June 2007 -

Changing Scenario

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‘Ethanol’ has been discussed debated and continue to hold front. But I think we should take a stand and look at other alternatives. Solar for example. Connected to Solar is TSL or the Trina Solar. Eben Esterhuizen in his article in the panelist, has given good backing to this stock, he feels that one the U.S. energy bill gets passed, the going will be good.

Talking on the views of the ‘Fed’, I too second Esterhuizen’s view that the Fed’s need to tone down their language, this would prove to be a great incentive for the stocks. My opinion is also in sync with him, that Fed will not increase the rate, as far as the inflation seems (and would continue to remain) in line.

Diversification: A necessity

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On my earlier post of ‘changing for better’ I reiterated the importance of healthy living, now I understand this is a global phenomenon, wherein the majority are trying to lead a healthy life. This change in outlook has affected two major ‘names’ in the stock market. I am talking about ‘coke’ and ‘Pepsi’. Todd Sullivan in his article “Coke vs. Pepsi: Diversification’s the Name of the Game”, in seeking alpha has traced the growth and diversification aspect of both coke and Pepsi.

In his opinion ‘coke’ seems to be doing the ‘catching up’ act and Pepsi seems to hold the roost as far as diversification is concerned in areas, like ‘tea’ and ‘water’. Now I wonder why coke has lost all its fizz and is lagging behind in diversification.

Diversification is the key word today and when Beverages Company like coke and Pepsi already have a brand name, it should only be easier for them to venture into related sectors! Is it the business plan that is suffering in case of coke or the failure to foresee the future?

Now Sullivan says that he would stay away from buying both coke and Pepsi! I wouldn’t comment on that. But in the long term one thing is sure; people are looking for a cleaner and healthy life so wont it be better for coke to take the cue!

To learn from Apple..contd.,

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Though apple is yet to release its iphone model on Friday. The waiting has already started, the service provider for iphone is AT&T. There were people who were ready to change their services once iphone was released. The iphone itself is priced at $3000 per piece.

The price does not seem to have detered anyone from waiting from wednesday. The shares of Apple were volatile last week. But AT&T seems to be doing quite well after apple announced the iphones service provider. Analysts say that the present edition will be a total sell out. Some people though are ready to wait for the next better version, like higher internet speed and more importantly lower cost.

Well the marketing campaing seems to have worked well and sure to have the right spot!


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Guess this time the picture would do the speaking! Hope u guys guess the occassion.
(standing L to R): Uttam, Hemant

To learn from Apple…

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One thing that we need to learn from Apple is its marketing strategy. The most sought after iphone is releasing this Friday, but the marketing seems to have kick started in January itself. Probably the ‘Academy Award’ started it, but then without much effort of the people at Apple the speculation around iphone has been going around the globe. So much so that there are sperate blogs created on iphone by ardent followers. This speculation inturn has affected its stock price!

Now how does the ‘marketing team’ in Apple make use of this unforseen and unprepared advertisements. Well the people in Apple are sure happy and also cautious that the majority of the mass use iphone and not view it as some ‘tech’ gadget ….so the phrases being used are video, audio and internet access. This sure is to draw the mass. The tech part of advertisements has already been going around from die hard apple fans. Looks like the key words used by the ‘marketing’ team at Apple have also hit the majority becuase, if you are ‘not heard of iphone u must be from another planet’.

But all the team at ‘apple’ are worried is that the ‘hope’ created does not die down and the iphone lives up to its expectation. This successful campaign should result in a successful product. Looks like it is easier to sell a product when it is already sold!

Energy and Inflation

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The Rate of Inflation which has become a cause of concern in the U.S, includes a important and controversial component, the energy cost. Picerno, in his article “What do Higher Energy Cost Mean of Inflation”(Seeking Alpha) talks about the exisence of two measure of inflation and the disparity between them. The difference between the two measure could be a cause of concern for the policymaker and the economy as such.

The two measure that the blog talks is the top line measure and the core measure which again is based on two important indicators, the CPI(Consumer price Index) and PCE (Personal Consumption Expenditure Index). The disparity lies in the fact that Energy cost is included in the top line inflation measure(which is showing an upward trend). Wherase in case of core inflation this cost along with food is excluded!

Therefore monetary policy cannot be implemented on the basis of Core Inflation measure because this excludes energy prices which is an important component.

