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manishdave
Senior Member
Joined: 05/Aug/2006
Location: India
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Posts: 1371
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   Posted: 15/Oct/2006 at 11:04am |
WBA5261,
Actually I can't agree with anything that you said. Govt IS to be blamed for mess. If we all start using bicycle, it will compound the problem. Govt is robbing peter to pay paul. They make money on patrol and subsidse other products heavily. If less patrol used, more loss to companies. Few questions: Is govt developing efficient public transportation? What will happen to car industry? Isn't free mkt better than all other systems?
In China people can't unite. Govt enforces lot of things. Even some horrible things.
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omshivaya
Senior Member
Joined: 06/Sep/2006
Location: India
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Posts: 5966
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Posted: 15/Oct/2006 at 11:20am |
I agree with Manish. The ground reality is vey different in China. Commies force a lot of things there and that is why things get done there, no matter what happens to the poor chinese. We are much better off, where poor people have a major say in the system.
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The most important quality for an investor is temperament,not intellect.A temperament that neither derives great pleasure from being with the crowd nor against it
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investor
Senior Member
Joined: 06/Sep/2006
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Posts: 1745
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Posted: 15/Oct/2006 at 11:51am |
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Its very easy to criticize others, but we must not forget their good policies as well. All said and done about the numerous problems in India and its economy, nothing can be perfect. Even the US economy is in red, they have
been having a deficit budget ever since Bill Clinton left.
So its very unfair that we as investors, wanting the industry and the economy to be "perfect" so that our stocks can zoom up, just go on critisizing the govt. What was the last thing we did to help our economy, even in any smallest of ways?
Edited by investor - 15/Oct/2006 at 11:53am
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basant
Admin Group
Joined: 01/Jan/2006
Location: India
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Posts: 18403
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Posted: 16/Oct/2006 at 4:57pm |
Originally posted by wba5261
Hello fellow Members and Basantji,
The problem lies with we Indians.We blame the government for making these Oil Marketing companies bleed, but then are we behaving responsibly. Are we trying to reduce the oil we consume.... how many have decided yo forego cars for bocycles ot publictransporta. Unfortunately, India is not China, where the people will unite in no time and shun oil if they see their country in problem. I am not patronising the politicians and have been a vehement critic of them but I dont like we indians react to crisis. weare so symbolic in our responses.... we are vocal but then we dont really know how to fight as a collective unit.
coming to Oil Bonds, I beleive the governement was left with no other alternative.May be trying to fool everybody for some time.
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It is not a question of "we Indians" it is very easy to be an idealist and preach what others would do but it is so difficult to follow that. Do you know of anyone who has sold off his car and goes to office in a cycle. Now 100% of Indians cannot be wrong. Let us not make such sweeping statements that defy all reality.Are you in favour of some rationing system for oil? Basic demand supply economics would tell us that if oil prices are put at internationsl levels consumption will come down automatically.
If Manmohan Singh remembers a bit of Economics he learnt in ENgland and PC recalls a bit of the same he must have been taught before he left for Harvard I am sure they woulkd come up with better options.If someone tells me that this is the best they could have done I would add the following phrase to that line "to keep their seats and the vote bank".
Edited by basant - 16/Oct/2006 at 5:00pm
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'The Thoughtful Investor: A Journey to Financial Freedom Through Stock Market Investing' - A Book on Equity Investing especially for Indian Investors. Book your copy now: www.thethoughtfulinvestor.in
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manishdave
Senior Member
Joined: 05/Aug/2006
Location: India
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Posts: 1371
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Posted: 16/Oct/2006 at 11:54pm |
Originally posted by investor
Its very easy to criticize others, but we must not forget their good policies as well. All said and done about the numerous problems in India and its economy, nothing can be perfect. Even the US economy is in red, they have
been having a deficit budget ever since Bill Clinton left.
So its very unfair that we as investors, wanting the industry and the economy to be "perfect" so that our stocks can zoom up, just go on critisizing the govt. What was the last thing we did to help our economy, even in any smallest of ways?
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Few points:
Why shouldn't we criticize wrong policies? If we do it may take long before it changes. If we dont it will never change.
Should we take solace from problems of US or others.
When we work every day, it helps economy. When we spend everyday it helps economy. When we put money into bank or invest in stocks it helps economy, so I guess we help economy everyday.
