DOT CBI Chidambaram and Karunanidhi

State elections over in three states.  All clear!!!

Now the CBI raids one of the goverments own ministries (DOT) on a scam perpetuated a year back.  (This is as much quick action that the Goverment of India takes!)

The CBI reports to the Home Ministry.

The Home Ministry is the fiefdom of Chidambaram ( an ex finance minister who was the darling of the stockmarkets).

Chidambaram is elected from Tamil Nadu and very close to the Sonia caucus.

Tamil Nadu is the fiefdom of the DMK (Karunanidhi).

The Telecom Ministry is the fiefdom of Raja, a sepoy of Karunanidhi.

Raja says the PM is party to all decisions taken on spectrum in the ministry.

The Prime Minister is not talking.

Now the CBI has visited many telecom offices, has collected spectrum contract copies (as if it was not available earlier), is scanning visitor passes in DOT for the last three years (ridiculous).

Now are you smart enough to understand the wheels that run within wheels.  If you are with me on this, then both of us know that this is a red herring and nothing in hell is going to come out of this facade.  Either we are fools, or we are taken to be fools, or we are fooling ourselves!!!

Reliance Industries and Hardy Oil

Way back in June 2009, Hardy Oil released a report quoting gross risked best estimates for D3 and D9, which meant a quadrupling of India's gas production base in the next 5 years.

The Directorate General of Hydrocarbons (DGH) said these claims were not approved by the regulator and Hardy should not have made such a report public without an approval from the DGH.


The Directorate General of Hydrocarbons (DGH) has said that Hardy Oil has gone out of its way to release these estimates and perhaps there is a hidden motive behind it.

The Hardy stock spiked 30% in London!!!

SP Tulsian a leading analyst on Reliance, mentioned "Coming on the gas front, they have started the production, couple of day’s back we had a new that they made more new discoveries. Right now they are producing gas from D6. They made new discoveries in D3 and D9 also which is almost double the estimate of the D6 blocks. So one can imagine the growth coming in from the gas production, maybe the enhance refinery production and they will start making the marketing in the domestic front. Maybe for FY10 they will have EPS of Rs 140 which can keep going up to Rs 200 for FY11. If one can hold it for the next year, maybe till March 10 he/she can expect a price of Rs 3000 of the stock."
http://alturl.com/z42h

Sometime end of October SEBI too got into the act.

Four weeks ago, at the beginning of this month the Directorate General of Hydrocarbons wrote to the Sebi Chairman saying that it suspected unethical disclosures by Hardy Oil which is listed on the London Stock Exchange. It actually went ahead and alleged that these disclosures were being made in an inappropriate manner to influence share prices. Now what we understand from our sources is that Sebi is going to take up this issue with the UK regulator to find out if at all any norms of disclosures have been violated by Hardy Oil.  

The entire imbroglio got mired in clarity of global regulatory norms for JVs etc and was forgotten.
http://alturl.com/x68j

Back to the markets today.
Again, Hardy Oil makes a dud disclosure on one of the wells in D9 and the Nifty tanks along with Reliance Industries.

On a day when Europe had opened strong and the Dow had closed earlier on a strong note on good results, Hardy tanked 36% on the London Stock Exchange.  Reliance tanks 4% on the Indian exchanges.

Mind you, the entire jingbang on the Hardy board as well as the CEO, COO, CFO are all Indians!!!  Hardy holds 10% stake in KG D3/6/9 while RIL  holds 90%.  While Reliance can conveniently throw its hands in the air and say that they have not made any disclosures and it was the joint venture partner that did so in London, a whole host of doubts arise in the retail investors mind with respect to insider trading!!!

Where does this leave the retail investor?  Nowhere!!!  Probably insiders in both RIL and Hardys are making hay while retail investors sweat their pockets out.

As I mentioned, way back we have laughed our guts out watching Laurel and Hardy movies.  This Hardy was too much to digest!!!

