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Tuesday, July 24, 2012

Inflation and Growth: Hindu rate of growth?

Inflation is increase in price of goods and services and something to be avoided.. surprisingly inflation at 2-3% is something every nation's central banker aspires for as an ideal inflation target??
Coincidentally the "Hindu rate of Growth" once famous as the rate at which the Indian economy was growing was also 3%

A farmer takes a handfull of seeds worth maybe 1000/= Adds water and fertilizer of say 2000/= and generates goods worth 10,000 in 4-5 months time frame. Farming is not considered as a profitable venture.. when anything that returns 16% ROCE is actually a great thing? why is farming not profitable?

Why is increase in price of food ... food inflation negative while increase in asset prices (house/real estate/stocks) considered positive? Inflation and Growth definition have been force fed .. where "inflation is bad while "Growth" is good when the fact is without "Inflation" there is no growth?

Financial Assets are given higher weightage while core assets such as production of food crops and cotton are labelled as commodities and almost pushed out of the economic picture.. to the level where one is considered a developed country because the economy is basically "Service oriented" 

The Peak Energy crisis which basically means that "Energy is no longer Cheap" changes the priority 180Degrees.. 
Cheap energy prices encouraged "Use and Throw" Replacement mentality..
High energy prices will question if we really need to "Replace" something that is not broken?
Cutting edge was a requirement to stay ahead of competition .. but going forward is it going to be "Live and let live" everybody manages their share of the global consumer market?
Economic growth will tumble (actually negative) while what will remain is basic necessities such as food, clothing and shelter.. with food being the prime economic engine (as its perishable and required on a daily basis) while "Clothing and Shelter" due to their longer shelf life will be smaller part of the future economy..

India has been an energy deprived state and has imported most of its energy requirements.. The original idea was to have an economy that was self sustained which meant "curtail energy demand" (Oil import)
The India of today has allowed the consumer demand to be "open" which is equivalent to taking a child to a toy shop and asking him/her to "Feel free" to buy anything and everything you want.. what we will end up with is a toy shop in our home. Every household has a pvt vehicle (2 or 4 wheels) People go for a "Drive" to kill boredom.. Drive makes people feel productive (I am going somewhere!!) Cars are being marketed as "The First home where I relax"  - Amazingly Nuts!!

What we need is a controlled /directed use of resources to productive assets..Energy Independence is "Key" Renewable energy resources such as hydro electricity must be encouraged. "Telecommute" use public transportation (Rail, waterway, road,air) 

The real economic activity of agriculture production (which happens at the farm level) is a small part of the current global economy and hence the "Peak energy" will shrink the "Financial assets" economy running on Cheap oil while the "Real economy will continue to run and maybe expand at 3% level..

Service industry is a dying industry.. as demand will remain for the basic necessities .. future is bright in "Food industry", "Renewable Energy" and "Public transportation" 

Stocks in general are a loosing proposition..(due to peak energy making most of the economic activities un-economical)  one has to be stock specific .. I have locked in on "Jayant Agro, GAEL, NHPC and Tata Comm" find your gems.. and focus. 

Sunday, July 22, 2012

GAEL: Alert!! Gujarat Ambuja Exports June 2012 Results

Gujarat Ambuja Exports results are out.
ParticularsQuarter Ended
Jun. 2012Jun. 2011% Var.
OPM %8.708.305
So we could expect Net Profit for full year ended 2013 to be 100Cr .. expect the stock to jump on monday July 23,2012

Thursday, July 12, 2012

Jayant Agro: Castor oil Shoes by Nike!!

In the name of environmental concern Nike!! is also making shoes with Castor oil derivatives.. 
unfortunately nobody publishes the real reason.. new EU Regulations (REACH) which would force companies to label their products as carcinogenic or can cause birth defects.. 

Good news for investors in Jayant agro Organics the largest castor seed processing company in India. 
Here is the news for all..


Nike Introduces Sneakers Made Of Beans & Recycled Bottles

The iconic sports brand successfully creates a football shoe that built with sustainability and speed in mind.
Nike has launched the Nike GS in London, a football cleat the company is heralding as the ‘lightest, fastest, most environmentally-friendly production boot the company has ever made.’ The lightweight shoe weighs in at a mere 160 grams and features recycled and renewable materials throughout its body.

The laces, lining and tongue of the shoe are made from a minimum of 70% reused plastics, including recycled water bottles and polyester, and the traction-plate on the shoes is made from 50% renewable Pebax® Renu, a plant-based material composed of 97% castor beans. The result is a shoe that is lighter and stronger for the athlete, and more sustainable for the environment- using the castor beans makes the shoe 15% lighter than traditional cleats while the beans also require much less water to grow than other natural materials. The Nike GS are also chemical free, and the Kangaroo leather in the shoes are made with 35% less carbon emissions than traditional material. Andy Caine, global design director for Nike Football, says of the Nike GS:

The Nike GS is the lightest and fastest football boot we’ve ever made and really defines a new era in how we create, design and produce elite football boots. When you can deliver a boot that combines high end performance and a low environmental footprint that’s a winning proposition for players and planet.

