Investment in Indian Market

There are 2 main types of Businesses 1)     B to C: - these businesses can be classified as business which sell generic products and one which sell branded products. a) Generic Products : - These are businesses which are not able to create brand about of their products. Their only differentiation compared to their peers is price. High capital intensive, low margin and high working capital requirements to run it. Example Sun pharma b) Brand Products : -Companies which create brands have pricing power which help them past on the cost high raw materials to its customers without impacting their margins. Low capital high margin and usually low or negative working capital required in the business. Example Abbott 2)     B to B: - these are business's which deal with other business's. These are  a) Commodities business : -Commodities business make money when price of commodities rises. They are usually high capital intensive, highly vola...

In my previous blogs I have illustrated the phases of Economic cycle which are; Phase I - Initial Recovery and Phase II - Early Upswing. So let’s go to Phase III - Late Upswing. Watching Dow Jones going all time crossing 21000 mark brings a question in my mind "Is the US market expensive?" We will analyze the information before creating a view using the theory of market cycles and comparing it with Phase III - Late Upswing. In this phase the economy starts to get overheated, business confidence is at the top, unemployment falls, inflation starts increasing, both short term and long term rates tends to rise and stock prices are rising. This is the last phase before the economy goes into "Recession". 1)      Confidence and Employment :- Consumer and Business confidence in the US is at all time high, while unemployment is at all time low. Below mentioned data gives us some insight into the unemployment rate for the last 16 years, being the lowest in 2007 at ...

In my previous blog I explained about the first phase of Economic cycle that is the Initial Recovery which lasted for few months.India as an economy has moved to the second phase of the economic cycle that is the Early Upswing. This phase is characterize by high growth and low inflation which last for one year to several years. Here are some of the signs of Early Upswing Rising stock prices :- Stock prices across all the segment starting to rise. Primarily if we see sector wise all cement stocks ,metal stocks,specialty chemicals , 2 wheeler and 4 wheeler stocks ,FMCG space most of the stocks are making fresh highs. 2 things have given boost to the economy one is good rainfall and second is the 7th pay commission. Index is making higher top higher bottom and about to make 52 week high. Business confidence :- Business confidence is primarily rising which can be easily been seen with amount of deal happening in the economy. Assets whether its power sector,metal,Telecom...

Normally a business cycle takes 9-11 years to complete a full cycle. In order  to understand a cycle we need understand it in 5 phases 1) The Initial recovery 2) Early upswing 3) Late upswing 4) Slowdown and 5) Recession. When we see in context of India, business cycle is just about to kick start and we have started the first phase of Initial Recovery. Here are some of the key initial signs of Initial recovery Business Confidence : - Recovery last for 6-8 mths where business confidence started rising. Business confidence bottomed out in year 2013 and we have seen initial glimpse of confidence coming back in the year 2015 as more and more global MNC coming to India setting up plants and building with a long term view in the country. G overnment Stimulus : - Government stimulus by way of low interest rates and budget deficit provides the stage for growth. In India government has tried to structure its balance sheet and thanks to the gains from commodity prices gover...

Over last 3.5 years of my experience in the Investment Industry equity got the attention of investors for just 1 year actually real estate had stolen the show. Certainly 2014 was an exciting year for the Investment Industry. My experience in the market made me realized to some extent how market operates and how tezi creates excitement and brings people in stock market. People do more of talking and less of understanding when it comes to investment. Most of the frontline stories get popularity followed by news which plays a big role in grabbing people’s attention. One more learning is that lot of people work on tips when it comes to investment so I thought why not share prospective on tips. TIPS! How people want tips! They crave not only to get them but to give them. There is greed involved, and vanity. It is very amusing, at times, to watch really intelligent people fish for them. And the tip-giver need not hesitate about the quality, for the tip-seeker is not really after go...