Stocks
Changes to Our Stocks Section

Beginning this issue, we are dropping the Street Beat section and Long-term model portfolio

 

Regular readers would have noticed that we have now made extensive changes to the stock information we publish. Earlier, our stocks section consisted of analysis of one company in the Street Beat section; there was one item about stock manipulation, a list of value stocks and a model portfolio. We then added a new section—Stock Watch—which vastly expanded the section even as we dropped the list of value stocks. With this issue, we are making two important changes. We are dropping the Street Beat section and ending the model long-term portfolio we had started in 21 February 2013. We will retain the Unquoted section in the Stock Watch section, as it showcases, in every issue, examples of blatant price manipulation.
 
The Street Beat section has been an outstanding performer over the years, handsomely beating most top mutual fund schemes. In fact, as our report card on page 38 shows, over the past year, we have notched up a return of 50%. The long-term stock portfolio, consisting of many large cap stocks, has also easily beaten the Nifty over this period. So, why are we closing these two sections that have been an essential part of the magazine? 
 
We now put out a gamut of stock information and there is a need to avoid overlap between them to avoid confusion. Many readers of the magazine are also subscribers of the stockletters. They have often asked: between Street Beat stocks, long-term model portfolio stocks and also stocks in stockletters, which are the ones they should focus on? This confusion is now eliminated by dropping the Street Beat and model portfolio sections. The magazine will now focus on stocks and sectoral updates and thematic studies under the extensive Stock Watch section. The actual identification of stocks is done in stockletters, which will eventually be housed under Moneylife Smart Savers, the platform for choosing the right financial products.
 
The Stock Watch section, we trust, offers much food for thought for the serious stock-picker. We share our perception on results and offer insights into valuation from multiple angles, bearing in mind that it is valuation that makes or breaks returns. This section will expand your understanding of sectors and stocks but will not offer any definitive recommendations any more.
 
Readers, of course, eventually want to know which stocks to buy. The best of our ideas will be available only in stockletters, from now on. Indeed, there was always a question in our minds about which stocks to include in the Street Beat section and which stocks in the stockletters. This conflict will no longer hamper us. 
 
There was one more reason to drop the Street Beat section. It was a fixture of every issue and had to be filled up with a good stock once every fortnight. This was not a problem earlier; but has become a problem over the past 7-8 months, after the market ran up and made many small- and micro-cap stocks expensive. After all, it is small- and micro-caps that we focused on, to offer a distinctive choice to our readers. 
 
With such distractions out of the way, our stock team can now focus on honing various smart tools, such as systematic investment plans for investing in stocks. As and when we launch them, they will be available on savers.moneylife.in.
 
 
Moneylife Long Term Portfolio (MLTP) had 50 stocks, weighted equally & was benchmarked against Nifty and large-cap equity funds. But MLTP returns were not adjusted to the cost & constraints of equity schemes: 1) Yearly equity fund charges of around 2%  2) Buying & selling, based on purchase or redemption pressures 3) Impact cost in buying/selling

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COMMENTS

Sudharshan Katipally

1 year ago

Magazinaes are not a free content, it is premium content and are charged accordingly. Magazine should continue investor knowledge section specifically equity specific, be it model portfolio or stocks fundamental insight.

REPLY

Debashis Basu

In Reply to Sudharshan Katipally 1 year ago

You seem not to have noticed that we have EXPANDED the stocks section

Sudharshan Katipally

1 year ago

You should not stop completely, magazine will loose its weightage. There are 4 stock letters and each stock letter has upto 50 stock recommendations which will make a total of 200 stocks which could cause confusion to investors and also the performance is questionable as there are stocks which have fallen more than 25% in couple of weeks after they are recommended.

REPLY

Debashis Basu

In Reply to Sudharshan Katipally 1 year ago

You say each stockletter has 50 stocks. This is false. Every issue clearly says it will have maximum of 30-35. We have 20-22.

webkitendfullscreen

1 year ago

Good move as free advice is never taken seriously and most of the paid advice in stocks promise get rich quick ideas. As a premium member of MSSN I can vouch that stock letter advice is good and realistic. Also there is no confusion in choosing the stocks.

