Wednesday, September 17, 2008

Morgan Stanley & Monsoon Capital : Feathers flying & Turkeys trying.

For quite a while now, we have been keeping a steady eye on this global zoological bunch who've managed to pass off as a finance and investment firm wherein the careful eye did reveal a while back , the startling underlying reality that it was a bird pen for largish, puffy birds who loved to dress as suits.

Since those early days , the seeming success of these orniths ( distinctive for their awkward gait and useless views) despite their odd practice of providing every MD's cabin with private sand-box to immerse his head and views in those head-y days..oh yes!..we confess.. MS Ostriches and Monsoon Capital's Turkeys made it look so easy that we floated our own little UnHedged fund.. to try and ease the pain of cashConstipation so many Indian bulls seemed to be suffering from .. they needed relief and one which ensured they never be put into that pain again..the poor suffering bulls needed a cash enema..and needed it hard.

So we did copy their model a bit, yes.. but improved on their feathered fetish with a more hirsute pursuit.. and have to admit the westAfrican Baboons have wildly exceeded our X.

But recently the softly humming, big bird beehive of smooth, oblivious and cluelessly unflappable activity that was the hallmark of Morgan Stanley's investment genuis in this country, started showing alarming signs of disarray and disruptions and you can understand the sand and feathers flying around in downtown Mumbai's financial district can cause even the most longTermStoryIntact bulls to look up nervously from their plodding..yup, the flying feathers and large flightless birds in suits suddenly didn't look right.. especially when visitors reported the MDs' new ritual of collectively putting their heads together and in into the central sandBox at the Head Office for the entire trading hours.. the rumours were now rife..could these really be Chimps pretending to be Ostriches??..gimme a break.. just the markets overshooting again.

Though on a positive note, Monsoon Capital seems to have put together another India specific fund from entirely fresh crop of investors and plans to expoit the fantastic new Inflection emerging in this country.

As we had noted in March:

"The Monsoon India Inflection Fund LP has dropped 28.3% this month, through March 20. That leaves it down 45.9% so far in 2008, Prakash wrote in an update to investors. MarketWatch obtained a copy of the letter."
..and Gautam Prakash, one of the sharpest turk(ey)s in this business, quick learner from mistakes that he is, is aptly naming his new attempt as the "Monsoon India Deflection Fund LP" deflect any disgruntled criticism or attempts to enforce prior claims .

..smells like some American largeBird Flu, if you ask me..

Wednesday, September 10, 2008

Indian stocks bottom again !!

As most every half wit knows, India is a great long term fact a fantastic opportunity that is evident to everyone and their portfolio managers.. a certainty..clear as day.

So, what now ails the "smart" money from getting onto this gravy train.. especially when it was this very "smart" money that enlightened the clueless natives about the glorious economic future that lay ahead .

So the foreign "smart" money came in plane loads.. saw the crowds around the airports.. smelt a mega opportunity.. met up with the "promoters" and convinced the poor saps to look beyond their quick buck, corner cutting, short termist, scummy businessman outlook and get a little "professionalized", "corporatized", "organized" and soon "private Equitized".

So the ordinary Indian Business Galoot suddenly sat up and started pestering his staff to quickly tell him how much was a million dollar in rupee lacs rupee crores.. this started looking good from his angle.
For years he had had to bribe, fleece, lie , beg and finally cheat and steal from his share holders and unsympathetic bankers( the salaried class ha!) to fund his gaming the system and suddenly these young "smart" money foreigner gents ( who obviously knew something he didn't ) wanted to throw easy cash at him and his "business" at lovely "valuations" that only they could calculate oh sooo accurately.. it just excited him.

And thus the great Indian growth story was on.

Everyone and his neighbour got this "smart" money in their companies.. at ever more exciting "valuations" and "stakes".. and they even pitted some "smart" money against each other ( so much "smart" money and so little time) to bid that wee more naughty "valuation".. oooh it was heady.

..And then suddenly the "smart" money which had been confidently and in suitably impressive tones been sermonizing on the equally impressive reasons why India was "decoupled" from turmoil back home .. this same "smart" money quickly lost that knowledgeable sheen to plunge to panicked hen levels shockingly naive even vis-a-vis the retail investor losers who'd succumbed earlier to loss of faith in the Long term.
To be fair the "smart" money boys did hold on to InForTheLongHaul song and dance for as long as their religious faiths allowed (and some faithfuls hold on even till today) .. but it does get difficult to hold onto the original positions after being fired from your firm or (as increasingly seen lately) the entire "smart" money firm going under, in this completely unforeseen Emerging Markets' mess.. gets a little tough to finance Indian real estate companies in these circumstances.

And that seems likely what ails the smart money.

Now fortunately ..and after a long 2 week gap of no "analyst" and market "expert" calling a market bottom.. we have had some sane voices explain in serious tones that the worst seem to be over as far as the Indian stocks are concerned and they do not expect further down moves..

This is a big relief as many of our clients have had trouble sleeping without being able to find a single reassuaring voice after all day of scanning news and TV to confirm their hope that this looks like the bottom.. you know these poor "investors" have been holding onto their stock "investments" since Sensex 19,500 that it cannot go lower and no point selling now..after this much fall.

Well we have been busy at Luddic Research at our UnHedged Fund what with hiring and training a couple more west African Baboons to expand our core Research team and as these two specialise in special situation shorts, their dart throws have just handily beat the market ever since.

Finally further to our latest discussions with Prashant Bhatia, the analyst virtuoso over at CitiGroup .. it is likely he will join our fledgling Unhedged Fund in the newly created important position of the Chief decoyTurkey for holding forth in the financial media about the Indian Banking sector and sometimes regaling the girls with his historic US banking upGrade calls that are now folklore..notably Lehman Brothers..We got us a legend !!

Lastly, we are now a bit worried about India's first authentic Warren Buffet , who modestly confessed he has never lost money in stocks (surpassed Warren too here).. is a bit missing in action for past few months .. and his lovely face and priceless pearls are no longer being cast in the financial media.. hope all is well..since no corpulent bulls on TV means no sustainable bull moves in Indian stocks.

But then Rakesh Jhunjhunwala knows Sensex will be 25,000 by 2010 and 50,000 in 5-6 years.. so why worry about this short term noise.. eh?

Though,we thank the lord the Bottom is finally reached again..was getting a little rough.