My Finance Times

Limiting losses, via the stop loss

2012-01-13T20:33:00.000-08:00

Trading in stock markets can be as tricky as a monkey. One may use all his skill and will but may still avoid making profits if stop loss is ignored. The first step while creating a position should be to determine these two crucial levels. Failing this the investor might lose his capital over a period of time as it becomes difficult to book profit orlosses without a stop loss level.

Various strategies may be used for setting the stop loss. The trader may fix a stop loss which remains same irrespective of the stock price. Instead a strategy of trailing stop loss can also be employed whereby the trader revises his stop loss as and when the stock moves in profit giving range.

Not only setting a stop loss and target price is important but setting them at proper levels is even more crucial. The level at which the stop loss is set depends upon the volatility of the security. For securities which are volatile one may give the position a more space to move as against a stable security. One may also use a strategy whereby stop loss is fixed in such a way that the loss suffered at stop loss price is a certain percentage of the returns expected at the target price. This percentage may vary according to traders of different types i.e. high for a risk taker and less for a risk averse person. But as a thumb rule this percentage can be 25%. Such a strategy will ensure that the trader earns sufficient returns even if he predicts the price movements with just 50% accuracy.

Stop loss is a simple tool but can be highly effective to keep emotions in check while trading. However setting a stop loss is an art and it requires time to master what strategy should be applied when.

Fiscal and Monetary Policy-The Road ahead for India

2012-01-05T07:56:00.000-08:00

Amid fears of a global economic meltdown, the country’s fiscal and monetary policy shall play a key role in defining the roadmap for the country’s development. So far, the Reserve Bank of India has followed a tough monetary stance, increasing key policy rates continuously with an objective of controlling the spiraling inflation. This has had a negative impact on the growth which has resulted in many economists considering the possibility of a GDP growth below 7% for the year. Lower tax collections (due to slowdown of economic activity), high levels of expenditure on subsidy and lower proceeds from disinvestment may cause fiscal deficit to exceed the ambitious 4.7% (of GDP) target this year.

As inflation has begun to cool down (albeit due to base effect) and corporate earnings data show revenues hit by higher financing costs due to higher interest rates, it is expected that the RBI will lower key policy rates to stimulate demand in the economy and address supply side inflation oriented constraints. This is expected to end the continuous policy hike seen during the last 19 months, and bring back investor confidence, enhance credit delivery, stimulate economic activity and thus strengthen the consumption story India possesses. As Indian companies face problems in raising external commercial borrowings due to global economic slowdown and euro sovereign debt crisis, it is expected that this move will come as a breather for them and would enhance their earnings.

With regard to fiscal policy, implementation of Direct Tax Code along with higher corporate earnings is expected to enhance government tax revenues. However, it is expected that government expenditure will stay high, partly due to the need of investment in infrastructure following the 12th five year plan and partly due to the assembly elections to be held in 2012. Thus fiscal deficit is expected to be in a 5-7% range over the next few years.

Narottam Garg|Guest editor

Food Bill : Are we losing the larger picture?

2012-01-04T08:05:00.000-08:00

This is the world’s largest experiment done to provide food security to 63% of Indian population. Implementation of scheme is expected to cost 3.5 lakh crore rupees and subsidy bill is expected to cost 95000crore rupees. No doubt, both poor urban citizens (50%) and rural citizens (75%) will be benefitted from this scheme if successfully implemented.

People below poverty line (BPL) will get 7 kg food per person (instead of family) where food contains rice, wheat and coarse grains at a rate of 3, 2 and 1rupees per kg respectively. General category get atleast 3kg of grains at rate not exceeding 50% of minimum support price. The supply of food grains shall be linked to targeted PDS reforms, including introduction of schemes such as cash transfer or food coupons and leveraging ‘Aadhar' for biometric identification of the beneficiaries “for proper targeting.”

While this may be a good thing to weed out bogus ration cards or duplication of beneficiaries, it can also deprive deserving beneficiaries in case of any failure of system or technology. Its operation in villages that have no electricity is to be seen. In the present fluid situation, when streamlining of the PDS is not visible, there is a scarcity of storage facility, the number of beneficiaries is not settled, identification of beneficiaries is not done, food grain production levels have not enhanced significantly and irrigation systems are lagging, the government seems to be rushing through the Bill.

Our Indian government should not be reliable to the statistical figures of Food And Agriculture of U.N as it gives the misleading figure of no. of poor people in one’s country. In May 2008, while talking about the ongoing world food crisesPresident Abdoulaye wade of Senegal expressed the opinion that FAO was "a waste of money" and "we must scrap it". Mr Wade said that FAO was itself largely to blame for the price rises. There is no guarantee that poor people used the food for themselves as they will further sell food at escalated price to market people and used that money either to their children’s education or to buy drinks.Consumption level of Indian people is on decline rate. As people have less physical work than before. Quality of food increases drastically which is more nutrient oriented now.

There is a saying in Tamil "Muzhu Pushani kayai.Sothil Maraikathey" meaning do not try to hide a pumpkin amidst the food in the plate, may be the current food security Bill is attempting this trick.The bill should provide a secured food to the poor irrespective of the failure or success of the public distribution system.Creation of employment opportunities and vocational education is what we need, not nobleman’s food security bill.

Shobhit Singhal | Guest Editor

Shobhit Singhal

2011: Highs and Lows

2012-01-01T02:23:00.000-08:00

With the year coming to an end everybody around hopes to make a resolution to brighten their new year. As we do it, the economy too hopes to make a few resolutions to see the coming year in a much better state than what it has shown us in 2011.Lets see where the economy went wrong in the last year. The RBI continued to increase its key policy rate during the year from 6.25% to 8.50% in order to fix inflation but it eventually led to bad numbers for industrial and economic growth.

