Mahesh

"Buy high, sell low, buy again, sell again, exit fully, buy again after the rally… that’s how funds behave. A novel analysis by Debashis Basu and Swapnil Suvarna" - Mahesh from Bookmarklet

In an exclusive interview with Moneylife, Nilesh Shah, deputy managing director, ICICI Prudential AMC, gives his perspective on the current market rally and where the markets are headed. Moneylife presents the final part in a three-part series of the interview. - Mahesh from Bookmarklet

"Brands have a choice of two strategies. One, they can offer the same delectable taste that comes from the right blend of cocoa butter, cocoa powder, sugar and milk at the same price but reduce the weight of each piece and change the packaging in ways you and I won’t notice. Basically, compromise on the wrappings and trappings but not on taste and price." - Mahesh from Bookmarklet

"I was always a reasonably good student so I took up chartered accountancy. In January 1985, I completed my CA. I told my father I wanted to go to the stock market. My father reacted by telling me not to ask him or any of his friends for money. He, however, told me that I could live in the house in Mumbai and that if I did not do well in the market I could always earn my livelihood as chartered accountant. This sense of security really drove me in life." - Mahesh from Bookmarklet

"One year later, one of the key excesses that led our consumer-based economy into an historic downturn is being abused in the exact same way that got us $147-a-barrel oil last summer. Worse, many in the media are again getting the facts wrong on oil prices and demand—as if the oil and gasoline price explosion of 2005-2008 never happened—as one look at last week's oil report will verify." - Mahesh from Bookmarklet

""Over any 20-year period in history, in any market, an equity portfolio has outperformed a fixed-income portfolio," one reader recently emailed me. "Warren Buffett believes in this rule as well," he added, referring to Mr. Buffett's bullish selling of long-term put options on the Standard & Poor's 500-stock index in recent years. (Selling those puts will be profitable if U.S. stocks go up over the next decade or so.)" - Mahesh from Bookmarklet

"Beside investing regularly in equities, invest when no one wants to even listen to the word equity." - Mahesh from Bookmarklet

"Let me give you an example of how American auto manufacturers have not done an effective job at reverse innovation. Companies like Ford brought their global automobile platforms into India, thereby, becoming niche players in the premium segment. After all, only 5% of the Indian population can afford a Rs10 lakh ($20,000) car! In 2009, Tata Motors launched the Tata Nano -- the Rs1 lakh ($2,000) people's car. Multinational companies have to find a 10% solution to capture the full potential in urban India and a 1% solution to capture rural India. That is to say, if a product was to sell for $100 in US, a similar solution is needed for urban India at $10 and for rural India at $1. This is because of the income gap between US and India. The per capita income in India is about $1,000, whereas per capita income in US is about $50,000. That is why one needs the Tata Nano type of solutions to unlock new markets in India. The Tata Nano is targeted at the non-consumers of automobiles in India... more... - Mahesh from Bookmarklet

"Like other countries the world over, India is facing a slowdown. One solution offered by economists is to create jobs, boost confidence and fuel consumer spending. The target for such activity is not the cities, however. "In view of contracting global demand, we have to focus on domestic consumption by primarily stimulating growth in the rural areas," acting finance minister Pranab Mukherjee noted during a recent press interview. Ajay Gupta, founder and CEO of ruralnaukri.com, has focused on jobs in the rural sector for several years now. (Naukri can be roughly translated from Hindi as "jobs" or "employment.") Gupta graduated from the G.B. Pant University of Agriculture and Technology, holds a post-graduate degree from the Institute of Rural Management Anand (IRMA), and received a PhD from the Delhi School of Economics. Initially, he entered the corporate sector -- 10 years in the corporate social responsibility (CSR) arena and five years in business development. He then tried to... more... - Mahesh from Bookmarklet

"A few years ago, a job portal for rural India would have been unthinkable. Internet penetration was extremely low -- even today, there are only 12.8 million Internet subscribers among the country's 1.2 billion people, according to the Internet Service Providers Association of India. What's more, a study by market research firm IMRB International found that there were 45.3 million active Internet users as of September 2008, of which 42 million were urban. Even given a growth rate of 30%, the rural numbers wouldn't look very exciting today. Yet several rural job portals have been launched over recent years. At the forefront was ruralnaukri.com, which began in 2001 by advertising job opportunities at corporate and non-governmental organizations in rural areas (see "Ruralnaukri.com's Ajay Gupta: 'Rural Jobs Can Provide Momentum to the Wheel of the Economy'"). Its founder and CEO, Ajay Gupta, more recently went on to launch villagenaukri.com for village youth looking for jobs in urban areas." - Mahesh from Bookmarklet

