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Home > Business > Stock Chat > Transcript
'Market seems nervous before Budget'
June 15, 2004
ajaymattoo : ramesh, saw ur feature on cnbc aout warren bufet..oracle of ohama..did not understood one thing..if he never sells anything, how do u make actually make money???i mean liquid cash?
Ramesh S Damani : Hello everyone. Thanks for joining. Let's start. Buffett has operating business, which has huge cash flow, insurance company float and stock dividends.
ahmedabadguy : Mr. Damani what is your view on market in the wake of pending petrol & diseal hikes tonight.
Ramesh S Damani : If the hike is below Rs 2 oil companies and the market may be sluggish.
ahmedabadguy : Sir,Mcdowell has increased per case prises in Maharashtra & planning to increase in other states too in the wake of increased raw material prises..Thus protecting the margins & increasing top line..You seem the stock is now ready to break the range and is ready for a bull run...
Ramesh S Damani : Technically the chart is looking good however no fundamental news. So don't hold your breath.
sanujkadavil : We enjoyed your programme on cnbc about greatest value investors. I think warren buffet entered in the US market in early 60s. that time US economy was the same level which India now stands . after that US produced lots of global giant companies their market caps grown from 100$million-1$billion to 10-50$billion. And the equity investors became rich not the bank depositors. I think our country grows at 6-8% , and GDP will reach 800$billion in 2010 . if the country grows like this , the companys should grow, so the shareholders should benefit, not the bank depositors
Ramesh S Damani : That is generally correct. Identify good companies and give them time to grow.
kans : I would like to understand the TEchnial analysis in stock market. To me it appears that the Chart etc are nothing but ploting broad investors physicology ? is there something more in the technicals ? pl explain !!
Ramesh S Damani : Charts operate on the assumption that hostory will repeat itself.and that the prices discount everything. It helps is sizing up the market, nothing more.
niraj : ARE WE STILL IN BULL MARKET???
Ramesh S Damani : Not in the technical sense.
sureshmakhija : sir i missed u r programme on warren buffet as i m doing job so i was unabale to watch u r programme plz let me know is going to air again
Ramesh S Damani : I am sorry, I don't know when they will air it again. Maybe you can e-mail them at CNBC
deepak : hi how does HTMT looks to u .. as they have an effective stake of 6% of hutch through fascel . that alone should amount to Rs180/- per share . and what should be the value of the company 5 years down the line ...
Ramesh S Damani : It looks cheap at the current time.
HiDamani : I'M A S/W ENGG AND DON'T GET TIME RESEARCHING FOR SHARES.I HAVE COMMITTED A MISTAKE AND BOUGHT TOO MANY NUMBER OF SHARES. I HAVE A PORTFOLIO OF 8 LAKH , AND ACCORDING TO YOU ----- THE NO. OF SHARES SHOULD NOT HAVE MORE THAN 5-6 SHARES.I CAN HOLD FOR NEXT 3-4 YEARS AND CURRENTLY MY PORTFOLIO'S WORTH IS JUST 6 LAKH AND ITZ REALLY GIVING ME HUGE PAINS. THE STOCKS WHICH I HAVE ARE BALAJI TELE..... .... COLGATE..... .... ....HINDUJA TMT .... MCDOWELL .... UB HOLDINGS .... GOLDIAM .... GILLETTE .... ITC .... LOGIX MICROS .... NELCO .... SBI .... SUNDARAM FINANCE .... TATA ELXSI .... TISCO .... MORGAN STANLEY...... . PLEASE GUIDE ME FILTER OUT 5-6 SHARES OUT OF THESE SHARES.PLEASE PONDER OVER THIS QUESTION FOR 2-3 MINS AND HELP ME FILTER OUT 5-6 SHARES.THANKS IN ADVANCE
Ramesh S Damani : I am sorry, i dont recommend portfolio changes. You know the stocks I like.
baracuda : to what extent of your investible capital will yu allocate to tech at this stage
Ramesh S Damani : Maybe 30%.
vikrantgoyal : hi ramesh .... do u believe in the principle of " Plan your Trade and Trade your Plan "
Ramesh S Damani : I am not sure I understand the question.
VAITHI : Mr.Ramesh, whether market will improve after budget and what is the right time to buy stocks.
