno khelte hai
SG: haan lekin mere ko fno nahin maloom. jua maloom hai.
SA: horse racing jaise khelte hia, koi ghoda acha laga to paise laga
SG: lekin yaar yeh news based hai
SA: jeeta to sahi nahi to bhi sahi. What is the news?
SG: matlab news aaegi to 10% upper and bad news aayi to 10% lower
SA: IFCI ka stake kiske pass hai? GOI? Who is selling stake?
SG: IFCI itself it selling stake
SA: ok. To who all? Pvt. Companies? Oh fuck it is 75 now
SG: http://www.IFCIltd.com/shholdpattern.pdf and IFCI kay liye moja sey pooch ki story ya hai
SA: I am not sure I have just put some money in IFCI. Fingers can be burnt here but lets see i have just bought 200 shares
SG: greed @ play!!
SA: :) :) a lesson can be learnt
SG: saale. Greed hai aur kuch nahin hai. Sun TFCI dekh. That can be bought for long term
SA: tourism finance corp
SG: ye IFCI type hai. I saw it at 10 bucks and now its 30
SA: haan
SG: may main 10 ka tha and I think I told you about it also
SA: ya I want it lower than 30. It has gone up very quickly. IFCI should be sold at at least 90. That’s what I think. So I will buy more
SG: abey! Irrational exuberance!
SA: :) mujh pe model lag raha hai. But I will stick my neck out and buy more
SG: saale. I will post this conversation on blog!! and on lollapalooza
SA: :)
SG: serious!
SA: ok no issues. but some parts should be removed. like references to some company names as done earlier
SG: hehe. I will remove things that I think should be removed and maine bhi 100 khareed liye :). ab meri IFCI holding *** shares ho gayi
SA: :)
SG: saale tune model laga diya. achha khasa chup chap kaam kar raha tha main
SA: maine kya kiya
SG: lekin ab khareed liya hai to lite. mera average price 75 ho gaya
SA: 75 average price kaise ho sakta hai, jab lowest price *** rs hai
SG: I meant abhi ki purchase
SA: oh ok
SG: till yesterday my average price was **** including taxes
SA: :) mujhe kaam nahi hota hia to bahut bira hota hia :)
SG: seriously! 100 share khareed liye maine bhi
SA: maine bhi 250 share khareed liye
SG: 250 ?
SA: haan
SG: ok
SA: 200 pehle 50 baad mein. But all after we started chatting
SG: this will make an interesting post on blog!
SA::) I know
SG: I will post this after correcting spellings and removing names of people and companies
SA: yes companies definitely
SG: IFCI is now 79 :D
SA: let's sell :) but on a more serious note it should have gone down more I wanted to buy another 50
SG: sell kar dooon ?
SA: mein bhi wohi soch raha hoon
SG: this will be my first experience with intra day trading!!
SA: :) abhi mujhe thoda kaam bhi hai
SG: ok
SA: thodi der kaam karna padega
SG: you carry on. I will post about it on the blog after editing some parts of the conversation
SA: ok

Disclaimer: Both of us now have a stake in IFCI. Please be advised.

And this is a very good example of how NOT to invest.

Wednesday 3 October 2007

Aftek Ltd.: Am I Missing Something

Aftek Ltd.

Company Website: Aftek Ltd.
Company Details: Google Finance on Aftek Ltd., Kotak Securities on Aftek Ltd
Annual Report: Aftek Ltd. Annual Report 2006, Aftek Ltd. Annual Report 2005

I am not comfortable with the kind of business they are in. Also I am not very sure of the products they make. They sound complex and it is a business that keeps changing. Also the company has an uncharged amount around 17 crores against foreign exchange that is essentially a reduction of 17 crores.

Consider the market cap (857 lac shares * 73rs = 625 crores), cash flows the company is generating (they claim in excess of 300 crores as cash and cash equivalent) and reported profit after tax around 100 crores. The company is not very heavily loaded as far as debt is concerned (aroud 50 odd crores).

Is this some kind of a scam or is all this true. Add to this a subsidiary (25% holding I think) which is currently valued at 600 crores (25% stake was purchased in lieu of knowledge transfer). The company exists for sure as I had once appeared for an interview for a job oppurtunity with the company (don't ask what was the result).

And the chairman starts his speech with a line from "Sound of Music"

Lets start from the very begining
a very good place to start


ANY COMMENTS, whoever has read this far ...?

Monday 1 October 2007

Few Videos on Worldy Wisdom

With Youtube, sharing and viewing videos is easy and fun. Here are a few very highly recommended video - for investors, speculators, traders, students, random people alike!

1. Steve Jobs at Stanford Graduation Commencement - June 12, 2005

Video on YouTube | Full Text

"Your time is limited, so don't waste it living someone else's life. Don't be trapped by dogma — which is living with the results of other people's thinking. Don't let the noise of others' opinions drown out your own inner voice. And most important, have the courage to follow your heart and intuition. They somehow already know what you truly want to become. Everything else is secondary."


2. Warren E. Buffett at University of Florida MBA - 1998
Video on YouTube | Video on Google Videos | Full Text


3. Guy Kawasaki at TIEcon - May 13, 2006
Video Link | Full Text


4. Randy Pausch at Carnegie Mellon
Video on Google Videos | Video on Youtube | Full Text

Credits: Ravi, Value Investing


Please recommend more videos and help make this a comprehensive list.
Last updated: 1.Oct.2007