Monday, January 15, 2007


work, personal life, work, personal life, more work, lots more work pending... .fatigue has set in. Sad part is there is no break on the horizon.

Friday, January 12, 2007


Well, I'm finally trying out technorati. What do you people feel? useful service?

Satish is out of the markets :-)

My good friend Satish has just posted (linked above) about how he has sold all stocks and gotten out of the markets. I told him how he seems to share timing with Dr. Marc Faber who also seems to have sold all equities.

Marc Faber's portfolio - Cash, Farmland , Precious metals.

Now my take on the entire situation:-
1. Every sell-buy decision has to be taken on its own merit.
2. I am not a trader who buys and sells. I am a buy and hold person.
3. I buy value and value in absolute terms. I've trained myself to remain unaffected by ups and downs in the market.
4. I have realised Marc's perspective - (300mn+ under management, big cap index stocks) , Satish's perspective (??? under management) and my own are totally different in the indian context. If I was in Marc's shoes - I would only do private equity as of today. But then again, he's an investor. I am a buy and holder.;-)

What do I feel presently?
I don't think small and midcaps have participated in the rally upwards so I would be surprised if they saw significant downside.
I have bought value. I'm comfortable buying more if the opportunity presents itself.
Some companies I've bought have not yet proved my investment thesis though my returns have come in. I would rather wait till my investment thesis plays out. I guess the broader market will be willing to overpay for a story that has played out as opposed to myself who is willing to buy cheap and see potential. I guess a story of people with different expectations from their capital!!

Small aside:- On comparing Marc's portfolio to my own- I seem to be invested in companies with heavy cash and farm land on their balance sheets. In some cases, the market cap is below the combined value of these two put together. Cheers :-)

Net Net. I am staying invested.

Thursday, January 04, 2007

Portfolio Report

Just thought I would do a quick report on the total performance of my portfolio. I bought my first stock after my return to India on 19-07-2006. So it's going to be six months in another 15 days. I've progressively increase my exposure starting very small and then pretty much doubling the amount I have invested every month over the past 5. I dont think its gonna be possible as the entire portfolio is now pretty substantial.

Firstly my investment principles.
1. No tips
2. Only buy and hold. No daily monitoring of stocks or daily trading.
3. Only buy stocks I have done homework on myself and whose business I understand.
4. Small portfolio - Today I have in total 6 stocks.

How have I done?

Overall I'm up about 35% on total cash invested. Considering that I've been investing progressively in an increasing manner, I would say my returns would end up being about 10-15% on a monthly basis. Decent stuff in my opinion.

Risky Predictions for 2007

Hi Everyone,

I keep getting asked by various people about where I think the mobile industry is going both globally and internationally. This is probably because of my long association with the Mobile VAS industry (seven years) since its inception somewhere around 1999. I thought I would start 20007 off by making some risky predictions and maybe feeling like a fool in Jan 2008.

Firstly why prediction for 2007. Are things going to be so different in just 12 months. I think so for sure. In my opinion, there is so much activity in the sector at the moment that lots of shifts that would have happened in the longer term time frame will happen far faster and thus even if things dont go to the overall extent of my predictions in 12 months I expect the writing to be pretty clear on the wall. So here are some of them. I've tried to make small arguments out for the overall rationale but will not flesh them out completely for lack of time.

1. Shakeout among the indian aggregators. I think this will be one of the biggest news stories. Today indian aggregators try and do too many things. I like to draw parallels with the other media industry - that of Films. There are three clear entities - Producers, Distributors and Exhibitors. I feel strongly that the mobile business will follow these broad three paths. A few Indian companies who are confused about where they stand in these pillars will have to die. My own opinion of the biggest confusion that will cause their downfall- A lot of them will try to be the exhibitor a.k.a the portal owner. Here they will come across stiff competition from the Mobile Operators own brands and esp. those of the larger ones who will overpay for association with the big brands / exclusive deals.

2. Death for India focussed Aggregators without an international focus. I dont see the market for aggregators who will aggregate indian content and distribute the same to indian operators. Thats not a space thats looking to be aggregated. Too few people on either side who know each other well. I do see a future for Indian aggregators offering a package to international operators with large indian subscribers.

3. Blockbuster success for content producers and rise in their bargaining power. I expect to see at least a few Indian companies who have focussed hard on creating great content for the mobile medium to see good success. Their challenge will be in monetization but I am sure advertisers will step in there. This in my opinion will be something that will surprise most people and will be just reward for a few small smart creative teams who I am sure are feeling left out over the past few years.

4. Bursting of the India VAS bubble. I think realism will set in here. Too many people are chasing the India dream and while it might make decent money at the end of the exercise, I don't feel it is justified from the opportunity cost. For the kind of people who are focussing on this area, the money to be made elsewhere for whats a global requirement is much much larger. Even if the founders choose to ignore this, the employees wont.

5. Rise of the Indian MNC. This is something I am putting in here more as a wish rather than a prediction. I definitely see one of the Indian VAS players becoming a truly global MNC over the next 12 months. There are quite a few (us included) who have their own markets where they specialize, but I think the next 12 months will see one of them truly becoming a global company or at least reaching escape velocity.

6. Fall of a major indian operator. I've got my own reasons for saying this but I feel one of the big Indian operators will see grave financial trouble. There just too much wastage, too much incompetence and too many people out there with no understanding of telecom and technology for a few organizations to turn themselves around. I also dont trust the numbers doing the rounds. Not the investment numbers. The balance sheet numbers.

7. Not so Significant increase in revenue shares. I dont expect this to happen completely. Or I might be pleasantly surprised. I eventually expect these numbers to get to a 70:30 figure with 70% going to the aggregator + producer and the operator keeping 30%. I dont want to go in depth into the reasons why I feel this will happen. Short explanation. Todays scenario is one where the operator has nothing to lose by walking away from any deal. I expect this to change over the next 12 months.

If not debt, then equity?

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