Seeking Alpha by Adding Beta

Recently one of my stock recommendation Teledata has been on a roller-coaster ride. In recent times, it has been locked in either upper or lower circuit limit of 5% (in India, many smaller stocks have circuit limits of 5 to 20% to avoid extreme fluctuations). When I recommended it first time on one of my post, it has gone from 47 to 96 and back to 63. As per previous news, it should be demerging in 3 different companies by end of May. My recommendation is to HOLD and BUY more if it goes below 50. From financial point of view, it has excellent balance sheet and is winning orders from many state governments. It has good product in education and shipping management software. Unfortunately there is not much information available on management. So at this time I am giving them benefit of doubt and would hold onto these shares for potential windfall. I recommended Zee news at 40 and finally it has started moving. Last week it was trading at 46. Finally market has started realizing the pote...

Last week I completd second year of my part-time MBA at UC Berkeley - I was so looking forward to summer break after hectic spring quarter. I took Financial Information Analysis, Brand Management and Risk Management courses. All were pretty good courses. Did a marketing plan on Ebay and got a chance to take a closer look at how Eddie Lambert made billions with his smart move on Kmart. Learned couple of excel tools like Crystal Ball and Solver in Risk management course. Overall it was a good learning quarter. It was an interesting week for markets which are becoming little bit frothy even for an aggresive investor like me. It is definately climbing peaks every week but I almost feel that end of rally is coming anytime. Here are my predictions for rest of year: Now that SSE index has crossed 4000 (my earlier prediction was that it will reach 3500 by year-end), it reminds me of Nasdaq of 1999-2000 when it was crossing thousdand milestones in months. SSE index is almost reaching similar st...

Emerging markets (India, China) are hot again. Both SSE and BSE indexes are making records every day. From macro economic point of view, these markets are getting slightly ahead of their economies. If you are a long-term investor, then you don't need to worry since macro-economic, demographic factors are in favor of continuing growth for years to come with some bumps along the way. However if you are momentum player, you may want to watch out next few months. Remember last summer (I was in India at that time) when BSE index came from 12000+ to 9000. You may want to cash out some of your winners by Apr end and keep some cash handy to invest at lower levels. Same goes for China market As saying goes in US, sell in May and go on summer vacation! Coming to my individual recommendations in previous posts, here is quick update: Teledata Informics still going strong. It is at 87+ and nearing my target of 100 within 3 months of my recommding at 47. Latest Q results were great and on annua...

Since my last posting on "seeking alpha in Indian market", my recommendation "Teledata Informatics" has increased nearly 40% in 2 months (from 47 to 65+) when BSE sensex has moved only sideways. Similary my last year's recommendations (Aptech) is doing great and just crossed 260+. I wish I can start some type of hedge fund focusssed on Indian market and apply my "alpha" finding skills:-) My another prediction about SSE Composite Index crossing 3500 has already came true. It is trading at 3560+ as of Monday 4/16. IMO it is getting way overheated even to my taste. But momentum is very strong and I won't be surprised if it crosses 4000 by year end but along the way there would be lot of volatility. Here is another "alpha" stock in India market: Zee news: This is spinoff from Zee entertainment mainly focussed on news in various languages. There are many news only channels in India (NDTV, Aaj-Tak, Doordharshan and so on) but Zee is one of t...

As promised, I have been tracking my model portfolio regularly and here are the results and highlights of Q107 results. Model portfolio resturns were 2.22 % (compared with .6% for S&P). So at least till now, I am track to beat S&P by 2% points by end of year Best performaing asset was FSESX: FIDELITY SELECT ENERGY SERVICES which returned 15.59% and Yahoo stock was second with 12.73% return Worst performaing asset was Cisco stock which was down by 10.36%. Second worst was FXI:ISHARES TR FTSE INDX which was down by 3.31% Overall till now the portfolio is well balanced and even during late Feb sell-off held pretty well. I am not doing any adjustments to this model portfolio Here are my forecasts for overall market: USA market will go sideways for next quarter till there is clarity on economy and interest rate direction Chinese market will keep on going upwards and Shanghai Index may break thru 3500 by quarter end (from 3250+ now) Indian markets will continue to go sideways and BS...

