Fortnightly Market View: Valuation Vs Macro
Bull market intact as long as the Nifty is above 8,300 in March
On 23rd January,...
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Digital Age

This is with regard to “NGO Clean-Up Needed” by Sucheta Dalal. In USA, if an NGO’s income is less than $25,000 a year, all it has to do is file a brief statement online, called an e-postcard. The NGO files a short form every year to indicate it is still active, with the names and addresses of the directors for a fee of $5 with it to take care of the regulatory requirements. The charity commissioner’s office in our country must be brought into the digital age as soon as possible. If they don’t have (wo)man power, I am sure that they will get many volunteers to help them digitise their records.

Meenal Mamdani, online comment


Lost all relevance!

This is with regard to “SEBI De-recognises Regional Stock Exchanges” by SD Israni. This should have happened a long time back; these exchanges were unnecessarily kept alive. Once demat and screen-based online trading became a reality, these exchanges lost all relevance. Investors should have moved away from these exchanges because, I suspect, most companies listed on these must not have been very good, in any case. Companies can shift to the BSE and SEBI should help them in this.


No point saying investors are at the receiving end.

Anil Agashe, online comment


Fix this soon!

This is with regard to “Corporate Espionage and Worse: All Too Common” by Sucheta Dalal. The biggest scams in Delhi relate to counterfeit currency and counterfeit documents, oil and defence deals and, now, judgements from the justice dispensing system. This is, in addition to the loot, scoot and stack of assets abroad.


The present espionage scandal appears to have bound all three together. Hopefully, the new administration will be able to fix this soon.

Veeresh Malik, by email


Contradictory Signals?

This is with regard to “Fortnightly Market View: Reflation Is Here” by Debashis Basu. Last fortnight, the Which Way column indicated that a short-term top was possible. Now, the same column is mentioning a bullish move will continue. The market PE (price-to-earnings ratio) is 24 today (2 March 2014) which is grossly overvalued. Do Moneylife and the market expect earnings to grow more than 20% next year? How to go about this market? Are we to buy, based on more growth, or wait for the earnings to improve? Moneylife is giving contradictory signals and readers are confused. Kindly, provide the needed clarification.

V Ganesan, online comment


Analysis after one year of preferential allotment?

This is with regard to “Unquoted” section in Moneylife magazine. The scrips discussed on stock manipulation are mostly penny stocks. Recently, there have been news reports that the manipulation of penny stocks, after preferential allotment, is to earn LTCG (long-term capital gains) and launder money. The analysis of these stocks, covering aspects like whether the company had done preferential allotment during the past 1-1.5 years (since statutory lock-in of one year is applicable for preferentially allotted shares and to earn LTCG) and the change in the number of locked-in shares of those holding 1% or more of the shareholding, is available on the BSE website immediately after preferential allotment. A similar analysis, which is done one year after preferential allotment, may provide a more insight into the manipulation of penny stocks.

RM Krishna, feedback alert


Developments in Insurance Broking

I would like Moneylife to decipher the recently floated regulations on insurance marketing firms (IMFs). The validity of such a model of distribution seems to be in question, as insurance brokers are already in operating. Also, the regulations allow for 12th standard passed persons to sell insurance products of two life insurers, two general insurers and two health insurers.


While brokers are not allowed to receive any compensation beyond the IRDAI-stipulated product commissions, IMFs are allowed to claim reimbursement from insurers. This is not fair to brokers and corporate agents who incur customer acquisition costs similar to those of IMFs. I would like Moneylife to study this distribution model.

Subba Rao, feedback alert


Criticism of NPS is not correct!

This is with regard to “Just 3 Products to Save Taxes & Earn High Tax-free Returns” by Jason Monteiro and Yogesh Sapkale. I am not able to understand why there is criticism of NPS (National Pension System). This is one of the schemes especially created for retirement {other than PPF (public provident fund) and EPF (employees’ provident fund)}. This Scheme is now backed by an Act of Parliament. There is one regulator and the regulations are being framed which will be applicable soon. It gives the option for a subscriber to choose the asset allocation as per his/her risk-taking abilities. Returns are market-linked. Slowly, tax benefits are being provided. Maybe, in future, it will come under EEE (exempt-exempt-exempt) category, as it is a long-term retirement savings product. Returns are less volatile than in equity schemes, whose future performance cannot be predicted.


It appears that Moneylife is prejudiced against NPS. It is a long-term product and comparing it with equity mutual fund products, which are short-term (there are very few long-term investors), is incorrect. In equity mutual funds, investors come and go, as and when they make money or incur losses.