Ramesh S Damani : Market seems nervous before the Budget I beleive it could rally afterwards especially if it remains weak going into the Budget.
sanujkadavil : Sirmost liquor stocks other than ub and mcdowell moving up. Mcdowell and ub not even published their results. Vindhya chabria says shawwallace will become most profitable liquor company in three years and triple the profit. But even if look shawwaallace they are not doing beer business directly , it is done by the sabmillwer. Shaw waalace only a partner of beer venture. So shaw Wallace will get only dividend incme from sabmiller. Shawwallace now sells only alchohol spirits . so shawallace is just like a holding company. Markets sometimes maynot value their holding value.. whats your opinion ?????????
Ramesh S Damani : Even the liquor business is getting shifted in Shaw Wallace. At some time someone will have to wake up Mallya.
HiDamani : REGARDING UR PROGRAM ON CNBC, WHEN U SAID "COMPOUNDED INVESTMENT" , WHAT EXACTLY U MEANT--- INVEST SMALL AMOUNTS PER MONTH OR INVEST THE GAINS OF EQUITIES BACK INTO EQUITIES
Ramesh S Damani : Compounded means how money grows. If you compound at 20%, that is investment - returns reinvested. You can double your money in 4 years. Remember untill you sell no tax or transaction charges are incurred.
SUBHANKER : GOOD EVENING SIR, GOOD RAIN IN MUMBAI AND VALUATIONAS ARE ALSO WASHING UP WEAK BY WEAK NOW WE ARE FAR AWAY FROM 5000 LELVAL AND OUR TECHICALS ARE SHOWING THAT WE ARE IN BEAR MARKET.. ARE YOU STILL POSITIVE ABOUT MARKETS????
Ramesh S Damani : I am because valuations are in our favour. Markets should find a way to go higher.
vvinay : sir, could you please elaborate on top down and bottoms up approach to investing
Ramesh S Damani : Botom up is looking at one company at a time and inveting.top down is done on broad macroconditions.
sureshmakhija : thanx sir according to mr buffet insurance companys have much more earning powers then other as thety dont have to invest in costly technology deprecition of asset and other benifit is that premium generated can be used in other investment considering this how u consider the max as its is in insurance and they had also good investment in hutch plz comment sir
Ramesh S Damani : Yes, but currently it is at 200. It will still take 4 years for them to make money.
AnandBhatt : Hello Sir,whats your call on the marketss.Do tou expect them to fall some more before the budget?Like 4300-4400
Ramesh S Damani : I would hope not. 4500 should hold till the Budget and beyond.
sanujkadavil : SirTimes group (bennet column) starting a new entertaint channel in 3rd quarter of fy04. and they selested BALAJI TELE as the producer. I think this will boost revevue and bottom line of balaji in very largely. Also they looks to start a spiritual channel . and they are saying that the channel might be a PAY chanel ..
Ramesh S Damani : They are also starting a business channel. The numbers are in favour of Balaji. It is cheap.
vikrantgoyal : do u headge yourself against a market fall like the one we had recently and do u headge looking at the charts technically
Ramesh S Damani : No I don't.
vikrantgoyal : could u recommend some good books for traders and investers which help us to educate ourselfs in financial markets
Ramesh S Damani : I had recommended some books at an earlier coloumn.
anaam : Sir,My father has left me a great potfolio.He never knew about EPS/PE/Ratios etc but he merely invested in a co with majaority "white" directors.He suceeded........Great insight..What do you call his stile of investment????????????
Ramesh S Damani : It takes all kinds to succeed and I am happy for him. Nothing succeeds like success.
Gaurav : Sir , this is something personal . I met you at HYATT when you were addressiong CNBC investor camp . I asked you if you have some kind of openings for a freah grad in your firm . U had asked me to meet you online . Is there any way by which I can be associated with you.
Ramesh S Damani : Gaurav i am not hiring at the current time. What is your background?
sanujkadavil : Sir Now days chartists saying that when anything is down for two days, chartists find it weak and whenanything is up for two days it begins to look good.. I think its good phase for value buyers.
Ramesh S Damani : Pretty much.
sanujkadavil : SirDid you gone through the special bulletin book of UB,s spirit division in BUSINESS TODAY. And they saying they looking to become no:3 in three years with 50milion cases. And mr.mallya says oneday UB will be NO:1 in all areas of competence like laloo says one day I will become the prime minister …
Ramesh S Damani : They are number 3 worldwide in volume.