THE CALM BEFORE THE STORM

Something is just not right!  One gets the feeling that there is something going on that is just not right, and I have been having this feeling not just today but since the last four trading days.  There is some funny stuff going on out there that just does not add up.  In fact, nobody is getting it right.  Lets just wait one day, Friday, and then decide how we spend the weekend,

This is the fourth night that we are sleeping with shorts on Nifty Futures.  If the Nifty does not oblige tomorrow, we reverse positions.

I have been busy with some engagements the entire day and possibly there seems to be some followup that needs to be followed up through the weekend until the mid of next week.  Regular updates on positions will be given as usual; however, the virtual world gets the boot for a few days.  Hope everybody has a good Friday and a swinging weekend!

THE SUCCESSFUL DHANDHO INVESTOR

How to be a "dhandho investor".  Good reading.

http://seekingalpha.com/article/164715-book-review-what-makes-a-dhando-investor?source=feed

Buy an existing business with defined business models; nothing new was being invented.
Buy businesses in simple industries with a low rate of change: all of the businesses described were necessary and were not about to be replaced.
Buy distressed businesses in distressed industries: the very best time to buy a business is when it is hated and unloved.
Buy businesses with a durable competitive advantage: this advantage can come from being low-cost to having a brand to having captive customers.
Bet heavily when the odds are in your favour: in the businesses described, sometimes the investor did not make moves for several years, but when the opportunity was clear (odds in favour, with excellent returns), he invested much.
Focus on arbitrage: in all cases, the investors saw a discrepancy between price and value that they exploited.
Buy businesses at big discounts to their intrinsic values: the odds of a permanent loss are low when this approach is followed.
Look for low-risk, high-uncertainty businesses: the uncertainty leads to severely depressed prices.
It's better to be a copycat than an innovator: "innovation is a crapshoot, but scaling carries far lower risk."

Fantastic tips to become wealthy!

THE LIBERATED STOCK TRADER

"The day I trust my money to a mathematician and a computer programmer (Stock Trading Systems), will be the day I leave for Romania to be a Shepherd."

This is from an article by Barry Moore in The Liberated Stock Trader (http://www.liberatedstocktrader.com/2009/03/1-what-type-of-investor-are-you.html)

The article goes on to define different types of  personalities in the stock market and what they do and what the liberated stock trader should be doing.  A must read.

To get back to our markets, many of you would remember the mayhem in Jan 2008.  Sentiment was gung ho and there were not many caution notices put out.  Nine out of ten people in the market were busy trying to figure out what to do with the enormous amount of liquidity that had poured into their pockets as well as how much the Anil Ambani IPO would fetch them on listing.  The market CRASHED!!!

Coming back to the Sept of 2009, one finds too many Caution stickers all around.  If you happen to be in the trading circuit, it is more than likely that you must have heard the doom tale from nine out of every ten people that you bump into.  Possibly, as they say, once bitten twice shy.  Public memory is short but not so short as to forget the wounds of a year and a half back.  Many a trader bit the dust, some never to rise again.

I must say as I have been maintaining that the day we found support at 3900 sometime mid July 2009 and pulled back to scale new highs we entered a new phase of the Bull Market.  Yes, we are in a bull run.  Many expected the markets to fill gaps that were left post the UPA victory.  However, not all gaps are filled immediately.  Surely we will get back to those gaps (should a catastrophic event take place) but not in the near future.

There was a time when sentiment moved markets.  Today liquidity moves markets.  Money needs to make more money and if it does not then there is a huge price to pay, one has no business to be in the financial markets.  Targets are too steep and extraordinary and demand innovative strategies.  The number of retail participants has increased manifold.  Markets have become more complex and simple tools do not seem to work.

Coming to the Delinking Theory, yes, we are figuratively delinked from the US markets, however, not so macro economically.  The US markets are still in a bear rally and until the Dow scales 10800 (this is the figure as of now and is likely to change as time passes) with great momentum, it will still be a bear rally out there in the Americas.  The action had shifted elsewhere long ago!!!

No, I am not a Technical Analyst.  I am a Psychic!!!:)