The year saw BSE sensex making new lows, gold at historic highs and INR falling to record lows. IIP (index for industrial production) numbers decreased throughout the year, it showed us a negative 5.1% in October 2011 for the first time after 2009 .This is because of the expensive capital available due to high interest rates leading to declining corporate investment and also falling consumer demand Downgrading of debt ratings and the poor outlook of some European countries in May deepened investors concern. Later, an unprecedented downgrade of the US credit rating by S&P on 5th August led to turmoil in global markets, triggering fears of another recession in the world's biggest economy. INR also fell to a very low 54.17 per USD reaching the 54 level for the first time in history on sustained foreign capital outflows and dollar gains against the euro and other rivals overseas. It has shown the worst performance among the Asian currency. This has its consequential effects on international commodity prices adding more to the ever inflationary pressure.

Sensex witnessed 23% fall till 29th Dec 2011 as risk aversion deepened globally and also due to the lack of appropriate policy initiatives to work for the betterment of the slowing domestic growth. Continuing with the trend, gold and silver touched the heights in 2011 (from USD 1400 levels in 2010 to USD 1900 levels in September 2011) because of strong demand even in times of inflation. Nervous investors considered in gold as a safe investment instead of other risky options like equities.

Internationally gold prices have seen correction from its all time highs. However, falling INR has promoted the gold prices in India. Though the economy had a tough time in 2011 we believe to see it growing with the action of appropriate policies and steps taken by the economists of our nation and wish to have this year show us a better state for everybody!

Yamini Agarwal | Guest Editor

Lokpal and its implications for India’s growth

2011-12-31T02:42:00.000-08:00

How a company is monitored

In the era where a new scam is unveiled every other month, the need for an ombudsman is critical. The reasons why it is necessary for India are: one, it will adopt the role of the auditors to the government and two; it will help imbibe the concept of Corporate Governance in the Indian Polity. For long, investors have stayed away from Indian markets due to the bureaucracy and corruption embedded at each level of the system. Good governance will bring stability and transparency; attracting foreign investors to our market. Lokpal will act as the auditor, providing relief from the pervasive corruption and make the government more accountable to the public. Little is divided between the Satyam Scam and the Common Wealth Games Scam as both have led to an enormous loss of the public’s hard earned money. Thus, the demand for public accountability of the bureaucrats and the government that manage public resources has become more evident. Taking the case of a Business scenario; we have the company, its shareholders, directors, internal auditors, external auditors and above all the Securities Exchange Board of India.

When compared with the political scenario; we have India as the company, Indian citizens as its shareholders and the Government as the directors. Here, the role played by SEBI and the auditors is not in play. This is where the Lokpal comes into picture. The Lokpal is required to fill in this gap. It has to fulfil the duties performed by SEBI and the auditors, but in the political scenario. It has to play the role of an auditor to the Government.

Likewise, how a country can be monitored

According to this analogy, Lokpal assumes the responsibilities of the government’s auditor. It is Lokpal’s duty to ensure that the country is run properly. The government assumes the role of the Directors. Their duty is to carry out the demand of the shareholders, i.e. the citizens of India, without thinking of personal gains. Today, the role played by SEBI and the auditors is vacant. Lokpal is required to realize this role. In conclusion, it can be said that India’s growth has been hampered from many a years to the malice called corruption. Lokpal may not be the cure of all ill, but it is indeed the best start that the movement against corruption can get and is highly recommended.

Arfa Shaikh | Guest Editor

Suzlon makes a turnaround in Quarterly profits

2011-12-28T08:15:00.000-08:00

Suzlon started its journey with mere 20 supporters in 1995. Being the Market leader in India, Suzlon Market Share worldwide is 8% thereby making it the 5th largest wind turbine manufacturing groups in the world.
Mr. Tulsi R. Tanti, founder- Suzlon Group, said: "We are pleased to report a strong first quarter on all operational parameters with an EBIT margin of 8.1 per cent.”
Mr. Robin Banerjee, Chief Financial Officer, said: "We have reported a profitable first quarter, with a major turnaround from a loss of Rs. 912 crore in Q1 FY11 to a profit of Rs.60 crore in Q1 FY12. We have improved our gross profit levels to 35 per cent despite a very competitive market environment and rising commodity prices.”
This has majorly achieved due to their consistently improving operational efficiency, managing debt profile, and securing orders.
Suzlon energy jumped 3.18% to Rs.37.30 at 10:09 IST on BSE after the company reported a consolidated net profit of Rs.48 crore in Q2 September 2011 compared with a consolidated net loss of Rs.369.23 crore in Q2 September 2010.Suzlon Energy said during Q2 September 2011,it concluded that non-alignment of the revenue recognition policy of Repower to that of Suzlon would result in more appropriate presentation of the financial statements and changed the process of consolidation from quarter ended 31 March 2011.Accordingly,the consolidated financial results for the quarter ended 30 September 2011 are to that extent not comparable. Had the company applied the same policy in the quarter ended 30 September 2010,the revenues and the net loss after tax for the quarter ended 30 September 2010 would have been higher by Rs.156.35 crore and Rs.24.87 crore respectively.
Suzlon’s management is confident that order inflow would be strong in the coming quarters despite a slowdown in the US and Europe, but things may not be that hunky-dory.

Yamini Agarwal | Guest Editor

European sovereign debt crisis-The case of Greece

2011-12-28T07:40:00.000-08:00

Amid USA credit rating downgrade, stubborn inflation in the country, high fiscal deficits and other economic problems, European sovereign debt crisis seems to be the biggest macro-economic problem we face today. Sovereign debt implies debt issued by a country to finance its expenses and the sovereign debt crisis implies fears of failure on the country’s part to service this debt. Let us understand the crisis taking Greece into account.

