Buying on Dips

[ravi1967]

from cnn money today

Comments from Fed officials about the threat of inflation have helped to fuel a sell-off in global equity markets over the last couple of weeks, and the higher than expected inflation reading in the Consumer Price Index report Wednesday convinced economists and investors Wednesday that another Fed rate hike is certain to be announced at its June 29 meeting.

Investors will now start watching for clues as to how high the Fed might raise rates after its June 29 meeting. The Fed's so called beige book said the various banks around the country saw signs of a cooling economy along with rising prices. That indication of slower growth helped lift stocks by raising hopes the Fed might not raise rates after June.

Oil prices rose after a Wednesday report on U.S. fuel inventories report that showed crude inventories smaller than expected.

U.S. light crude for July delivery gained 71 cents to $69.85 in early electronic trading, while the July contract for Brent crude gained 62 cents to $67.60.

Major markets closed mostly higher Wednesday in Asia after the Bank of Japan left interest rates there unchanged. Major European markets also were higher in midday trading.

 

[ravi1967]

hai all, Happy news. BUY ON DIPS , BUY ON DIPS is coming true.cover your shorts.Buy REL and Financial Technologies.
buy(Bye)
ravi

 

[ravi1967]

Investing World Cup Final: India and Southeast Asia
By Tim Beyers (TMF Mile High)
June 23, 2006

Once again, I am humbled. You've seen the Foolishness inherent in small-cap investing, and now it's incumbent upon me to convince you that my team from India and Southeast Asia deserves the top prize in this final match with Western Europe.

Not your average small cap
It's true, in a sense, that there isn't much difference between Jim's last opponent -- South America -- and what India and Southeast Asia have to offer. India is an emerging market, and investing there is riskier than investing in Western Europe. But that's where the similarities with South America end. Let's compare the top countries in each region:

Country
GDP/Capita
GDP Growth
Inflation

Brazil
$4,640
3.6%
4.7%

India
$772
6.8%
4.5%

Data from Economist Intelligence Unit. Projections for 2006.

It would be ludicrous to argue that Brazil has a far weaker economy than India. But isn't it fair to say that India has far more room to grow? And couldn't we also say that, with inflation outpacing real GDP growth, the fallout in the Brazilian Bovespa has been somewhat justified? I'd say so.

Conversely, recent fallout on the Bombay exchange has been largely fueled by fears of rising interest rates, especially here in the U.S. It just smells like panic selling. Maybe that's why the locals are calling it exactly that.
Big where it counts
What's more, India and Southeast Asia have huge economic advantages over Western Europe in two areas that drive expansion -- GDP investment and population growth. Have a look:

Country
Investment
Pop. Growth

France
19.4%
0.35%

Germany
17.1%
(0.02%)

United Kingdom
16.3%
0.28%

India
24.8%
1.38%

Indonesia
21.5%
1.41%

Thailand
31.7%
0.68%

Source: CIA World Factbook

Growing economies grow because they invest in expanding infrastructure and have burgeoning populations that produce engaged, educated workforces. India and Southeast Asia have been remarkable in both of these categories.

Meanwhile, Germany's population is shrinking, and France seems to be constantly teetering toward labor strife. Is it really any wonder that one of its best-known businesses, Airbus parent EADS, is plagued by much more than a delay in its signature A380 superjumbo passenger jet?

Risk is relative
Now, let's get back to the question of risk, beginning with the obvious: India and Southeast Asia offer a riskier bet than Western Europe. But that knowledge alone is not enough to help you as an investor.

What you need to know is whether your risks for investing in Southeast Asia will be compensated by higher long-term returns. Figuring that out is a matter of both valuation and history. Let's start with history. Were you to invest $10,000 in the closed-end India Fund (AMEX: IFN) on July 1, 1997 -- just before the Asian financial crisis that threatened to destroy billions in stock market value -- you'd be sitting on more than $55,000 today.