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So its very unfair that we as investors, wanting the industry and the economy to be "perfect" so that our stocks can zoom up, just go on critisizing the govt.
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Is it unfair for companies to sell something for more than waht they pay for? That is how business is done. Is business unfair? If these companies loose money how can they expand and how can the serve more people? They can't and that is why infosys had to wait for year and half to get connection.
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Vivek Sukhani
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Joined: 23/Jul/2006
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Posts: 6675
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Posted: 16/Oct/2006 at 1:08am |
Manish, before i initiate my writing I must declare that I am not in favour or against governement. Although, I dont disagree with your views yet am not in consonance with them either. I beleive prices take care of themselves but then we need to understand that the fragility of our growth. Wealso need to understand if the government would have allowed the prices to run up it would have led to inflation. Inflation would have led to higher interestrates. Most of the new projests would have become NPV negative and hence would have needed to be abandoned.Thiswould have reversed the business cycle.... i admit i am talking a bit too loosely.
I for one,has never beleived in the solidity of our growth story.By this issuances we are merely crowding out investments.This may not be visible now but will be visible when defcit finanacing will be resorted to pay for these bonds. I have always held the opinion that we are running on 1 major fuel:
Cheap Credit.
If credit no longer cheap as such issuances will prompt it not to...we will have some major issues to handle. We are merely delaying the inevitable, an end which would have been actually visible had the government allowed the oil prices to behave independently.Its really surprising to see people no longer taking it into their basket of risk.
Manish, seriously I am seeing some major risks emerging.... may be I am wrong and hopefully let me be wrong but there are questions which I am unable to answer. Thats why I am screening off those companies which have more than normal debt and that too denominated in domestic currency.I seek your views on this...
Edited by Vivek Sukhani - 16/Oct/2006 at 1:10am
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manishdave
Senior Member
Joined: 05/Aug/2006
Location: India
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Posted: 16/Oct/2006 at 3:31am |
I beleive prices take care of themselves but then we need to understand that the fragility of our growth.
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As Mark Faber mentioned somewhere if we support growth artifically, then we are going on higher diving board. If situation doen't support higher growth, go for lower growth - consolidate. Artificial higher growth would be much more painful later on. Higher prices would take care of lot of things though. More people use public transportation, share transportation, they move closer to work, prefer bikes over cars etc. Japan has very high fuel cost but still economy is good so I dont think higher fuel price will stall economy. Now I am not for higher prices, but if cost is more then be it.
I am not too worried abt risk right now coz we have great momentum. There is no reason that investment will stop coming from inside/outside. I still see lot of people are getting good jobs and my frineds there say that productivity is improving. Deficit is concern but govt can burn furniture(PSUs) to stay warm in worst case.
Subsidies do more bad than good. For example due to subsidy on kerosene, people use that on autos and we had very bad pollution. Which effectively more costlier. Subsidies doesn't always go to needy people.
I sold out BPCL by the way. I think OIL may see higher price anytime now.
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Vivek Sukhani
Senior Member
Joined: 23/Jul/2006
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Posts: 6675
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Posted: 16/Oct/2006 at 8:43am |
Even I agree with you on oil. I have always beeen a die-hard devotee of ONGC and am picking up more and more tickets. People are becoming more casual as such rallies are showing. The cause of worry is negative breadth and I beleive more people are still losing and few handfuls are making gains. I beleive most of us have 13000 clear on their minds.... and although I must admit that I was also very optimist when the sensex was hovering in the band of 12300-12500 and made such a view on one of the posts but now given the way we are turning casual, I beleive a tipping point may be just in the offing.All in all, I am picking yp more and more conservatives and letting go some of the hots....
Coming to oil, I beleive people like Chavez and countries like Iran and North Korea will never allow crude to cool down(although N.Korea has a negligible impact, but nonetheless it heightens the tension). So, I agree that HPCL and BPCL are still not very attractive and stand in total agreement with your views.
Currently, I am adding my position in the following companies:
1.ONGC.
2.Great Eastern Shipping
3.BASF India.
4.Foseco India.
5.Chambal Fertilizers.
6.Some stray chemical stocks.
Will be delighted if you can throw your views on them. Also advise which Oil production company is alooking attractive. And also your views on Exploration and Off-shore sector.
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