Greece was one of the fastest growing economies in Europe from 2000 to 2007, having achieved an annual growth rate of more than 4%. This was also the time when savings began to grow across Europe and so did the investable funds with banks and public. Coupled with this, a moderate budget deficit of 5-6%, allowed Greece to make greater bond issuances, leading to its public debt rising from 100% in 2005 to 143% in 2010.Greece used higher funds primarily to increase wage and pension rates which are non-development expenditures. During this very time period, global economic turmoil following the sub-prime crisis of 2007-08, led to the decline of Greece’s biggest industries-shipping and tourism with revenues falling by more than 15%. Added to this, Greece manipulated fiscal data in 2010, paying investment banks huge fees, to show lower level of borrowings, so as to continue increased spending while hiding the borrowings from the European Union. With budget deficit and GDP growth rates being revised to 13.6% and -3% in 2010 following the revelation of this manipulation, coupled with a 70% external debt, Greece inevitably faced a downgrade of its bonds’ rating to ‘junk status’. Let us now understand the result of this.

Following the downgrade, borrowing costs for Greece increased and so did the negative sentiments and failure of default of Greece’s debt among the investor community. Yields on 10 year Greece bonds doubled to 23% in a year following the downgrade, while interest rate on 2 year Greek bonds rose to an unbelievable 110% figure in November 2011. The use of Credit Default Swaps (CDS) (an instrument that is used to protect oneself against the risk of default of a loan advanced, or to speculate the failure of a debt instrument) against Greece’s bonds rose to such a high level, that price of a CDS taken against Greece’s debt rose from $ .3 million (to insure a debt of $10 million) in January 2010 to $8.1 million (to insure a debt of $10 million) in November 2011. In brief, higher borrowing costs, widening budget deficits and problems in raising funds followed the credit rating downgrade.

What followed were actions from the European Union. The European Central Bank (ECB) announced that Greek bonds would be accepted as collateral even with a junk status, which helped increase confidence among investors and also helped relax bond yields temporarily. As expected, a series of bailouts from International Monetary Fund (IMF) and ECB also followed. Bailouts of f€45 billion and €110 billion In April-May 2010 were advance to Greece, followed by a write off of 50% of a part of Greek debt owed to private banks (which equal €100 billion) in October 2011. Meanwhile European Financial Stability Facility (EFSF) was also agreed upon on 9 May 2010, with a power to borrow up to €750 billion (which includes €250 billion from IMF and €60 billion from the budget of EU), in order to grant loans to fiscally weak economies to ensure stability across Europe. Greece also launched Austerity packages, to improve its fiscal situation. Despite all measures, Standard and Poor's downgraded Greece's sovereign debt rating to CCC, the lowest in the world, following the findings of a bilateral EU-IMF audit which called for further austerity measures.

A lot of suggestions have come up to improve Greece’s Fiscal situation, right from imposing tight austerity measures, to bringing tighter fiscal norms across the EU. Economists like Paul Krugman on the other hand argue the need to revive growth across Europe via investment expenditure. Many economists now also argue that Greece should engineer a ‘orderly default’, for the current situation will only increase future asset strains. They argue that an orderly default will allow Greece to leave the EU and re-launch Drachma at a debased rate. I refrain from giving my personal opinion on these suggestions.
In retrospect, I would just mention the need for debt-restructuring for Greece, without which it will continue to pile up its debt, now extrapolated to 180% of its GDP by 2012.

Narottam Garg | Guest Editor

Opinion on Multi Brand Retail FDI in India

2011-12-15T10:01:00.000-08:00

Almost every news source has been hitting on the Indian government for the past few days as it came up with 51% FDI in multi brand retail and 100% FDI in single-brand retail, though they come along with riders like 50% of the investment and jobs to the rural areas,30% of the inputs should be sourced from medium and small enterprises and investment in infrastructure but the target segment is restricted to 51 towns with population of more than 10 lakhs. Undoubtedly, the issue brings along serious concerns for the economy, the probable effects would be different for different sections.

For an individual consumer a store like WalMart would be beneficial. On the contrary, it is believed that this would be a negative introduction for the local “kirana” shops as it would displace their customers. It is believed that the high number of population (around 33,100,000)engaged in such stores would suffer a loss but a focus on creating jobs in manufacturing and smaller service sectors to employ the roughly 25 million youth who join the labour force every year would lead to a less severe economic impact of FDI retail.

Instead, Rajesh Shula states that the death knell of the kirana shops and local vendors is exaggerated. Countries like China have Wal-Marts but their retail industry is still flourishing. The policy also has its positive sides as with the introduction of FDI, the storage and warehousing facilities will improve leading to an efficient supply chain and reduction in wastage of grains. With this, many argue that the inflation would be brought under control. With the opening up of FDI norms, this may accelerate land prices and the cost of space in shopping centres bringing opportunities for real estate. This might not be immediate as there are a lot of non-performing retail assets on the market that will be absorbed in the first phase.

To conclude, the policy will be thumbs up if brought along keeping in mind the effected part of the society in the long run. Though the policy would bring along greater competition in the market with greater benefits but these need to be accompanied by other policy changes to make it a successful deal.

Yamini Agarwal | Guest Editor

Savings rate at 6% : Boon or bane?

2011-12-14T02:09:00.000-08:00

How it affects the economy, broadly

Prior to the deregulation, savings rate had been changed only 3 times since 1978; the
rate being fixed at 3.50% from March 2003 to March 2011. Frequent changes in the repo
and reverse repo rates resulted in a huge difference between term deposit rates and
savings deposit rates, despite the fact that 69% of the total accounts held with banks in
2006 were savings accounts. The banks primarily used the funds acquired via savings
accounts to lend at a much higher rate of interest and thus earned profits. However, due
to the increasing differences in interest rates of savings accounts and term deposits, the
proportion of savings accounts began to decline.

