Seeking Alpha

bonpriya's  Instablog

bonpriya
Send Message
Bonpriya Sen is based out of Calcutta, India. Specialize in International content writing in commodity , equity and other investment avenue. Working with across the world client on Finance & Investment. Presently working with Netherlands, US and Canada Client.
My blog:
View bonpriya's Instablogs on:
  • Understanding Indian Equity Market – At Sweet Spot

    espite the major BRIC (Brazil , Russia , India, China) country are facing challenges , Indian market has outperformed its peer by a huge margin. Generally, it is believed that, after its national election, India is going to have a strong Government with focus on governance and growth. We strongly feel that the Indian market is sweetly placed both in terms of Fundamental & technical perspective. One has to understand that market is a lead indicator, rational and understand only "Future earnings". With this, now let's look at the Indian market purely from a rational perspective (without so called Modi Wave).

    Technical

    First of all, would like to clarify that I believe the bull run, which was started in 2003 , is still intact on quarterly chart. We feel that after 5 years of rally (2003-2008), the market was in consolidation for 5 years and given breakout in the year 2014. The correction was overdue (after 2008) after the first five year of rally. So, now, the market has broken out after the consolidation rage for five years.

    • Nifty (Indian benchmark Indices) was on the cusp of a major breakout at around 6338. After making a top of 6357 in 2008, Nifty plunged all the way to 2252 in October 2008. From there it rebounded back to 6338 in November 2010, made a double top and fell to 4531 in December 2011. The benchmark has crossed this successful & we feel that this is the major breakout after a long-long consolidation of nearly six years. This in turn would project major up move over the next couple of years. The triangle formed by 6338-4531 range projects a immediate target of about 8150, which can materialize over one and half to two years

    .

    • Moving forward, if one takes the triangle formed by 6357-2252 range, the target comes to about 10460, which can materialize over next 3-4 years. On the way down, trend line adjoining two major bottoms, viz. 920 in 2003 and 2252 in 2008, presents a solid support around 5100.
    • We tried to represent this 8 year cycle of Indian Market. Generally it follows this pattern & every 8 years market makes new highs. According to this cycle, the market might make new high in the year 2016. (This is not rational study). Hope you know in the year 1992 . 2000, 2008 market was at the highest level.
    8 year cycle in Indian Market
    ConsolidationConsolidationconsolidationNew rallyBull marketBull marketBull marketMarket Pick
           1992
    19931994199519961997199819992000
    20012002200320042005200620072008
    20092010201120122013201420152016

    Few Fundamental drivers

    Though, I am not a fundamental specialist, however, several factors now impacting the market. We tried to put little fundamental perspective on the Indian market to global investor, which may be helpful.

    • Market is at a new high, but the valuations are not. The overall valuation has compressed by 40% since its peak in 2008, as the market has remained flattish despite the earnings growth. This level, forward earning at around 16 times. On 22000 (31st dec 2007). Presently BSE Sensex EPS is at 1450 & markets at the same level.
    • Historic P/E bands have been around 22-9 which gives a rage of 10000-4100 for Nifty.
    • The earning spread (difference bet ROI - 10 year Gsec Yield) has come down to 5% from its peak of 12% plus ( 2007). This is at its lowest for last 10 years. Probably, it is showing a bottoming out. This fundamental data is monitored by the promoter, FII, MNC. Now can you understand why FII & MNC (Unilever, Glaxo etc) is buying back its own share?
    • Despite the election year, the present Government has gone ahead with OIL sector deregulation & diesel price has increased by 30% in last 3 years. This is probably the biggest reform of the present Government. The under recovery on account of Diesel has come down to Rs 5 from a high of Rs 17. Better fiscal management & current account deficit (Due to Gold import duty hike) has helped its currency (Rupee) to stabilize.
    • Another fundamental aspect which is going to help is an interest rate cycle, which according to many analysts is at its pick. Given the moderation in inflation rate and sluggish economic growth, we feel that increase in interest rate is very unlikely. This is going to help investment cycle to pick up. This is a very important fundamental driver.
    • We believed that Indian market is going benefited from the strong global inflow of capital. Slowdown at china is looming at large, Russia is in War mode & this is certainly going to benefit India.
    • On a sector specific, we are bullish on Banking, Auto, Auto-ancillary & capital goods. Banking (especially Pvt. Banks) should be from major part of the portfolio. FMCG , Metal we are underweight.

    Risk

    Personally, I believe in trend analysis & market has maintained its trend & given fresh breakout on quarterly chart. But, the only risk at this point of time is fractured political mandate & probably crude oil rally. Though as per Opinion poll, fractured mandate is very unlikely. But, personally, I am bullish on crude & it is going to have its impact on India's economy.

