Earth, Lights and Money

The night lights of the world, India and parts of Asia look like these (click images to enlarge):

I was surprised to see India pretty well lit up and not looking too bad on the world slate. I now know why the BJPs India Shining political campaign did not work on terra firma – since it you can see this only from extremely high altitudes and politics is all about keeping your ear to the ground. To me Japan looks the brighest and USA a very close second. Africa is truly the dark continent. Given what is now being said about Nigeria and Ghana, I guess they’ll light up in the decades to come. South Africa, as expected stands out and so does the Nile channel in Egypt. Western Europe, is aglow with the prosperous lumens that dissipate quickly as one moves eastward eventually following the path of the Trans Siberian Railway. If the natural earth glow is filtered out, I’d have missed Australia completely. And finally, China is well lit on its eastern side. The fact that the eastern sides of largish land masses are better lit than the western side is striking. The US east coast, China’s eastern provinces, Australia, the African continent, South America, the sliver of light that is Japan, UK, the Meditteranean Coast – all have brighter eastern sides. Why? The exception seems to be India. Its east side is darker.

From personal aerial experience I know for sure that Mumbai shines the brightest of all Indian cities. I guess it’s got to do with two factors – A) density of population in an area and B) the degree of urbanization. The latter is more important, I think since while Mumbai has the world’s largest slum, the slum lights will fade out if seen from such high an altitude. These are closely placed street lights (the streets lights in Hyderabad are not closely placed at all) and residential light fixtures. Highway lights again, would get too diffused, I think. But just take a look at the Indus basin. No wonder the rich alluvial soil and the 5 rivers spawned the Indus Valley Civilization 5000 years ago. The Punjab provinces (both Indian and Pakistani side) seem to be bathed in white! On the other hand, you just cannot make out the path of the Ganges at all. Beats me. Also, if you follow my eye, you can almost see the lights carving out the combined boundary of Maharashtra and Andhra Pradesh. Leaving out Orrisa, Chattisgarh, Madhya Pradesh and Jharkhand in the dark. It’s almost as if the previous two states had dotted light beacons along their perimeters. Is there a correlation between insurgency and electricity consumption? The problem of naxalism seems to be hitting states that are darker at night. And therein lies the answer – light up these areas and the arms that hold the guns will pick up laptops instead. Alas! If wishes were horses, beggars would ride – read my latest tweet on our Government crazy Robin Hood logic. Agreed, that the income disparity amongst states needs to be reduced. But don’t do this by making the richer states poorer! The New Delhi think tank is tackling the problem of runaway food inflation in the agrarian states of India (Punjab, West Bengal, etc.) by increasing the procurement price of food stuff. Their logic is if food prices are increasing (it’s c20% in these states), lets give more money to the farmers so that they can afford to buy more. How can you fight inflation by increasing prices?

Leaving bumbling babus behind, I panned out to look at Asia and peg the two big neighbours against each other. The electricity consumption in India is quite less as compared to China. Now, while China has a much larger land mass, much of China is in its east. Also, the land masses of eastern China and India are almost equal in size. So what explains the fact that despite the higher consumption of electricity by China it does not appear brighter than India? China seems to consume 3,650 TWH of electrcity per annum (a neat 10 TWH per day!) as compared to just 568 TWH/yr for India. So, eastern China should appear 6 – 7 times as bright, right? I guess whats happening is that almost all of the incremental electricity (as compared to what India eats up) is being used to fire the foundries that line up the dragon’s belly.  This article from China Daily sheds some light on the issue. Are the Chinese producing too much too soon. Maybe they should slow down.

This sudden reading up on lights, lighting and night lights came about when I was contemplating a company called MIC Electronics – they’re the LED solutions company that’s lighting up stadia, streets, festival venues, the Commonwealth Games, village lanterns, railway coaches, airports etc. They’ve got a nice banner on their website and the spooky thing is that this company is also from Hyderabad! God knows whats wrong with me – Shakti Met Dor, Hyderabad Industries (contemplating) and now this! It’s a nice city ok, perhaps a bit sleepy but investing like this is crazy. I’ve taken up a small position in this company so that I don’t lose track of it and am reminded that I need to think more about it. I read a reseach report about it sometime back but as yet I am not fully convinced that it has the power to light up my portfolio. My first issue with this company is that it currently shows up at rank 33 when I search for “LED lighting india” in Google. Which is not that bad considering that A) they are largely B2B and that B) this website itself shows up at rank 58 in a google search on Kaushal! And no, I have not heard of search engine optimisation – but maybe the MIC guys have? Actually doesn’t matter since they largely sell to people like Indian Railways and other assorted organisations who don’t really need Google to find out about them.

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Shakti Met Dor

Here is another dilemma that I face now. I had invested in Shakti Met-dor about a month back. The company looked undervalued, some people were beginning to notice and write about it but the charts were not indicating anything stellar to me – at least then. I was more happy to cream off 7 – 8% in about a month’s time and get out. I am sitting on an upside of 26% now. Of course, my digging around on the net had made me aware of a much larger upside that was possible on this stock. So I was waiting for the market to discover the hidden value in it – perhaps around the time of it’s quarterly results declaration? I also thought it a good omen to have dumped some money on the stock of a company which is domiciled in the same city where I am working currently.

