Thursday, March 02, 2006

Learning R, still bearish on markets and Warren Buffet's annual letter coming up

Its been a while since I posted anything on my blog. Blame it on 'R'. Have been trying to learn this statistical package, and the quest is still on. It is an extremely intelligent, but a programming language driven software which requires good amount of time and patience. Nevertheless, inspired by one of my mentors, I do intend to learn it well.

Infested by FII money, the markets seem to be scaling new highs virtually every day. Looking at the past few years data (relying a little on history), the ever expanding p/e ratios of index stocks, the sustained firmness in crude oil prices, slowing down in corporate profits and a slowdown in the overall Index of Industrial Production, I've been expecting a sharper correction in recent months. But, that seems not to be. Nevertheless, I remain concerned and am sitting on 50 per cent cash in the small portfolio that I currently manage. Haven't been able to find any new value buys (finding them in the current scenario seems like trying to find water in a desert, that too in the month of April). My main investment ideas, however, continue to remain so.

Warren Buffet's famous 'annual letter to the shareholders' for the financial year 2005 will be released on 4th March 2006. This is one thing no student of finance/stock markets should miss out on. It provides a great insight into the art of investing and teaches a lot more than many (rather most) of the finance books available today. The way Warren Buffet and his partnet Charlie Munger present the annual report is simply amazing. It is the pinnacle of good corporate governance practices and quality disclosures to the shareholders. A must read.

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