Has the market bottomed out? , Is this the right time to buy? , How much more downside?, Should I invest now or wait?
So many questions , Well and there doesn’t seem to be any answer for it. When things turn bitter it takes every good out of it.
Let me ease you out and help you to go in some direction which I think could be the best option.
Well if you take the above questions into consideration the only thing I can say is that look it as an opportunity and you will win.
Look @ the risk reward ratio. Imagine downside to upside and rethink.
Can market go to 6000? Or there are better chances for it to go to 12,000?
If we see the current levels of 8000 on sensex and assume the levels. Just imagine that you have a max loss of 25% but a profit of 50% and things around 50% is more viable. But what makes me feel so…
Well there are many reasons for it
1) Why a country like India should fall as much as US? Do we deserve to go down the same way as other countries I would say probably not and the reason is simple. In spite being affected due to the recession in world I think that we can withstand the pain in a much better way.
2) Earnings downgrade?
Some times I feel like laughing on such things. Why? Because just few months back when we were at 22,000 no one was even talking about it and now at 8000 people are showing concerns on earnings.
Average growth of companies had been good in range of 40-50% (Avg) for the last 5 years but that doesn’t mean that we should continue to do the same and we will not because we are some where affected by the global slow down and it should reflect on earnings. But even if you take that into consideration still companies in india are growing at an average rate of 30% which is not bad at all. Just see how much stocks have fallen but in that comparison do they deserve to be battered so hard? Is the slow down in earnings so severe? Does this mean that 30% growth is here to stay? Again so many things . now let me put the worst case scenario. Earning could slow down to 20-25% from 40-50% that’s for short term I mean 2-3 quarters. Currently we are in the range or 30-32% but if things gets worse it will come in the range of 25%.
Even if we grow at 25% I don’t think that there is any other country in the world where companies are showing 25% growth. So the positive thing is that we have fallen in line with the global markets but we do not deserve to fall that much.
Now going forward when things stabilize people will again start putting money into the markets. And India would be the best place where people will find it safe to invest money in. The reason Is we have a steady growth.
People talk about GDP growth coming down from 9% to 5-6% now most of the FII expect growth to be in the range of 5-6% but personally I feel that we are going to exceed expectations. It will be more than what FII expect which would be a trigger for our markets to go up.
By the time the numbers come out our markets might already be trading up 30% from the current levels. So 20% more will make it 50% up from the current levels of 8000.
Few other reasons to be bullish about this market
1) Interest rates have peaked out
2) Crude has fallen to $60
3) Inflation is coming under control
4) Dollar appreciation will be under control going forward
So the concerns that seemed to be there few months back are going to be solved in next few months.
This is not the end of the world. Its not that people will keep that money into banks because they don’t even trust banks – looking at what has happened to US banks. (It doesn’t mean that in india the banking system is not good – infact it’s the best amongst all, ofcourse there are few exceptions) but people want more returns so they are going to put money into stock markets.
Now comes other source of high returns or other sources of investments. Lets take real estate into consideration. Almost everyone feels that property rates have peaked out and soon they will see real estate price falling around 30%.
So people are selling of their properties and investing 50% in stock markets and 50% in banks FD.
Now going forward things will stabilize in stock markets as well as real estate market. Lets assume that real estate price have fallen 30%
Take an example of a house which cost me 10 lakhs few months back is now available for 7 lakhs. I en cashed money @ 10 lakhs and kept 50% in FD and 50% in stock markets. i.e 5 lakhs in bank and 5 lakhs in stock markets.
Taking a period of 1 year into consideration. Lets assume that stock market are at 12,000 levels ( and there is no reason y it should not be at those level) your investments made @ 8k sensex for 5 lakhs would be of atleast 6.5 to 7 lakhs and your 10% interest on 5lakhs FD would amount to 50000 Rs. So total amount comes to 6.5 lakhs + 5.5 lakhs = 12 lakhs 20% net profit and the cost of the house you sold would be 7lakhs or less.
Now the choice is depending on market conditions you can keep the 5lakhs FD as it is @ 10% and invest back 7 lakhs in the same house you sold for 10 lakhs few months back.
Or invest 2lakhs of the money that you earned by doing all these transactions in stock markets (tension free as its not your capital)
5 lakhs in FD and buy a smaller house for the 5lakhs that you have. In this way your investments will be diversified and the risk might come down.
So think I just gave you a ray of hope and the things that I feel.
I may not be correct in what I said. But I am just talking something that’s logical in my way.
Hope you enjoyed reading this. And hope that this has helped you to get some direction if you are stuck.
Njoi
My all time favourites
My aim here is to make all the investors get reasonable returns @ the least possible risk….People might not agree to these views..but I have proved it again and again since past many yrs….
Here is the proof I m just writting about those stocks in which i have traded the most in terms of % turnover and also % returns. I will get you updated all these stocks like @ wat levels one should buy and sell them in order to get the best of it.. Apart from that I will also get u the latest News updates or recent developments of these specific companies..
