WealthMills securities Views on Moneycontrol on Semi conductor Industry in India

WealthMills views on Money control https://www.youtube.com/watch?v=APwoYyY_WcA

WealthMills securities Views on CNBC International

WealthMills securities Views on CNBC

 https://www.youtube.com/watch?v=Tom7xCRxejk

 

Book profits after listing gains in Tatva Chintan: Kranthi Bathini

Investors must be cautious and be selective when applying for IPOs, says Kranthi Bathini

https://www.money9.com/news/markets/book-profits-after-listing-gains-in-tatva-chintan-kranthi-bathini-62264.html

Benchmark indices extended gains in afternoon trade with the Nifty inching higher around 15,800 led by IT, metal, financials. Nifty Metal index was up sharply by 4%. Realty and IT stocks also leaped over 1% each. Hindalco, Tata Steel, JSW Steel and Tata Motors were among the top gainers in Nifty while Maruti, Power Grid and Cipla led the pack of laggards. Kranthi Bathini of Wealthmills Securities spoke to Money9 to share insights on the market momentum going forward.

“Markets have been facing stiff resistance around 15,900. Global factors, relentless selling by FIIs, also some hedge funds are booking profits and all of this together is leading selloff in the markets. Domestic institutional investors and retail investors are still actively investing. Another big reason is that money is being pulled in the primary market space”, he said.

On the new listing of Tatva Chintan IPO, the shares extended rally after stellar debut, rising as much as 130% to hit a day’s high of Rs 2,486.

Bathini believes the primary market is abuzz with retail frenzy. He believes investors should take profits after such sharp listing gains and then look at entering on dips once the stock cools off.

“Be selective in the IPO space, do not blindly invest in all IPOs”, he said.

 

IT stocks poised to move higher from current levels: Kranthi Bathini

There is a great buying opportunity at lower levels for investors

https://www.money9.com/news/markets/it-stocks-poised-to-move-higher-from-current-levels-kranthi-bathini-48518.html

omestic equity markets ended the last session of the June series futures & options (F&O) over half a percent higher.

The S&P BSE Sensex rose 393 points, or 0.75% to close at 52,699, while the broader Nifty50 index ended the session at 15,790, up 103 points, or 0.66%. Information technology (IT) stocks led the rally, the index was up 2.8% while the Nifty PSU Bank index dragged and closed 1.4% lower.

“Investors have been moving profits at higher levels but also there is buying interest when markets dip. We are witnessing a range-bound trade in markets. There is a slowdown in FII activity as well,” Kranthi Bathini, Director – Equity strategy, WealthMills Securities said.

“I believe there is a great buying opportunity at lower levels for investors even in current markets”, said Bathini.

On whether the IT sector will continue to build on the momentum, Bathini said that the IT sector is poised to move higher and the companies are going to expand in the US once things get normalised and business comes back. Rupee depreciation is aiding growth in IT stocks. “I advise investors to invest in large and mid-cap IT space,” Bathini said.

In an interview with Money9 in February, Bathini said that Quickheal Technologies has given an absolute return of 72% from Rs 163 and is currently hovering near Rs 270. He believes investors can now book partial profits on the stock.

The other stock from the IT space he is bullish on is KPIT Tech which he had shared as a stock recommendation in April at the price of Rs 193. The return on the stock so far is about 33%. Bathini believes there is more steam left and investors could continue to hold the stock.

Apart from the IT sector, Bathini also shared his top bet for long-term investors. He believes investors with a high-risk appetite can invest in Centrum Capital which can be a money-spinner in times to come. The financial services company having several finance-related subsidiaries. It is on course to become a full-fledged bank in the coming times.

“I expect an upside of 25% upside from the current levels of Rs 46”, said Bathini.

 Views on Money 9 Network 22nd July 2021

Cash is king in the current market juncture: Wealthmills Securities’ Kranthi Bathini

Investors must enter stocks with the highest margin of safety in the current markets, says Kranthi Bathini

Sensex, Nifty witnessed a robust start on Thursday. Asian stocks climbed early Thursday after solid company earnings boosted Wall Street, easing concerns about peak economic growth and coronavirus flareups. The Sensex was at 52,817, up 619 points or 1.19%, while the Nifty was at 15,811, up 179 points or 1.15%.

“Enter stocks with the highest margin of safety in the current markets, for traders this market can make quick bucks but for investors, one needs to invest in quality names,” Kranthi Bathini of Wealthmills Securities said.

He also believes that there are times when ‘cash is king’. Every portfolio must have 20-30% of cash reserved in current markets. This will help them to enter quality names in a staggered fashion.

He prefers IT, Pharma, and auto as sectors that will do well on the back of positive earnings.

Stock Recommendation

Wockhardt Pharma | CMP: Rs 576 | Upside 25% | Duration 1 year

WealthMills Weekly market update .

At WealthMills securities, We share the Indian stock market and global economy insights regularly. you can subscribe to the WealthMills youtube page.

https://www.youtube.com/watch?v=lmZ1HzNwHbY.