If you haven't came from another planet, you would have noticeed that lately Indian stock market has been on fire. Economy growing at about 9% per year, BSE index has been up about 40+ % in last two years. In such market, it's very difficult to beat the market when any stock you pick would do well. By defination, seeking alpha is nothing but find stocks which would return better than just by investing in any index funds. I have been successfully investing in India for some time and have developed few skills to pick some stocks. At start of 2006, I have selected Aptech which I picked up at 130 rupees with target of 200 in 12 months. Check out in blog archives at: Today it is 209 rupees. I recommended to some folks back home when it was 60. But that was past (in stock market - no one cares about past) Let's talk about which stocks would do better going forward now that BSE index is at 14300 and it has become difficult to pick wining stocks. I am planning to write about one or...

Our Trip to Paradise 2006 By, Yash Maniyar " Swimming clothes Sunscreen Candies Beach toys Excitement Camera ...," I read off the list I made while my mom packed the bags for tomorrow's Hawai'i trip. We were all so excited. My mom & dad were waiting to go to Hawai'i for 14 years. "Go to bed you guys. Tomorrow you have to wake up early," my mom said. So we went to sleep in our cozy beds. The only ones awake were me & Isha. We were talking about how much fun we were going to have in Hawai'i. "We're going to go snorkling!" I exclaimed. "Mamma said that we're going to have a swimming pool near our hotel room," Isha said as if she knew everything about our hotel already. I didn't know when we fell asleep but I had a feeling it was late. The next morning, I woke up by the call o...

Based on my not so good track record of 2006 returns on my stock picks, I decided to design a portfolio with a mix of stocks, many mutual funds and for first time mix of bond and cash. (yesterday when we were playing bridge, one of our buddy mentioned that his portfolio returned 60% - congratulations to him on this excellent record. I would be interested if he can repeat and sustain similar results with large amounts - say 100K) On Friday when Yash had gone to singning class, I designed this model portfolio based on closing prices of Jan 5, 2007. My goal is to beat S&P by at least 2% by Jan5, 2008. I promise to update the blog with quarterly results on this portfolio. (Diclaimer: I personally don't have 100K to invest in such a portfolio. This is just to test application of some of the learnings I am getting in my MBA classes) Symbol Shrs Holdings Value Name - 5-Jan-07 28.47 527 15,003.69 $15,003.69 CSCO 527 15,003.69 $15,003.69 CISCO SYS INC - 5-Jan-07 27.7...

I have been wanting to write blog for some time but life got busy with kids, MBA, work and Hawaii vacation. Finally taking the opportunity of new year 2007, I decided to write up my thoughts. Reader beware - it's just free-flow of my thoughts spanning from my recent reading, movies and some investment ideas. First of all, Happy new year to all folks who happen to come across this post ! Last week saw quite a few movies like "The Night At Musuem", "The Good Shephard" in theatres and saw "The Inconvinent Thruth: Global Warming" and "World Trade Center" on DVD. I liked all 4 movies - they were covering completely different topics but I happen to like all of them. I liked acting of Matt Daemon in Shephard, family friendly comedy of Museum and the presentation of global warming problem by Al Gore in Inconvenient Truth. This really opened my eyes and I am glad I saw it with my son Yash. Not only do we need to educate our generation and act on it bu...

Much awaited part II of Munnabhai movie came in this weekend. We went to see the movie w/ Milind and Prashant's families. We went for 7 pm show to Naz theatres but it was sold out and we got tickets for 9 pm show. Overall the movie was excellent - after long time some good Hindi movie worth writing has come up. The dialogues, script was funny and it also achieved delivering some social message - basically the values about Gandiji's techings which all of us Indians have forgotten. The duo of Sanjay Dutt and Warsi had a great chemistry. I would definately recommend seeing this movie even if you are not a fan of Hindi Movies like me. Labor day weekend is good break for me before I fully get into my MBA studies...Yash had a Bhajan singing program in cultural activities in Ganeshotsav program. Yash's singning has been improving. He has started singning Mitwa song pretty well. Read about Coke+Mentos fountain. Yash wanted to try it out. The concept works but fountain was not a g...

