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Uncertain Times Ahead |
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ADI
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| 23 October 2008, 23:23:23 |
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From the past 1 year i was sick of hearing from all FII's sitting in US that INDIA is expensive market compare to its Asian peers.
These FII's are taking their money out from our capital market and giving excuses like India is expensive, other market offers better oppurtunity.
But last week what we saw largest bankruptcy in US history. Iconic companies like Lehman Brothers, Merill lynch, AIG and i am sure there will be many more to come to eat the dust.
All these FII's have taken out to the tune of Rs.74,425 Crore in the domestic market between 7 sept'07 & 7 sept'08 and our Sensex has fallen from a peek of 21000 point in Jan'08 and is hovering around the 14000 Levels.
Why I am writting, to make clear that these FII's quoted Indian market expensive was just a Fake preception which they want to give to us so that they can hide their mistakes. India by far not directly related to these Issues.
Mistakes: Sub Prime Loan lending
To create the liquidity to meet Bond Liabilities they are selling in International market. The asset including sub prime mortgages backed bond and no doubt many other things that aren't worth as much as Lehman hoped they might be worth. These FII's even not sure that their liquidation has Negative value.
Now all eyes are on other biggies Morgan Stanley & Goldman Sachs, both engage in same line of business.
It will be interesting to see how these financial consulting major perform in their own arena. Will these companies can quote same credibility in future?
Hard times will still be there.
It is a lesson for those countries who are in growth stage like India.
Thanks
Aditya Kachru
Financial Planner & Consultant
The Fund House Investments
http://thefundhouse.blogspot.com/ |
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Re: Uncertain Times Ahead |
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Sonu
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| 27 November 2008, 22:13:50 |
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Adi
when the term capital markets is applied, it does not mean only,
Buy @100 and sell@ +100
it also means
sell @100 and buy @-100
the markets give us ample opportunities both sides.Looking at FII's or FI's will not help us in earning. TRUE strength lies in technicals,if properly understood. |
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Re: Uncertain Times Ahead |
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Amal
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| 30 November 2008, 20:41:26 |
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Dear Friends
The real reason here lies in leveraging. Every person from the streets to the corporates ends up leveraging. This is good to a limited range but the moment it crosses the trash hold levels it becomes toxic. We are taking of US sub prime, but look who is to be blamed for this. If sound financial basics are kept in place the question of sub prime wouldnt have come. Again the next bad thing is to spend the money even before you have earned it. In the U S people would be spending money which they may earn 2-3 years down the line that mean they would be perpetually in debt. If there is a down trend then the defaults are bound to come in. Atleast here in India the trend is not as much we are still a society which spends what has been earned last month. If we as advisors teach people the soundness of planning properly we would be doing a great job.
While talking about the FII selling then, i feel we are crying about spilled milk. I would see this situation as absolutely normal. If I have a house on fire i would take hold of all the valuables as it is and run. So you cannot blame the FIIs doing this they too need to fill up the gaps that have come into the system by pouring in as much money they can possibly do so and it would mean selling across the board.
Why are we not seeing the opportunities that have come around to us to regain the control of our companies with major holding by the citizens of the country who have all the rights to the wealth being created in our country. i should see that the average holding in most of the bluechips companies around 30% or more before the fall set in, should now drop less then 23-25% post fall. This is good.
A lot more can be said here, but i feel that we as indians need to come out and take equities as an option of creating wealth then to put money in debt instruments and then cry for others to come and create value for the money. |
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