Only 2012 Nike GS shoes were made; they will be available for purchase through Nike.com and selected online retailers for 300 USD beginning August 15th.Nike GS

Link to original article: (Link)

Sunday, July 08, 2012

Song: Johnny cash: One piece at a time and it would'nt cost me a dime

I was working with GM in Detroit .. though nowhere close to an assembly plant for Cadillac.. 
GM cars (higher end) are really good cars .. unlike the image in the mind of Indians in US...
I like this song.. (long before I went to US.. never though I would be working for GM.. made a bunch buying GM Bonds when GM was reorganized in 2009 (Link) )

Well, I left Kentucky back in '49
An' went to Detroit workin' on a 'sembly line
The first year they had me puttin' wheels on cadillacs

Every day I'd watch them beauties roll by
And sometimes I'd hang my head and cry
'Cause I always wanted me one that was long and black.

One day I devised myself a plan
That should be the envy of most any man
I'd sneak it out of there in a lunchbox in my hand
Now gettin' caught meant gettin' fired
But I figured I'd have it all by the time I retired
I'd have me a car worth at least a hundred grand.

I'd get it one piece at a time
And it wouldn't cost me a dime
You'll know it's me when I come through your town
I'm gonna ride around in style
I'm gonna drive everybody wild
'Cause I'll have the only one there is a round.

So the very next day when I punched in
With my big lunchbox and with help from my friends
I left that day with a lunch box full of gears
Now, I never considered myself a thief
GM wouldn't miss just one little piece
Especially if I strung it out over several years.

The first day I got me a fuel pump
And the next day I got me an engine and a trunk
Then I got me a transmission and all of the chrome
The little things I could get in my big lunchbox
Like nuts, an' bolts, and all four shocks
But the big stuff we snuck out in my buddy's mobile home.

Now, up to now my plan went all right
'Til we tried to put it all together one night
And that's when we noticed that something was definitely wrong.

The transmission was a '53
And the motor turned out to be a '73
And when we tried to put in the bolts all the holes were gone.

So we drilled it out so that it would fit
And with a little bit of help with an A-daptor kit
We had that engine runnin' just like a song
Now the headlight' was another sight
We had two on the left and one on the right
But when we pulled out the switch all three of 'em come on.

The back end looked kinda funny too
But we put it together and when we got thru
Well, that's when we noticed that we only had one tail-fin
About that time my wife walked out
And I could see in her eyes that she had her doubts
But she opened the door and said "Honey, take me for a spin."

So we drove up town just to get the tags
And I headed her right on down main drag
I could hear everybody laughin' for blocks around
But up there at the court house they didn't laugh
'Cause to type it up it took the whole staff
And when they got through the title weighed sixty pounds.

I got it one piece at a time
And it didn't cost me a dime
You'll know it's me when I come through your town
I'm gonna ride around in style
I'm gonna drive everybody wild
'Cause I'll have the only one there is around.

[Spoken] Ugh! Yow, RED RYDER 
This is the COTTON MOUTH

Huh, This is the COTTON MOUTH
And negatory on the cost of this mow-chine there RED RYDER
You might say I went right up to the factory
And picked it up, it's cheaper that way
Ugh!, what model is it? 
Well, it's a fortynine, fifty, fifty one, fifty two, fifty three, fifty four, fifty five, fifty six, fifty seven, fifty eight, fifty nine automobile! It's a sixty, sixty one, sixty two, sixty three, sixty four, sixty five, sixty six, sixty seven, sixty eight, sixty nine, seventy automobile

Wednesday, July 04, 2012

Jayant Agro: June DGFT Export numbers

Director General of Foreign Trade has published Export data for Month of June 2012 
as per DGFT data Jayant has Export FOB (Free On Board)for June 2012 at 157.9Cr 
You can get the info at DGFT Website (Link)

License no info for Jayant is available here (Link)
IEC Code for Jayant is: IEC: 0393002047

Here is the processed data (June 2012) for every one..

April 2012 FOB Data was: 242.07Cr (Link)
May 2012 FOB Data is: 187.59Cr(Link)
June 2012 FOB Data is 157.9Cr
So Q1 2013 ie quarter ending June 2012  = 242.07 + 187.59+157.9 = 587.56Cr

Another observation is that higher value Derivatives exports are forming a larger part of Jayant's exports.. Derivatives are higher value exports where the FOB/CIF is around 50 while castor oil & 1st Generation derivatives have a FOB/CIF ratio of 20-30 which is good news for investors in Jayant Agro.

PN: Please Note this is the expected sales numbers to be reported by Jayant Agro based on publicly available information. There is also a possibility that there is misinterpretation of data... Please do your own deep dive before investing