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Archive for July 2008
Investment Nuggets by Mark Mobius
Known for his proficiency in emerging markets, Mark Mobius, Executive Chairman of Templeton, guides the judgment of many fund managers across globe. Joining Templeton in 1987 as president of the Templeton Emerging Markets Fund, he offered US investors the first emerging market equity fund. He was also the Joint Chairman of the Global Corporate governance Forum Investor responsibility Task Force of the World Bank. With over 40 years of expertise in emerging markets, he is regarded as the God-father of investments in emerging markets.
Below are the few nuggets picked up from his public speeches:
“It is very easy for us to be caught up in emotions or simply follow the herd. I would suggest that investors take a long-term view to investing, carefully evaluate their options and of, course, diversify their holdings. History has shown us that the best time to buy is when everyone is despondently selling. This enables us to pick up stocks at more attractive prices. The markets may continue to be volatile at times, but the underlying fundamentals of emerging markets remain in tact.”
“The rationale behind my interest in emerging markets is that these countries grow faster than the developed markets and, of course, there is a wide range. If you take countries like Nigeria and South Africa and you average their growth rate, you’ll see that their growth rate is about double that of the United States, Japan, and Western Europe. So what we’re trying to do is capture that growth and of course make money for investors. But of course the risks are very great, because there’s no free lunch.”
“The time of optimism is the best time to sell. Also, when everyone else is dying to get in, get out.”
“Investors should be prepared to invest for the long-term. Stock prices are not only dependent on fundamentals but also on market sentiment. A change in either can cause stock prices to experience great volatility, be it in emerging markets or in developed markets. Investors should also be aware of the different types of risks (economic, liquidity, operational and currency) involved in investing in emerging markets so that they are in a better position to make an informed decision.”
Additional Reading
No one is smarter than the market: Aswath Damodaran
Among the best known experts on valuations with several books on the topic to his credit, Aswath Damodaran is a professor of finance and the David Margolis Teaching Fellow at the Stern School of Business at New York University.
Damodaran’s major works on equities include Investment Valuation, The Dark Side of Valuation and Damodaran on Valuation while books on corporate finance are Corporate Finance: Theory and Practice and Applied Corporate Finance: A User’s Manual.
In an e-mail interview, Damodaran talks about the Indian economy, stock picking and factors investors need to watch out for before committing their money to the markets.
Click here for the story.
Additional Reading
What Lessons Did You Learn or Relearn from the Recent Market Crash?
The recent market correction has taught (again) every investor a thing or two. Although the recovery in the past weeks has given investors some relief, but some of the losses might as well be permanent loss of capital. We started a thread, ask our users to share the lessons he/she learned in the market crash. Hopefully all of us can learn from each other’s lessons and do better next time.
Click here for the article.
Additional Reading
Not the bottom yet, but time to pick some long-term investments
Having sleepless nights seeing the Sensex gyrate to the tunes of rising oil prices? Hurt by inflation? What about politics? Will the FIIs continue to stay away from the Indian stock market? What should you do with your investments? Should you stay put or exit?
Just relax, is the message from top fund managers to investors who are in the game for a period 3-5 years.
Madhusudan Kela of Reliance Mutual Fund, Sanjay Sinha of SBI Mutual Fund, A Balasubramanian of Birla Sun Life Mutual Fund, Mihir Vora of HSBC Mutual Fund, Sandip Sabharwal of JM Financial Mutual Fund and Sanjiv Shah of Benchmark Mutual Fund came together to launch the first of the DNA Money Conversations series of round-table conferences on Friday, July 18.
Anchored by DNA executive editor R Jagannathan and business editor Raj Nambisan, the topic of the round-table was the current macro-economic environment and the fundmen’s message to the retail investor.
Click here for the full story.
Additional Reading
Market Views
| Market Views |
|
| Market | No body knows where it is headed |
| Fundamentals | Overtaken by fear |
| Valuations | At attractive levels |
| Strategy | Selective stock picking irrespective of market |
| Sectors to buy | Capital goods, construction, telecom |
| Sectors to avoid | Interest rate sensitive - auto, real estate, banking |
| Investors | Could see more pain |
| Bottom | 10-15% lower? |
| Concerns | Oil, inflation, interest rates and elections |
| Positive | GDP growth, earning growth at 15% |
| Contrarian | Banking and IT |
| Recovery | Longer but first in large cap |
| Value | More in mid caps |
| Investment | Horizon of at least one year |
| Returns | Decent from current levels |
Click here for full article. [Time to shop]
Additional Reading
- Bull market over; may not resume soon: Ramesh Damani
- FIIs try out reverse swing to beat the Street
- Introduction to the Essays of Warren Buffett: Lessons for Corporate America
- Wanna know why US remains the world’s largest debtor nation?
- The Economist on Sir John Templeton
- Phil Fisher on Profit Margins, Part 1
- Phil Fisher on Profit Margins, Part 2
10 most important investment sayings
Why did the share price of Woodside — a big producer of oil and gas — fall by 4 per cent as oil prices soared? And why have the share prices of Australian banks — with their balance sheets and profitability in more comfortable shape than banks elsewhere — declined disproportionately? Share markets are jumping at shadows.
It’s a good time to ignore day-to-day imponderables and to muse on something solid, like the 10 most important investment sayings of all time. Here are my favorites:
- “Diversify your investments” (Sir John Templeton). During the 1980s, I twice had the pleasure of one-on-one meetings with Sir John at his home in the Bahamas, and admire his investment style, his personal modesty and his philanthropic work. Sir John (who died last week aged 95) always emphasised the importance of sensible diversification across and within the main asset classes.
- “The four most dangerous words in investing are ‘This time, it’s different”‘ (Sir John Templeton). We often hear claims that “this time, it’s different” — or, worse, “it’s a new era” or “it’s a new paradigm”. When you hear such phrases, be wary!
Continue reading ‘10 most important investment sayings’ »
How to call a bottom?
As the markets head south, anxiety levels are rushing northwards.
Not without reason, the erstwhile supports expected at the 4365 (minor support) and 3960 (intermediate support) stand conclusively violated.
The despondency levels in the markets are hitting new highs as the headline indices plumb to new year 2008 lows.
But before you write off equities just yet, consider the following:
Click here for the full story.
Additional Reading
Why Buffett Is Buying
The Omaha investor is taking advantage of the market turmoil to fire up Berkshire Hathaway’s acquisition machine. Yet a string of recent takeovers has done little to buttress the conglomerate’s flagging growth.
By Richard Teitelbaum
Warren Buffett is in Toronto, fielding questions from a crowd of 300 executives. One asks what makes people want to sell their companies to him.
The Berkshire Hathaway Inc. chief executive officer replies that he tells a prospective seller to think of the company as a work of art.
“You can sell it to Berkshire, and we’ll put it in the Metropolitan Museum; it’ll have a wing all by itself; it’ll be there forever,” he says at the February meeting. “Or you can sell it to some porn shop operator, and he’ll take the painting and he’ll make the boobs a little bigger and he’ll stick it up in the window, and some other guy will come along in a raincoat, and he’ll buy it.”
Buffett, 77, can afford to throw a little mud on his competitors in the private equity industry. Wall Street’s acquisition machine has seized up, while Buffett, in the valedictory chapter of a career stretching back more than 60 years, is on a buying spree.
Click here for the full story.
More on Warren Buffett
- Value-Stock-Plus’ Warren Buffett Resource - Largest Resource on Warren Buffett on the net!
