Saturday, October 25, 2008

Indian Corporates Update = I.C.U

Things got a little rough this friday.

Patient long Term Investors got a bit worried.. in fact Luddic Research has long laughed straight into the face of anyone who introduced himself (don't see many chicks in this game) as a long term investor.. so geddafuggoutt been the standard response followed by uncontrolled mirth whenever some pompous (and always bearing a loss on his investments) schmuckturd announced he was not worried.. it will recover.. he is in it for the long term.. fundamentals are still strong..

.. but even we were getting tired of laughing at these dull, pitiful fools and finally the Gurkha watchman downstairs was given strict orders not to let any long term investors in.. one grows sick of same old.. and these dullards could drive the Dalai Lama homicidal.

So, as I was saying these (formerly) amazing long term clairvoyants' simple minds got a little jolt in terms of faith and most promptly lined up at their favorite temples and deities' feet for a frenetic chanting session with bleets for mercy between every shloka.. O' mighty protector.. why this great test you put me through.. you know I suffer.. give me just one chance to breakeven.. I will never play the markets.. never watch cnbc.. never average down.. O' Lord.. just this time.. OK.. atleast give me a little bounce to exit least this much?

But what brought this sorry state about? Luddic Research points out to a deep underlying white man conspiracy to undermine the growing BRIC and especially the quickly emerging, brown global clout.
This became even more worrying to the western business world when even half witted, semi literate Indian promoters like Tulsi Tanti ( Suzlon) ,Kishore Biyani (Future group), G.Mallikakrjuna Rao (you guess right GMR), plethora of Real Estate tycoons.. as well as businessman Daddy's progeny like Ambani wunderBrothers, Kumarmangalam Birla, Ratan Tata, Vijay Mallya, exhibited multiple talents and core competencies far beyond any business leader ever to run Intel, GE, Microsoft, ABB, Unilever, CocaCola, IBM kind of small cap, small vision companies could fathom(leave alone envision and execute)..
..well these westerners plotted long and careful how to bring down these Incredible Indians crowding out the rest of the planet on the 10 richest persons list.

According to some reliable sources, these boys just plain pulled the money out when they knew it would hurt the brown man most.

And all along this country was jiving to the most popular tune in the nicely appointed offices of fund "managers" of various shapes, sizes and amazing hand shaking/networking techniques..

..the Indian growth story is Intact..the Indian economy is decoupled.. the Indian markets are decoupled.. the Real Estate prices go only Up in India..the growth rate will only get higher from now on.. the Index is going to 25,000.. and then to 28,000.. and finally 50,000 is now visible in the imminent future.. we will be rich and mighty and brilliant..we are decoupled.. we are decoupled..
.. this tune had everyone dancing and clapping and tears of sheer joy streamed down the more emotional fund managers cheeks.. privately, most of these fund managers realised they had underestimated their own worth in the previous plebian years.. Oh why did I live less brilliantly all these years.. anyway now I will not be denied my destiny.. yes, there will be a private jet someday(even that fool G.Mallikarjuna Rao has one)..oh yeah!!

Heady days to be in the fund management business in India, those were.. it did not matter what type of fund.. Hedge, FII, Mutual, PE, Prop,..hey even the local committee Fund you formed with your neighbours and uncles.. you were part of that WASPish(though brown) mastersOfUniverse you'd seen in Gordon Gekko.. and you worked hard to look the part..even their spouses started wondering if was the same dull sap she'd married!

(It got so bad that ordinary hand pumping, social networking, schmoozoids like our bearded accountant Ashok Wadhwa(Ambit) felt left out of the loop entirely, quickly floated a money management gimmick and felt it important to pull favors with CNBC to announce his view (..whotf is really interested in that, really) that the market looked close to bottom and would not go below 14,000 in any case.( looks like a bad start Ashok, eh?)

