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Saturday, March 31, 2012

Equity Research Coverage on Karnataka Bank

Equity Research Coverage on Karnataka Bank


(NSE: KTKBANK; BSE: 532652; ISIN: INE614B01018; Bloomberg Ticker: KBL:IN)

Prepared on Mar 30th 2012 Quote: Rs. 96

For Full Report Kindly Write To: Century.Partners03@gmail.com

Karnataka Bank Ltd.  (BSE:  532652 )
Sector: Banks - Private Sector

Prepared on: Mar 30th 2012, Quote Rs. 96; 

Current Price: Rs. 96                                              52 Week Range: Rs. 64 - Rs. 133
Shares: 18.83 Crore
Market Capitalization: Rs. 1801Crore; ($360mm)
P/E: 7.1 (Trailing), P/B: 0.74                                   Book Value/Share: Rs. 129;
EPS: Rs. 10.87,                                                      Total Debt/Owners Fund: 11.25
Total Income 5Yr. Growth Rate: 16%,                        EBITD 5Yr. Avg.: 15% 
ROE: 8.5%
Capital Adequacy (%) Basel II Tier 1: 10.48 Tier 2: 1.98                             
Net Interest Margins (NIM): 2.12%
CASA: Rs. 7140 ($1.4B); Total Deposits: Rs. 29785 Cr ($5.9B)
Net NPAs: Rs. 439 Cr Net NPA%: 2.23
Div & Yield: Rs. 3.0 (3.14%);                                   Risk: Low 
Current Ratio: 0.03,                                                Quick Ratio: 23.77
Holdings: Non Promoters Corporate Holdings: 18.9%;  Institutional: 25.26%

Owners Earnings (Free Cash Flow) positive and growing for last 4 years 
Book Value YOY Growing at steady pace

Headquarters: Mangalore, Karnataka, India

Conversions: $1 = Rs. 50; Rs. 1 Crore = $200,000; 1Crore = 10 million, 1 Lakh = 100,000;

Full Report consists of following key Items:


For Full Report Kindly Write To: Century.Partners03@gmail.com

Wednesday, March 28, 2012

India to become world's largest economy by 2050: Report by Knight Frank & Citi Private Bank

PTI | Mar 28, 2012, 06.47PM IST
NEW DELHI: Surpassing China, India will become the world's largest economy by 2050, says a report. 

"China will overtake the US to become the world's largest economy by 2020, which in turn will be overtaken by India in 2050," according to Wealth Report 2012 by Knight Frank & Citi Private Bank

As per the report, Indian economy will reach $85.97 trillion size in terms of purchasing power parity by 2050, while the Chinese GDP would be $80.02 trillion during the same period. 

The US -- currently the world's largest economy -- is expected to have a GDP of $39.07 trillion by 2050. 

Other nations in the top ten list of world's largest economies would be Indonesia (4th), Brazil (5th), Nigeria (6th), Russia (7th), Mexico (8th), Japan (9th) and Egypt (10th). 

In terms of growth from 2010-2050, India would be the second fastest with its economy growing at the rate of eight per cent in the period. 

With a pace of 8.5%, Nigeria would be the fastest growing economy during the same period, the report said. 

In 2010, India was world's fourth largest economy with a value of $3.92 trillion compared to China's $9.98 trillion and America's $14.12 trillion. 

The report named Surat and Nagpur among fast-growing cities to watch in 2050. 

"We believe the cities to watch in 2050 are the 400 emerging market middleweights - fast growing cities with populations between 200,000 and 10 million. 

"This dynamic group includes many cities that are not household names today: Linyi, Kelamayi and Guiyang in China; Surat and Nagpur in India; Concepcion and Belem in Latin America," it said. 

Monday, March 12, 2012

35 Years of Buffett's Greatest Investing Wisdom

Source: Motley Fool

35 Years of Buffett's Greatest Investing Wisdom

Matt Koppenheffer
March 1, 2012

Last weekend, Berkshire Hathaway (NYSE: BRK-A  ) (NYSE: BRK-B  ) released Warren Buffett's annual letter to the company's shareholders. As always, Buffett delivered with a combination ofever-quotable folksy wisdom and an easy-to-digest view of the year that Berkshire Hathaway had.