The deregulation of savings deposit rates is thus an effort on the part of the Central
bank to ensure that savings accounts remain an important component of the financial
system and that the depositors are offered a much highest return on their savings
account in an era when repo rate is as high as 8.50%. The deregulation would not only
ensure that savings deposit rates move in line with other key rates as the repo rate
but also stimulate competition among commercial banks to raise funds at low cost (via
savings accounts), by offering higher interest rates on savings accounts.

However the deregulation has had its own disadvantages. The Net Interest Margins
(NIM) of banks have declined, as banks have increased savings rates, with some banks
like Yes bank increasing them to as high as 6%. Experts believe that as costs of fund
acquisition for banks rise, further rise in interest rates on loans will be witnessed, which
in effect will harm growth in an era when Industrial production of the economy has fallen
by as much as 5.1%.

In retrospect, banks need to exercise caution to ensure that the depositors are
benefitted with higher savings rates, without having an adverse effect on the growth of
the economy.

Narotam Garg | Guest Editor

Asset Allocation: Key to Profitable Investments

2011-12-13T20:10:00.000-08:00

The most important step before making any investments is analyzing risk and return objectives and whether the investments comply with investor’s objectives. Once the analysis of risk and return objectives is done, asset allocation is next on the list. Asset allocation is an investment strategy used to choose the asset classes in which an investor should invest money in. It deals with adjusting the percentage of asset classes (such as stocks and bonds) in an investment portfoliodepending on the investor’s goals and investment time-frame. Asset allocation plays an important role in determining returns and can be done using two major methods: strategic allocation and tactical allocation. Strategic asset allocation is based on investors’ long term goals and market expectations. It proportionally combines asset classes based on the different expected rates of return for each asset. It is ideally specified in a range of percentages and the investment portfolio is rebalanced if the actual percentages digress outside the range. Strategic allocation depends upon investor’s long term goals and expectation but if there are short term market disruptions, the investor can re-adjust the asset allocations for a short period. This deviation from the relatively rigid strategic allocation is called tactical allocation. Tactical allocation helps to capitalize on exceptional investment opportunities given to its flexibility in investment portfolio. This gives rise to one question in everyone’s mind: why to use strategic allocation iftactical allocation has to be performed. Well, strategic allocation is important in order to provide discipline and retain focus on objectives and constraints. An investment portfolio would lack investor’s expectationswith respect to risk and return if one does not have a well-defined strategic allocation in place. Strategic allocation is based upon long run systematic risk factors.

Therefore, with strategic allocation, an investor can expect asset classes to respond similarly to all macroeconomic factors. Tactical allocations capitalize on capital market disequilibrium by rebalancing aninvestment portfolio. The process can also include trading assets or derivatives. For example, if an investor feels that equities are undervalued, he can

Equities	50%
Debt	30%
Alternative investments	10%
Cash	10%

buy equities and sell bonds and profit from the temporary market conditions. Likewise, when the prices are in equilibrium, the investor can sell equities and adhere to his original strategic asset allocation. Let us take a look at Mr. A’s strategic asset allocation on the basis of his risk and return objectives. If Mr. A feels that equities will not be profitable in the coming months and bonds are likely to perform better due to decrease in interest rates and inflation, he can do a tactical allocation to capitalize on the temporary mispricing. He can readjust his investment portfolio in the following way:

Equities	20%
Debt	60%
Alternative investments	10%
Cash	10%

Thus, tactical asset allocation will help Mr. A to make profit from the mispricing by switching from equities to bonds. For this reason, asset allocation is vital in investments because it determines returns for your investment portfolio. One should carefully analyze market and economic conditions while strategizing asset allocation so that it will provide profitable returns on investments. A financial services firm like Kotak Securities can help you to decide your allocations and minimizing risks by monitoring your equity through their share market software . You can strategize your investments by allocating your resources in a good mutual fund also.

References:

www.investopedia.com › Dictionary
Idzorek, Thomas M., “Strategic Asset Allocation and Commodities”, Ibbotson Associates, March 27, 2006
Wikipedia: http://en.wikipedia.org/wiki/Asset_allocation

Infosys pips Reliance to No. 1 weightage in benchmark indices

2011-12-13T04:25:00.000-08:00

With the freefall of Reliance Industries continuing, its firm dominance in the Sensex and Nifty was loosened with Infosys replacing it as the most influential stock in both the indices.

Even though RIL, Coal India have greater market capitalization that Infosys, Infosys commands a weightage of 10.25 in Sensex in comparison to RIL's 10.08.

The reason is the method of valuing the benchmark indices. Both Nifty and Sensex follow the concept of free float market capitalisation. This translates to a market capitalization of all those shares that are owned by non-promoters. Since Infosys is not as closely held as other companies, its free float non promoter capitalization is the largest in India, now at Rs. 1.33 lakh crore pipping Reliance at Rs. 1.31 lakh crores.

Once considered the darling of investors, mutual funds, Reliance has been susceptible of its falling output in the KG basin, legal tussles with the Government. No new venture (eg. Reliance Fresh) has thrived, and the DE Shaw Joint Venture failed to attract the eyeballs. Also RIL has failed to convince investors of the optimum application of its idle funds, and all speculation of possible acquisitions have been doused.

The rupee deterioration in a way, has been beneficial to IT stocks that receive payments in dollars. If unhedged positions exist, or payment that is 'receivable' IT stocks make an instantaneous profit.

The emerging equity paradigm shift

2011-12-11T02:55:00.001-08:00

A Mckinsey Global Institute report has suggested that the roles of equities in the asset allocation of investors/house-holds will shrink from 28% during 2010 to 22% in 2020, a sharp 6% fall in 10 years that will characterize the next decade as one of less risk taking capabilities, and household and investor fear for complicated securities that are dealt on stock exchanges, which have daily fluctuation in values.