Talking of energy or oil prices, there is a transistion in this sector itself where people are looking at alternate sources of energy…so the debate remains on the change of scene and for how long oil prices will form the basis of energy cost!

Now as far as the rising oil prices are concerned it depends on the global and the political scenario and hence more stability needs to be bought about in this sphere. I think this change might happen when a cost effecient renewable source of energy is found and forms the basis of the energy cost. But there is a time factor involved in bringing about this change and until which measure of Inflation should we follow?

Since it is absolutely baseless to implement any form of monetary policy excluding the energy sector, I guess Picerno is right when he says that all the price indexs must be considered while structuring the monetary policy. Gues this dual measure his here to stay!

Blackstone makes its mark

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On Friday all the investors eyes rested on ‘Blackstone’ , which was the first ‘private-equity’ firm to go public. All the major Exchanges and the Congress kept a watch over ‘Blackstone’. It is another story that it had opened less than what it was expected. Yet the opening was good, the unit shot upto 23%, it sold upto 133.3 million units at about $31 per unit, it was supposed to be oversubscribed by about seven times!. Blackstone has been labled as one of the fastest growing money manager and many are more than willing to lay their bet on it.

Though, overall the market did not perform too well on Friday, Blackstone seems to have made its mark. It might not have made an huge impact, like it was supposed to, but it did do fairly well. The reason for such ‘less than expected’ start might be due to taxes that could attract such a private equity firm. The investors need to wait another year to see how the stock performs and if it lives up to its track record.

Well we need to wait for some more time on various factors like that of tax structure, performance of the company to see whether it was worth the buy..along with the others in the exchange, I am sure to keep an eye on this one!

Shift of preference in the Congress

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June 19th will probably go down in history as one of the reason for a major change of scene and probably in coming years change of power and wealth. Well this is factor was analysed by Marquit in her blog in ‘the panelist’. The press reported that about $14 billion over ten years will be shifted in developing alternate energy sources. Looks like that free ride for Big Oil will be over, as the major subsidies granted to the Oil companies would be reduced or taken away.

Of course Exxon and American Petroleum are completely against such a shift. The Capitol Hill is only happy that this change would reduce the dependence on foreign oil and economy. It is a known fact that White House will only look at such changes favourably. It is another thing that alternate fuels like Ethanol’s share did flare and it had created an ‘Ethanol Bubble’ but now looks like the bubble has burst given that factors like ‘efficiency’ of the fuel and the ‘transport cost’ involved in transporting ethanol, cost of farm products proove to be a major hurdle. Well other types of alternate energy like hydro, solar needs to be developed and tuned in terms of ‘fuel efficiency’

Big oil in the long run would definetlly face the low. But for the short term it would do well. As far as the long shot is concerned we need to identify on alternate energy sources.

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The ‘Godliness’ in me:

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I had undertaken a trip to the ‘temple city’, Madurai last week and wanted to share my experience there. For one the traffic to the city has increased by leap and bounds, a few years back there was only one Indian Airlines flight between Chennai and Madurai, now there are about nine flights operative on a daily basis and they are all booked. I could come to only one conclusion; Indians have shed their conservative attitude and are starting to spend, though there was no dearth of money actually speaking! This I must say is a positive step and infact good for the economy as a whole.

The facts read as follows: the full fare for a Deccan flight operating between Chennai-Madurai-Chennai is Rs 13,000/-, and a return flight to Singapore might cost me around the same amount….amazing!

Coming to the purpose of the visit, I got to visit the most beautiful temples and the architectural wonder in the form of Pazhamudircholai, Kudalazhagar, Kalazhagar. I was caught by the architectural brilliance and was immersed in the deep spiritual vibrations that these temples were filled with. This was a refreshing change and provided a complete satisfaction to my spiritual side.

One more aspect of the journey that I would like to reflect upon is the ‘Guest House’ that I stayed in. I got the opportunity to stay at ‘TVS Guest House’ which provided me with a ‘clean’ experience, the House was filled with antiques and was maintained so bright and clean. The bathroom tiles and floors were spotlessly clean, even giving the best five stars a run for their money. I believe the floors and tiles are cleaned everyday irrespective of whether people are staying there are not. Guess a new certification must be introduced on cleanliness called the ‘TVS House Certification’. I repent there are no photographs take to show you people. I really do hope hospitality industries take a cue and work towards such beautiful maintenance.

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