10 Companies for an Encore to your Portfolio

These are some of the companies which I(Arun) feel has bottomed out.These are pretty interesting companies with decent business models and good fundamentals. So check them out.

Aishwarya Telecom: In my earlier note i said it for no reason deserves a price of 136rs. Just look at the bechara now,quoting at 28rs. Surely bargain hunters would opt for it sooner or laters. So though not 136 but a mere 28 is very feasible for one to have a token position.

Asian Electronics: Market i feel has discounted all bad news of the company. Asian electronics at present level of 70 is a good buy. Within the next 6 months asian should rebound bigtime. Battle to regain its lost glory has already begun.

Futura Polyesters: The court recently sanctioned the demerger scheme. So one is surely entitled to get Innovasnyth technologies now. Futura polyester is a steal at present levels of 22.A great buy.

Jai Corporation: A huge success story being beaten down badly though for some reasons. But still jai corporation doesn’t deserve a price of 280. Several funds opted for it,a great company with a solid aggressive, vision oriented owner. He has taken oath to take the company beyond ones reach.A good value buy.

Jaiprakash Associates: I feel pity for these company,a superb company being misunderstood so badly.At 150rs its a must have in anyones core portfolio.You are also entitled to get free shares of JP Infratech.

Kemrock Industries & Exports: One of my hot favorites of yesteryears.Superb result,great aggressive management. The company supplies its products to the biggies like boeing and all. At 300 i would definitely book it for my portfolio.

Punj Lloyd: People who feel Larsen & Toubro is beyond your reach please don’t get disappointed. The next Larsen in making, the company with over 20000crs of order book is just quoting at 210 levels. Exit out flop ones in the basket to replicate it with a success, Punj lloyd.

Saag RR Infra: The company ended the fiscal with 66crs of topline.It has got a robust order book position of over 410crs.So huge revenue visibility,sunrising sector coupled with great outlook makes it a super buy.The company is quoting at 38rs.

Valuemart Info Technologies Ltd: To start with the company is quoting at “3″rs presently. To conclude-checkout its promoter-the real man with an amazing mind. He has taken a lot at 6rs now its hi-time you book it at the earliest.Valuemart info is a great but at the current level of rs 3.

Walchandnagar Industries Ltd: My 2nd 50 bagger,my darling,my walchandnagar. Dont be jealous guys though not a 50 bagger but Walchandnagar still has the potential to do an encore from the present levels of 200. A quality company at much of a discount.

10 Great Investing Rules To Become RICH

An old saying goes, “You can’t build wealth by buying things you don’t need, with money you don’t have, to impress people you don’t like.” So how do you build wealth? Read on…

There are basically only four roads to wealth:

• You can marry it (don’t laugh, some do);
• You can inherit it (others do that);
• You can get a windfall (from a lawsuit settlement, lottery, or some other unexpected good fortune); or
• You can accumulate it.

Most of us are stuck with option #4 – accumulate it. To do so, you need to understand how to manage cash flow. First, look at your annual earnings and multiply that figure by your working years. Not counting inflation (that is, pay raises along the way), the result may total several million dollars.

Whether you will have that several million dollars by retirement, though, depends on how you manage your cash flow – and how you answer the following questions: What do you need now, what do you want now, and what can you save and invest for the future?

Here are ten time-tested rules that can weather the stormiest market cycles.

Rules #1: Live within your means

This includes managing debt and learning to budget. Such boring topics may not be the most exciting things about becoming wealthy, but they may be the most critical.

Consumer-driven economies relentlessly hammer away at why we must buy this item or that gadget so we can have the appearance of being successful, happy, and altogether “with it.” So it takes financial discipline and sensible behavior to successfully accumulate money and grow wealthy.

Possibly the biggest trap out there is easy credit, which lets us buy numerous things we might not need. Comedians have pointed out the foolishness: “You buy something that’s 10 per cent off and charge it on a 20 per cent interest credit card!” And US newspaper columnist Earl Wilson opined, “Nowadays there are three classes of people – the Haves, the Have-Nots, and the Have-Not-Paid-For-What-They-Haves.”

