Investment Hub
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Activity:
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last activity : 04 07 2011 08:17:11 +0000
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Due to India's current account deficit
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what ever may be the deficit the real issues are not address
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It may not be due to inflation can be corruption
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Rising Inflation, twin deficit in India and Bearish notions of Property Bubble In China
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Unprecedented levels of corruption
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India's current account deficit is running at a record pace of 4.1 percent of GDP and it is 100 percent funded by short-term portfolio flows, which cannot be relied on indefinitely. Also due to the impact of rising inflation which is there and Governments unable to do anything, also the the long term picture of Asia outperforming the US is taking a breather at the moment, hence firms are warning against investing in India & China. |
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Goldman Sachs reminds me of JP Morgan during the "Great Depression" of 1929.
Goldman Sachs is a "DALLA"!
Major issue is rising inflation which needs to be controlled,due to market correction and rise in interest rates(as predicted)will effect FII flows although its short term but a panic is been created due to which investors are taking a back step.
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the real issues are not addressed hence this parity will always remain. It is also in the interst of the west or else where will they order cheap labor to wash their dirty lenins
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Se todyay yahoo front page, IAS couple with 300 cr assets.
Inflation may not be the reason, since suppose a burger costs 3.75 dollars in US and in India on translation costs 4 then every American dollar has to be upward scaled in India so that it will be 1.1 dollars in Indian sense. So if our gdp is 1 trn then in ppp terms it will be 1.1 trn, which is a good sign of the economic future.
So it can be corruption, or most of our blue chips are over valued. I checked up l&t which is around 1600 with a p/e of around 36. With 56 eps growth 9% and roe 18% dividend 13 rupees then price last year can be di/ks-g= 13/0.18-0.09=around 150 rupees. So it is agood stock for shorting. All others in bluechip might be in the same category, leave alone goodwill and expectations for future.
There had been lot of 1 std. dev. upward corrections may be due to high expectations and risk might be rising for fat tails and systemic risk for economy to pick up at these valuations.
This may be another reason.
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Rising Inflation, twin deficit in India and Bearish notions of Property Bubble In China
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Dear Esha, Thanks for referring this Idation. Well Goldman Sachs, the US investment banking giant, has issued a short-term alert over investing in India and China due to the impact of rising inflation, advising clients to rotate into Wall Street and other bourses as a safer bet over coming months. According to the report, India is an even bigger worry, with yawning twin deficits, and overheating visible on all fronts. The nation's central bank warned of "surging inflation". "India's current account deficit is running at a record pace of 4.1 percent of GDP and it is 100 percent funded by short-term portfolio flows, which cannot be relied on indefinitely," said a spokesperson at Goldman Sach, describing Mumbai's bourse as "crowded". Goldman expects China to rebound strongly in the second half of the year, distancing itself from the ultra-bearish views of those such as hedge fund star Jim Chanos betting that Beijing will prove unable to engineer a soft landing from its property bubble. Goldman insists that the longer-term super-boom remains healthy in both the BRIC nations.
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Global investors look for cleaner markets to invest their money....but unprecedented levels of corruption in India in recent years have raised a big mark of worry in the minds of foreign investors. Due to this corruption & daily emerging scams...the indian markets are not going to show as much growth for investors.
Also Due to high interest rates all sectors of the market will witness enormous pressure resulting in retarded growth. A whole lot more could go wrong for India if its minders take their eye off the ball.
Offtopic comment: In coming days of 2011, i personally expect some more severe pain in indian stock market. Global oil prices can inch much higher to $125-$150+ which can make the condition from bad to worst!! The best way to hedge funds is to invest in silver (at every 2-8% decline) & Copper to get some good profits! In coming days expect these two metals to perform better than gold.
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India vs China |
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218 referals
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China is selling Pakistan at least 36 advanced fighter jets in deal worth 1.4 billion dollars.... |
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Why China And India Don't Get Along January 4, 2011: India-China ties are set to enter... |
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98 referals
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A set of people believe that dreams change and hence buying a dream home just increases the maintenance cost whereas renting one is relatively better option. In today's world where the property rates are increasing like nothing else. Which... |
JV needs more dedication and yes sir back stabbing approach kills it all. The end result of a well set JV with values gives more value. |
No we are not.. not right now. We are still in recovery stage and this time I do not think the same mistake will be repeated. Having tough time is one thing and going back to recession is totally different, we cannot mix them. |