Nothing contained in this publication shall constitute or be deemed to constitute an offer to sell/ purchase or as an invitation or solicitation to do so for any securities of any entity.

WealthMills securities Pvt Ltd.( WealthMills) Registered office of WealthMills securities Pvt Ltd.at Unit No.: 49, Plot No.: 6,7,8,9, Arenja Complex, Sector – 08, CBD Belapur, Navi Mumbai – 400614, Maharashtra, India, SEBI Registration No: INZ000054130 , WealthMills securities PVT Ltd is a member of BSE Ltd (Formerly Bombay Stock Exchange).Name of the Compliance Officer: Mr. Kranthi Bathini Contact number: 022-27576466, E-mail corporate@wealthmills.in. Investment in the securities market are subject to market risks, read all the related documents carefully before investing. The contents herein above shall not be considered as an invitation or persuasion to trade or invest. Investors should make independent judgment with regard suitability, profitability, and fitness of any product or service offered hereinabove. WealthMills securities Pvt Ltd and affiliates accept no liabilities for any loss or damage of any kind arising out of any actions taken in reliance thereon. The information contained herein is strictly confidential and meant solely for the selected recipient and may not be altered in any way, transmitted to, copied or distributed, in part or in whole, to any other person or to the media or reproduced in any form, without the prior written consent of WealthMills securities PVT Ltd. The contents of this mail are solely for informational purposes and may not be used or considered as an offer document or solicitation of an offer to buy or sell or subscribe for securities or other financial instruments or any other product. While due care has been taken in preparing this mail, WealthMills securities PVT Ltd and affiliates accept no liabilities for any loss or damage of any kind arising out of any inaccurate, delayed or incomplete information nor for any actions taken in reliance thereon. This mail is not directed or intended for distribution to, or use by, any person or entity who is a citizen or resident of or located in any locality, state, country or other jurisdiction, where such distribution, publication, availability or use would be contrary to law, regulation or which would subject WealthMills securities PVT Ltd and affiliates to any registration or licensing requirement within such jurisdiction. 

https://www.bloomberg.com/news/articles/2018-01-04/india-is-said-to-seek-nod-for-12-6-billion-of-bank-recap-bonds
India’s finance ministry sought parliamentary approval to issue about 800 billion rupees ($12.6 billion) of bank recapitalization bonds before the end of the current fiscal year.

Prime Minister Narendra Modi’s administration expects to sell the bonds by March 31 as part of plans announced in 2017 to inject capital into state-controlled lenders, which are weighed down with soured loans, according the proposal put to lawmakers in New Delhi on Thursday. The new bonds will carry annual interest of more than 60 billion rupees, people familiar with matter said, asking not to be named as the information is confidential.

The signal that the recapitalization plan is moving ahead boosted shares in Indian state banks on Thursday, with the NSE Nifty PSU Bank Index climbing as much as 2.9 percent, the biggest intra-day jump in two weeks.

“Bank shares jumped as this is finally providing some clarity regarding the time frame for the capital infusion,” said Kranthi Bathini, Mumbai-based director at WealthMills Securities Ltd. “This will be another step forward in resolving the bad debt and kick starting loan growth.”

Why India Is Pumping $32 Billion Into State Banks: QuickTake Q&A

The fund-raising forms part of a planned 2.11 trillion rupee capital infusion into India’s state-run lenders, announced by the government in October. By allowing the banks to address the stressed assets weighing down their balance sheets, the government hopes to bolster loan growth which has fallen to a 25-year low.

INDIA UNDER RENOVATION

INDIA UNDER RENOVATION

The iconic BSE towers at Mumbai undergoing through some renovation activities at present

A good decision made of knowledge but not of numbers - PLATO. 

A Brief Note: Any renovation activity of any structure certainly cause some sort of inconvenience to the residents living in the structure. Incase India as a nation requires renovation , then it will certainly create major inconvenience to the people of the nation , but  Politicians and policy makers at least should have knowledge of major consequences that impacts people life , even though if they don't knew numbers .

Why Indian Markets are sliding down: At global front Brexit implementation, as the wave of protectionism pass through different continents Theresa May is stern on this, Indians are ignoring this but this will have a major impact, and consensus on Fed rate hike in December as FOMC focuses on Trumpation but not on inflation .

On domestic front: Market were exuberant running based on good monsoon on citing rural consumption all these days, but due to demonetization last 15 days rural consumption came to stand still  and urban & semi urban consumption is on single digit . People are very cautious in spending 

Rs 100. Capital Markets are anticipating same saga continuing for some more time, which will have big negative impact on 3rd quarter earnings and GDP growth.

How long the saga continues:  Hard to digest but at present RBI Printing quantity capacity for the month is 300 crores notes per month. To replace approximately 15 lacs crore rupees of existing Rs 500 and 1000 notes with new Rs 100 , 500 denominations, it will take government to at least 4 to 5 months , that's the reason RBI introduced Rs 2000 notes . Unfortunately RBI cannot outsource currency printing to increase the printing quantity capacity .So it will take 1 to 2 months to get required float of currency to resume consumption. In the meantime, earnings and GDP will take major hit in short term.