    This is written for my reader. One should consult his/ her investment adviser before investing. Pl feel free to give suggestion/ feedback at bonpriya@gmail.com

    Apr 27 2:14 PM | Link | Comment!
  • Twitter - EXPECTATION OF HIGH GROWTH

    Twitter

    "140 characters ought to be enough for anybody.."-Bill Gates

    Introduction

    Twitter is a social networking & micro-blogging site (Both Exe and web format) that connects users to people, information, ideas, opinions, and news. Recently, Twitter touched all-time high as investors welcomed the social network's new targeted advertising feature. After huge successful Initial Public offering (NYSEARCA:IPO), micro-blogging site Twitter has been trying to ensure that it grabs that proverbial worm. After the IPO, it has been trying to change the strategy to some extent to stay above of the competition. They have been able to stay ahead of the competition due to their innovative approach.

    We tried to highlight little key change in approach & try to touch its valuation.

    1) Presently it has more than 230 million monthly active users generate more than 500 million Tweets per day. We think it is just the beginning. These numbers will continue to rise phenomenally in the future.

    2) They are trying to add more women power in their team. Then announced appointment of Mrs Marjorie Scardino as the eighth board member of the all-white-male board. It is trying to re-discover them .

    3) Twitter to Feature across all phone - Come March 2014 and Twitter can be in very hand on each and every phone. We feel that the new growth is going to come from this segment.

    4) Twitter to focus on data mining business.

    5) The newly launched tool, known as "tailored audiences" will allow advertisers to reach consumers based on their browsing history, allowing brands to identify potential customers. This could be a potential driver for twitter revenue growth. IT is going to be a key marketing tool for advertisers.

    Though twitter continues to chart its growth roadmap. However, investor believes significant challenges are ahead of them. There has been a downgraded of the stock due to due to high costs, rapid adoption of TV related product and amplification risk associated.

    Twitter is a growth investing. Probably justify the present valuation at this point of time is very difficult. One has to look at this stocks based on the long-term opportunity for the company.

    About these ads

    Occasionally, some of your visitors may see an advertisement here.

    Tell me more | Dismiss this message

    Disclosure: I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours.

    Tags: TWTR, TWITTER
    Jan 13 2:49 PM | Link | Comment!
  • Learn From Financial Planning Common Mistake

    I have been doing financial planning for various risk profile category investor. Different Financial planners have unique planning process. However, when we tried to restructure the portfolio, we found few general observations which I tried to put below. It may be helpful for the other to understand the common mistake & take learning from it.

    Few mistake -

    • A Investor generally does not differentiate between savings & investment. Both are different; savings is the first step towards investment. Savings does not give growth in the portfolio. Just for understanding, if you are savings and putting in the bank it is a savings.
    • Though Insurance is a critical part of financial planning but we treat insurance premium outgo as Investment. One need to understand that buying insurance is not an Investment. Insurance policy gives 1-3% return in US (p.a) which is failing to trump inflation.
    • Since most of the cases, investor is overweight on Insurance & we face great difficulty to adjust his portfolio based on his risk profile. Stopping insurance premium is very difficult decision for any investor.
    • You need to understand one point is that the distributor is not your financial advisor. Any distributor tries to push the product based on commission earned and forced selling by parents company. The similar point goes for Mutual fund too. However, since it is the investment in nature, it does not make much of the difference. We can restructure underperforming portfolio & invest in growth.
    • Most of the cases, we found debt (especially personal loan, car loan). We found that people have a loan on one side and money ideal on savings account.
    • Few cases, we found that, investor is heavy on gold. One has to understand the fact that, in longer term perspective, Gold has not given inflation adjusted return on a portfolio.
    • Most of the cases, we found, real estate investment has hugely impacted. Most of the High Networth Individual (NYSE:HNI) has taken a beating due to high real estate investment. Secondly, due to distress market condition , we are not able to restructure it. You may read other article by the author at -
    • Investor does not understanding the importance of your credit score and credit report

    Warren Buffett is the world's most successful living investor have no issues discussing his biggest blunders. So, one has to understand the mistake that he has done and try to rectify these mistake by 1) educating himself 2) creating self risk profile.

    I am seriously look forward for your suggestion. You may send the same to bonpriya@gmail.com

    Disclosure: I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours.

    Jan 13 2:48 PM | Link | Comment!
Full index of posts »

StockTalks

More »
Posts by Themes
Instablogs are Seeking Alpha's free blogging platform customized for finance, with instant set up and exposure to millions of readers interested in the financial markets. Publish your own instablog in minutes.