Had you invested the same amount, at the same time, in the Europe Fund (AMEX: EF) you'd have a little less than $40,000 today. Think that's an unfair comparison? Check the fund's latest annual report. A full 100% of its assets are invested in Western European stocks such as GlaxoSmithKline (NYSE: GSK), Total SA (NYSE: TOT), and Novartis AG (NYSE: NVS).

As for valuations, Morningstar pegs Motley Fool Champion Funds selection Matthews Pacific Tiger (FUND: MAPTX) with an average forward P/E of 16.3. Meanwhile, larger cousin Matthews Asian Growth & Income (FUND: MACSX) trades for a similarly reasonable 14.3 times earnings. Neither multiple strikes me as pricey for a fund of high-growth stocks. And both appear to be cheap when compared with the slower-growing Glaxo and Novartis, which trade for 14.7 and 15.2 times anticipated income, respectively.

David 1, Goliath 0
If anything, the World Cup proves that the small and talented can beat the big and experienced. Indeed, that's how it was recently when Ghana delivered a 2-0 defeat to the highly regarded Czech Republic team, and that's how it is in this match-up of India and Southeast Asia versus Western Europe. Only here, you have the power to decide the winner. So, I ask -- in which would you rather invest: a slow-growth region with a history of relative underperformance, or a high-growth region that has, virtually overnight, been made a whole lot cheaper

 

[ravi1967]

hai all, does the above convince you to invest in INDIAN MARKETS. Buy for long term and BUY ON DIPS
bye
ravi

 

[ravi1967]

Investing World Cup Final: India and Southeast Asia Rebuttal
By Tim Beyers (TMF Mile High)
June 23, 2006

Jim's right: Western Europe is a wonderful place to find market-beating investments. I'd never have invested a portion of my portfolio in Nokia (NYSE: NOK) shares, which I still hold, if it weren't.

But this debate is about which region will be capable of delivering greater returns over the long haul. On that score, India and Southeast Asia should earn your vote. Read Jim's argument again. Perhaps he's just being prudent by focusing on the uncertainty of growth rates and the specter of "overvaluation." As Stephen Simpson pointed out, such an attitude 200 years ago would have led the proud European to avoid that "frothy" American market across the pond.

So let's put aside our fears for the moment and have a look at this chart, which plots the performance of an index of Indian companies against some British and German counterparts over the last nine years.

The arguments Jim is making now were made by others in 1997. Those who didn't listen -- those who bought at the top -- still pummeled those who thought it best to stick with the Brits and the Germans.

Frankly, that's cause for celebration, because Indian and Southeast Asian markets have recently endured a massive correction. Those buying today have nothing in common with the head-in-the-sand crowd that bought a decade ago. And they'll earn far better returns as a result. If only Europe could say the same

 

[ravi1967]

see a comapriosn chart of indian index with other markets.this chart is a part of previous message

 

[ravi1967]

Todd Market Forecast Stock Market Update for Tuesday 6/20/06

www.toddmarketforecast.com

Available Mon- Friday after 6:00 p.m. Eastern, 3:00 Pacific.

DOW + 33 on 450 net declines

NASDAQ COMP. - 3 on 300 net declines

SHORT TERM TREND Bearish

INTERMEDIATE TERM TREND Bearish

STOCK MARKET ANALYSIS:

One of the dumbest comments that I have heard repeatedly over
the past several months is that the new Fed chairman must impress
the markets with his inflation fighting resolve. No! No! No! The
markets don't want an inflation fighter, they want easy money.
Let's look at some facts. Every new Fed chairman has felt that
he must impress the markets. Alan Greenspan entered the fray in
June of 1987. Four months later in October the Dow was so
impressed that it dropped 20% in one day.
By common consent, the most fearsome inflation fighter was
Paul Volker who so impressed the markets that the S&P dropped
12% three months after his appointment as Fed Chair and another
20% four months later.
His predecessor G. William Miller had the most benign
introduction. The S&P dropped 14% in October of 1978, but it was
seven months after he took power.
Arthur Burns entered the scene in March of 1970 and was
greeted with a 22% decline one month later.
So far, Bernanke has been greeted with a 7.6% drop in the S&P
500 after four months and this is the most benign decline yet, but
stay tuned. If he is as tough as he seems, we could be in store for a
lot more on the downside. It does indeed appear that the markets
tend to greet new Fed heads with a razzing.
Today the Dow was up almost 90 before giving most of it back.
The market looks to be somewhat lethargic. We think that it is a
negative that the Nasdaq and the high techs, after foreshadowing
this decline, are still lagging. We also are unimpressed with
breadth which is lagging badly.