Muru R

1 year ago

ML-"Best of the rest '

R Balakrishnan

1 year ago

Nice move. Free advice is never appreciated.

REPLY

Nilesh KAMERKAR

In Reply to R Balakrishnan 1 year ago

Very true . . . "If you don't value your time, neither will others. Stop giving away your time & talents. Value what you know & start charging for it." - Kim Garst

Arpita Padiyar

In Reply to Nilesh KAMERKAR 1 year ago

It is not free. People pay for the magazine.

Sucheta Dalal

In Reply to Arpita Padiyar 1 year ago



There are new SEBI rules too that you may want to touch base with

Nilesh KAMERKAR

In Reply to Arpita Padiyar 1 year ago

Now pray, do consider the foll:

More than 60% of the stocks in MLTP have given a return of 20% per annum or more;

If you had invested say, Rs.1000/- only in any five of 'those' stocks . . . Then you would have made profit, anywhere in the range of Rs.1000 to Rs.Rs.3000 (conservative estimate) on an investment of Rs.5000/-

Now from the above, we say, it is the stock recommendations that paid for the magazine - & not the other way round.

Debashis Basu

In Reply to Arpita Padiyar 1 year ago

Yes. we appreciate it. As we explained, we have EXPANDED the stocks section

Suketu Shah

1 year ago

nice changes and congrats for the successful returns.

V ganesan

1 year ago

This is another unethical way from moneylife to force readers indirectly to subscribe moneylife stockletters.Recently u have raised magazine subscribtion by 50 percent. I am not expecting this kind from a magazine like moneylife.How a reader can find a stock whether to hold or sell or buy without a subscriber of moneylife stock letter.Kindly provide

REPLY

Debashis Basu

In Reply to V ganesan 1 year ago

"Another unethical way"? Hope you can cite our previous "unethical ways" too. You seem to be full of anger, hostility and bile about Moneylife. I am sure you will find more ethical and higher quality resources at lower cost to satisfy you :)

Rakesh

In Reply to V ganesan 1 year ago

You pay up for quality. Hope you know that good quality scrips are always expensive :-)

Rakesh

In Reply to V ganesan 1 year ago

There are lots of information source totally free like moneycontrol and CNBC. Wonder why you have been reading an unethical publication so long.

Suketu Shah

In Reply to Rakesh 1 year ago

mc and cnmc are best to suggest to yr enemies they provide 4/5 wrong picks! lol

Need for media blackout during spectrum auctions
The spectrum cost that has emerged today is about 20 times that of the 2001 cost, while the customer base has gone up by 240 times. Yet, there was a deliberate attempt by media to frustrate true market forces and let narrow interests determine the price of a scarce natural resource
 
Information dissemination is occasionally throttled to ensure fairness to one and all. Especially with respect to information that has a direct bearing on the financial health of a country, there are regulations that mandate a delayed release to public. This is done to enable stakeholders who are directly involved in a transaction to take independent decisions on their investments. These decisions are therefore based on internal merit and capacity to analyse trends and make projections. Any external influence would – in these cases - open up the floor to no less than retrospective accusations of fraud or duplicity. Two clear examples of this kind of information management are observed when enterprises are raising funds through depository receipts and when management boards meet and discuss forward-looking strategy for their enterprise. On both these occasions, it is a criminal offense to directly or indirectly reveal non-public information in order to manipulate investors’ minds.
 