No summary of Indian Fund managers is complete without mentioning the sheer number of fools ICICI has released into the Indian fund management scene where their bull market genuis just pyramided incessantly into higher and higher positions( and a rather faster rate of higher self esteem and self worth) that made these gaboons some of the largest participants in the Great Indian Funds story permeating every organisation in some position and cluelessness.
(The latest and greatest example is JP Morgan's new CEO.. of course not to blame for it's coming ills ..she just joined for crisssake.. but she was heard expounding immediately on her plans to grow JP Morgan as far as her eye could see double true ICICI alumni fashion).

But what about the real drivers of the great Indian Growth Story?
The assorted bunch of "promoters" and "family run" tycoons who leapt from oblivion into global "smart" money destinations .. who were shown charts extrapolating their growth well into the ceiling by the very westernised "smart" money smooth knowalls.. slowly it is dawning on these yoyopreneurs their go getting drive is got up and gone.. and it is time to take a hard look at the books. The books are suddenly looking increasingly messy and piled with large debts and much larger urgently required (and completely unavailable) funding.. and the fact the asset side is piled with such crap at such valuations that only blind monkeys who passed accountancy are willing to sign off these books(though extracting dozens of bananas more now).
Seriously denting the announced growth plans of the "promoters" is that the only believers left in company balance sheets are the research analysts from vernacularly headed and named brokerages or the public transport commuting regulatory officers.

You know things are bad when you realise the Ambani boys have not announced a single multi-billion project in a completely unconnected industry for the past 10 days.. that is scary..

It is shocking that the market did not get weak kneed with schoolgirl delight when Reliance Industries unveiled the latest cooking extravaganza of profit growths etc. etc. at twice the industry average with lovely chutzpah.. the bovines actually got selling this stock..never fear, Muckesh is gonna settle some scores monday.. we hear he was forced to fork out Rs.1400 for a chunk of carefully planned increase in stake (as usual, much lower than market price for instant gain, when it was decided by the board) and cannot stand being played at his own game market puts him out of pocket by Rs. 400 , eh.. he is gonna show who's the Daddy now.

Junior ofcourse has his work cut out after bravely announcing Reliance Energy(now Infra) buyback at Rs.1400 a while back .. being forced to buy at Rs.1100 + as they had to sheepishly confess and blink back tears as shares disappeared below Rs.400.. all that buyback cash gone poof.
A-nil is ofcourse dodging calls from a certain Spielberg over at Hollywood who wants to know when is the $500 million turning up and recently making unflattering comments about third world wannabes trying to get into the white glamour scene..when they cannot pony up the cash.. what else you need these suckers for.

Also looks like Junior's plans to buy an English football club may have to be postponed till be can run up his various ventures' share prices up.. it's not easy to stay in the 10 richest men of the world .. that this wunderbrother pair have realised.

About our Real Estate "promoters" and their comical overseas moneybags .. let's just say "Property prices in India are not coming down" is the official word and these orangutans are giving sleepless nights to the usually smug and confidently forging ahead Private Equity types whose grasp of ground realities is scaring the privates out of them.

The captain of this floundering ship, our own Finance minister has taken to putting on his best starched whites, shawl on his shoulder , hair dyed a debonair black and spending long hours in TV studios rather than the minstry trying to exhort the unwashed masses to buy some stocks .. or at least do not sell.. as he put it plainly.. every seller should realise that each time he sells someone is buying.. ( well greatIndianGrowthStory types have been buying intelligently all the way down from 21,000 index levels).
His latest ministerial feat, delivered with his customary elan was this account on thursday.. that he'd personally called the (shaking with adulation) Chiefs of 7 main public sector banks and told them to "lend aggressively".. to anything that had a pulse.. and the Chairmen had assured him to a man .. they were just waiting for a potential borrower to walk in ..Oh yes Sir,yes Minister.

As usual .. this is the bottom ..yup, the fundamentals of this country remain strong.. yawn.

p.s. coming soon..
Indian Funds Update = I.F.U

1 comment:

Anonymous said...

Excellent Post, Luddic Research!!
Keep up the good work! I wish you could publish this in the mainstream media as well, to prevent the remaining fools from losing their banian as well in the stock market (they already lost their shirt).