Saturday, January 10, 2009

Stock markets behave like a voting machine... the short term, while in the long term they act like a weighing machine", said Benjamin Graham in his bible on investing, Security Analysis, the sixth edition of which has just been released, a highly recommended book.

We've had two nearly full trading sessions since the news about the fraud at Satyam Computers was made public. During this period, the voting machine has been working overtime (literally, given that volumes on the stock exchanges have shot up significantly, up from an average of around 6-700 million shares on the NSE to over a billion shares per session).

So, what are the votes (in case of the Nifty 50 companies) indicating?

Top Losers (since the Satyam announcement):

1). Reliance Communications -25.0%
2). DLF -22.2%
3). Suzlon -22.1%
4). Unitech -21.8%
5). Reliance Infrastructure -20.2%

Top gainers:

1). Hindustan Unilever +6.8%
2). Sun Pharma +5.7%
3). TCS +5.5%
4). Maruti +4.0%
5). Wipro +3.3%

Intuitively (again in the short term, i.e.), the companies voted out (the top losers category), seem appropriately placed...isn't it !?!

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