As the India’s currency renovation exercise completes in few months, let’s hope and ready to see a beautiful India soon.

WealthMills Wisdom of Investment

Indian Investors Don't Ignore Deutsche Bank

It’s hardly a shock…

Deutsche Bank boasted a notional derivatives exposure of €41.9 trillion (US$46.53 trillion) in its 2015 annual report. This is about 10% of the total global derivatives market, standing at roughly US$493 trillion. In comparison, the current market cap of Deutsche Bank is worth €17.46 billion. In other words, Deutsche Bank is leveraged 2,399 times. Imagine promising to buy a house for $2,399 with assets of $1!.

While a fair chunk of these derivatives are hedged (i.e. there’s a buyer and seller for each contract), what happens if one side can’t pay up during the coming times of chaos? This is exactly what happened during the US sub-prime crisis of 2008. For this reason, the IMF notes that Deutsche Bank ‘appears to be the most important net contributor to systemic risks.’

We had underestimated the importance of Deutsche Bank.  Lehman Brothers on May 31, 2008, (the last 10-Q it had filed before it went bust) showed assets on its balance sheet of $639.4 billion and stockholders' equity of $26.3 billion. By comparison, Deutsche Bank, as of June 30, 2016, has assets of €1.8 trillion and stockholders' equity of €66.5 billion. Given the size of Deutsche's balance sheet, it is three times as large as Lehman Brothers was.

Indeed, the bank is connected to everything. Will it be the first domino to fall?

Source: IMF, WealthMills.

Looking at the globally connected game of counterparty derivative contracts, if Deutsche Bank fails, everyone else should follow.  But IMF, European central Bank and politicians are proactively trying to rescue 'Deutsche Bank' as it is the symbol of European Economy to avoid any chance for financial crises.

Corporate debt in India

Here's a financial tip no one gives you. If you owe money to the banks, make sure the amount is huge. Then you won't need to worry about paying it back on time. Or, indeed, in some cases, paying it back at all.

This is not a joke. Several top business houses in India owe banks astronomical amounts and have defaulted in repayment. But instead of facing pressure to pay back these loans, companies are routinely given sweet deals: either their loans are 'restructured' in a way that allows a moratorium on interest payments, or their repayment schedule is extended generously. Here are the Top corporates with high debt levels

1 .The Reliance Group : The Anil Ambani-led Reliance Group is in the business of power, insurance, wealth management, telecommunication infrastructure and entertainment. In March 2015, the company had a debt of Rs 1.25 lakh crore on its balance sheet.The amount is equivalent to the special package announced for Bihar by Prime Minister Narendra Modi ahead of state elections in August this year.

02 .The Vedanta Group :Anil Agarwal's company is the second-most indebted company. According to Credit Suisse, the company, which is into metals and mining, had a debt of Rs 1.03 lakh crore. This is equivalent to the amount raised by the Government of India in March 2015 through its biggest-ever auction of telecom spectrum.

03. Essar Group : Managed by the Ruia Brothers (Shashi Ruia and Ravi Ruia) the company, with operations in 25 countries, owes Rs 1.01 lakh crore. That's what the Centre plans to spend on building smart cities until 2020.

04.Adani Group :Gautam Adani, the chairman of the Adani Group of companies is known for his proximity with Prime Minister Narendra Modi. His business house owes Rs 96,031 crore to the banking system. The amount is a little less than the Budget for building the bullet train network between Mumbai and Ahmadabad proposed by the government. Earlier this year, the State Bank of India reportedly approved a loan of around $1 billion (Rs 6,600 crore ) for the company's coal mine in Australia. However, after much hue and cry in the media due to the highly stressed balance sheet of the public sector bank, the approval was withdrawn.

05. Jaypee Group :Manoj Gaur-run Jaypee Group has a debt of Rs 75,163 crore on its balance sheet. Jaypee Group had a golden time during the Mayawati rule in Uttar Pradesh between 2007 and 2012. The debt is eight times the allocation for mid-day meals in 2015 that feeds 12 crore school going children in the country.

06.JSW Group :Sajjan Jindal is the chairman of JSW group and he was recently in headlines for reportedly organising the meeting between Pakistan Prime minister Nawaaz Sharif and Narendra Modi. Big connections allow you big credit lines. As per the Credit Suisse report, the group has a debt of Rs 58,171 crore. The amount is equivalent to the cost of 26 Rafale fighter aircrafts that India plans to buy from France.

07.GMR Group : Named after its promoter GM Rao, the group is known for building Delhi's T3 International Airport terminal.The group has a debt of Rs 47,976 crore on its balance sheet. The amount can be used to build to coal-based power plants with a generation capacity of 4,000 MW each - enough to provide electricity to the state of Haryana during peak summers.

08.Lanco Group :Headed By L Madhusudan Rao, the company runs solar and thermal power plants. It has a debt of Rs 47,102 crore.

09.Videocon Group :Venugopal Dhoot's company, the group once famous for making televisions, owes Rs 45,405 crore to banks. This amount can be used to 93 missions to Mars by India.