Learning to live within your means leads to a freer life – debt can be a mean master instead of a worthy servant. Save first, spend second. If you do so, building wealth will be a lot easier for you.

Rule #2: Save aggressively

This does not mean “invest aggressively.” Rather, it means making it an absolute priority to set aside 10 per cent of your income right off the top, and even more if your goals tell you to do that. The longer you wait to start saving, the larger the percentage of your current pay you will have to save to reach your goal.

If you can save aggressively, you will be surprised how that “nest egg” will start to compound. Look at any chart of compounding. It has been said that it’s the last compounding that makes you wealthy.

In other words, $20,000 becoming $40,000 doesn’t seem like a lot of headway, but when the $40,000 compounds to $80,000, and the $80,000 to $160,000, and finally the $160,000 to $320,000, we’re now talking about some serious money. Two more “doublings” and this account will be worth over $1.2 million. Those who spend first and save later inevitably end up working for those who have learned to save first, spend second.

Rule #3: Dollar-cost average

When buying shares, remove emotions from your investing by automatically buying more shares or equity mutual fund units when they are cheap. Emotional investing gets too many people in trouble. Statistics continue to show that we tend to buy when things are going up and sell when they are going down – in other words, we tend to buy high and sell low. Dollar-cost averaging not only removes emotions from investing, but it helps you buy low. Here’s how:

By putting a constant amount into the market, as the price slips, you buy more and more number of cheaper shares or fund units and thereby reduce your average cost.

For example, let’s say you are investing $100 a month into a fund. In the first month, the price of the fund is $10 per share and you buy 10 shares. The next month, the price has dropped to $8 per share, so your $100 buys you 12.5 shares. The next month, the price has fallen again, to $5 a share, and you buy 20 shares. In the fourth month, the price ticks back up to $7 per share. Your total investment so far is $400.

If you’re like most people, though, when you look at your statement and see that by the end of the third month the price has fallen to half, you would probably think you were losing money hand over fist. Especially after a fund continues to decline month after month, investors lose patience and start to bail. They’re looking for “better returns,” but they don’t understand what’s going on with the math.

At $5 a share, it feels as though you’re down 50 per cent (because the price started at $10 per share). However, you own 42.5 shares, which, when multiplied by $5 a share, equals $212.50 – and you’ve invested $300. In the fourth month, the price gets back up to $7 per share. Although it might feel as though you’re still down because the price started at $10 per share, you’re actually within a couple of dollars of your break-even point. You own 56.79 shares, which when multiplied by $7 equals $397.53, on an investment of $400.

Of course, if the fund or market continues to go down and never comes back up, you can’t be guaranteed a profit. But this would happen rarely, if ever. Dollar-cost averaging – by investing a fixed amount in regular intervals – is the best way to make money in a variable market over time.

The most difficult part is having the discipline to keep doing it. Investors should be willing to consider their ability to invest over an extended period of time. Remember, you need a longer time horizon when investing in the stock market.

Rule #4: Diversify

No investment is risk free; only a diversified portfolio can mitigate the risks of market cycles. We’ve all been warned against putting all our eggs in one basket; even Warren Buffett said, “It’s better to be approximately right than definitely wrong.” By “approximately right,” he was referring to diversification.

If one piece of your portfolio is doing substantially better than other parts, the natural inclination is to load up on the part doing the best and forsake those not doing well. But the result will be an under-diversified portfolio that will probably be much more volatile – and the risks may be on the downward side.

Also, proper diversification does not mean any old bunch of mutual funds or stocks, but a proper allocation among stocks, bonds, real estate, fixed assets, and other investments. It also means diversifying within those investment categories.

For example, your stocks should include a mix of mid cap, large-, and small-cap stocks as well as growth, blend, and value stocks. You should have bonds that are long, medium, and short term, as well as high grade, mid grade, and low grade.

