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Winning is not a sometime thing; it's an all time thing. You don't win
once in a while, you don't do things right once in a while, you do them
right all the time. Winning is habit. Unfortunately, so is losing.
- Vince Lombardi
National Headlines Blood bath in Indian stock market on 22 January as sensex falls by 2300 point leaking
out Rs 3 trillion market loss. Trading was also suspended for an hour.
RIL Q3 profit was Rs 3882 Cr. Jumps 26% from the last quarter. Based on better returns
in refining front.
Banks make merry in the last quarter by higher profits. Andhra bank Q3 profit rose by
17% to Rs 159.02 cr, IOB rose by 25% to Rs 308 Cr, Bank of Baroda rose by 52% to Rs501.05 cr.
BSNL lines up 40,000 Crore big bang IPO.
India has the most number of PE funds among BRIC countries that is 160. China is
second that has 115 than Brazil 89.
The biggest turbulence in automobile industry after fords model T.
Wockhardt revises the IPO price band to Rs 225260 from Rs 280310 on market
woes.
International Headlines
Federal Reserve may push interest rate below the pace of inflation now it will stand at3%.
Average price for a gallon of gasoline in the US fell below $3 due to less demand andslightly lower oil prices an is likely to hold steady.
US economy nearly stalled in last quarter of 2007 which was 0.6 %. Growth rate for theyear was just 2.2 % which is the worst figure in last five years.
French bank Societe Generale on Thursday has uncovered 4.9 billion fraud one of thehistorys biggest by a single trader.
Citi bank writes off $18 billion loss nearly $10 billion on sub-prime assault.
IMF slashes US growth forecast from 4.9% in 2007 to 4.1% this year.
FBI is investigating 14 companies for possible accounting fraud and insider tradingoffense related to subprime mortgage
UBS hit by further $4 billion write down taking the total loss to $18 billion in 2007.
1st FEB 2008
Volume 1, Issue 11
..Tracking the Economy
A brand for a company is like a reputation for a person. You earn reputation by trying to do hardthings well. - Jeff Bezos
Inflation 3.83 % , IIP 5.3%
Issue AttractionsNationalHeadlines
1
InternationalHeadline
1
CorporateInterview
2
Quiz 2
Student Editorial 3
Pearls ofWisdom/Taglines/Buzz Word
4
15 days Movements
CHAANAKYACHAANAKYACHAANAKYACHAANAKYAWealth Incorporation - A CCIM Finance Club Initiative Presents
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Quiz
Sometimes you just got to give yourself what you wish someone else would give you. - Dr Ph1. 2. 3. 4.
Robert G Kahl , CFA, MBA, CPA is the founder of Sabino Investment Management, L.L.C.
What is your investment philosophy?RGK: I look for companies that are projected to generate a large amount of free cash flow relative to tamount of money invested. I prefer to see assets on the balance sheet that support the price of tstock. There are also qualitative issues involved such as earnings predictability, financial strength, amanagement ability.
How did Benjamin Graham change your perspective on the financial markets?RGK: After I received my MBA, I believed in efficient market theory. At UC Berkeley, efficient market theowas the guiding principle in the finance classes. People like Benjamin Graham and Warren Buffett were neven mentioned. If an investment manager outperformed the market, it must have been luck. Based upon mpersonal experience at that time, it made sense to me. After reading Benjamin Grahams books, I could no longer accept efficient market theory. In BenjaGrahams books, he gives examples of companies that represent a buying opportunity and others that weclearly overvalued. Since then I have identified other companies that were undervalued and Ive been abletake advantage of those situations. I now think of the financial markets as a bell curve. On one side of tcurve, you have stocks that are overvalued. At the other extreme, you have stocks that are undervalued. the middle of the bell curve, you have many stocks that are close to a reasonable price. At times, tdistribution curve may be skewed so there are many undervalued or overvalued stocks. I attempt concentrate my clients capital among those stocks that I believe are undervalued.