Looking at initial public offering (IPO) related regulation in the US, we find that as per American securities law, there are two time windows commonly referred to as "quiet periods" during an IPO's history. The first one is from the period following the filing of the company's S-1 but before US Securities and Exchange Commission (SEC) staff declares the registration statement effective. During this time, issuers, company insiders, analysts, and other parties are legally restricted in their ability to discuss or promote the upcoming IPO according to the Securities Exchange Act, 1934. The other "quiet period" refers to a period of 40 calendar days following an IPO's first day of public trading. During this time, insiders and any underwriters involved in the IPO are restricted from issuing any earnings forecasts or research reports for the company. It is only when the quiet period is over that the underwriters will initiate research coverage on the listed entity. Additionally, the NASDAQ and NYSE (New York Stock Exchange) have approved a rule mandating a 10-day quiet period after a Secondary Offering and a 15-day quiet period both before and after expiration of a "lock-up agreement" for a securities offering. Thus, during a Quiet Period, a publicly listed company cannot make any announcements about anything that could cause a normal investor to change their position on the company's stock. The same applies in the UK, where the Prudential Regulation Authority and the Financial Conduct Authority mandate non-disclosure. In fact, in June 2011 the internet company Groupon was forced to amend its IPO filing after Bloomberg News published a statement from Groupon’s co-founder and Executive Chairman saying that “Groupon was going to be wildly profitable.” 
 
In India, similar regulations with respect to price-sensitive information are put in place through trade windows by the SEBI (Prohibition of Insider Trading) Regulations, 1992. But, unfortunately, such is the vindictive nature of India’s business culture that press information is now being used to influence other critical investment as well. It seems the time has come to extend the scope of Quiet Periods to other transactions such as spectrum auctions. 
 
Earlier, the Department of Telecom (DoT) auctioned spectrum in the 900MHz and 1800MHz bands over 10 days and 64 rounds. The auction pulled in about Rs60,000 crore for the government, of which close Rs18,000 crore will enter the coffers this fiscal itself, through upfront payments. By all means, it was a successful auction and with the bright prospects of data driven services, it is likely that the buyers of spectrum will roll out robust and profitable services for the 88.1 crore mobile subscribers in India. However, a peculiar trend was also noticed during the auction. The media left no stone unturned to influence opinion of transacting parties and manipulate investors’ minds in real time, while the auction was ongoing. The so called analysts’ first response in the media was to call the then ongoing auction “winner’s curse”, without bothering to explain the basis of this judgment. They raised hue and cry over spectrum pricing that was being determined through a transparent auction process and claimed that the companies had quoted high bids. This was followed by a number of other rhetoric statements that smelt of nothing but vested interests.
 
In 2001, when the customer base was only 25 lakh and tariff was Rs6 a minute, the spectrum contributed only 80 paise per minute to the tariff at the best. The same spectrum is being used even now when the customer base is anything between 50 and 60 crores. This is nearly 200 times of the then customer base in 2001. Therefore, the spectrum cost that has emerged today is about 20 times that of the 2001 cost. However, the customer base has gone up by 240 times. Therefore, if the operators pass on the cost of spectrum to subscribers, increase in tariff will not be more than a few paise. Thus, when Marten Pieters, the CEO of Vodafone, says that the mobile telecom industry has reached a point where annual tariff increases are needed to sustain itself. It is important to focus on the quantum of increase and not the superficiality of increasing tariffs in an industry where they have only decreased over the last 18 years.
 
None of the involved players entered the auctions without the required knowledge and understanding to participate effectively. However, newspapers such as Economic Times clearly implied so. In fact, in one particular article, the newspaper went to the extent of advising Bharti Airtel (India’s largest and most professionally managed telecom company) to pull out of race 900MHz at extant price points.  This created much panic among small investors and could have even been published with the aim of misleading Ministry officials. There was a deliberate attempt to frustrate true market forces and let narrow interests determine the price of a scarce natural resource. The media houses running this propaganda should either allow their conscience to operate for the benefit of India’s poor for whom revenue is raised, or clearly label such “analysis” as “paid news”.
 