The ritual of the annual letter is far from new. In fact, this most recent letter was the 35th edition that Berkshire has posted online for investors to peruse. Most of those letters' contents are dated in terms of when Buffett put pen to paper, but to show just how enduring his wisdom is, I thought I'd take a look back at some of Buffett's best quips over the past three-and-a-half decades.

1977: "Most companies define 'record' earnings as a new high in earnings per share. Since businesses customarily add from year to year to their equity base, we find nothing particularly noteworthy in a management performance combining, say, a 10% increase in equity capital and a 5% increase in earnings per share. After all, even a totally dormant savings account will produce steadily rising interest earnings each year because of compounding. ... we believe a more appropriate measure of managerial economic performance to be return on equity capital."

1978: "We make no attempt to predict how security markets will behave; successfully forecasting short term stock price movements is something we think neither we nor anyone else can do."

1979: "Both our operating and investment experience cause us to conclude that "turnarounds" seldom turn, and that the same energies and talent are much better employed in a good business purchased at a fair price than in a poor business purchased at a bargain price."

1980: "[O]nly gains in purchasing power represent real earnings on investment. If you (a) forgo ten hamburgers to purchase an investment; (b) receive dividends which, after tax, buy two hamburgers; and (c) receive, upon sale of your holdings, after-tax proceeds that will buy eight hamburgers, then (d) you have had no real income from your investment, no matter how much it appreciated in dollars."

1981: "While market values track business values quite well over long periods, in any given year the relationship can gyrate capriciously."

1982: "The market, like the Lord, helps those who help themselves. But, unlike the Lord, the market does not forgive those who know not what they do. For the investor, a too-high purchase price for the stock of an excellent company can undo the effects of a subsequent decade of favorable business developments."

1983: "We will be candid in our reporting to you, emphasizing the pluses and minuses important in appraising business value. Our guideline is to tell you the business facts that we would want to know if our positions were reversed. ... We also believe candor benefits us as managers: the CEO who misleads others in public may eventually mislead himself in private."

1984: "[M]ajor repurchases at prices well below per-share intrinsic business value immediately increase, in a highly significant way, that value. ... Corporate acquisition programs almost never do as well and, in a discouragingly large number of cases, fail to get anything close to $1 of value for each $1 expended."

1985: "[A] good managerial record ... is far more a function of what business boat you get into than it is of how effectively you row ... Should you find yourself in a chronically leaking boat, energy devoted to changing vessels is likely to be more productive than energy devoted to patching leaks."

1986: "We intend to continue our practice of working only with people whom we like and admire. ... On the other hand, working with people who cause your stomach to churn seems much like marrying for money -- probably a bad idea under any circumstances, but absolute madness if you are already rich."

1987: "The value of market esoterica to the consumer of investment advice is a different story. In my opinion, investment success will not be produced by arcane formulae, computer programs or signals flashed by the price behavior of stocks and markets. Rather an investor will succeed by coupling good business judgment with an ability to insulate his thoughts and behavior from the super-contagious emotions that swirl about the marketplace."

1988: "To evaluate arbitrage situations you must answer four questions: (1) How likely is it that the promised event will indeed occur? (2) How long will your money be tied up? (3) What chance is there that something still better will transpire -- a competing takeover bid, for example? and (4) What will happen if the event does not take place because of antitrust action, financing glitches, etc.?"

1989: "Because of the way the tax law works, the Rip Van Winkle style of investing that we favor -- if successful -- has an important mathematical edge over a more frenzied approach."

1990: "Because leverage of 20:1 magnifies the effects of managerial strengths and weaknesses, we have no interest in purchasing shares of a poorly managed bank at a 'cheap' price. Instead, our only interest is in buying into well-managed banks at fair prices." (He wrote this in reference to Berkshire's purchase of Wells Fargo (NYSE: WFC  ) , a bank he continues to laud today).

1991: " An economic franchise arises from a product or service that: (1) is needed or desired; (2) is thought by its customers to have no close substitute and; (3) is not subject to price regulation."

1992: "[W]e think the very term 'value investing' is redundant. What is 'investing' if it is not the act of seeking value at least sufficient to justify the amount paid? Consciously paying more for a stock than its calculated value -- in the hope that it can soon be sold for a still-higher price -- should be labeled speculation (which is neither illegal, immoral nor -- in our view -- financially fattening)."