Everyone is talking about YouTube and within few months it has become "the" company - similar to Myspace. I thought let me check out it - especially when "OK GO" song video which was uploaded on YouTube few days back came on VH1 Top 20 Countdown Myself and Yash decided to give it a try by creating our own video and upload it on YouTube. Check it out and please rate it: Yash's Boom Chika Boom

We were discussing on how to get steady income from stocks which one is owning for long-term and do not plan to sell anytime soon. Basically lot of us own stocks through ESPP or boughts stocks which we are not planning to sell due to company's long-term prospects. e.g. I have bought some EBAY when in was in mid thirties and not plan to sell anytime soon - one because it is in mid-20's and other reason is that I believe it will go back to low 40's in 18 month. However just holding the stock is not doing any good to my return. Basically here is how it works in layman's term: If you have 100 shares of of a stock say EBAY (which is selling at $ 27.15). If you are willing to sell the stock in one month if it goes to say 30 (about 10 % return in one month). Just sell a covered call option for Sept 30 which would net you about $ 30 before commission (about $ 21 after commission). If stock goes about 30, you may have to sell stock at 30 giving you 10 % return in one month. If s...

Over the weekend, I just completed a nice read of "Five point someone" written by Chetan Bhagat, 1995 IIT graduate from IIT Delhi. It is nice read about student life in IIT which is applicable to student life in any engg college in India. Some folks take it as 4 years of mugging and some folks go to extreme of just getting by enough grades to get a degree. The book was more about "what not do in IIT". It reminded me of my days at IIT Kanpur even though they were much different than what is mentioned in the book. It's nice read on sunny afternoon@beach. My next read is more serious: The end of faith by Sam Harris. So relavent to current events around the world with Israel/Hezbollah conflict, bombings in Mumbai, US war in Iraq and nuclear standoff with Iran. I have my own opinions but that's for later writing. Myspace has selected Google as ad provider. Great win for Google considering MySpace traffic is going gang-buster and that's more sticky than anyth...

Finally the rumors of Sandisk buying M-flash became real - it's good that I did not sold few shares I had in M-flash. I think it makes a great deal since Sandisk buys a good company (except some stock options enquiry) with excellent technology in a growing market and at the same time gets access to critical patents and royalty income stream. Looks like the pace of consolidation in technology industry is gaining quite a bit of momentum. The article in WSJ on technology industry matruing was really good. Basically it says that technology industry has become matured and has already grown as much it can. Extending this logic, I beleive that market valuations in technology industry is not going to grow to 1999-2000 levels ever (tech industy accounted for 34% of S&P 500 valuation in 2000 - now it's 14-15 %). Maarket would move the valuations from one tech company to another company. e.g. Most of networking industry valuation is concentrating in Cisco whereas some of the internet ...

After a long break I am writing on my blog - I was off to India for my vacation and before that was too busy in finishing first year of MBA. Now that I have off from MBA@Berkeley, I can spend some time in writing up some stuff. Today AMD bought ATI technologies and that brought me to think - should Intel buy Nvidia. I think it will fit very nicely. First of all, Intel, unlike AMD can digest acquisition like Nvidia even if they paid about $8B (for about $ 23 per share). It would get Intel into graphics chip market which is grwoing faster than Intel's own business and fits well with it's focus on PC business (unlike its communication business). After AMD/ATI deal, Nvidia is also last pure playin this space. All other parameters like P/E, P/S ratios are comparable and even lower than Intel. Last but not least, it's right across the road from Intel head-quarters in Silicon Valley. Continuing on the theme of in-organic grwoth, I do believe that SanDisk should buy M-systems to ex...

