'Indian Stocks' - desi eshtyle, dose of news.. something which does not easily go out of fashion

Well.. most of Warren Buffett fans would know his love for media stocks (newspaper specifically) and how he has moved away from them over time. His shareholder letters are a wonderful source of 'gyan'..

Been in India for a vacation.. first thing which catches my eye is the newspaper.... I have 'read' the news, I know what to expect from online sources... but still... I LOVE to hold that paper in hand to get latest on the local stuff... happenings in politics... gossip.. some discussions on what are the current hot handles...

What a wonderful business to be in - 'local news'... better still in your own mother tongue. Hindi.. Kannada.. Tamil.. Telugu... Marathi.. Gujarati.. Bengali... Malayalam... whatever other languages which are 'not easily available on the net'.

Well... I'm now classifying all the regional newspapers listed on the market. There seem to be host of the small players. I have not spent time riding on one or two stocks in this space. Starting tops down - I am listing the top 1 -2 in each languages and trying to download their annual reports..

For starters - Hindi, Malayalam and Telugu have struck my mind. One tip: In Hindi - I like 'Hindustan Media Ventures'. Strong balance sheet and lot of cash (too much cash can be bad in wrong hands.. however I think coming from the HT stable, could be a good buy in mid term). I am still trying to see other language papers currently...



Ciao till next time...Harsha

Recently struck me... Food inflation

YoY increase in food prices (India) - 45.67%

No sane man could have guessed this correct if you asked him a year back (whatever happened to garibi hatao..). The weekend was spent doing research on how food ends up on our table (will not bore you will details).

Anyway.. There are at least 6 - 7 value adding layers which add-up to produce that basic idli-vada / anna-sambar on dining table.

Interestingly many companies in the supply chain have seen Sales, GM% increase quite consistently. Debt seems to be the only concern for some big companies.. (Example - Jain Irrigation.. by the way - I trust this to be a multi-bagger); then again I think the inflationary trend is not factored in at all. Stock prices have remained at pre - 2008 levels though earnings have more than doubled for most agri based firms.

Well.. on a side note, maybe... instead of getting MBA degrees - youngsters should pursue agriculture degrees. Anyway; for me - its time to pick up some stocks cheap.

But seriously - think again 45.67%!

Ciao till next time... Harsha

Banking - Only way is up.

Banking in India is fairly mature in terms of supply, product range and reach-even though reach in rural India still remains a challenge for the private sector and foreign banks... I think from a long term perspective the only way is 'UP'....

From a global perspective - Indian banks are very limited in size (example: SBI - India's largest bank in all respects doesn't figure in top 50 banks worldwide. I think it is no. 89 or so on the list). Nevertheless - I reckon RBI is taking more measures to speed up banking growth. New banking licenses coming in by end of 2013 is one such indicators...

Banking (and Insurance - which is nascent in India and somewhat related) would be long term growth story. Last private sector banks to be given licenses were - Yes Bank, Kotak Mahindra.. nearly 9 years back. Before that sometime in 1990's - ICICI / HDFC (one knows the meteoric rise of these banks).

From a growth perspective, my picks -

Yes Bank - One of the fastest growing banks in India. Have been accumulating ever since 2008 when it reached sub 50 levels... some nice buying opportunity now when its hovering sub 300 levels now..

South Indian Bank - One of the oldest private banks in India. Steady presence in south.. patronized by NRI's. Nice one to pick sub 20's.

DCB - Its sort of rising again as a phoenix... dark horse worth holding. Once the debt goes (hopefully next year) - I like this one.

What could be interesting bets - some of the applicants for new banking licenses - LIC Housing Finance, L and T Finance Holdings, AB Nuvo, others... I'm kinda looking at averaging the top 6 - 7 players who most probably will get a license. Seems like the safest strategy for me!

Ciao till next time...Harsha

Auto ancillaries - Lumax Auto Tech

Auto Ancillaries is a long term growth story in India.

I have been pretty bullish on Auto Ancillaries as a long term India story. There are many good picks currently and one of the interesting ones I feel is Lumax Auto Tech.

Recent panic has seen many of the Auto ancillaries trade all time lows. This led me to research recently about all my picks in this sector. Best of the lot I think is this little known company.

Have been following this for a few years since its IPO. Pretty strong promoter presence, nice dividend yield (trading in 90 - 93 range, dividend yield of ~6.2%), strong growth prospects since they have a strong presence in Auto lighting segment (Near monopoly at Bajaj) and others like two wheeler chassis, Adjustor Motors, Exhaust systems & Mufflers, Fork & Handle Bar Assemblies, Petrol tanks, etc to two and three wheelers.

I didn't have enough money in 2008 when I thought this could be a nice bet - just had another buying opportunity. Seems like a nice investment for next 5 - 10 years.

Ciao till next time...Harsha

Stock Investing - My little mutual fund

As I have said sometime back - it feels awesome to get more return on your money than a fixed deposit could give you. Better still if you could average 20%+ YoY.

I am going to share with you my current thoughts on stock investing. Its just my story as I see it. I know I have a long way to go. I am just starting off and I feel happy to have struck to investing. I have no reason to share this, but for my own personal gratification.

Stocks have always been fascinating. Dad's old shares - mastergain / mastershare and the small talks in house made me want to invest and learn.

As soon as I finished engineering - I bought a few shares from my first salary. I have not stopped doing so till today. Analyzing companies, reading balance sheets and just reading about different sectors and trying to create a vision for future gives me a kick.

Here is a timeline of my investment story.

2004 - started investing from my account.

2006 - doubled my money (what little I had put in).

2007 - was a bad year. made investments at wrong level. Let me blame this on my MBA degree I just got. Broke even though.

2008 - worst year till date. Lost nearly 40% of my money. However - stayed put.

2009 - through 2010 - recovery. Modest gains - something which I really took on was habit of reading balance sheets and analyzing cash flows.

2011, 2012 - picked some good ones. Started diversifying. Something which hit me hard last year was the dividend aspect. I feel that a way of making easy tax free money is dividends.. money that comes back to you every year. never ending. usually increasing.

2013 - currently analyze and hold positions in 80 - 90 different stocks. The wild swings and high rupee-eur/usd rates have been my friends. Lots of stocks trading at low valuations during past couple of months. I am not much into buying and selling on short term basis. Like to hold onto them. Except that I like to keep most of my money in few of my favorites!

So.. that's my hobby. Let me give you my thoughts on my favorite picks next time I write my blog (hopefully soon)...!

Ciao till next time...Harsha