I want to sell SBI @ Rs.10000 per share - Not kidding

Yes I agree with your logics about selling SBI at 10,000. You have mentioned that one should happy with 20% return in long run which seems to be on lower side. When MFs are giving more than 50% return in long term, why people will take risk and invest directly to gain only 20% p.a. One can get more than 100% p.a. even applying thru IPO and retaining the alloted stocks for long term. How much return you get from your portfolio since you have long experience.

Sorry to break my silence too soon. I could not have stopped posting this when I saw the above message. Only to clarify my position and to quell doubts if any.

Pankaj,
If Parv makes a sound fundamental analysis and then invests, I will be far more happy than he himself. But you look at his posts in this thread and see whether the reasons given by him are sufficient to say that SBI will go to Rs. 10000/-. If there is no sound analysis on the basis of reliable information, rest will be only wishful thinking. That is pretty dangerous, in my opinion. All long I have been probing Parv as to whether he has got sufficient information and sufficient data so as to make a good analysis and to come to good investment conclusion. So far all that I could gather that some of his friends made some statements and that is the basis for his investment decision. You are a veteran. I need not explain to you the dangers of these decisions. That is the reason I have been repeatedly warning him not to love any particular share/company. I myself have made clear in my earlier posts that I donot have the required information/data so as to come to a conclusion that SBI will reach Rs. 10000/- I have no hesitation in accepting a well researched analysis report stating that SBI will reach Rs. 10000/- But accepting mere statements is a different thing.
Thanks for your valuable comments
Thanks and regards
R. S. Iyer

Once again I find my self in full agreement with Mr Iyer as to an illogical conclusion that SBI could go up to 10000 unabated .An analysis is a must for such hopes. There is what is known as weibull probability analysis, which states, inter Alia ,that life / mortality of a man, animal, industry etc follows bath tub curve. Now take a bath tub and reverse it. There is the ascendancy phase, the Plato phase and the decline. This is natural and no one is an exception. Why organisations are born, they grow exponentially flatten up and then they die is a complex phenomena linked to technical advances, employee inability to learn and obsolescence etc., Take the example of Indian Telephone Industries the First Public sector industry in independent India for which there was no competition due to monopoly It did mighty well for over 3 decades with over 14000 employees (I was one for a while) and then declined. What about ACC the monarch of BSE for a decade. My friends even mother earth is destined to perished one day. In fact all life on earth ,90%each time to be accurate, died off more than 5 times, in the past 4.6 billion years since earth was born. So where is stability and perpetual growth for any thing else !!!

Mr. Iyer

I am happy that I am able to break your silence.
I agree with you that mere statement is a wishful thinking unless supported by facts and analysis. other members are in danger of making uninformed decisions because of that.

Parv has to appreciate this aspect .

Here are some of the fundamentals of SBI vis a vis its pear in private sector.

Market cap(SBI)-119,990.88cr as on date. ( price 2280)
Market cap (HDFCbank)-60,334.24 cr as on date (price 1700)

PE(SBI)-23.21
PE(HDFC)=49.29

DIVSBI) last-170
DIV(HDFC) last-70

EPS(SBI)-98.21
EPS(HDFC)-34.75

BV(SBI)-594
BV(HDFC)-201

Price as on 2.11.2004(SBI)-<Rs.600
Return 3.5times approx)
Price as on 2.11.2004(HDFC)>Rs.360
Return 5 times.

Financials (qrtly)SBI/HDFC Nabk
Income Statement (Sep '07)
Net Sales 11616.28 / 2362.76
Other Income 2041.94 /482.38
PBDIT 10480.87 /1737.37
Net Profit 1611.42 /368.48
Reserves=Rs.4169186Lakhs/---

Inherent strength os SBI
*
The largest number of ATMs 7124 and largest card base (28.27 million Cards).
*
5686 of SBI branches and 10638 of SBI Group Branches under CBS.
*
90% of business of SBI Group is now on Core Banking.
other Details
http://www.statebankofindia.com/view...11B81DEC99E507

Inherent Strength of HDFC

HDFC Bank 2007, has an nationwide network of 684 branches and 1605 ATM's in 316 Indian towns and cities.

The Govt of India is working on a policy under which banks would be slowly encouraged to amalgamate in order to reach the levels of International capitalisation norms. SBI subsidiaries would also be merged.

Industry and businesses would always need money and Bank would be one viable source of raising long term resources, even though other avenues have opened up but they are not for every businesses.

What I have given is only some of the basic parameter. One would say the why prices don't go up.

Prices are not simply a function of fundamentals or technicals. Expectations, greed and fear . Being a PSU Bank it has certain limitations on its functioning. In the long run the policies of Government would make it appreciate in value. In fact it would go the way BHEL and BEL has gone., proving a bonanza for their investors.

However one can analyse fundamentals and policy directions and convince themselves. This is certainly not a short term view.

