Coal India: Star Performer

Coal India, the PSU behemoth has lived upto people’s expectations and continues it’s stellar performance even when the broader market is facing multiple headwinds.

Coal India has posted YTD returns of 15.54% till 23 May, 2011 in comparison to Sensex and Nifty’s returns of -12.49% and -12.52% in the same time-frame. The scrip has also outperformed BSE 200 and BSE 500 indices which have posted -11.20% and -11.25% in the similar time-frame.

    Courtesy: Finalaya “Compare Company” feature.

Even the market darlings like Infosys, Bharti, SBI and RIL have suffered mercilessly after their shocking performance in their report cards. The new kid on the block has outperformed the big daddies of D-Street and continues to allure more and more investors.

After making a blockbuster debut on the bourses on November 4 last year, Coal India, the Maharatna PSU recently surpassed ONGC to become the second most valuable company. The Kolkata headquartered Coal-India is now fighting hard with RIL to take a leadership position on market-cap terms.

The world’s largest miner which recently touched a 52 week high of 400.90 on BSE (17 May 2011) is still quoting at 370 which is still a premium of 51.02% against it’s IPO issue price of 245.The central government holds 90% in PSU and Institutions holding 7.80% of the remaining 10%.

The mega-PSU posted net sales of 4137.57 million as on 31 March, 2011 over 3978.55 million (31-March, 2010).On profitability front, company posted a whopping PAT of 46,961.03 million as on 31 March, 2011 over 37991.59 million (31 March, 2010).

The mega-PSU is already a constituent of BSE-500, BSE-200 and Morgan Stanley Composite Index. Being a second rank holder on Market-Cap front, it is already a strong contender for inclusion in BSE Sensex & Nifty.

References:

1) http://www.finalaya.com/CompareCompaniesChart.aspx

2)  http://www.coalindia.in/

Lessons from OBL encounter

1. A clear mission: To kill Bin Laden. Yes…this was a kill mission. While there may have been a discussion around capture, this mission was to rid the earth of one of the greatest threats to humanity. The mission was crystal clear…

2. Laser focus on the mission: As the report goes, this mission to get Bin Laden has been in the planning stages for two years, and the focus has been razor sharp.

3. Responsibility. Bush made it clear that he wanted Bin Laden “dead or alive”, and he did not accomplish that. Unfortunately, Obama inherited this duty, and not once has he criticized the former leadership for not capturing or killing Bin Laden. He made this “mission critical” and obviously said “If no one else is going to do it, we are going after him, and we are going to succeed.”

4. Strategic Agility: This mission is not something that was talked about in a bar over a week-end retreat and then implemented. Every step of the process was calculated out to the very minute, the very second. The President and the CIA met numerous times to plan out what would be one of the most historical events in humanity.

5. Discretion: Neither this mission nor the strategy were leaked. In leadership, there are times when you are going to need to practice the deepest level of discretion, especially when the stakes are so very high.

6. Delegation: Obama did not go into Bin Laden’s mansion and kill him. He gave the order to the CIA and the military to do the job, and he empowered them to get the job done well.

7. Top talent placement: The mission was accomplished by a team of Navy SEALS. The Navy Seals are the U.S Navy‘s principal special operations force and is a part of the Naval Special Warfare Command (NSWC).

The unit's acronym ("SEAL") is derived from their capacity to operate at sea, in the air, and on land – but it is their ability to work underwater that separates SEALs from most other military units in the world. They are the best of the best, and have been trained for years for a mission such as this one. They knew exactly what to do.

8. Vigilance: This mission has been planned and coordinated over a two year period. The focus, importance and desire did not wane or waver. To wait two years for a mission to be accomplished will send many leaders into a state of frustration, and the mission then gets dropped. Learn from this vigilance. Well thought out missions take time, patience and commitment.

9. Persistence: The mission to get Bin Laden did not stop until it was accomplished. I am sure multiple road blocks were thrown into the path, but their leaders found ways around and over those obstacles to make this mission come to fruition.

Axis Triple Advantage Fund - NFO

The NFO period for Axis Triple Advantage Fund will open on 30th June and will close on 27th July 2010.Investors should note that the investment principles of this fund is to seek long terms capital appreciation and hence, as per the fund information, the investors are expected to stay invested for long.

The unique thing about this fund is that it is offering you a diversified investment opportunity, where your invested capital money will be split across into 3 and invested into the following in the mentioned proportion:

- Shares/Equity and related instruments - 30-40%

- Debt Instruments (Fixed Income Securities) - 30-40%

- Gold ETF's or Gold Exchange Traded Funds - 20-30%

Overall, this Axis Triple Advantage Fund seems to be offering a good mix of 3 variety of products. The proportion of allocation also seems to be good enough.The fund is ideal for investors who want to invest in all three asset claasses and don't want to keep the vigil themselves but want to pass all the headache to the fund manager.