First of all the list of the ones which i like..In my next post i will tell u the reasons y I like the stocks metntioned below
1) GDL
2) Nitin Fire
3) Zylog System
4) Balrampur Chini
5) Amtek India
6) Rain Calcining
7) CESC
8) Religare
9) Infosys
10) Tata Motors
All the stocks above have given good returns to the investors and traders if they have traded these stocks at proper levels.. This is true with almost all the stocks but these r some which i track regularly..and i continue to like them inspite some of them might have underperformed..but for me they have always outperformed..
So Keep watching this space i will get u updated with the stock details soon and also the research reports if possible. Watch the comment space for each stock to get the latest updates
My Picks for 2008
1) L&T
2) Punj lloyd
3) Reliance Inds
4) Gmr Infra
5) NTPC
6) CESC
7) GDL
8) Infosys
9) Godrej Inds
10)Shiv Vani oil
These are the combination of midcaps and largecaps..And i wouldnt hesitate to put equal amount in all the 10 stocks..one can expect minimum 50% returns frm these stocks in this yr if traded @ proper levels..also watch out for specific news abt the stocks in the latest stocks section..
Keep visiting
Latest Stocks
Here I will be posting the stocks which r not in the favourite list but they r on my radar and which looks good at particular levels..I will posting all these details on this page..
So keep visiting
Counter Cache in rails 2.1
Counter cache is really an important feature in rails 2.1 . This method is really helpful when u want to keep a count on something and avoid firing sql query every time which results in more processing times.
Here it goes
To activate this feature, you need to take two simple steps. First, add the
option :counter_cache to the belongs_to declaration in the child table.
class LineItem true
end
Second, in the definition of the parent table (products in this example) you
need to add an integer column whose name is the name of the child table with
_count appended.
create_table :products, :force => true do |t|
t.column :title, :string
t.column :description, :text
# …
t.column :line_items_count, :integer, :default => 0
end
Thats it .. Counter cache is enabled now.
Memcached with nginx on rails
As promised in my last article i m posting the way to configure memcached with nginx. Nothing much to do again
Download memcached from http://www.danga.com/memcached/download.bml you might also require a memcache lib available on http://tangent.org/552/libmemcached.html install both of them and the memcached command will be available to you
just type in this on the terminal
memcached -p 11211
Thats it..now memcache is on. Just few more changes in the nginx.conf file and you r ready to zoom your rails app
you just need to write this
location /dynamic_request { # append an extenstion for proper MIME type detection if ($args ~* format=json) { rewrite ^/dynamic_request/?(.*)$ /dynamic_request.js$1 break; } if ($args ~* format=xml) { rewrite ^/dynamic_request/?(.*)$ /dynamic_request.xml$1 break; } memcached_pass 127.0.0.1:11211; error_page 404 = @dynamic_request; } Also you might require to set the uri so do this set $memcached_key $uri;
Ok thats done no restart nginx service and your memcache + mongrel cluster with gzip on will be running and ur rails app will be zoooooooooooooming
Njoi
Nginx configuration, expiry headers and gzip component with rails – nginx.conf
Just configured nginx server with rails and here is the nginx.conf file. It also includes gzip component and header expiry which is advisable as per the yslow tool.
# user and group to run as
# number of nginx workers
worker_processes 4;
# pid of nginx master process
#pid /var/run/nginx.pid;
# Number of worker connections. 1024 is a good default
events {
worker_connections 1024;
}
# start the http module where we config http access.
http {
# pull in mime-types. You can break out your config
# into as many include’s as you want to make it cleaner
include mime.types;
# set a default type for the rare situation that
# nothing matches from the mimie-type include
default_type application/octet-stream;
# configure log format
log_format main ‘$remote_addr – $remote_user [$time_local] ‘
‘”$request” $status $body_bytes_sent “$http_referer” ‘
‘”$http_user_agent” “$http_x_forwarded_for”‘;
# main access log
access_log /var/log/nginx_access.log main;
# main error log
error_log /var/log/nginx_error.log debug;
# no sendfile on OSX
sendfile on;
# These are good default values.
tcp_nopush on;
tcp_nodelay off;
# output compression saves bandwidth
gzip on;
gzip_buffers 16 8k;
gzip_http_version 1.0;
gzip_comp_level 9;
gzip_proxied any;
gzip_types text/plain text/css application/x-javascript text/xml application/xml application/xml+rss text/javascript application/javascript application/css;
# this is where you define your mongrel clusters.
# you need one of these blocks for each cluster
# and each one needs its own name to refer to it later.
upstream mongrel {
server 127.0.0.1:8000;
server 127.0.0.1:8001;
server 127.0.0.1:8002;
}
# the server directive is nginx’s virtual host directive.
server {
# port to listen on. Can also be set to an IP:PORT
listen 80;
# Set the max size for file uploads to 50Mb
client_max_body_size 50M;
# sets the domain[s] that this vhost server requests for
# doc root
root /sites/sitename/public;
# vhost specific access log
access_log /var/log/nginx.vhost.access.