Do undervalued stocks entail more risk?RGK: To the contrary, I believe that they often involve less risk. Benjamin Graham wrote that the secretsound investment was margin of safety. Value investors attempt to find companies that are selling for lethan their intrinsic value. Intrinsic value is determined by the analyst based upon facts and reasonaassumptions about the future. The difference between the price and the intrinsic value of the stock providthe margin of safety. The potential for appreciation results from the tendency of the stocks price to motowards its intrinsic value over time. We cannot eliminate risk but when a stock is undervalued, the potentnegative factors tend to be fully reflected in the price.
growth may not be reflected in the price.
Value investing has been a popular style in recent years. Is it a style for all seasons or shouinvestors consider growth stocks now?RGK: In my article, Value vs. Growth The Importance of Investment Philosophy I summarized the resuof ten different studies on the subject. The studies involved different time periods and some included forecountries. The results were consistent - if you buy stocks at low ratios of price/earnings or price/book valyou should be able to beat the market by 3-4%. The vast majority of investors and money managers haignored the results of the empirical studies to their detriment. It should be noted that many value stocks haearnings growth but investors may not be excited about the company, so the prospects for earnings growmay not be reflected in the price.
Identify the Personalities (Answers in the same issue)
Interview With Robert G Kahl
(Contd...to next issue)
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Did you Know?
In Germany shoes t
cost 12 Marks in 191
were sold for 32 tril
Mark in 1923. In
Hitlors favorite b
bar, a glass of b
costed a billion Mark.
due to hyper inflat
which occurred due
over pr int ing
currency notes by go
Spice Jet
BSE500285, NSE MODI
CMPRs.71.85, Target price
Larsen & Toubro
BSE500510, NSEL
CMPRs. 3770, Target price
Kalindee Rail Nirman
BSE522269, NSEKALIN
CMPRs. 395, Target price
Exide Industries
BSE500086, NSEEXID
CMPRs. 80.85, Target price
(CMPCurrent Market Pr
Stock Ratnas
Everyone experiences tough times, it is a measure of your determination and dedication howyou deal with them and how you can come through them.Lakshmi Mittal
Answers To Quiz
1. Swaraj Paul
2. Laura Ashley
3. Michael Potter4. Robert Reich
Understanding Capital Account ConvertibilityBy: Fouzia Taranum
Capital account convertibility (CAC), as defined by the Tarapore Committee, is thefreedom to convert local financial assets into foreign financial assets and vice versa atmarket determined rates of exchange. Simply, it allows residents to convert (buy or sell)
currencies to make investments into foreign shares, properties and other assets. It issometimes referred to as Capital Asset Liberation.
CAC has 5 basic statements designed as points of action:
All types of liquid capital assets must be able to be exchanged freely, between any twonations, with standardized exchange rates.
The amounts must be a significant amount (in excess of $500,000).
Capital inflows should be invested in semi-liquid assets, to prevent churning and
excessive outflow.
Institutional investors should not use CAC to manipulate fiscal policy or exchange rates.
Excessive inflows and outflows should be buffered by national banks to provide
collateral.
In layman's terms, it is basically a policy that allows the easy exchange of local currency
(cash) for foreign currency at low rates. This is so local merchants can easily conduct
transnational business without needing foreign currency exchanges to handle small
transactions. CAC is mostly a guideline to changes of ownership in foreign or domestic
financial assets and liabilities. Tangentially, it covers and extends the framework of the
creation and liquidation of claims on, or by the rest of the world, on local asset and
currency markets. In most traditional theories of international trade, the reasoning for
capital account convertibility was so that foreign investors could invest without barriers.
What CAC brings with it?