As for prices I have never seen them going in linear fashion. Ups and downs are there and one needs to keep re balancing portfolios. A portfolio must comprise of sectoral allocation and short/intermediate/long term investment. Also keep booking profit especially when Markets are at all time highs is really a good idea.

Though I did not invest in the market for long time but I have been observer of the Market since 1990. I would say it may so happen that SBI or any stock go out of favor. But investments are
not for holding a stock but about how to make money. One can switch to

any stock depending on their perception. There is always a risk of losing all monies in the market.


Pankaj

That is why humans are exploring outer space and trying to find other habitable space and species. It is a looo...ooonger term view, but making investments on these views is not wrong.
Also one should not stop eating or investing if earth is going to perish a few billion years hence.

Karma , you know

pankaj

I presume this is directed to me. So here is my answer.
20% return is a historically proven fact. through bull and bear phases.Currently India is witnessing bull run so MF are giving higher returns. We have to see if they continue to perform similarly during bear phases. The average of two comes to somewhere near 20%, still beats the inflation by wide margin.

My investments have yielded mixed results. I was able to achieve 100% YOY result. But my watch list stocks have appreciated upto 60 times from the date of their putting in watch list. I had no courage of investment in them as I was plagued by many doubts and contradictory advices. Some were telling look at ACC look at infy , look at HLL polaris, what happened , don't invest etc.

By the time I plunged I was in the middle of Bull run so mostly did well and then the crash. I have survived without a scar. and on the same stocks which I had in my portfolio, I made 3 times return from 2006-2007. That covers about all.

Some time in Jan 2005 NKPanjiyar had put out a list of stocks and I also put some of the expected stocks. Looking back I see all of them have performed 500% or more.(theoretical of course).

I will name few stocks which I spotted back in 2003.

L&T/ULTRA TECH CEMENT(pre split and post split)
Texmaco
ALSTOM
AREVA
TATASTEEL
TATAELXI
Bharti AIRTEL
BALAJI Television
NDTV
SBI
IFCI when it was at Rs 8 and written off
IDBI when it was going through rebirth pangs
TATATELE(M) around 10
HFCL(risky)
IGL
Polaris(risky and underperformer)
PBAINFRA(when it debuted, only stock in negative) I suppose it 's time is yet to come.

There may be few others. Remember I have not invested in all of them .

The one I missed are UNITECH JAICORP which were later pointed out in this forum but fundamentals were/are suspect.

pankaj

Shareholding Pattern>>>>>>>>>>>>>>>>>>>>>>
Company Name STATE BANK OF INDIA
NSE Symbol SBIN
Quarter Ended on 30-SEP-2007

Statement showing Shareholding of persons belonging to the category "Public" and holding more than 1% of the total number of shares


Sr. No Name of the shareholder Category of shareholder Number of shares Shares as a percentage of total number of shares {i.e., Grand Total (A)+(B)+ (C) indicated in Statement at para (I)(a) above}
1 Life Insurance Corporation Of India 17424454 3.31 %
2 BMF - Bank Bees - Investment A/c 7312025 1.39 %
3 CLSA (Mauritius) Limited 13422864 2.55 %
TOTAL . 38159343 7.25 %

Pankaj,
Only a few words. Thank you very much for a detailed explanation.

At least now this thread is becoming interesting. Hoping for more informative posts from other veteran members as well.

Parv,
You should now notice the difference between mere friendly statements and cool headed analysis based on facts and figures. Which one do you think is better? No easy money. No free lunch.

RSI,
it was you who said SBI will take a looooooooooooong time to reach Rs. 2000 and will come to Rs. 500 and stagnate there. And till now I've not got the explanation as to why it has to come to 500 and stagnate there.? Looking forward for a cool headed analysis based on your facts and figures for this.
Waiting for your explanation

Parv

Parv,
Read my earlier posts once again. Several times I have stated that Rs. 2000/- and Rs.500/- are being quoted only as hypothetical figures for explaining the consequences of blindly holding a stock. They are not target prices and I never intended them to be. If by chance it happens to be target price at a future point of time, note it now itself that it is only an accident. I do not venture in to guessing to target prices. Even in my earlier posts also I stated that a trend trader will try to remain in the trend (without having any preconceived notions with regard to target prices) until market throws him out. In fact, if you read the very post where I posted these two figures (for the first time) there itself you will be able to notice that these were only hypothetical figures.

Do you want a real life example? See the chart of Tripex Overseas (BSE Ticker Code: 531774) See what happened in between February 2007 and until today. Now if a person is still holding it thinking that it will go to Rs. 400/- and if he has invested all his money on this stock, what will be his fate? No prizes for guessing. In fact I had started a thread "A tale of two stocks" some time back on that. But that did not catch the imagination of many members. I do not have any remorse or regret for this. What I am trying to say is that for every SBI there is a Arvind Mills, Tripex Overseas etc. Blind faith in any stock is too dangerous.
Hope this post reduces your anxiety.
Take care
Thanks and regards
R. S. Iyer