It has been widely seen in the past 2 years that many investors have lost large amounts of their capital, and this loss is deeply engrained in another loss : their risk taking capacity. The growth in emerging economies and the inadvertent aging of the general population will be the reason for this 6% shift from equities to cash, demand deposits and fixed income securities like bonds.

Accordingly, Mckinsey follows up with :

The potential equity gap, modeled on detailed data from 10 mature economies and eight emerging ones, would be seen largely in emerging market economies, but would also appear in some European nations. This has important implications for economic growth, how companies fund themselves, and how investors with lower holdings of equity can reach their saving goals.

However total investment demand for equities will continue to grow in the forthcoming decade, but its share in the total asset allocation will fall, that is, demand for fixed income securities will rise faster. This imbalance will affect the external financing requirement for growth in emerging economies' corporates.

Conversely a few developed countries like USA will remain unaffected due to sufficient profits adding to the reserves, and hence preventing external financing.

The above trend that Mckinsey points out is already evident in Europe, where the need for additional equity is rising for banks so that they can meet current and new capital requirements.

Answers to Strategist Quiz 229/234

2011-11-27T21:42:00.001-08:00

Kindly check the answers of the Latest strategist quiz 231 at http://quiz.myfinancetimes.com/

For the quizzing enthusiasts looking to complete the last few questions of their weekly dose in Business Standard Strategist Quiz 229. Provide your own answers, if you have different ones or those that I could not provide, in the comments below :

Which footwear brand has introduced the lightest product in the market of 165 grams which carries an eight-gram chip inserted beneath the sole that transmits data on maximum speed, distance covered or number of sprints to a computer or a mobile device?
This 40-year-old industry based in a town, which is believed to have got its name from Ravana’s father-in-law, has grown tremendously in the last seven to eight years. It supplies Hollywood producers with ancient arms, ammunition, attire, furniture, books, leather goods and household items. Name the town.
Which Indian business group is headquartered in a building called Boomerang?
Name the world’s youngest CEO and the company he set up when he was six years old.
Which company is adopting the Shatabdi strategy for growth? Also, explain the strategy.
______ on Air, since 1955. Complete the baseline and name the brand.
What is common to French President Nicolas Sarkozy, Jet Airways founder Narendra (Naresh) Goyal and Chiang Kai-shek, the erstwhile Premier of China?
Which brand gets its name from Old Scrooge’s dismissive remark about the entire Christmas celebration? Ebenezer Scrooge is the miserly character created by Charles Dickens.
‘By non-hatred alone is hatred appeased’ is a quote from the Sutta Pitaka that contains the teachings of Buddha and his most authoritative disciples. Inspired by that, which brand recently launched its brand’s communication campaign?
Identify the logos represented in the following visuals.

Answers :

Adidas (Brainy)
Meerut
Spice Group
Harlie Jordan,
Max Healthcare, locations along the routes of the superfast train — Bathinda, Mohali, Dehradun — to build its hospitals in non-metropolitan cities
Faber
Virgin Holidays
Benetton Unhate
Four Seasons

Kindly check the answers of the Latest strategist quiz 234 at http://quiz.myfinancetimes.com/

Which management guru of Global Strategy propounded the concept of a AAA triangle and what does it mean?
This beverage was launched in the mid 60s and its inventor added lemon to it in order to mask its urine flavour. Name it.
It is claimed that in this company so far all its CEOs started their careers at the entry level. Name it.
This place is named after a famous tree which marked the eastern approach to the place. It was felled in 1942 to prevent the Japanese artillery from using it as a ranging point during World War II. It is now famous for a world class facility and a corporate entity which partners with other infrastructure companies worldwide.
This famous character was born in its creator's imagination while he was traveling in a train from New York to Los Angeles after his financial supporters had rejected his earlier creation Oswald. Name both the character and the creator.
Despite disagreement over who originally designed this apparel, the designer who is credited for revolutionising the fashion industry with this creation, named it after her favourite car. Name the person and her creation.
To find a pronunciation in China that would sound like its brand this company did achieve a similar sound but the characters in Chinese meant “Bite the wax tadpole”. It later changed the characters to mean “Happiness in the mouth”. Name the brand.
Which company did Ja-Ri Corporation subsequently become?
Name the first airline to offer its passengers Wi-fi broadband internet access on long-haul flights?
Identify the brands from the visuals below. They have a partnership in India.

Mirroring the indices of the markets through ETFs

2011-11-22T06:41:00.001-08:00

ETFs Offer Great Returns In Investment Portfolios
One of the most profitable investments in the current market conditions includes ETFs. Exchange- Traded Fund (ETF) refers to an index, commodity or an index fund which can be traded like a stock on an exchange. It is listed on a stock exchange and trades intraday, and can be described as, a Mutual Fund traded like a stock. However, there are several important differences between mutual funds and ETFs.

ETFs tend to follow indexes like the S&P 500, unlike mutual funds, which try to beat them. For example, if S&P 500 trades fifteen percent lower, the ETF that follows will decline by fifteen percent too. Likewise, if S&P 500 trades ten percent higher, the ETF that follows will trade ten percent higher.

The concept of investing in ETFs is new as compared to mutual fund investments. This new investment arena provides great opportunities as currently there are very few investors with the necessary skill and knowledge. So, if you are one of the early birds to invest in ETFs, you have a good chance to reap great returns.

If you wish to find more details about ETFs, you can check the websites of the issuers of those ETFs. Kotak Mahindra group is one of the issuers of ETFs.

Kotak Securities , one of the oldest and largest stock brokers in the industry, helps in managing investment portfolios to make profitable investments. With regards to ETF, it offers Kotak Gold ETF , with an investment objective to generate returns that are in line with the returns on investment in physical gold.

ETF is a great means of investment and you should certainly seek this opportunity because the market is currently low, and expected to recover in the next few years. If you invest now, you might make amazing profits when the market is booming a few years down the line.