10.GVK Group :Founded by GVK Reddy, the group has interests in energy, infrastructure and hospitality sectors. The company has a debt of Rs 33,933 crore. The amount is just a little less than government's allocation under the MNREGA scheme (National Rural Employment Guarantee Act) of Rs 34,000 crore in 2015.

Media in India

If you're not reading News papers and Financial Reports you're uninformed If you do so you're misinformed. Please check  Who owns majority of Media  in India in the below Table
                       

Confidence Factor

It's a bitterly cold day. you have lost all feeling in your nose. Your ears are hurting . You hunch your shoulders together to bury your head under the raised lapels of your greatcoat.
You turn a corner and you see a frozen pond. Can you risk taking a short cut across ? Or would it be safer to walk to the bridge half a mile down the road ?
You notice a man on the other side of the pond . He gingerly steps on to it. It holds the weight of one foot. He carefully places the other foot on the ice.
A young women behind follows his lead. As you watch, some children arrive with skates, and more adults follow them. Soon, the whole village is having a party on the ice. Each person had given the next person the confidence to join the party. The more people clamber on to the ice, the safer it feels. It's logical, isn't it? Or is it? Something makes you stop. You turn around . You walk away. Behind you , you hear the crack and the first scream .
Stock market follow the same psychology . As an increasing number of heavy bodies add themselves to the ice, human nature makes them feel that the safety factor is increasing. But the clear thinking observer realises that their added weight means the opposite is true. Each fresh body on the ice makes it more - not less- likely that the ice will crack .The global investment business today is a business exactly the same way that the street market in Mumbai or Dubai is. It is manned by salespeople, and they all have products they want you to buy .They make sure that what they sell is attractive . They tell you uplifting stories of how buyers of their services have generated wealth for themselves. They attract you to the ice. There are lots of people on it, so it must be safe .

At WealthMills we are committed for the safety and wealth creation of our clients with high ethical professional standards .

IPO ICICI Prudential Life Insurance co Ltd .

Most  investors  make  the  mistake  of  thinking  that  the  IPO  is  once-in-a-lifetime  opportunity to buy the aspired stock.  It is not!

Rather it may be the once-in-a-lifetime opportunity for the promoter and early stage investors to get the best possible valuations. And hence they leave no stone turned to make the months in the run up to the IPO look like a dream to prospective investors.

Now if you are not investing in a company for a quarter or two, the latest quarter’s performance should hardly matter.  But unfortunately that is what most investors look at. And this is why you will find most companies debuting on the bourses in their most profitable year or when the sentiments at the peak. If the profits and the sentiments do not last, it is very likely that investors may end up buying a mediocre business at an expensive price in the IPO. 

Buffett has explained that the mathematical probability of fetching a good stock at cheap valuations in its IPO is minimal. Therefore, investors hoping to become IPO millionaires have to rely on luck apart from their value investing skills.

IPOs and the Less Knowledgeable Buyers : It’s  almost  a  mathematical  impossibility  to  imagine  that,  out  of  the  thousands  of  things for sale on a given day, the most attractively priced is the one being sold by a knowledgeable seller (company insiders) to a less-knowledgeable buyer (investors).

These words of Warren Buffett explicitly manifest his unwillingness to invest in IPOs.

The billionaire passed on the opportunity to subscribe to Google's IPO in 2004, which was offered at over 52 times earnings. In addition to Buffett's general reluctance towards the business models of most internet companies, Google's early valuations clearly didn't interest him.

The  stock  returned  nearly  1400%  in  ten  years,  proving  Buffett's  intrinsic  value calculations  wrong.  But  he  didn't  compromise  on  his  margin  of  safety  criteria,  and  the legendry investor never regretted his decision.

On the ICICI Purdential life Insurance company debut on stock exchanges, just to refresh my memory. I knew the flavor of Insurance industry as a disclosure I worked with ICICI Prudential life sales team in

2004. It was the time company was growing at a ballistic pace in sales and revenue. I recollect a young chap joined as Head of sales force, he was used to keep sales missions on selling life insurance policies. The team was so much charged up and selling policies left, right and center. Top sales men were heros of the company, such highly aggressive sales practice in all regions made ICICI Prudential life Insurance company as No 1 private life Insurance company and also NO 1 in policy lapsation by 2009. About 7.70 lacs conventional policies worth Rs 25269 Cr lapsed, highest among the private life insurers by value (As per IRDA Hand book published in 2009).

Later on change of management in 2009 at top deck brought persistency and improved focus on quality of sales, off course stringent measures by IRDA helped the company to maintain quality.  ICICI group strong channel alliances helped ICICI prudential life insurance co Ltd to remain as Top private life insurer. 

Challenges in Valuing Insurance Businesses

Very  few  businesses  have  a  demonstrable  or  predictable  level  of  repeat  business  from customers. Life insurance, by its very nature, primarily sells long-term contracts with  annual  premiums  and  expectation  that  a  portion  of  those  will  get  renewed  year-on-year. Additionally, it considers life mortality assumptions to create adequate reserves for future pay-outs on account of death, maturity or surrender of policies. These challenges could impact growth as well as valuation assumptions.