I am not sure if I am qualified to write what title suggests but let me wtite few lines anyway. Reading the annoucements coming out of CES at Las Vegas and reactions various internet companies were getting from Stock Market, it was almost feeling like 2000. Google going up by 20 bucks, EBAY and Yahoo making their own movements. So what are the main significant annoceuments and how it may change the landscape: 1) Skype going everywhere: This is one of the most significant development happening. I did not think it would happen so quickly. Now you can get a skype-enabled phone which you can use in wi-fi hotspots to make free calls. So technically when cities like SFO becomes wi-fi cities, you don't need regula phones at all ! This is far fetched but still reality is very close. In my opinion, all telcos need to watch out this fast changing development very carefully and move aggresively to play a role in that. EBAY made a very smart move by getting Skype even though it was completely ...

As continuation of my predictions for 2006, I thought let me create a sample tracking portfolio with timeline of 1 year and see how it performs. Since I do not have spare $50K to invest, best way to test my analysis of some of these stocks is to actual create paper portfolio and track it for its performance. I created this on Jan 3 morning so I assumed Dec 30 closing prices for buy. Symbol Shares Price Comm Amount Notes RIGL 200 8.10 10.00 1,630.00 Fallen Pharma company SIFY 500 10.76 10.00 5,390.00 India + Internet, what else you need ? PALM 200 31.75 10.00 6,360.00 Treo700 + RIMM woes EBAY 200 43.43 10.00 8,696.00 Auction growth + Skype CKCM 500 21.00 10.00 10,510.00 RFID play BBI 1,000 3.75 10.00 3,760.00 This is not going BK so it would recover ELN 1,000 13.90 10.00 13,910.00 Tyasbari returning to market in Apr06 Total paper money invested: $ 50256 My target for this paper portfolio is to return 15%. Let's see how it does in 2006 ! /Shyam

Since this is first time I am writing blog on a new year eve and I am kind of fond of predicting some of the stock actions, I thought let me put it in writing so I can evaluate if they were on target or not. Some of these may be obvious but nonetheless let me put them in writing. I am willing to take bets (Bhandi - are you up for it:-) Top 5 stock predictions: Google: Google hitting $ 500 (pre-split)in next 6 months (before 7/1/06), gets included in S&P and gets split PALM: Will hit $ 40 by year-end Apple: Will split 2:1 and hit $ 42 after split ($ 84 before split) EBAY: Will cross $ 50 in next 9 months (before 10/1/06) Click Commerce (CKCM): An RFID vendor will cross $ 30 (currently at $ 21) Mutual Funds: - Japan and Korea based mutual funds continue to do well. Watch out for Profunds Ultra Japan and fidelity Korea funds - Health care industry would continue to return decent returns Indian stocks: - BSE index will cross 10500 by year end - Aptech will touch 200 in one year (curre...

This was first cal game we went. Yash, Mark are having good time during half-time. It was fun to watch first college football game. Now that I am cal student, I have started taking interest in college football and it is pretty interesting. I just saw Adam Sandler's The Biggest Yard - good entertaining movie. Today my second half of Fall semester started with accounting and and markting classes in EWMBA. Both pref are pretty good and keep discussion interesting. Accounting prof Suneel is good at making fun of accountants and keep a subject like acct interesring. Markteing is whole new area for me so understanding those concepts are useful. Good thing is there is no mid or final term exam even though project sounds scary...but hey you can't learn just by reading books. So for now I am enjoying and learning my MBA. Looks like Apple stock has already paid for my "nano". Friday was the day for Google. I should have done some more study and bought Oct 220 options which were...

I have been monitoring Apple stock for quite some time and I have always admired Apple as a great innovator in computing and now music players and great marketer. I got excited by their introduction of ipod nano and went with my son Yash to check it out in Apple Store in Valler Fair Mall. It was so cool and neat that Yash wanted to buy it immediately. I mentioned to him that we will buy over Christmas and started thinking how can I use this cool nano. I started a competition on my group on whoever fixes most defects from Sept to Dec05 timeframe would get a ipod nano. We call it as "nano" race. And the group got really excited about this race and I am seeing about 30-40% increase in defect fix rate than normal conventional times. My conclusion is that folks get motivated more by public recognition and competative spirit of race. Now coming to nano for myself or Yash, I decided that I will buy nano only with money made on Apple. So I went and bought 100 shares of Apple at aroun...