In my view, Moneylife must revisit its stand on NPS now.

Suresh Bisht, by email


Jason Monteiro replies:

Our analysis is based on the present situation. As and when the regulations are put in place, we will change our views. We mention that one should invest in Section 80C investments, such as ELSSs, for the long term, i.e., 10 years or more. The equity exposure under NPS is limited to just 50%.


Poor Financial Literacy?

This is with regard to “The Fad of Financial Literacy” by Sucheta Dalal. NABARD (National Bank for Agriculture and Rural Development) paints on buses and trains and organises a few video films and audio films in the name of financial literacy. Still, many persons do not know the difference between loans and investments! Several others do not distinguish between money and wealth. MCA’s (ministry of corporate affairs) ritualistic investor education doles are meant to reach the Budget targets and do not fulfil the needs of financial literacy and financial education.

B Yerram Raju, online comment


Simple basic stuff!

This is with regard to “Common Sense Investing” by R Balakrishnan. I have always enjoyed reading the author’s columns, online as well as in Moneylife magazine. I love one of the definitions of value investing that calls it ‘boring’. That’s where people get it wrong. Nowadays, everyone wants exciting news/stocks/career. But the fun actually lies in ‘simplicity’ and ‘simple basic stuff’.

Ritesh Gulrajani


Generate more power!

This is with regard to “GMDC: Growth Phase”. GMDC must think of putting up the second plant to produce the much-needed power in the country and also increase briquettes. Can GMDC associate with Neyveli Lignite and use their joint strengths to generate more power?

Dr Anantha K Ramdas


Sharing and caring

This is with regard to “When doctors assume that they know what a patient wants” by Prof BM Hegde. Thank you, Dr Hegde, for creating awareness about the grey areas in healthcare. The gradual disappearance of the concept of ‘family doctor’ in India and the transfer of healthcare responsibilities to machines and specialists are causing avoidable agony to those who approach hospitals for medical attention. The medical profession and pharma industry are becoming parasites on the ill-health of patients. Some self-regulation and some amount of sharing and caring from the government can reduce the agony.

MG Warrier


Future returns?

This is with regard to “Stock market: Still a Good Time to Jump in?” by Debashis Basu and Jason Monteiro. Everybody is talking about the Nifty and the Sensex, as if all other stocks don’t exist. Though the Nifty is making new highs, the Small-cap Index is well below its life-time high... The future returns would come from this sector... Of course, stick to quality names!

Vinayak Bhimrao Mudholkar



MG Warrier

2 years ago

This refers to Suresh Bisht’s view that ‘Criticism of NPS is not correct!’. Perhaps the comments have restricted implication as Bisht has compared National Pension System(NPS) with two essentially savings instruments namely PPF and EPF. NPS has not yet proved its efficiency as a substitute for Defined Payment based Pension system which was available to government and public sector employees. Kindly seen my letter on the subject published in the previous issue Moneylife (March 19)

4 Ways DirecTV Deceived Consumers, According to FTC Lawsuit

Nation's largest provider of satellite TV faces lawsuit from consumer watchdog agency


Maybe DirecTV’s “Poor Decision Making Rob Lowe” is down with deceptive advertising, but the FTC most certainly is not. The agency is suing DirecTV for allegedly misleading consumers about the costs of its satellite television service. The lawsuit is seeking what could amount to millions of dollars in refunds for DirecTV customers. It alleges that DirecTV deceptively advertised a discounted one-year programming package by failing to clearly disclose:
1. That the package comes complete with the shackles of a two-year contract.
2. That the monthly cost of programming increases anywhere from $25 to $45 in the (mandatory) second year of the contract.
3. That there is a penalty for leaving DirecTV before the two-year contract is up and it is typically $20 for each remaining month.
4. That customers must take it upon themselves to opt out of receiving premium channels, such as HBO and Showtime, before a three-month trial period has expired, or else, going forward, be charged around $48 per month under the negative-option offer, which the FTC found to violate ROSCA.
The nation’s largest provider of satellite television, DirecTV has more than 20 million subscribers across the U.S., according to the FTC. An agency spokesperson told that a “substantial portion” were affected by the FTC’s allegations. AT&T, which has faced its own federal lawsuits alleging deceptive advertising, is in the midst of trying to acquire DirecTV.
DirecTV did not immediately respond to a request for comment from but a company spokesperson told the New York Times: “The F.T.C.’s decision is flat-out wrong, and we will vigorously defend ourselves, for as long as it takes. We go above and beyond to ensure that every new customer receives all the information they need, multiple times, to make informed and intelligent decisions.”
Read more of TINA’s coverage on television services here


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