AnandBhatt : Thankyou.DO you recommend buying textile stocks at these levels for post Jan 2001.I remember Valabh Bhansali at Hyatt saying that its a low margin business.What is your opinion about this low margin business.Anything you recommend at this level?
Ramesh S Damani : I bought HimmatSinka Seide, Zodiac and a few others. However they were at earlier levels.
AnandBhatt : If I were to invest in tech at these levels,would you still advise that same basket of 4 small caps like crest,kale,nelco and Logix?
Ramesh S Damani : Look at Elixsi among the larger companies the other four are a tech basket and we will have to see how they perform.
vikrantgoyal : hi ... we know that CNBC TV18 is also launching a hindi business news channel ... by when will the channel start and what will be your call on the stock ... at the current levels
Ramesh S Damani : It looks good at the current time.
sanujkadavil : SirWarren buffets return compounded return of 23% in 35-40 years looks amazing. He only invested in 8companies and one in asia. Indin investors can follow his strategy go buy good business at right price and hold as much as possible, we can easily make 20% compounded in next 10 years , if we identifying good business prospects. If he asks me to pick some good business for 10 years , I will pick mcdowel, agro tech foods , ub holdings , tvs electronics. Sundaram finance Which will you buy???
Ramesh S Damani : Just a note. Warrent Buffett son Howard Buffett is on the baord of Agro tech India.
sureshmakhija : sureshmakhija says, sir seeing the growth of economy and the awaraness of pepole towars health dont u consider apollo hospital as a good investment as they are growing at good pace and they had good acqusition aborad and thet r going in medical bpo in a big way plz comment
Ramesh S Damani : It is. I own some. However management has not exactly delivered for shareholders.
vikrantgoyal : hi sir given your technology background ... why dont u start your own website and give us useful insights about u and your belief of the stock markets
Ramesh S Damani : That is what this is for.
deepak : for all our help .. how would u define short term , medium term and a long term give time durations
Ramesh S Damani : That keeps fluctuating. However, short-term is generally for trading. Medium-term and long-term are anywhere from 1-5 years.
sureshmakhija : sir what r u r views on retailing is any wall mart is going emerge from big giants of reta;ling in india like trent pantaloon shoppers stop recently in business world edition they have cover story on kishore biyani do u consider pantaloon as emerging walmart of india
Ramesh S Damani : It is nuts to compare Pantaloon and Walmart.
AnandBhatt : SIr, I was just checking today,VST Tillers Tractors and Punjab tractors have PEs of 10 and 22 respectively.Are they not expensive at these levels?
Ramesh S Damani : VST Tillers could earn Rs 10 this year for 2005. And pay a dividend of Rs 2. Punjab Tractors I am not sure about the numbers.
tigershark : could yu please give a vey breif resume of agro tech india on valuations is it cheapand is atta the only business and will they buy back
Ramesh S Damani : They are moving slowly into branded foods. Next 3 years turnover should be Rs 200 crs.
sureshmakhija : i m not comparing i jst wanna to know u r views that is there any retailing company whom we can consider as walmart in india context
Ramesh S Damani : You cannot compare a Wallmart.
sanujkadavil : sirwhether buffet has any holdings in CoNAGRA , agrotechs holding company
Ramesh S Damani : I don't think so.
niraj : DO YOU EVER BEEN BEARISH ON MARKET?? IN PAST TIME IF YES THEN HOW MANY TIMES??
Ramesh S Damani : Yes in 2000.
SUDHIR : SIR WATCHED YOU ON CNBC. DO YOU CONSIDER MACMILLAN & MCDOWELL IN THE SAME LEAGUE AS CMC. I.E 10 TIMES APPRECIATION FROM THE CURRENT LEVEL
Ramesh S Damani : Defintely McDowell, McMillan perhaps not.
kots : sir,please tell what it means by that infosys is going Ex dividend from 1 july?shall is it better to buy before that date or not?
Ramesh S Damani : It is going to go x-bonus from July 1. It is already x-dividend.
niraj : WHAT YOU DID THEN AT 2000 YOU SOLD YOUE ENTIRE PORTFOILIO OR REMAIN INVESTED??
Ramesh S Damani : I sold large chunks of tech not at the top but may be around 4800 levels.
jvinay : Sir, which company will have more growth prospects ? Life insurance or Non-Life insurance company? As far i know sundaram finance is only into non-life insurance business and MAX is into life insurance business . LIC is much bigger than other goverment owned none life insurance companies .So Do do you thinkinsurance business MAX will gave more growth prospects than that of sundaram ?