A mutual fund may offer more diversification than you could afford by owning the same stocks individually. But owning a handful of mutual funds may not offer the diversification you seek unless you research the funds’ holdings carefully. That’s because many funds have substantial “overlap.” In other words, fund A from mutual fund family X may have many of the same stocks as fund B from fund family Y.

Rule #5: Be patient

Warren Buffet says, “The market has a very efficient way of transferring wealth from the impatient to the patient.”

But waiting is very hard to do. How long are you willing to hold an asset that is not performing well? One year? Two, three, or four? If you look at the history of asset classes over time, you will see that an asset can be “out of favor” for several years in a row.

You have to be prepared to wait. Don’t think you can time when bonds will perform and stocks will get hot. If someone really could do that, he would own the world by now. So remember: Time in the market is more important than timing the market.

Rule #6: Understand volatility

Very few people truly understand the risk and volatility inevitably baked into every investment portfolio. Without getting into its complexity, every variable investment has produced a range of returns over its lifetime, and this range, or deviation, can be plotted on a chart.

So, it’s important to understand what the investment category’s “average” annual return means in order to prepare yourself for its volatility. For example, does a 10 per cent average mean the investment was up 73 per cent and down 30 per cent and happened to average 10 per cent? Or was it up 15 per cent, and then down 5 per cent to average 10 per cent?

Many investors are fooled by averages – they chase the 70 per cent return after it has happened, when the likelihood of a repeat performance is slim (which we’ll discuss more in Rule #7). Yogi Berra is rumored to have said, “Averages don’t mean nuthin”. If they did, you could have one foot in the oven and the other in a bucket of ice and feel perfectly comfortable.”

Over time, returns from investments regress to a mean. “Regression to the mean” simply means that highs and lows will average out so that your return regresses to a certain number or range. Understand an investment’s range of returns so you know what to expect annually, and over time.

Markets move from fear to greed, and back to fear. So there are times when the market is “overvalued” and other times when it is “undervalued.” Warren Buffett said of the stock buying and selling decisions made at his company, Berkshire Hathaway, “We strive to be fearful when others are greedy, and greedy only when others are fearful.”

Rule #7: Don’t chase returns

If we know from Rule #6 that a 10 per cent average annual return does not really mean a 10 per cent return each year, why do we still fall for an ad touting a fund that produces 20 per cent annually or some other phenomenal return?

Human nature. And maybe we even convince ourselves that for the chance to experience a year or two of 70 per cent gains, we’re willing to stomach the years of 30 per cent losses that also fall within the fund’s range of returns.

So, before chasing that incredible return, find out how the investment did during the last bad market for that asset class. Find out its risk, and ask yourself whether you can stomach a bumpy ride over the long term.

Another Buffettism: “The dumbest reason in the world to buy a stock is because it is going up.” So before chasing a return, always consider how likely it is that the investment will continue to produce that return – and whether it’s really worth the cost of cashing out of another, perhaps only temporarily depressed, investment to do so.

Rule #8: Periodically rebalance your portfolio

You may decide that your investment mix should be, for example, 50 per cent growth stocks, 20 per cent value stocks, and 30 per cent bonds. But asset classes vary in performance over time, so after a year or so, the portfolio balance will start to shift as one asset “overperforms” and another one “under performs.”

Emotions would tell you to sell the under performers and buy the overachievers. If you want to remain adequately diversified, however, you would re balance by selling some of the over performers and buying some of the underachievers – probably just the opposite of what your emotions will tell you.

So, if you strive to put your portfolio back to its original allocations from time to time (annually, semi-annually, or possibly even quarterly), you will be taking gains from the best-performing assets (selling high) and buying those temporarily out of favor (buying low). But it takes discipline to keep your emotions in check.

Rule #9: Manage your taxes

Have you ever considered how taxes are your biggest expense in life – more than mortgage expense, education expense, or any other expense? So, you must take advantage of all tax breaks available – each and every single one of them.