1993: "The worst of these [arguments for selling a stock] is perhaps, 'You can't go broke taking a profit.' Can you imagine a CEO using this line to urge his board to sell a star subsidiary?"

1994: "We will continue to ignore political and economic forecasts, which are an expensive distraction for many investors and businessmen. ... Indeed, we have usually made our best purchases when apprehensions about some macro event were at a peak. Fear is the foe of the faddist, but the friend of the fundamentalist."

1995: "Any company's level of profitability is determined by three items: (1) what its assets earn; (2) what its liabilities cost; and (3) its utilization of 'leverage' -- that is, the degree to which its assets are funded by liabilities rather than by equity."

1996: "In the end, however, no sensible observer -- not even these companies' most vigorous competitors, assuming they are assessing the matter honestly -- questions that [Coca-Cola(NYSE: KO  ) ] and Gillette will dominate their fields worldwide for an investment lifetime." (A decade and a half later, and he's yet to be proven wrong, though Gillette is now dominating as a Procter & Gamble (NYSE: PG  ) subsidiary, making Berkshire P&G's fourth-biggest shareholder and Coke's largest.)

1997: "Only those who will be sellers of equities in the near future should be happy at seeing stocks rise. Prospective purchasers should much prefer sinking prices."

1998: "[W]e give each [of our company managers] a simple mission: Just run your business as if: 1) you own 100% of it; 2) it is the only asset in the world that you and your family have or will ever have; and 3) you can't sell or merge it for at least a century. As a corollary, we tell them they should not let any of their decisions be affected even slightly by accounting considerations. We want our managers to think about what counts, not how it will be counted."

1999: "Our lack of tech insights, we should add, does not distress us. After all, there are a great many business areas in which Charlie and I have no special capital-allocation expertise. For instance, we bring nothing to the table when it comes to evaluating patents, manufacturing processes or geological prospects. So we simply don't get into judgments in those fields."

2000: "But a pin lies in wait for every bubble. And when the two eventually meet, a new wave of investors learns some very old lessons: First, many in Wall Street -- a community in which quality control is not prized -- will sell investors anything they will buy. Second, speculation is most dangerous when it looks easiest."

2001: "Some people disagree with our focus on relative figures, arguing that 'you can't eat relative performance.' But if you expect as Charlie Munger, Berkshire's Vice Chairman, and I do -- that owning the S&P 500 will produce reasonably satisfactory results over time, it follows that, for long-term investors, gaining small advantages annually over that index must prove rewarding."

2002: "Many people argue that derivatives reduce systemic problems, in that participants who can't bear certain risks are able to transfer them to stronger hands. These people believe that derivatives act to stabilize the economy, facilitate trade, and eliminate bumps for individual participants. And, on a micro level, what they say is often true. ...
"Charlie and I believe, however, that the macro picture is dangerous and getting more so. Large amounts of risk, particularly credit risk, have become concentrated in the hands of relatively few derivatives dealers, who in addition trade extensively with one other. The troubles of one could quickly infect the others. On top of that, these dealers are owed huge amounts by non-dealer counterparties. Some of these counterparties, as I've mentioned, are linked in ways that could cause them to contemporaneously run into a problem because of a single event (such as the implosion of the telecom industry or the precipitous decline in the value of merchant power projects). Linkage, when it suddenly surfaces, can trigger serious systemic problems."

2003: "True independence -- meaning the willingness to challenge a forceful CEO when something is wrong or foolish -- is an enormously valuable trait in a director. It is also rare. The place to look for it is among high-grade people whose interests are in line with those of rank-and-file shareholders -- and are in line in a very big way."

2004: "Over the 35 years [ending in 2004], American business has delivered terrific results. It should therefore have been easy for investors to earn juicy returns... Instead many investors have had experiences ranging from mediocre to disastrous.
"There have been three primary causes: first, high costs, usually because investors traded excessively or spent far too much on investment management; second, portfolio decisions based on tips and fads rather than on thoughtful, quantified evaluation of businesses; and third, a start-and-stop approach to the market marked by untimely entries (after an advance has been long under way) and exits (after periods of stagnation or decline). Investors should remember that excitement and expenses are their enemies. And if they insist on trying to time their participation in equities, they should try to be fearful when others are greedy and greedy only when others are fearful."