Answers to Strategist Quiz 228

2011-11-20T20:31:00.001-08:00

For the quizzing enthusiasts looking to complete the last few questions of their weekly dose in Business Standard Strategist Quiz 228. Provide your own answers, if you have different ones or those that I could not provide, in the comments below :

What product is codenamed “propeller”?
Where does a customer earn the title ‘mayor’? The term identifies the person that has visited a location most number of times and is the most loyal customer a brand can have.
An MNC has launched an initiative that allows employees across departments to flag product shortage in any store in the country through a portal. The move, which can help it stem the loss of clients to rival brands, is named after a spinach-eating cartoon character. Name the MNC and the initiative.
Who uses the base line “Be great at what you do”?
This Roman God is the inspiration behind certain management/business concepts. One of those suggests looking both inward and outward for companies to be successful in a small marketplace and another one advises organisations to look into their past and the future at the same time. Name the Roman God.
Which brand broadcast a 30-second ad for its product 42 light years into space through high-powered radars in the Arctic circle?
What is common to GE and Domino Foods Inc?
The yellow line underneath this brand’s logo is called the “opto-digital pattern.” It represents light and the boundless possibilities of digital technology. Currently the firm is mired in financial irregularities. Name it.
This fictional character has been in existence since the fifties and for a short period of time was known as Mel Haney. His motto has always been “What, me worry?”. Identify him.
Identify the company from its logo given below. It is a new kid on the block and has celebrity promoters.

Janus, looking both inward and outward

Answers :

Yellow line under Olympus

Google's new social news reader
Foursquare
HUL, Popeye
Linkedin
Janus, Janus Principle
Doritos
Both were among 12 stocks in the Dow Jones Industrial Average.
Olympus
Alfred E. Neuman

Answers to Strategist Quiz 227

2011-11-13T10:45:00.000-08:00

For the quizzing enthusiasts looking to complete the last few questions of their weekly dose in Business Standard Strategist Quiz 22

Who designed the world’s first corporate logo and when, and for which company?
Which company claims that by using its trademarked 3-in-a-box strategy, it is able to grow and meet the market expectations?
The Indian founder of this business group was a college drop-out who drove taxi cabs in London and cleaned hotel rooms to support himself before starting his career in the business of retailing. Name him.
Which was the first movie to be released on YouTube on the day of its theatrical release in international markets?
Which brand in India has set up a group of local cricket teams having seven players per team who play seven balls an over?
During the history of this 100-year-old brand, there was a point in time when a model called 490 was launched by it that was sold for $490. Why?
The corporate image of this company is a small white teddy bear, adapted from a Christmas card sent by the grandson of the company’s founder to his grandmother during the early 1950s. Today it is the world’s largest producer of an essential food item consumed all over the world. Name it.
With what first was an Anglo-Armenian converted to Islam who had mastered the thumri style of singing associated?
Name the brand for which animation was used for the first time in a TV commercial
This logo was designed by a mint master who chose the banyan tree since merchants used to collect under a banyan tree and conduct business in ancient times. It is the entity’s first logo which was subsequently changed. Identify it.

Answers:

The East India Company
Cognizant
Micky Jagtiani
Super K
PepsiCo’s 7Up brand
1915 Chevrolet
Grupo Bimbo
India's first ever Gramaphone record
Bombay Stock Exchange

Has India got the game?

2011-11-13T08:25:00.000-08:00

The gaming industry, growing rapidly across the world, is finding its feet in an ever increasing world of smart phones and tablets in India. The social network has made it possible for millions in India to connect to each other, and play games where they can interact with their friends, play similar games, and set highscores among own peer group.

Gone is the time when one needed to visit a Reliance Web World to play Fifa or Age of Empires on LAN. Cloud computing coupled with internet has made it possible for game developers, distributors and gamers to continue the party, but hassle-free this time.

A PwC report indicates a quantum jump in the worldwide gaming industry, which is currently pegged at $26 billion. If the online and PC market continues to grow according to PwC, it'll nearly double to $47 billion in the next 4 years.

The above figures have been quoted for the entire world. But will India watch these numbers from the sidelines, or capitalise on this growing phenomenon?

The key growth drivers for the Indian gaming industry are

Enhanced User interface with smartphones, tablets and a burgeoning target market with disposable income
Apps/Games at less than a $1 and easily available via Android and Apple Markets on device itself
Game developers and entrepreneurs waiting to plunge: From Srabulous to Party Poker, India has had its share of gaming success in the past, and passionate entrepreneurs will be quick to make good use of these trends.
Likelihood of the PE industry betting on Indian successes after foreign bets like Jamdat Mobile paid off.

The potential is there, but has India got the game?

Answers to BS Strategist Quiz 215

2011-08-22T02:37:00.000-07:00

The latest quiz with attempted answers. Check it out now

1. Perfumes, board games, cigarettes, an asteroid, slot machines and a Mediterranean pollution monitoring project are all named after this ancient personality, who by some is considered the world’s first celebrity. Name the person.
2. This founder started this company in 1998 and in 2000 he sold his creation, called Win Amp, to AOL. Later he created a cloud music service and sold it to Yahoo! in 2003. Name him and the first company he founded.

3. Which financial brand has drawn inspiration from this line: “Until Sir Edmund Hillary and Tenzing Norgay had reached the summit of Everest, they would not rest”?
4. The multi-billion dollar beauty industry is supposed to have developed after a Polish immigrant set up the first beauty salon in Australia in 1902. Her brand still exists with a commitment to ensure its customers live brilliantly. Name her.

5. This brand was first introduced in 1948 and then a hole was punched into it in 1955. Recently in India this brand has roped in fashion designer Wendell Rodricks to give it a stylised look. Name it.