Rule #10: Get advice

Never underestimate the value of good advice. Someone who manages investments full time certainly will find things you have overlooked or done wrong. A good financial adviser is like a personal trainer for your finances and can get you on track and keep you there until your goals are met.

And even more critical than getting the advice is being sure you consistently follow your game plan. The greatest problem for most people is procrastination and erratic investment behavior. So get started, get advice, and get going down the road to wealth – and steadfastly follow through.

Top 15 Hot New of Companies

Some news can really change the fortunes of companies.Below given are some of the hot news which will bring a change in the fortune.So go on with rapt attention.

Graphite India:The company has decided to expand its graphite electrodes capacity by 10,500 tonnes at its Durgapur plant which is expected to be completed within the next 18-24 months.

Cera Sanitaryware Limited (CSL):Cera is confident of maintaining 20% OPM in spite of the competition. The company hopes to close the present fiscal with over 150crs of sales.

Sejal Architectural Glass: The company has orders worth Rs 30 crore, to be completed within the next three months. During FY10, the company expects to clock revenues of Rs 350 crore and profit of nearly 50crs.

Plethico Pharma: Plethico is scouting for more acquisitions to expand its network further and plans to ramp up production of Natrol’s products, which are well-established in the US, and distribute them widely in other key markets.

BLB Ltd:To wind up the retail broking unit or dispose it off to any willing buyer. To wind up wholly owned subsidiary company”BLB Global Business Limited” or dispose it off to any willing buyer.

Global Vectra Helicorp:More than 30% of the pilots on the company’s rolls have walked out in the past 15 months to join a rival startup.

JPT Securities: Rumuor of nikhil gandhi acquiring major stakes in it.Nikhil gandhi is right hand of mukesh ambani and has pioneered MUMBAI SEZ , chandigarh sez , PIPAV port , PIPAV shipyard ..he is the main man who look after mukesh ambani group’s infrastructure foray.

Nelcast: The company is in the process of moving up the value chain and plan to increase the share of high-margin machined castings in the total production to 20-25 per cent in next two years from 10 per cent in FY07.

Gokul Refoils and Solvent Limited: The company expects revenues to rise by 45% in FY09 to around Rs 3,000 crore, compared to FY08. Likewise, it expects a 60% growth in FY09 net profit to nearly Rs 100 crore from Rs 61 crore in FY08. The incremental growth will come from increased production at its Gandhidham and Surat facilities.

Rei Agro: Rei has launched a chain of retail stores branded 6Ten. It has started by opening five stores in Chandigarh, Mohali and Panchkula. 6Ten is a food store offering grocery, consumer products, fruits and vegetables. Rei intends to expand this chain to 50 stores across Punjab and Haryana over the next one year.

VLS Finance: VLS Finance holds 25% stake in Sunair Hotels, which operates Hotel Metropolitan in Delhi. The company hopes to win the case vs counterparts of sunair hotels and that would up its stake to above 85% in hotel metropolitan.

Karuturi Global: Karuturi, the world’s largest producer of roses has acquired 40,000 hectares of land in Ethiopia to foray into the lucrative food processing business.

Pyramid Saimira: The company intends to list its production arm, Pyramid Saimira production International, in the coming quarter, which could raise up to Rs 1,800 crore. So some free shares in on the way to the shareholders of the company.

Jai Balaji Industry: Jai Balaji, at present is an integrated 1.2 million tpa steel manufacturer. It expects to add 2 million TPA in another 40 months. The company is going to be a 25000crs turnover company by 2014-15. It ended fy07-08 with a sales of around 1350crs.

Core Projects And Technologies: The company is an IT company with focus on verticals like education, logistics, BFSI, ERP and healthcare. The company is expected to set up 40 IGNOU centers by FY09 and another 100 by FY10. It also plans to set up another 100 IGNOU centers every year for next 5 years.