Considering, neither of the above two alternatives will be adopted before an ideal world order is miraculously created, there is a clear need for regulation that mandates dissemination of information in a phased manner. While spectrum auctions are ongoing, no information should be released on a day-to-day basis and no “reportage” on the proceedings should be allowed. The minutest details of the auction may be dissected, analysed and presented before the public only when the whole process is over. But allowing rookie journalists to influence transactions that involve such phenomenal wealth would be allowing for a loophole that we would be daft to not address immediately. We must bear in mind that a single spectrum auction could significantly alter the fortunes of the telecom industry, or the country’s poor, or both. In the light of this, a blackout period should be mandated for the media for the sake of fairness and inclusive growth.
 
(BK Syngal is former CMD of erstwhile Videsh Sanchar Nigam Ltd (VSNL). He is a B Tech (Hons) and M Tech from IIT, Kharagpur, C Eng (UK), MIEE (UK) and Sr MIEE (US). He is also a member of the London Court of International Arbitration.)
 
You may also want to read:
 
 
 
 

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COMMENTS

Anand Vaidya

1 year ago

Paid media (NDTV, Times Now, Aaj Tak, Ind Exp, The Hindu etc) influences or tries to, not just auctions but a whole host of issues & non-issues. They need to be shut down forever. Honest, fearless media will then blossom in the nation

Emergency: A bureaucrat recalls the dark months
To counter inflation, the government stopped all new construction works, froze wages and salaries in the public sector, and imposed compulsory savings on income tax payers
 
The experience of the Emergency - 19 months of undemocratic rule in India, without civil liberties - is now a distant memory. For the young, it is a paragraph in history books. Those who do not remember history, it has been said, are condemned to repeat it.
 
The trauma of June 26, 1975, followed months of economic discontent, and political turmoil. Two bad agricultural years, and the phenomenal rise in world oil prices after OPEC was formed, sent inflation in India up to an unprecedented 15 percent in 1974.
 
Rising prices in food and essential commodities meant distress for rural and urban labour and hardship for fixed income families. To counter inflation, the government stopped all new construction works, froze wages and salaries in the public sector, and imposed compulsory savings on income tax payers. These measures, though they brought prices down in a few months, were highly unpopular. A countrywide strike of railway workers was put down with some severity.
 
The political opposition, earlier impotent against prime minister Indira Gandhi's popularity and large majority in parliament, seized on this opportunity to mobilize public support against the government, whom they charged with pervasive corruption. The working of parliament was disrupted with frequent rallies in Delhi demanding its dissolution and fresh elections. In Gujarat, the Nav Nirman movement against the then Congress (I) government led to sporadic violence.
 
Then Jayaprakash Narayan, or JP as he was called, the former socialist leader who had quit politics for Gandhian social work, came out of retirement, calling on students and youth to join him in a peaceful revolution for the moral regeneration of politics. JP's political aims were unclear, beyond removing Indira Gandhi from power. His movement evoked great enthusiasm in Bihar and Uttar Pradesh, and then spread to other states in the north and west. 
 
At this critical juncture, on the June 12, 1975, an order of the Allahabad High Court on an election petition unseated Indira Gandhi and barred her from elections for six years. The Supreme Court stayed the order, pending appeal, allowing her to continue as PM but without voting powers. Tension mounted in Delhi with daily rallies outside the PM's house and counter-demonstrations by her supporters led by her son, Sanjay Gandhi. At a major rally in Ramlila Grounds, JP called on the army and police to disregard orders to suppress demonstrations.
 
Indira Gandhi could have stepped down as PM in favour of another Congress leader, who could later dissolve parliament. The High Court order, based on technical infringement of electoral law, would very likely have been overturned by the Supreme Court. She would almost certainly have won another election with ease.
 
But the PM saw herself as the victim of a right-wing conspiracy; she would not risk even a temporary loss of power. Her advisers on the extreme left even told her that her life might be in danger, like those of Salvador Allende in Chile and Sheikh Mujibur Rahman in Bangladesh.
 