Ramesh S Damani : Both are around 200. Equity is same. No question Sundarma Finance is the better bet over the next 3 years.
SINGARAJU : What will be your screaming call for now if you got awakened 5pm in morning?.
Ramesh S Damani : Liquor.
VAITHI : MR. RAMESH, WHAT IS YR VIEW ON IPO OF TATA CONSULTANCY SERVICES.
Ramesh S Damani : Let's wait for the prospectus.
SUDHIR : SIR I AM A SMALL INVESTOR & CAN INVEST IN ONE OF THE STOCK FROM YOUR TECH BASKET. IF YOU ARE GIVEN ONLY ONE CHOICE FROM THE BASKET WHICH ONE WILL YOU PICK ,I MEAN WHICH IS THE MOST PROBABLE STOCK YOU THINK WILL DELIVER
Ramesh S Damani : I am a bit excited by Tata Elixsi, you could also take a look at Tata Infotech. I own it.
SUDHIR : SIR IS THERE A PART 2 OF YOUR SHOW ON WARREN BUFFET ON CNBC THIS SATURDAY.
Ramesh S Damani : I don't think so. Some one else next week.
HiRDamani : DID U RECOMMEND SOMETIMES THAT IT CAN APPRECIATE 10 TIMES BCOS I M A REGULAR ON THIS CHAT AND I DONT REMEMBER U SAYING ANYTHING LIKE THAT... IS WHAT SUDHIR IS SAYING IS CORRECT?
Ramesh S Damani : It has the potential.
SUDHIR : WHAT IS THE PRICE TARGET YOU SET FOR MACMILLAN 1-2 YEARS FROM NOW. I KNOW IT IS IMPOSSIBLE BUT JUST A WILD GUESS
Ramesh S Damani : 2 years from now if they earn Rs 45 it could get a multiple of 15, you figure the price, the key is the BPO business growth.
skljesus : Hi Ramesh,Made a killing on many of your recommendations. Thanks. God bless you always.
Ramesh S Damani : That makes me very happy
HiRDamani : OOOPS , IT DID NOT FRAME MY QUESTION PROPERLY... I AM ASKING ABT CMS, I KNOW ABT MCDOWELL.THANKS
Ramesh S Damani : I bought them at 20, it started me off.
SUDHIR : SIR WHAT IF MCDOWELL DOESN,T DELIVER SAY IN COMING 5-6 YEARS. THEN WHAT ABOUT YOUR STOCK PICKING ABILITIES
Ramesh S Damani : I make mistakes all the time. It would be one more mistake. You need to get 1-2 picks right every few years thats all.
vikrantgoyal : sir i am one of your potential coustomer of your brokerage .... could u give your address of office
Ramesh S Damani : Sorry, i am not looking for clients on rediff.
VAITHI : Mr.Ramesh, If the face value of share is Rs.1/- and if the company announced a dividend of 100% and if a person is holding 100 shares what will be dividend amt? Sir, pls. answer this qutn.
Ramesh S Damani : You need to know 100% on what face value. If it is on Rs 1 paid up you will get 100*1 or Rs 100.
HiRDamani : BUT DOES CMC STILL HAVE THE POTENTIAL TO GO 10 TIMES THE CURRENT VALUATION?
Ramesh S Damani : 10 times is difficult.
sanujkadavil : sirwoud you add ub holdinhgs to your buffet list. at 70cr market cap we are buying 50% of worlds 4th largest liquor company
Ramesh S Damani : Yes but it doesn't have an operating business.
WarrenBuffet : I will buy Agrotech tomorrow
Ramesh S Damani : Remember it is his son not Warren.
AnandBhatt : IS CARBORENDUM UNIVERSAL A GOOD BUY AT THESE LEVELS?
Ramesh S Damani : Yes, I think so. They have a good BPO business hidden in the balance sheet
SUDHIR : SIR CHOICE OF 3 STOCKS 10 YR DOWN THE LINE AS MULTIBAGGER. PLEASE ANSWER THIS ONE SIR. ITS IMP.
Ramesh S Damani : You can guess from my chats. You come up with a list and next time I will tell you if I agree or not. Happy investing. Thanks and bye.
sidhartha : If there is one book that i want to read on the science of 'Value investing' - and not the personal lifes of VALUE investors - which one shud that be ?
Ramesh S Damani : Read The intelligent investor by Benjamin Graham.
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