Friday, August 17, 2007

No More Blogging, atleast not for sometime.

Taking a long sabbatical from blogging. Will be back after a few months. Have learnt a lot over the past few months from a lot of you. Thanks for all those who subscribed, commented and read this blog.

Tuesday, August 07, 2007

Link: Chicken-and-egg economics by Caroline Baum

Aug. 6 (Bloomberg) -- If companies keep hiring, the economy will hang in there just fine.

There's something counterintuitive about that proposition, and repeating it often enough (it's one of economists' favorite palliatives) doesn't make it true. I mean, businesses don't hire out of the goodness of their heart or to earn humanitarian awards. Quite simply, they hire people to produce the goods and services consumers want to buy, hopefully turning a profit in the process.

Companies would prefer to do it all with machines, which don't get paid holidays, a lunch hour or sick days (well, maybe some mechanical downtime now and then). Industrial equipment doesn't need health insurance, complain about the boss or file sexual harassment suits.

Most businesses, however, can't function without humans, at least not yet. So they hire the minimum number of workers they need to earn the maximum possible profit. It may be crass, but that's how it works.

So what to say when you read comments that distort the natural order of things?

For example, following news on July 27 that the U.S. economy expanded at a real 3.4 percent rate in the second quarter, up from 0.6 percent in the first, an economist told the Wall Street Journal that ``the real risk for consumer spending is if for some reason companies slam on the brakes and stop hiring.''

In other words, if businesses just keep adding to their payrolls, the consumer will keep on spending his wages. The catalyst in this model is business hiring.

Cluck, Cluck....

Read the entire piece here. I simply love her style of writing, that too articles in Macro Economics. Highly Recommended.

Saturday, August 04, 2007

Man Industries: robust Jun'07 numbers

Man Industries reported a robust financial performance for the quarter ended June 2007.

> Sales were up by 54% to Rs.321 crore
> PBDIT was up 60% to Rs.38 crore
> PAT shot up by 66% to Rs.17.4 crore

The company reported an EPS (on full dilution basis) of Rs.6.5.
For the full year though, it is expected to report an EPS in the range of Rs.25-30 per share.

At a CMP of Rs.267, the company is trading at a price-to-earnings multiple of less than 10 times. It remains a BUY in my books and I continue to hold it. Though, I do trade in and out of it occasionally.

Thursday, August 02, 2007

George Soros' Quantum fund turns big seller in Indian Stock Markets

George Soros' Quantum Fund was a big seller in Indian markets today, at a time when the Sensex crashed by 600 points. Is it just a beginning of a bigger outflow from FIIs? Or is there more to this than what meets the eye?

Quantum Fund's transactions that were reported on the BSE today were:

> Ansal Infra 1,391,912 shares @ 267 = Rs.37 crore
> Apollo Hospital 762,551 shares @ 488 = Rs.37.2 crore
> Aurobindo Pharma 2,211,710 shares @ 636 = Rs.141 crore
> GVK Power 2,254,150 shares @ 532 = Rs.120 crore
> Shriram Transport 3,200,000 shares @ 160 = Rs.51.2 crore

> TOTAL = Rs.386 crore (close to USD 100 million).

Wednesday, August 01, 2007

Learn about Monetary Policy, India-specific and in-general....

Dr.Ajay Shah has been writing insightful articles on Monetary Policy, both specific to India and in general. The complete list of his articles can be read here. Highly recommended.

His recent opinion on the 'credit policy statement' by RBI Governor - Y.V.Reddy can be accessed here.