In the run-up to full capital account convertibility, the Tarapore committee had charted out
a phased liberalization of capital inflows and outflows. Some of the recommendations ofthe committee in this regard were:
Allowing Indian joint ventures/ wholly-owned subsidiaries to invest up to US $50 m
abroad;
Removal of existing requirement of repatriation of the amount of investment by way of
dividend within in five years;
Allowing exporters/exchange earners to keep 100% of their forex earnings in the
exchange earners foreign currency accounts;
Permitting individual residents to invest in financial assets abroad up to US $25,000
and gradually raising the limit to US $50,000 and US $100,000;
Allowing mutual funds to invest in securities abroad within an overall limit of US $500
m in phase I, US $1 bn in phase II and US $2 bn in phase III;
Giving banks greater freedom to borrow and deploy funds outside India in stages;
Allowing foreign institutional investors' portfolio funds to be invested and repatriated
without prior RBI scrutiny;
Allowing FIIs, non-resident Indians and foreign banks full access to forward cover for
their Indian assets;
Permitting banks and financial institutions to participate in gold markets aboard; and
Withdrawing the Reserve Bank from playing the role of the government's merchant
banker.
Did you Know?
As per June 23, 2
report, the inflation
Zimbabwe has risen
11000% and rising
As economy is contin
to worsen, the cen
bank is issuing
highest denominat
bank notes ever w
face value of 10 mil
Zimbabwe dollars
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How to Prepare:
Be thorough with the fundamentals & financ
concepts.(Banking, Accounts and risk Management
In GD be specific, quality is important th
quantity. Be thorough with the contents of your CV a
projectsSuggestions: Learn something about t
company, its achievements and areas
business .Be positive and confident, Should
flexible regarding location and timings (i-flex stan
for Integrity and Flexibility)
Pearls Of WisdomRavi Kumar P N ( Batch-2007)[email protected]
Business Analyst,i-flex solutions limited, Mumbai
Phone # : 09920043294 Blog site : www.ravisblognet.com
Job Profile :
Preparing Functional Specifications based on clients (Banks)
requirements Preparing test plans and data pool which will be used in
automation testing.
Assisting Automation team in developing scripts and
automating the testing process
Please mail your valuable feedbacks, reviews at [email protected]
Buzz Word
Bulgea slang term used to describe a rapid advance in price
within the commodity market.
First in, Still Here (FISH) - an accounting buzzword that
describe when companies still have inventory on hand that is notbeing sold due to inattention or obsolescence. While not an
official type of accounting treatment, the term is named after
the LIFO and FIFO accounting methods.
Kitingthe act of misrepresenting the value of financial
instrument for the purpose of extending credit obligations or
increasing financial leverage.
Loan shark an arrangement where the borrower is charged a
much more higher interest rate than the market.
Book Quotes: the unreal is more powerful than the re
because nothing is as perfect as you cimagine it. Because it only intangible ideaconcepts, belief, fantasies that last. Stocrumbles, wood rots, people, well they die. Bthings are as fragile a thought, a dream,legend, they can go on and on
Chuk Palahniuk
Courage is the discovery that you may win, and trying when you know you can lose
Tom Krause
Tag Lines:
We know money -AIGAIGAIGAIG
Legendary reliability -APCAPCAPCAPC
Whats In Your Wallet? -Capital OneCapital OneCapital OneCapital One
Live Richly -CitiCitiCitiCiti
Quality In Everything We Do -Ernst &Ernst &Ernst &Ernst &
YoungYoungYoungYoung
Its Everywhere You Want to Be -VisaVisaVisaVisa
A. HSBC B. IIFCL (Indian Infrastructure Finance Co. Ltd)
C. Trillium Mutual Fund Co. D. AUL, One America FinancialPartner
A.
C. D.
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Contributions made by :
(1st Year Students) Article, Taglines & Quiz Fouzia TaranumNews Anup Rajan &
Ashish Poddar
(2nd Year Students)Book Quotes, Buzz Word & Ritesh VermaStock RatnasEditing Sindhu B. Navali
Graph Anshu AwasthiInterview Ravi Sekhar MPearls Of Wisdom Gopal Pai M