2005: "[For CEOs] huge severance payments, lavish perks and outsized payments for ho-hum performance often occur because comp committees have become slaves to comparative data. The drill is simple: Three or so directors -- not chosen by chance -- are bombarded for a few hours before a board meeting with pay statistics that perpetually ratchet upwards. Additionally, the committee is told about new perks that other managers are receiving. In this manner, outlandish "goodies" are showered upon CEOs simply because of a corporate version of the argument we all used when children: 'But, Mom, all the other kids have one.' "

2006: "Corporate bigwigs often complain about government spending, criticizing bureaucrats who they say spend taxpayers' money differently from how they would if it were their own. But sometimes the financial behavior of executives will also vary based on whose wallet is getting depleted. Here's an illustrative tale from my days at Salomon. In the 1980s the company had a barber, Jimmy by name, who came in weekly to give free haircuts to the top brass. A manicurist was also on tap. Then, because of a cost-cutting drive, patrons were told to pay their own way. One top executive (not the CEO) who had previously visited Jimmy weekly went immediately to a once-every-three-weeks schedule."
2007: "A truly great business must have an enduring 'moat' that protects excellent returns on invested capital. The dynamics of capitalism guarantee that competitors will repeatedly assault any business 'castle' that is earning high returns. Therefore a formidable barrier such as a company's being the lowcost producer (GEICO, [Costco]) or possessing a powerful worldwide brand (Coca-Cola, Gillette, [American Express]) is essential for sustained success."

2008: (Recall that the financial crisis was raging) "Amid this bad news, however, never forget that our country has faced far worse travails in the past. In the 20th Century alone, we dealt with two great wars (one of which we initially appeared to be losing); a dozen or so panics and recessions; virulent inflation that led to a 21 1⁄2% prime rate in 1980; and the Great Depression of the 1930s, when unemployment ranged between 15% and 25% for many years. America has had no shortage of challenges.
"Without fail, however, we've overcome them. In the face of those obstacles -- and many others -- the real standard of living for Americans improved nearly seven-fold during the 1900s, while the Dow Jones Industrials rose from 66 to 11,497."

2009: "We've put a lot of money to work during the chaos of the last two years. It's been an ideal period for investors: A climate of fear is their best friend. Those who invest only when commentators are upbeat end up paying a heavy price for meaningless reassurance. In the end, what counts in investing is what you pay for a business -- through the purchase of a small piece of it in the stock market -- and what that business earns in the succeeding decade or two."

2010: "Money will always flow toward opportunity, and there is an abundance of that in America. Commentators today often talk of 'great uncertainty.' But think back, for example, to December 6, 1941, October 18, 1987 and September 10, 2001. No matter how serene today may be, tomorrow is always uncertain."

2011: "The logic is simple: If you are going to be a net buyer of stocks in the future, either directly with your own money or indirectly (through your ownership of a company that is repurchasing shares), you are hurt when stocks rise. You benefit when stocks swoon. Emotions, however, too often complicate the matter: Most people, including those who will be net buyers in the future, take comfort in seeing stock prices advance."

And there you have it, 35 years of Buffett's wisdom.

Source: Motley Fool

Tuesday, March 6, 2012

Creating Portfolio Like Warren Buffett - By Jeeva Ramaswamy

Creating a Portfolio like Warren Buffett: A High Return Investment Strategy
Creating a Portfolio like Warren Buffett: A High Return Investment Strategy
by Jeeva Ramaswamy
Edition: Hardcover

5.0 out of 5 stars Outstanding guide for basic investment analysisMarch 6, 2012
This book reverse engineers and provide the secret sauce behind Warren Buffett's investment success in a very practical manner which is easy to understand and follow. Overall, this book comes highly recommended by me.

Though there are many books in the market on Buffett which provides generic tenets of his investment style, this book however removes ambiguities and distills the analysis process which goes in making Buffett the most successful investors of all time. This book with the help of several case studies clearly outlines the security selection process by going through a checklist.

Readers can go through the checklist items and investment management principles and can utilize it to gain good returns for their portfolio. Though it is not an easy task as it requires strict discipline to stick to the fundamentals but even if followed to some extent, a passive investor can avoid very common mistakes and increase his returns.