The basic principles of valuation are applicable to the insurance sector too, just as they apply to other sectors. However, some unique aspects can affect how they are valued. Calculation of debt is difficult to estimate and measure. Frequent regulatory notifications and considerations too affect valuations. The regulations on channels impact distribution relationships with a potential to positively or negatively affect valuations.

I will remain positive on the growth prospects of ICICI Prudential life ltd.

Conquest of Investing

Let us forget about markets for a moment and consider the following: prior to our age of market economies and capitalism, some other form of ‘capitalism’ existed.

However this capitalism was not based on creating wealth through progress in all spheres of society and the production and distribution of goods and services, but through conquest (the acquisition of territories and wealth by force – so called unfriendly takeovers).

From our schooldays we all remember the incredible military achievements of conquerors such as Cyrus the Great (559-530 BC), Alexander the Great (356-323 BC), Julius Caesar (100-44 BC), Charlemagne (AD 742-814), Umar ibn al-Khattab (586-644), Genghis Khan (1167-1225), and much later, Napoleon Bonaparte (1769-1821).

Their empires were in steep bull trends for a while… but eventually (frequently after the conqueror’s death) toppled like a house of cards… the great conquerors of antiquity were the first ‘businessmen’ to make extensive use of leverage. Their armies never grew much in terms of size, but the territories they controlled expanded almost exponentially. As a result, the acquired empire grew disproportionately per unit of soldier…

But one victor after another led to euphoria, carelessness, and total misjudgement of risks. While most great military leaders were careful not to waste their armies at the beginning of their careers, they later fell victim to their own success and began to neglect the risks associated with the conquest of larger and larger territories (the acquisition of additional assets).Take, for instance, Napoleon. 

The Russian campaign of 1812 was from a risk

 point of view, a complete absurdity (it was an incredibly leveraged, high –risk low-reward transaction, typical of the terminal or climactic phase of an empire’s uptrend)…

Markets are no different from empires. They expand, rise in value, become ever-extended, and eventually collapse. In a modern market economy, conquerors are business leaders (Promoters of Businesses) , successful speculators, adventurous fund managers and leverage buyout artists.

The Army Generals are their immediate subordinates like CEOs & Board members (ambitious junior partners among hedge funds, Fund Managers, research prima donnas, etc) who are all sharing in the profits of their ‘conquerors’ and Business Media houses who makes money by telecasting these conquests . Finally the soldiers are the individual investors – usually uninformed, greedy, and displaying strong crowd behaviour [psychology] and rapid changes of sentiment.

At WealthMills we are committed to protect the interest of Investors with unbiased views on markets.

My Dear RBI Governor,

My dear Subbarao,
I have special respect and regards towards RBI governor as he was from the town in Andhra Pradesh where I was graduated in commerce and built my aspirations towards financial markets . But by his movements I know one thing , that he knows increasing interest rates other than nothing! . He increased interest rates 10th time in a row in last 16 months , since inflation is very high and all the emerging markets were grappling with the same problem. RBI governor is relentlessly working towards tame the inflation . I firmly believe monetary policy which regulates the flow of money in the country lost its control on the economy in the last 10 years because of the excess flow of un accounted money in the country , this unaccounted money flows makes every asset class toinflate and dance! especially real estate which has became integral part of India’s growth corrupted story . RBI completely lost its authority and control on food prices as they do not come under regulatory control & purview of RBI , where pricing mechanism of most of food articles are regulated by local bodies and state governments , even Central government also don’t have required proper control , RBI governor can’t control the price of tomato you pay but try to control the quantity with variations in interest rates.
If we remember Mr Governor in September 2008 when the world was reeling under recession , Lehman brothers collapse and financial crises , in India high inflation excess of 10% YOU reduced interest rates in line with your fellow Central Bankers across the globe , after 36 months for the same inflation problem Your increasing interest rates !!.
You should know a Simple law SIR , nobody in the world eats excess bread 6 times in one day if they have some excess money in their valet.
Simply commercial Banks are fooling you sir , by not lending to priority sector in the required quantum.Rural credit have taken a big hit because of securitization of debt, every bank is buying debt from Micro finance institutions to meet their rural credit targets which is a time bomb kind of debt and will burst balance sheets of banks after some time.
Due to integration of financial markets and globalization of world economies Central banks across the globe just became Money printers .
Inflation targets varies from economy to economy , for example Euro zone which consists of 19 European nations monitored by European Central Bank (ECB) inflation comfort level is 2% as its a low growth trajectory and they can pump more money inline with inflation . Finally the Money Printer ,originator of inflation and author worst monetary policies Mr Ben – Benjamin Bernake Chairman of US Federal Reserve Bank , He knows only one thing Print and Pump Money into the world which is causing global high commodities prices .
RBI don’t have any control on global commodities prices especially crude oil and local food inflated prices. So your team have to do their job as high profile bureaucrats ,one thing they knew raise or decrease rates that’s what they are exercising powers . If this situation prevails for prolonged time it creates dire consequences on middle class which accounts 40% of country’s population ( as per Mc Kinsey global ). Encourage lending towards basic agriculture infrastucture ,food storage and for farming , if you keep on increasing interest rates for every up move of inflation your adding fuel to fire .Please stop debate on super regulator sir , first focus on priority lending and un accounted money flows in the economy to strengthen RBI’s role.