6. Who said: “I have no use for a motor car which has more spark plugs than a cow has teats”?

7. Taking action, common sense, fairness, commitment and integrity form the basis for_______way.

8. Whose brands are Style, Flair, Taj Chhap, June Slim and Lips?

9.This brand’s logo was launched in the mid-1800s on the basis of the meaning of its founder’s name, which meant little nest in German. Name the brand.

10. Identify the brands. Where would you find them together?

Answers
1. Cleopatra
2. Justin Frankel, Nullsoft
3. Rolex is a probable answer as they used them in its commercials and also that the two persons wore Rolex while climbing Mt. Everest
4. Helena Rubinstein, Incorporated
5.
6. Henry Ford
7. Ziglar Way, named after Zig Ziglar
8. Golden Tobacco
9. Nestle
10. Yunus Centre: Grameen bank, Adidas, Intel, Otto, Veolia

Cocoa: The latest non-renewable source vanishing!

2010-11-10T23:48:00.000-08:00

During this festive season, I suddenly became replete with chocolates. After gaining a few hundred grams of fat, I realized that the price of chocolate was rising each Diwali. And economics taught me that with each year's inflation, all food items rose as a result
But Chocolate prices were rising exponentially that there was more economics at play.
An Internet search assuaged my curiosity where I discovered that Cocoa was progressively becoming a rare and expensive commodity.

Tropical and weather conditions were not the best for cocoa in today’s changing environment trends. Studies suggest that for cocoa to be grown, certain considerations need to be taken of. Cocoa crops take 3-5 years to mature, and must be grown within 10 degree latitude of the equator. Hence, while the whole world eats chocolate, only a small block of land is fit enough to grow cocoa. More importantly, a major constituent on this small block, Ivory Coast already throws up troubling statistics with harvests falling this year.
Cocoa being a labor intensive crop takes years to cultivate, and replanting is difficult. It suddenly morphs into a win-loss product that does not offer a good enough reward to cocoa croppers.

It is hard to imagine that in 2030, chocolates would be seen in museums or be consumed by the elite billionaires alone. The world might face a chocolate crunch in the coming decades, and the crisis would be tough to turnaround.

Some time back, I had explored more reasons behind this conundrum. Is there any way to prevent this? Or it this just a farce? Do leave a comment on the same.

Answers to Strategist Quiz 155

2010-06-29T03:49:00.000-07:00

Here go the questions , and check the answers at the end :

Which company’s corporate philosophy and belief systems are associated with the Japanese word kyosei and the ‘three selves’ — self-motivation, self-management and self-awareness?
This company’s first board comprised Raunaq Singh (late founder of Apollo Tyres), MA Chidambaram of SPIC, Coke bottler Charanjit Singh and VR Mohan of Mohan Meakins. It was headed by a person who did an apprenticeship at Rolls-Royce for three years (1964-67). Name this person and the company he founded.
The CEO of which company plans to focus on the development of people in his organisation using the proven scientific principles of homeopathy and yoga?
This product was a failure and was referred to as a pizza box. The number plate of its founder’s silver-coloured BMW bore its name. Name it.
The CEO of this company took up a summer job in a poultry farm during his school days and applied the learnings to manage his company. He also set up a corporate communication channel called U&I to establish better connect with his employees. Name him.
Who founded a VC firm called The Hot Fudge?
Link Madonna, Demi Moore and Matthew McConaughey and a brand’s baseline, “Nuts for Life”. What do you get?
What is colloquially referred to as the Toulouse Goose?
This company was an offshoot of an initiative of a chemistry teacher, TK Gajjar, and his student Koti Bhaskar in the early 1900s. It started as a laboratory and was funded by the business family that currently owns it. Name it.
Identify this luxury brand from its logo. It has set up shop in India.

Answers :

1. Canon
2 Maruti Udyog
3 Rajiv Bajaj
4
5 Shiv Nadar of HCL
6 PIERRE FERRARI
7 Vita Coco
8 Excessive fatness or obesity of the public
9 Alembic Chemical Works
10. Burberry

Answers to Strategist Quiz 151

2010-05-31T01:25:00.000-07:00

I'm back with answers to the latest quiz offering of Strategist, a Business Standard supplement. As always, please fill in the unsolved ones with comments below!

This brand’s baseline and rewards programme is called ‘Enjoy the Ride’. It has launched a denim version of one of its products; what is it being popularly called?
Fill in the blanks and identify the automobile companies that use these technologies, ____motion and _____ Efficiency.
Connect these and identify the inventor: Indian born, ideated in the bath tub, chocolate bars, radioactive substance and his wife’s ability to remember only four digits.
A hairdresser received a patent in 1995 for his invention that is made out of hair and pantyhose/ stockings. What is it called and used for?
During the 1990s, this brand’s image in the US hit a low when Jay Leno, the host of The Tonight Show, compared this brand with Yugos, the communist era rattletraps (cars) imported from Yugoslavia. Today it is an extremely successful brand. Name it.
Who recently compared mobile technologies to ration shop rice and basmati rice?
This businessman introduced in India foreign trees and plants which he personally cultivated in his estates in Ooty and Bangalore. He visited Japan in the 1890s and invited the Japanese to experiment in sericulture in Mysore which helped revive the silk industry then. Name him.
With what was the E in 7E7 replaced and why?
Which luxury goods store hired a live Egyptian cobra to guard a pair of haute couture sandals encrusted with ruby, sapphire and diamonds that was designed by an Italian fashion designer?
This organisation is identified by the illustration below and was one of the few that were not affected by the financial meltdown of 2008.