The book breaks down the complexities of valuation process by clearly laying out the most fundamental aspects which is very useful for passive investors.

Despite the fact Author has done his best in summarizing most of the principles in as clear terms, it's application by a common person also requires atleast some kind of personal wiring to the global financial markets.

Buffett's genius is in eliminating risk by staying in his circle of competence, going only for the sure thing, sticking to the fundamentals, having long term investment goals, combining value and growth models efficiently and using compounding power of owners earnings to deliver multi-fold investment returns. I have read almost all of the major books on Buffett and followed him very closely for a decade in USA but this book excel in the fact that it jots down most of the fundamental principles and actually makes an actionable items of list of things to do which is as close as you can get to Buffett's stock selection method.

Warren Buffett who is a superior grade learning machine has devoted 70 years of his lifetime into the investment field and readers studying about his investment analysis process as discussed in this book, will really help in amassing great fortunes.

End of Review

Jeeva Ramaswamy is a good friend of mine from New Jersey, who has come up with his investment book!

Creating Portfolio Like Warren Buffett - By Jeeva Ramaswamy, John Wiley Publication

Creating a Portfolio like Warren Buffett: A High Return Investment Strategy
Published by John Wiley, highlights actual trades author Jeeva Ramaswamy has successfully executed using principles established by investment guru Warren Buffet. Clearly explaining how Buffett's principles can be used to make specific investments the book, unlike other investment guides, also clearly explains how to apply Buffett's exit strategies as they pertain to holding or selling positions. Giving readers a complete overview of Buffett's methodologies and how to apply them, the book is a step-by-step stock research checklist and comprehensive guide to investing and managing a successful stock portfolio. It includes detailed instructions to:
  • Determine where to search for stock prospects
  • Thoroughly research stocks using a stock research checklist
  • Confidently make buy and sell decisions
  • Expertly manage your portfolio
Packed with specific stock examples, real-life calculations, and expert tips, Creating a Portfolio like Warren Buffett is your guide to harnessing the market savvy of an investing legend.

From the Inside Flap
Through timely, intelligent investing, Warren Buffett has accrued a net worth of approximately $45 billion, making him the perfect role model for budding investors. However, his incredible success and the epic scope of his acquisitions can make him an intimidating mentor. But just because most investors can't afford to buy companies like GEICO and See's Candies outright doesn't mean that you can't apply—and benefit from—the same rules and strategies that Buffett has successfully employed for decades.
In Creating a Portfolio Like Warren Buffett: A High Return Investment Strategy, investment expert and Buffett disciple Jeeva Ramaswamy breaks down the rules of stock trading that made Buffett a multibillionaire so that you, too, can apply his winning ways to building your own wealth. Highlighting actual trades that Buffett successfully executed, as well as Ramaswamy's own experiences investing using principles established by Buffett, the book clearly explains everything you need to know to make intelligent investments, including when and how to exit a trade.
Packed with eighteen Stock Research Checklists that help you assess stocks from all angles—from dividends to management and from inventory to debt—this book has everything you need to make smart, informed decisions you can have confidence in. While you might think that you understand the cardinal rule of investing, "buy low and sell high," most investors find themselves forced to do the exact opposite. The key to success is gathering as much information as possible about the companies you are interested in, and having the patience to only buy when their value is down.
Ramaswamy has studied, distilled, and practiced the teachings of Warren Buffett for years with excellent results, and with this book in hand, you have everything you need to capitalize on the market savvy of one of the greatest investors of all time.
From the Back Cover

"Jeeva Ramaswamy distills Warren Buffett's ideas into various useful and highly practical checklists that should be of immense help to all investors, big and small."—Prem C. Jain, author of Buffett Beyond Value

"Creating a Portfolio like Warren Buffett is a thoughtful guide to building permanent wealth in the stock market. It is a valuable addition to any dedicated investor's library."—Janet Lowe, author and speaker

"This book offers a thoughtful overview of the approach and techniques that helped Warren Buffett become the greatest investor in the world. A very worthwhile complement to any serious value investor's library."—Sham Gad, author of The Business of Value Investing

You can purchase at Amazon.com, click the link below