"Marriage system " Asset of India

Last week former Californian governor Arnold scharzenegger separated from his wife Maria after 25 years of married life !. Finally prince William tied the knot to his very old girl friend Kate , I pray for her it should not be Diana's story again.
Recently BRICS Nations including South African premieres conveyed a meeting for mutual cooperation and challenges among the emerging BRICS Nations , A term coined by Goldman Sachs in the year 2000 and succeeded in selling Nation's story and every one rejoiced and participating in the India's so called domestic growth story . As I interact with various investors across the globe , they are exuberant about India's robust growth than citizens of India. I was perplexed with variety of views .Finally I started analyzing the strong key points behind India's domestic story , it is amazing to know simple but powerful bullet point i.e. Our marriage & Family planning system , powerful asset of India . You are absolutely reading accurately our marriage and family system is the key strength of India's growth story .
The success of any economy depends on Human capital – how an economy efficiently using its human capital for development and providing employability referred as demographic dividends. And every one talk about India's demographic structure as key strength this strength is derived from the Marriage system in India.
We have to get educated to gain knowledge and wisdom , from wisdom , we derive the solutions which leads to revenue generation which translates as savings and spending for self well being and family prosperity this is the ultimate theme of majority of folks .For an economy people are key and their productivity is the lynch pin to run the economy . In the key financial planning of any individual your family will play a vital role which reflect in the economic development of the country .
Let me envisage the demographics of various nations. Chinese their average age is 37 years and 72% of population is in between 15 to 64 years and China also one of the aging population . Why Chinese household consumption so extraordinarily low , in part , it is because Chinese house holds can't rely on the traditional old age safety net in Asia namely children , As a result of government single child policy in past 30 years in China increased number of people above 45 years and indicates less productivity of nation and in a family of 5 every one depends on one young earning child .In USA because of increasing divorce rate and social system 50 % babies born in USA are born to unmarried girls and as per U.S state department statistics every year more than one l lac girls under 17 are diverted towards sex traffic .which will destabilize the nation over period of time . In Japan 25% of population is above 65 years and average age of Japanese population is 44 years which clearly indicates less productivity and consumption indicates clear threat to the nation . In Euro zone nations because of child delivering costs are very high , average European stopped giving birth and birth rate and population growth is very low almost it is zero which is impacting the Euro zone Economy . Very recently Russian Economy is very proactive to spur demand , it announced good number of schemes and incentives to its people who ever give birth to 4 children and above , if you want busy next 5 years migrate to Russia and enjoy the romantic life! .
Family instability too , is harder on poor children , poor less well educated couples are more likely to break up and when that happens the economic consequences are more severe than for the well off , the cost maintaining two establishments ,shuttling children between the two parents income , leaving less for the basic necessities , let alone counseling and remedial tuition to help devastated children cope with the breakup . Divorce therefore affects the children's health , hygiene and schooling far more in a poor family than in a rich family . In equality tends to further perpetuate it self through the social environment. To the extent that it is caused by significant part of the population is not being able to improve themselves because of lack of access to quality education it signifies tremendous inefficiency.
Father of Economics Adam Smith says that while population growth might increase the total wealth of nations but only improvements in productivity could make a nation richer on peer capital basis , it is not how much capital country has that makes it rich .It is how productive that capital is and according to Economist Solow the key to productivity is technology.
United states and other western nations countries did not became rich because of lucky endowment of natural resources or because of capital falling like manna from heaven . Rather they became rich through a virtuous cycle in which technology improvements led to capital became more productive , which in turn led to more capital investments, without technology growth , capital would grow in proportion to population and wealth per capital would simply level off.
The dynamics of economy and life changes for every decade, for example in 1970 civil engineering is demanding profession ,in 1980 banking was revolution and demanding profession in 1990 Media, and tele communication was in demand , in 2000 software engineering was demanding .2010 financial services is in demand . So I believe when your planning your family give greater gap between the children for greater diversification and you can't effort to have your children every one in the same industry , education and age group as dynamics of the economy changes . The greatest gift you can give to your children is education , of course every one endeavor is same but demanding education is crux . I encourage every married parent to educate your child in Chinese language , this is going to be the best gift you ever presented to your children . As we progress 70% business deals happens from China in future and this is going to change their business life.

If your single don't slew your life ! (Of course I am still bachelor) ! Get married or committed to be celibacy , adopt orphan and assist them for their brighter life . Those are married don't restrict for single child, with a long gap minimum 8 to 10 years give a birth to another child , this will help the economy to stimulate the workforce problems and later will help you in your old age
Your decision for marriage or break up and having kids and desiring for their prosperity will have significant impact on the nation as whole .
Don't take for granted since Indian population is young the opportunities will follow us ! Administration should plan well to stimulate population growth ! Or else one day India will face dire consequences like Japan or China.