Throwing caution to the wind,it's not as easy as it seems.Let's take a simple illustration,supposingly you invest 10k in this fund.The fund managers buy equity worth 3500, debt worth 3500 and gold worth 3000. After 5 years, the returns from equity are down by 30%, returns from debt is up by 10%, and returns from gold are up by 15%. Equity portion will then stand at 2500, Debt at 3850 and Gold at 3450. So your net value will be 9,800 - i.e. less than your invested 10K.Also, the more different instruments one invests in, the more brokerage charges and commission is to be paid. That adds to the cost and reduces the profit and returns. Investors should keep these things in mind while making investments in any funds or any financial products.

One has to analyze,whether he want to pass on all the headache to a professional or want to invest in these three asset classes on his own.For the latter option,one has to take the buy sell decesions all by himself and time it responsibly.

It's not a good idea to pass all the headache to the fund manager,keep some bit at your end.In simple parlance,opting for this MF is not a bad idea but one has to evaluate the performance on a timely basis.

Is it time to buy or sell?

As the “Reliance” euphoria and chinese whispers have been discounted by the markets, the markets find themselves clueless just before the triple witching day. Media reports on RIL’s entry in shale gas, E-GoM meet on June 24, 2010 are some positive signals but still needs to be transformed into reality.

Thankfully there is no bad news from europe but the euro-zone crisis is far from over. But, adding to the woes, any bad set of numbers from U.S front (this time U.S housing data) spoils the mood globally.

Also, we have the Q1 results lined up and the market pundits will be eagerly waiting to analyze results of select blue-chips stocks which may augur a certain direction to the markets.

Amidst all this, we cannot forget one most important factor for the Indian Economy, Monsoon. Though the monsoon express is on time but it’s yet to be seen whether it performs well on a pan-india basis and give boost to the agriculture , which has been continuously underperforming in terms of it’s contribution to GDP and an outperformer in terms of it’s contribution to inflation.

I think this is the right to rebalance the portfolio, a partial profit booking always advisable during any bull phase. Also, this is the right time to identify the duds in portfolio and get rid of them.

The simple theory always works : Buy the dips, sell the rallies.

Unity always prevails

Euphemism on the indian bourses continue as the “Reliance” stocks continue to move northwards. The scrapping of the non-compete agreement, withdrawal of defamation suit, finding new synergies, suddenly the world has changed in the Ambani camp. More so, these are cheerful times of Reliance shareholders as they continue to make moolah.

Analysts and investors are suddenly looking for growth drivers in Reliance camp and how they intend to harness this new found freedom. This is the emotional attachment and blind faith of an Indian shareholder with the name “Reliance”.

Mukesh Ambani, as perceived by lot of market experts is the winner of the family feud and Anil, a clear looser. Perhaps, the Ambani siblings can look back over the last 5 years and analyze what they have achieved in the personal capacities and whether they could have achieved much more in unison?

A classical illustration of family in-fighting over parental estate and in the process ruining the father’s legacy who build this empire starting from scratch. This one transformed in a bigger battle field as they tried in whatever manner they can, to allure more shareholders in their camp .Ultimately, resorting to appeasement, they suddenly are finding new synergies with every passing day.

“United we stand, divided we fall”

It's a learning curve

I visited Indore Zoo last weekend with my 16 month old daughter after a huge gap of almost a decade. As we reached near the main gate of the zoo, we saw a huge crowd. Some were buying entrance tickets, while others were gossiping and chatting.

We entered the zoo after paying a meager entrance fee of Rs. 5/- and initiated a leisurely stroll following hoards of people. At the outset, we came across cages of birds like emu, peacock and then came the relatively bigger species like blackbuck, deer. Suddenly you feel that you have entered a different world or colony altogether but when you see human species around, the illusion breaks then and there.

We stopped walking and looked at the cage that was roughly 20 meters away from us and saw a leopard pacing to and fro in the cage almost alone in his own world. My daughter got excited after seeing a scale-up version of what she is accustomed to see in our home (our pet dog). She waved her hand in excitement and signaled the big cat to come nearby, a visible friendship invitation.

On the contrary, there were people busy in making their presence felt by pelting small stones and twigs

at the leopard cage. Perhaps, the explicit expression of human nature that we are superior or may be the "Return on Investment" factor .Each and every person utilized their own means to distract the leopard and forced him to come out of his own world. This continued till the time when a person from zoo authority opposed the act and threatened to employ a coercive action.

We continued our stroll to have a glimpse of other wild species like elephants, alligators, crocodiles. Finally, we had a glimpse of tigers and were bit unfortunate like some others as they opted to take rest in a covered area at same point of time. Some people left the place in disappointment while some others; firm believers of human centrism tried every possible means to break the sound sleep of tigers until they saw the zoo authority guy around.

We retraced back to the entrance after the wonderful experience. Even more, it was quite an adventure for my daughter as she made some new non-human friends over there and had an awesome time.

On the way back, time and again I was thinking of the incidents mentioned in the aforesaid lines.

Perhaps it is the reflection of the thought process of human species and reason why humanity dominates and sees the need to continuously "develop" most of the Earth. It is a well-known fact that we are responsible for the ecological crisis and the extinctions of many non-human species .If this goes on, we may be responsible for more such extinction events.

It's a learning curve and hope we learn from our past sins.