A way out for the beleaguered prime minister was found by the then West Bengal chief minister Siddhartha Shankar Ray, an eminent lawyer. This was to misuse a constitutional provision meant for dealing with armed insurgencies. After two or three days of secret preparation, with the help of a few trusted officials, an ordinance proclaiming a National Emergency was taken by Indira Gandhi to President Fakhruddin Ali Ahmed for approval, late on the night of June 25.
 
It was issued early on the morning of the June 26. The cabinet knew nothing till it was convened later, and then dutifully approved of the ordinance. In dawn raids, leaders and activists of all political formations in the opposition, from the RSS and Jan Sangh to Socialists, Congress (O), JP and his supporters - in all 60,000 people all over India - were taken in for preventive detention. Newspapers were shut down on the 26th and 27th. All India Radio had no reports beyond the promulgation of the ordinance. There was panic in the country.
 
In the course of the Emergency, more than 100,000 people were imprisoned without trial. Access to the courts was denied to detainees, the government arguing that all fundamental rights had been suspended during the Emergency, and even the writ of habeas corpus was not available to detenus'. Three High Courts disagreed with the government. But on appeal, a Supreme Court Bench, with some of India's leading jurists, upheld the government view. Only Justice H.R. Khanna dissented. 
 
Pre-censorship was imposed on all newspapers and journals. Owners and editors were intimidated; only the Statesman and the Indian Express continued to voice some dissent. The BBC office was closed and Mark Tully expelled. Kuldip Nayar was in jail for some months. Romesh Thapar, earlier close to Indira Gandhi, suspended his publication of Seminar journal as a protest against censorship. Public opinion in the Western democracies was critical of Emergency rule in India. Only the British Labour Party gave some support to Indira Gandhi.
 
One's most lasting memory of those days is of the fear that gripped the entire middle class, of arrest and detention, if any dissent was voiced in public. Politicians made no protests in or out of legislatures. Ordinary people would not talk freely, except among close friends. One understood what it had been like living under dictatorships in Europe.
 
On the morning of June 27, when the public was still in the dark, the prime minister spoke to secretaries assembled in South Block. She said her actions had been necessary because of a grave threat to the government, mentioning JP's Ramlila Ground speech. She said she had no intention of changing the existing governmental system, and called for the civil service to make governance more effective. 
 
In a few days, in an effort to make the Emergency popular, a 20-point programme of social reform was hastily put together: it ranged from the abolition of bonded labour to free exercise books in schools. This was then incorporated in the Five Year Plan. Sanjay Gandhi wanted to give priority to two elements: renewed emphasis on population control and urban slum clearance. These were then implemented in ways that they became 'excesses' of the Emergency.
 
Early in the Emergency, it was clear that cabinet ministers now exercised only nominal authority and that too in routine matters. All important decisions were taken by the PM herself, with Sanjay as her chief adviser, and a small group of junior ministers executed these orders. Some positions in key ministries could be filled only after interviews with Sanjay. 
 
Some civil servants were prepared to praise the Emergency, accept the new dispensation and further their careers. The vast majority simply kept their own counsel and continued to work as usual. A few known critics were moved out of positions of authority. No one resigned.
 
The constitutional five-year life of parliament was twice extended by emergency legislation, to avoid new elections. This gave time to Sanjay Gandhi to extend his influence through younger leaders in the state Congress parties. This group revived an old idea of replacing India's parliamentary democracy with an executive presidency, and pressed for convening a new Constituent Assembly. At the end of 1976 it seemed that India's liberal democracy would never revive.
 
Then in mid-January 1977 came the wholly unexpected announcement that Indira Gandhi - whether impelled by a desire to regain her democratic legitimacy, or misled by intelligence reports of her continuing popularity - had decided to dissolve parliament and hold new elections. Political leaders and party workers were released and allowed to campaign freely. Press censorship was relaxed. In the elections of mid-March 1977, the country gave its verdict on the Emergency. Congress (I) lost across India to the Janata Party formed by united opposition leaders after their release.

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