ANSWERS:

Nissan
John Shepherd Barron, ATM inventor
Hair Booms; used for fighting Oil spills
Hyundai
JN Tata
787, the Dream Liner. Contrary to popular belief that E represented Efficiency, it meant Eight
Harrods

Answers to Strategist Quiz 150

2010-05-24T04:01:00.000-07:00

I didn't manage to find all the answers last week, but I'm in constant trial with this week's quiz. Here they go:

Connect a typewriter with an innerwear brand and what do you get?
In the context of the recent European financial crisis, what does PIGS stand for?
Name the Indian company and the designation it has given to a senior level executive who decodes sacred stories, myths, rituals and their relevance to modern times, and helps the company build its cultural strategy.
Who propounded the strategy of innovating in emerging markets and then marketing these innovations in developed markets as alternative ideas and what name did he give it?
This brand’s failure (late 1980s) is also linked to the word “fresh” which was added to its existing name. The FDA in the US termed the usage as a misnomer and called it false advertising. The brand gradually wound down and efforts to find a buyer proved to be unsuccessful. Name the brand and the multinational who owned it.
Name the foreign company in India whose expat employees are taking up Indian names to be more culturally acceptable to colleagues, business associates and clients.
If you are having a mudslide what would you be drinking?
This family came to prominence when it was commissioned to build carriages for the Royal Mail in 1760. By the late 19th century, it was hand-crafting the coachwork for the new “horseless carriage”. And today, this family’s name still resonates with the bespoke luxury of the world’s finest carriages and cars. Name the family and the cars it is associated with.
Which brand is associated with Nudes, Pinks, Reds and Browns?
Connect both the logos and give reason for their being in the news recently.

Answers

2. Portugal, Italy, Greece and Spain

3. Pantaloons/Future Group. Devdutt is the Chief Spiritual Officer

4. Trickle Up Innovation, Paul Krugman

6. Huawei

7. Vodka

8. HJ Mulliner . Now associated with Bentley

9. Lakme

10.

Would the housing build up in India's capital Delhi sustain?

2010-05-15T04:53:00.000-07:00

I'm afraid not.

If you live in Delhi and read Times of India or Hindustan Times, you cannot miss the huge one-page advertisements for property units: apartments, golf course plots and luxury condominiums. The advertisements usually line the front and back pages, and show an architect or better, an artist's impression of the buildings to come up.

Several developers are selling affordable houses in integrated townships like Kundli, Sonepat, Gurgoan, Faridabad and Noida, while others are focussing on the high-end condominiums in the heart of the city and Noida.

1. High end condominiums start at Rs. 1.5 crore onwards and are going to be bought by people who already own a house. If they propose to move into their condominium after allotment ( I'm guessing a few years from now) they would sell their present house. This gives us a problem of today's demand of condominiums and the eventual demand for the buyer's homes in the futures.

2. Affordable houses are not so affordable that the average buyer will give a whole cash down for the entire amount. In fact such buyers are in a large minority. Most of the buyers will be young, first time buyers and will be taking 10-20 year loans for buying the apartments. Their repayment of principal and interest in turn, depends on their incremental salary, which depends on the economy as a whole.

What if the default?
A similar situation prevailed in the US, but in that scenario, the majority of the owners were sub-prime borrowers, who had adjustable rate mortgages. After US house prices peaked, and started their downward movement, mortgage defaults started. Refinancing became tough, and mortgage backed securities lost most of their value.

The Indian borrowers are not sub-prime, but even them satisfying their repayment obligation isn't sure.

My above fears may be far fetched, but the immediate one is that of today's demand. Will Delhi and its surrounding population's financial capital soar up to buy one of the above property units? Will they shift? And what about the perennial problem of car parking, sealed shops, traffic, overcrowded buses and Metro in the metropolitan city?

Godrej buys out Sara Lee's stake to become 2nd largest household insecticide player in Asia

2010-05-13T04:50:00.000-07:00

The 15 year Joint Venture between Godrej and Sara Lee comes to an end, with Godrej Consumer Products Ltd. (GCPL) buying out its partner's 51% stake for Rs. 1065 crore. Both companies benefit from a break-up at this scenario, US-based Sara Lee wishes to focus on its core food and beverage businesses while Godrej seeks to wholly own shoe polish Kiwi, mosquito repellent Hit and Good Knight which accounts for 1/4th of its net profit.

It seems Godrej had all of it planned since a few years, because GPCL last year bought two units of the Godrej group that together held a 49% stake in Godrej Sara Lee.

Adi Godrej, its Chairman is planning on more acquisitions and is looking ahead to build a war chest of Rs. 3000 crore to fund these mergers in the near future. With its recent Megasari acquisition, it is now the 2nd largest household insecticide player in Asia.

Answers to the Strategist Quiz 149

2010-05-12T20:54:00.000-07:00

I've been attempting the Strategist Quiz of Business Standard each week since many months but can never find all the answers. So I thought instead of competing, I'll post my answers here, and hope to extract a few from you in the comments section. So here go the Questions and their respective answers at the bottom.

Whom will you find in conventions titled 140CC?
We know of black forest pastries, but who owns the Black Forest furniture brand?
Where are ‘credits’ and ‘pixels’ used as currency?
He is a Formula one racer and is now being called “Richard Branson of Asia”. Who is he?
Which book do you get to by linking 111 charity and playbook?
Which CEO has set up a practice of inviting only one senior leader out of the 200-odd leaders in his company to his house for the weekend which is dubbed as a sleepover?
What is common to Oracle, Symantec, Audi and Burger King?
Which Indian entrepreneur’s acumen of building an international brand without publicity is now a case study at Harvard Business School?
Where will you find Juicy, Chatkila, Bindas and Sting?
Identify the mascot, brand and its owner.

Answers .

Haboo, social networking site for teens
Vijay Mallya has a similar, but smaller brand value than that of Richard Branson, but I wonder if they meant formula one owner rather than racer
Jeffrey Immelt, of General Electric
Advertisements of these brands in the movie "Iron Man 2"
Shahnaz Hussain
Bingo's profile picks in their website

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