# this rewrites all the requests to the maintenance.html
# page if it exists in the doc root. This is for capistrano’s
# disable web task
# if (-f $document_root/system/maintenance.html) {
# rewrite ^(.*)$ /system/maintenance.html last;
# break;
# }
location / {
# needed to forward user’s IP address to rails
proxy_set_header X-Real-IP $remote_addr;
# needed for HTTPS
proxy_set_header X-Forwarded-For $proxy_add_x_forwarded_for;
proxy_set_header Host $http_host;
proxy_redirect false;
proxy_max_temp_file_size 0;
if (-f $request_filename) {
expires max;
break;
}
# If the file exists as a static file serve it directly without
# running all the other rewite tests on it
if (-f $request_filename) {
break;
}
# check for index.html for directory index
# if its there on the filesystem then rewite
# the url to add /index.html to the end of it
# and then break to send it to the next config rules.
if (-f $request_filename/index.html) {
rewrite (.*) $1/index.html break;
}
# this is the meat of the rails page caching config
# it adds .html to the end of the url and then checks
# the filesystem for that file. If it exists, then we
# rewite the url to have explicit .html on the end
# and then send it on its way to the next config rule.
# if there is no file on the fs then it sets all the
# necessary headers and proxies to our upstream mongrels
if (-f $request_filename.html) {
rewrite (.*) $1.html break;
}
if (!-f $request_filename) {
proxy_pass http://mongrel;
break;
}
}
error_page 500 502 503 504 /500.html;
location = /500.html {
root /sites/sitename/public;
}
}
}
In my next article i will also post how to configure memcache with rails and nginx
Load Balancing with pound and Mongrel Clustering
In my previous post I have written about mongrel clustering..
Now if you want to add the load balancing feature to it you may use pound. Pound is a software HTTP Load Balancer and Reverse Proxy.
These are the steps how you can configure pound with mongrel cluster. First configure mongrel cluster as per the previous post.
Then download and install pound from http://www.apsis.ch/pound/Pound-2.0.9.tgz
Now the configuration step
Pound.cfg needs to be configured which will reside in /etc/pound/pound.cfg
also a symlink is required to be made
$ sudo ln -s /etc/pound/pound.cfg /usr/local/etc/pound.cfg A basic version of pound.cfg will look something like thisUser "www-data"Group "www-data"LogLevel 2Alive 30 ListenHTTP Address 123.123.123.123 Port 80End Service HeadRequire "Host:.*www.dhavalparikh.co.in.*" BackEnd Address 127.0.0.1 Port 8080 End Session Type BASIC TTL 300 EndEnd Service URL ".*.mov" BackEnd Address 69.12.146.109 Port 8081 End Session Type BASIC TTL 300 EndEnd Service # Catch All BackEnd Address 127.0.0.1 Port 9000 End BackEnd Address 127.0.0.1 Port 9001 End Session Type BASIC TTL 300 End Then start pound with the following command$ sudo /etc/init.d/pound startfinally you will have mongrel cluster setup done so start mongrel clustersudo mongrel_rails cluster::start Thats it you mongrel cluster with pound configuration is done..njoi the power of load balancing
Mongrel Clustering with Rails
Hey every one wants to make their site run faster..and there are many ways like caching (page caching, fragment caching, method caching) so on. One other way is using mongrel cluster which will run multiple instance of mongrel on you server which will help to improve website speed to a huge extent.
Let me tell you the steps for doing mongrel clustering .. its really easy..
Step 1 : – Install mongrel cluster gem
sudo gem install mongrel_cluster
Step 2 : – configure cluster and run the config file which will reside in config/mongrel_cluster.yml
mongrel_rails cluster::configure -p 8000 -e production -a 127.0.0.1
Well thats it now here you go
Start the cluster:mongrel_rails cluster::start
Restart the cluster:mongrel_rails cluster::restart
Stop the cluster:
mongrel_rails cluster::stop
Well just try these steps and if you are not able to configure it just post acomment and i will get back to you.
Enjoy better speed 
Tough times ahead – ITs WORLD RECESSION
Every where people are just talking about recession in US economy . Where ever on what ever sites you go people are just posting negative comments about companies which used to be favorites just few months back
The buzz words are seeing a slow down. Some of the examples that I came across on some of the articles I read
1) iPod dying? It’s already dead
2)11 troubled Web companies: The next Kozmos? where people are talking about twitter, skype and other big names which were used to be widely used all over are now getting some cause of worry
3)Open-source innovation in a recession
4) Week in review: Tech stocks tumble
tech stocks falling like a pack of cards every where there is a slow down no matter which country you see.
6) Micron to cut workforce by 15 percent, slash flash output
7) The tech downturn: How long and how bad?
While dollar appreciating was a bit of a support for some of the IT biggies, but on the other hand default payments is affecting the revenues. They are forced to reduce number of employees
companies are not getting big contracts like before. People have reduced spendings.
So everyone is just waiting and watching WHAT WILL HAPPEN NEXT ? No one knows actually.. Lets see wats the road ahead especially for IT companies