War Times ...!

War Times ..! History: A collection of crimes, follies, and misfortunes of mankind – Voltaire.

As we are progressing into the month of April, beginning of the new financial year for Indian Economy renewed exuberance is creeping into the financial markets and stock markets. I can see a lot of new cars on the roads including mine. As cars are treated to be prosperity and Economic indicators of the nation. This Financial year is crucial for stock markets after the rebound from financial crises. In the world of Investing, there are Truths, there are lies, there are statistics, there are facts. The world we live in is no longer simple, But it is complex. The only worrying factor to me for the Indian economy is not monsoons or corporate earnings nor inflation and corruption but in geopolitics. Yes, everything in the world has to move in a cycle, even the War. As technical analysts on stock markets how they predict the market's support and resistance levels of indices, basing on the previous volumes and trading patterns. Through the war cycle, we can predict the wars to come. Back home UPA Led government is happiest, ever since Indian cricket team winning Cricket world cup especially their victory on Pakistan in semi-finals! Thanks to the cricket world cup and Indian cricket team. The key reason was all the national media attention was diverted towards the world of cricket from politics, telecom 2G issues. Prime minister Mr. Singh went one step ahead and invited rival cousin Mr. Gilani P.M of Pakistan to India to build a hostile relationship with the arch-rival nation. Where there were no concrete and amicable solutions to the issues between the two countries from the last 60 years. I am sure there will not be a solution in the next 60 years also for the same if history is the proof for the future on geopolitical science. United States President Obama speaks about patriotism and human rights in the U.N security council. Patriotism means not invading Iraq or war in Afghanistan or bombing Libya, It stands for sacrifices and I am sure Americans can't afford for the same now !. The only thing they are interested in is printing money till the time Dollar lost its value as a measure of exchange and store of value. The day US Administration desires these formulas won't work and the west financial condition deteriorates the only option to them is to encourage the geopolitical tensions across the globe. For a common man in India, it sounds stupid to think and read about these issues, who are habituated to a comfortable and peaceful life. But if You enlarge your global vision the geopolitical tensions are accentuating at a faster pace. The crux is growth is concentrated in Asia but also the threat. 60% population lives in Asia and India, China, Pakistan, and Korea are Nuclear club counties and in the middle east Iran is trying to book its berth for the club. Geopolitical tensions are going up on a daily basis across the globe, starting from the Ivory Coast, Libya, Egypt in Africa. Middle East countries like Syria, Bahrain, Israel, Afghanistan. In Asia border issues between China, India, and Pakistan.Political tension between Japan and China. Between North Korea and South Korea. If these tensions prevail for a longer period and increases then the USA's war chest and military order book will do well. So they have vested interest in encouraging these geopolitical tensions. The Swiss hate Germans, Germans hate the French, the French hate English and everyone hates Americans. Each of these nationalities carries certain profiles in your head and evokes certain reactions. And all these issues will definitely going to impact prices of commodities like crude oil and base metals and global financial systems and finally our lives and portfolios in India. I encourage investors in India to start paying the utmost attention to the geopolitical issues across the globe which will have a greater impact on financial and stock markets than India's strong domestic story. I am sure and confident growing geopolitical tensions will change the face of financial markets. I believe in war cycle theory, but I am not sure when it will intensify today, tomorrow, or after 10 years, but I am confident we are nearing to the next War cycle. "Reality does not depart even when you stop believing in it." I am not Dr. Doom but try to be optimistic and look for opportunities from these developments.For successful investing is not depends upon the city you lives but it depends on how much attention you pay to the developments and predicting its impacts and interpreting the same.