NEWS AND FUNDAMENTALS:
Housing starts rose 5% to 1.95 mln units annualized. This was
above the expected 1.87 mln. Building permits dropped 2.1% to
1.93 units which was less than the consensus 1.95 mln.
On the stock front, Cosco gained 3% after an upgrade by JP
Morgan. JetBlue jumped 6% after Morgan Stanley initiated
coverage with an outperform. JM Smucker and Kroger rose 7%
and 5% on earnings.
On the negative side, Apollo Group and Actuant Corp. beat
estimates, but still lost 6% and 19%. Trident Microsystems sank
9% after Piper Jaffray lowered its price target.

BOTTOM LINE:

Our S&P and NASDAQ intermediate term systems are on a
sell signal as of June 7, 2006 at 1256 on the S&P 500. Mutual
fund investors are currently 100% in cash.

Short term traders in the SPY and QQQQ are in cash. Stay there
for now.

For new subscribers, the QQQQ and SPY are exchange traded
funds or Spiders. The former mimics the Nasdaq 100 and the latter
mimics the S&P 500. ---- Additionally, an m.i.t. order means
"market if touched" It means that your order becomes a market
order if the price is touched.

OTHER MARKETS

We are on a buy for the bond market as of May 19.

We are on a buy for the greenback and a sell for the Euro as of
June 8.

We are on a sell for gold as of May 15.

We are neutral on crude oil as of June 1st.

We're now on a long term negative for all major world markets,
including those of the U.S., Britain, Canada, Germany, France and
Japan. This is a first in many years, but it should be a fairly short
time frame, meaning a few months.


STEPHEN TODD

 

[pkjha30]

hai all, Happy news. BUY ON DIPS , BUY ON DIPS is coming true.cover your shorts.Buy REL and Financial Technologies.
buy(Bye)
ravi

Good News
Pankaj

 

[ravi1967]

hai pankaj, i had recommended the above stocks on 16th June 2006. almost all stocks have risen and hence i cannot take credit for the rise.however extreme caution need to be applied as external factors(global), seem to have a significant effect on our markets players.so we need to take TA levels seriously. Weekly TA suggests that we are 50:50 on Bears Vs Bulls. So the markets can go either way. Lets hope it is up !!!.we may reach 3227 and may face resistance.But the chances are that we will move above this to 3300 levels, before tanking to 2800-2600 levels by end of July,as the support for Dow and Nasdaq seem to have been lost.Nikke is 50:50 like our market and FTSE around 55:45 in favour of Bulls.so extreme caustion is the word , with one position at a time. i trade in options and my strike rate is around 45%.i follow the recommendations ,that are given by me to this forum.so i also bear all profits and losses!!!
bye
ravi

 

[pkjha30]

Hi Ravi

I am sure you do.You are one of the few who have given buy call so seriously and with reason now.

In another thread you said that Fed will increase by 0.5%. I have no record of increasing more than what was hinted by fed. If you could post such data it would be helpful. It is not at all implausible. Market has already factored 0.25% hike. But if hike is more than that market will surely take southward plunge. I can only speculate that fed will not hike more than what it hinted at.

As for Bank of Japan, again you may be right. Politicians have shown their dislike for the idea. I don't know how far chairman would be able to do that given his admission that he was somehow involved in Insider trading. His position and moral authority will be now considerably weakened. He may not be allowed to have a free reign. I feel if he is allowed to increase the BOJ rate and triggering some more corrections that would be good. As market is now better prepared to tolerate such shock now that they are jolted out of their dream run.This will become another exercise in consolidation and good for LT investors.
Pankaj