""You can boost any kind of asset by printing money. What then happens, you can print money whether physically with a printing press or electronically, what you don`t really control are the long term consequences of the money printing, Faber told Bloomberg." - Mahesh from Bookmarklet

"The current market entered a long term secular bear market in 2000, and as history shows us, this will last at least until 2010, probably longer. As demonstrated above, during secular bear markets, the market trades in vicious cyclical bull and bear markets. Therefore, you have to be careful in the stocks you buy and be ready to sell them quickly should the market turn against you. Pull backs or cyclical bear markets will present opportunities to take new positions once they have run their course. It is also important to find value situations and play the hot sectors. We will need to be defensive in our positions and for those who are willing to take the risk, we may want to take some short positions." - Mahesh from Bookmarklet

"As he told the global shipping newspaper Lloyd's List only last week: 'You have a contraction of oil demand, you have a falling world economy and you have a contraction of financing capabilities - and at the same time as a lot of new ships are being delivered.'" - Mahesh from Bookmarklet

"Brain and behavior studies clearly show that when information is scarce and threats seem imminent, people often stop listening to their own logic and look to see what others are doing." - Mahesh from Bookmarklet

"William Ramsey, an executive at Blue Chip Stamps, stood in the office of Robert Flaherty as they both awaited a call. Moments earlier, Flaherty had attempted to persuade Warren Buffett, majority owner of Blue Chip Stamps, to consider purchasing See’s Candy, a popular West Coast candy maker. Buffett turned them down—up until then, he was used to buying boring businesses on the cheap: banks, textile mills and insurance companies. Ramsey however, thought See’s was a great buy, and desperately tried to get Buffett back on the phone. Their secretary finally got hold of Buffett at his home in Omaha. He had reviewed the numbers, and liked what he saw." - Mahesh from Bookmarklet

"Fundamentally, there are two ways to increase sales: (1) Expand the brand, or (2) Expand the brand’s market share. Most companies focus on the first way, expanding the brand. While this might seem to work in the short term, expanding the brand will eventually weaken the brand and leave it in worse shape than before the process began." - Mahesh from Bookmarklet

"Pankajakasthuri is an example of a local brand achieving grand success . It also gives confidence to small players to invest more on brand promotion rather than bargaining with the trade." - Mahesh from Bookmarklet

"About 20 patients have taken up the EMI scheme and no one has defaulted yet." - Mahesh from Bookmarklet

"Sundaram BNP Paribas Mutual Fund: The Select Midcap Fund of this fund house notched up the second highest returns (43%) over the 16 periods but could beat the benchmark only in nine out of the 16 periods. On the risk front, too, it was in the middle of the lot, with a Sortino ratio of -0.58. This is a mid-sized scheme with Rs1,567 crore in assets. Of this, 98% is now invested in equities and the balance 2% in money market instruments. This Fund has an unusual mix of picks—Indiabulls Real Estate, Aurobindo Pharma, Mphasis, India Cements and Max India. None of these stocks (except Mphasis) is among the top picks of other funds." - Mahesh from Bookmarklet

"This is perhaps the most important thing I learned over my years working on Wall Street, including as a managing director at Goldman Sachs: Numbers lie. In a normal time, the fact that the numbers generated by the nation's biggest banks can't be trusted might not matter very much to the rest of us. But since the record bank profits we're now hearing about are essentially created by massive federal funding, perhaps it behooves us to dig beneath their data. On July 27, 10 congressmen, led by Rep. Alan Grayson (D-Fla.), did just that, writing a letter to Federal Reserve Chairman Ben Bernanke questioning the Fed's role in Goldman's rapid return to the top of Wall Street." - Mahesh from Bookmarklet

"The first thing you need to know about Goldman Sachs is that it's everywhere. The world's most powerful investment bank is a great vampire squid wrapped around the face of humanity, relentlessly jamming its blood funnel into anything that smells like money. In fact, the history of the recent financial crisis, which doubles as a history of the rapid decline and fall of the suddenly swindled dry American empire, reads like a Who's Who of Goldman Sachs graduates." - Mahesh from Bookmarklet