Oh My Japan ! Tsunami

On 9TH of March at 9 pm I got call from my friend, he enquired what I was doing ! watching TV I replied . I was watching NHK global channel where no one understand and most of the people never heard about the same news channel. I have been watching this Channel from past 3 years to know more about Japanese technology and the economy , there are no commercial ads on this channel and no beautiful anchors but wonderful documentaries on world economy. Exactly after 4 days this channel have became world most preferred channel and single source of information on Japan for all media networks across the globe. Thanks to unexpected and devasting earth quakes, tsunami and nuclear radiations. People around the world became panic and investors pressed selling buttons after watching devasting news clips. It was unfortunate time for Japan.My Guru DR MARC FABER have just given a buy call on Japan just a week back before the tsunami and earth quake ! one of the biggest natural disaster in the history of the world. Nikkei plummeted 15% after the calamity its quite natural for a stock market taking gigantic back step .On 19th October 1987 Nikkei was down 14% .During 1989 to 2003 Nikkei lost Nearly 30,000 points. They were in the down trend and for stock market like Nikkei it got habituated to the down tend from past 40 years. Nothing New if you know the history .As lad in stock markets this was second opportunity to me to learn more about natural calamities and its consequences after the man made credit calamity around the world in 2008. We should take a closer look at Germany and Japan neither was nearly poor after world war II . both were bombed and destroyed during second world war .Their people were educated these countries had the blue prints to create the necessary organizations and some of their institutions and infrastructure survived but both had devastated bombed out economies. By 1980 Japan emerge of super power and became the top exporter to the world .but the key problem for Japan in the past20 years has been stagnated growth and its aging population with a average age of 45 years which is constraint to spur the domestic consumption . Japan is the 3rd largest economy in the world with a GDP size of 5 trillion dollars .On per capita income basis Japan is still the second largest economy in the world and second largest exporter to USA .Still China is largest exporter to Japan .Off late Japanese investment have been significantly important in India like Maruthi, Ranbaxy , Hero Honda ,Nomura and week days back by nipper life’s investment in reliance capital. Impact of current natural calamity has been strenuous and it will impact the global sentiment in short term and increase further pressure on current account of Japan. What ever be distraction happened in last week was just below 10% of the loss when we compare with destruction happened during world war II.I am sure and confident Japanese economy will raise as phoenix. key reason was the way they handled the current crises and their execution capabilities and technology advancement but this destruction will increase the demand for steel and others commodities for rebuilding related activities . This rebuilding will be a bigger stimulus package for the living people of Japan to create demand !

If we observe from past 10 years every fund that invests in Asia pacific Region comes as conditions as Ex Japan . Japanese economy has been ignored in the past 20 years as a investment destination and Japanese founds flows have been key funders to the debt of major countries this will definitely make the global liquidity stagnant for a while. It is premature to assess the immediate impact of Japanese natural crises on Indian stocks markets and liquidity flows. But this crises will increase the importance on alternative energy resources like solar energy, wind, and tidal energy as renewable energy. As the growing threat for nuclear power energy and its consequences from the past 15 days.

I also watch Russia Today channel more and ‘‘Pray for Russia’’

Inside Steel Sector

At Wealth Mills I am dedicated to enrich the continuous flow of Investor education . Today I am going to envisage on Iron & steel sector . The dynamics of steel sector are completely different when we compare with any other sector .Steel is considered as commodity and commodities will always move in very large cycles . The nature of steel sector is cyclical this represents consumption of steel moves on long cycles means it goes up and again comes down. In the Exhibit -1 you can observe the commodity index CRB Index which tracks the major commodities and how commodities prices moves over long term. Steel is the base metal and basic raw material for manufacturing, infrastructure and construction sectors which are integral part of any economy .For a simple fact 80% of Auto sector raw material is steel. In India the per capita steel consumption I mean usage is at 38 Kgs per head which was 29 kgs in 2006. Let us analyze how steel sector works !
Steel industry is highly capital intensive industry and it requires huge amount of capital to start a steel industry approximately billions of dollars for a midsized production capacity as it requires superiors technology to enhance the profit margins .
Gestation period to start a steel mill varies minimum from 7 to 10 years from the erection to start the production. Key concerns for steel industry are raw material and environmental clearances , we can observe World’s 3rd largest steel producer POSCO from past 4 years struggling to get environmental clearances for its plant at Odisha state in India . Basic raw material for steel industry is iron ore and the procurement of same is very crucial , across the globe iron ore reserves are completely regulated and restricted by the governments, as iron ore mines considered to be national assets & reserves. These are the vital entry barriers for steel industry and helps the existing players to reduce the competition in the industry. Still Steel Industry is highly fragmented industry which means Nobody in the world controls the production capacity as market share which reduces the pricing power of the producers .Even the largest Steel tycoon Arcelor Mittal controls less than 10% of world Steel Production which produces 90.6 million tones. Where as in India the largest producer Tata steel have production capacity of 6.8 million tones per annum.
There are different Investment strategies an investor can follow while investing in stock markets , one of the foremost and primary strategy is BUY & HOLD for long term and let the investments grow . But while investor choosing steel sector and stocks for long term investments , since the nature of the sector dynamics are cyclical so the investor need to be very much vigilant on the sector developments and stock specific updates and stock prices. In Indian stock market context Steel is considered to be growth sector and consumption of steel growth is stable and consistent until unless there is massive expansion of infrastructure , industrialization and housing boom . Globally steel is marked as stable sector in terms of growth.
As production of steel is limited to set capacities profit growth is challenge to the producers and growing input costs always put pressure on profit margins .This is the crucial reason Steel stock valuation are cheap comparatively to other sectors and always available for single digit price to earnings multiple valuations . Tata steel PE ratio is always on single digit where as banking & Information technology sectors always enjoys highest price earning multiples.
I advocate & encourage every investor to well aware the basics and industry dynamics and how it will be perceived in the stock market’s eyes is very important before taking investment decisions. Don't expect multibagger returns from steel sector in normal market environment but your capital is more secured in this sector. Basing on the industry & sector dynamics steel sector large cap stocks are perfectly suitable to beginners and risk averse stock investors. At wealth mills I will endeavor my efforts to foster the Investor’s Investment Quotient.