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India's answer to Superbowl !

Finally IPL mania is over with IPL final played between Mumbai Indians and Chennai Super Kings. Considering IPL is only in its 3rd season, the level of excitement it has created both due to exciting cricket and off-the-field politics, corruption and celebrity involvement, I won't be surprised if it takes similar level as Superbowl in USA. We had few friends at our place to watch IPL final - most of them from Maharashtra were supporting Mumbai Indians. So it was little dis-appointing that Mumbai lost to Chennai - but looking at today's game, Chennai deserved to win today's game. Overall it was great IPL season. By rough estimates, IPL with its 60 matches create economic activity of close to $1.5 to 2 billion per year ! Good for Indian economy.

Last week of 8th week when DOW had positive week. I was surprised at the strength and positive momentum markets had especially on Friday last week despite upcoming financial reforms and GS/SEC saga. Regional banks were very strong on Friday with some smaller banks with assets less than $10B had 50% returns (in one DAY). So should one put more money in financials or energy. IMO, the positive momentum would continue for another couple of weeks. But market is getting ahead of underlying strength of economy. In couple of weeks, we will get key reports such as Q1 preliminary GDP report and unemployment report. GDP should show growth of about 3-4% and unemployment should dip below 9.5%. Next few months, DOW could touch 11500 and then go side-ways before resuming its march towards 12000 by year-end. So if you are fully invested, it is wise to take some money out. One strategy is to sell "out-of-money" near term call options. So if markets go up, you can still participate. If they go down, you can keep "call option" premium. However one has to be careful since call option works with most volatile stocks like PMI/MBI/SFI/FAS/ERX/DRN.

SandRidge Energy (SD) is good buy at around $7.5 to $7.7. Due to its pending merger with Arena Resources, stock got punished. However once merger is completed, it could cross $10 in 12 months. Downside risk should also be less compared to other high-flying stocks.

Have a great week ahead !

/Shyam

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