Monday, September 10, 2012

Few Microcaps

hi amit,
you recently said you had 10 microcaps on your radar (few of them barely having any liquidity). Could you share a few of those ideas.



I would encourage you to pursue your own research such as,

1. Emailing the company
2. Calling up company secretary by phone

without anyone's support and arrive at your conclusions about these microcaps.

Paramount Cosmetics
parammount.com
Leader of "Bindis" Shilpa Brand, declining buggy whip industry but trying to establish Instinct de odourant brand etc, debt is concern.

Omnitex

Go though Annual Reports 2010 - 2012 (www.omnitex.com). Issue 7 of magazine at Glen Raven website (http://www.glenraven.com/raven.php?lang=en) and Strata India website (www.strataindia.com). Understand Geosynthetic Industry.

Bharat Fertilizer

www.bharatrealty.co.in

Sale of apartments and agri culture play. Back on dividend list and fertiliser outsourcing. Can't lose money but long term growth is uncertain.

What I can tell you is that they don't deserve more than 1-2% weight of portfolio if considering them for long term just yet.

Sunday, September 9, 2012

Do we need millions of Warren Buffetts ?

In a business book I read recently, Wisdom of the Bees (What the Hive Can Teach Business about Leadership, Efficiency and Growth - http://www.amazon.com/The-Wisdom-Bees-Leadership-Efficiency/dp/159184326X), what I found most fascinating was
honey bees' dance used for communicating distance, quality, direction of flowers/pollen. Karl von Frisch won a Nobel prize for deciphering this dance.

http://en.wikipedia.org/wiki/Karl_von_Frisch

It may sound astounding, a Nobel prize for this. Now compare a Fund that manages 100 Billion$ worth of assets. Other than the culture, respect and harmony that
exists in the company, the sum total value for society for sloshing money to and fro is absolutely Zero. In my opinion Funds contribution to society is less than contribution from a single genuine teacher who moulds the minds of others. Or even a researcher who give back a newer, disease resistant species of potato back to the world.

Thus, in a nutshell the value that I, CNBC, all fund managers are providing to society is actually Negative. Except for energy of money and what direction one could channel it in. It would be too presumptuous to presume that "we are providing risk capital to budding enterpreneurs" argument. Its vain and self serving. "Apne man ko behlaney ka khayaal acha hai".

US is paying for this crime of virtual and non-existent wealth. Also, the world does not need 10 million Warren Buffetts / 10 million Curators of Museums of companies. Therefore, at best trading in stocks is source of income by eating into other persons granary as Munger laments, and at worst a gambling addiction.
What I am suggesting is that Warren Buffett as each one of us wants to be has Zero value to society, imagine 30 crore Warren Buffetts in India sitting at home holding share certificates. Real hero does something else and creates another type of wealth via financial wealth. That is my understanding.