The company fabricates doors and windows. That’s it. My money is hinging on these humble pieces of building fitout equipment. Doors and windows are not cool enough, I guess. Maybe that’s why the company has never really been able to command a good enough valuation despite doing pretty well for itself. Some time back it recently upped its manfucturing capacity and no one seemed to have noticed back then. The additional capacity seems to have come on board and the additional widgets are now contributing to the bottom line. The coffers seem to be filling up and now people are starting to see it on their screens due to the falling P/E ratio.

What’s my dillemma? When to sell. Again. The same problem.

And what’s the catch? The management – or so it seems. They must have realised that since the market cares two hoots about them, it was time they got out of the party where they were not invited. They now want to delist. The promoters own around 55% and it may seem that they have a long way to go (SEBI requires 90% ownership for promoters before they can slink away). But there’s more to it – we need to open our doors of perception wider. The problem is that, in true Pareto style, just about 100 shareholders seem to own around 90% of the stock under issue. I am afraid that if the management is able to corner these 100, then I’m done for. Who knows what relation exists between these 100 and the management? I hope they do not locate me – but that seems difficult as I work just 7 kms from their head office. The website of the company is nothing great. I am sure some creative webmaster can create quite a few interesting themes with doors and windows opening and closing on their website. They do not have an investor relations page or section but that’s all undestandable since the management has said that the reason for seeking an exit from the listed secondary market is the heavy burden of listing and exchange fees that the company has to bear. If that is such a heavy expense then why would they ever want to pay a few thousands to a web designer to spruce up their website? But despite the frugal website, they have managed to slip in an extract about their company culture (Career With Us >> Our Culture) which should help us investors:

“Openness: We like to be ethical, fair and forthright in all our endeavors; openness not just in the sharing of knowledge across the organization, but also in terms of respecting the feedback given by our people.”

I hope they feel the same about their investors? Or are some investors more investors per share of holding than others?

Despite such nobility, there is some speculation that the promoters have been quietly ferreting away bite sized chunks of shares away from the market ever since 1998 and do not appear to have been open and honest about it. That sounds like fraud to me. Stock analyst Mudar Pathreya said all this and also a bit more in his interview to CNBC-TV18 on 27Jul’10. He says that the company should be worth more than Rs. 500/share and advises shareholders to hold on.

Where is SEBI when it is needed the most? I need you, SEBI for I need to make money. I remember Prof. A, who during my first year of management studies had remonstrated very vigorously and animatedly:

“SEBI should be plucked out and thrown into the Arabian Sea”.

 Serious, risk averse dyed-in-the-wool kind of value investors will stay away and look the other way. But I am greedy. Greed is good. Greed is good.

Saina’s Interim Success

While I’m shuttling around the city of the nizams, searching for a place to stay there have been so many times that I’ve looked up to see posters felicitating Saina Nehwal for her feat of being one short of one. I guess most of us would have read or heard or seen somewhere about Saina getting to world number 2 (with 64,791.26 points) behind Wang Yihan of China.

China = 1, India = 2. Looks good.

If you have been following her comments, you’d know that she has taken measured steps and always achieved the incremental targets that she and her coach, P. Gopichand have set for her. Last year she said,

“For the next year, my target is to break into the top 5 and also make my mark in the All England, World Championships and Super Series events.”

She’s gotten there. At least the ranking part. And now she says,

“It will be difficult to hold on to the ranking but I hope to continue my hard work and win more titles and become the number one player soon.”

But there is a concern. Is this her peak? Or will she head higher. I am sure no one will be answer that – not even Saina, but we’ve seen her ‘homophone-nym’, i.e Sania fizzle out. There so much more to aim for – the coming Olympic gold notwithstanding. But the best part is that she seems to be carrying a very mature head on her 20 yr old shoulder. In a recent interview she said:

“I have been training very hard and with more hard work I am sure to reach the top. I want to stay focused at my game to become number one. It is important for me to make my country proud.”

I particularly noted the phrase “It is important for me to….”. I think she has been coached very well by her parents and Gopichand. I’m some 14-15 summers elder to her and I cannot find any immature volley in her statements. I’m sure fans and observers much elder to me would also feel the same.  There have been quite a lot of financial hardships behind this interim success of hers. Imagine having to spend ~50% of your monthly income on the training of your kid. That’s what her parents did. And when that was not enough, they withdrew from their accumulated Provident Fund savings. When asked why she did not take up tennis, she said:

“No. My first love is badminton. I’m often asked why I didn’t try tennis. Training in tennis is too expensive compared to badminton”

Wow. I like the approach to money. As of now, at least. Sonia made friends with Sania, hope she leaves Saina alone. The former friendly overtures were obvisouly intended to gain Muslim votes but what kind of votes can Saina bring? Jat votes from Haryana? Well, I don’t know for she appears to have stayed in Hyderabad most of her time. But things can change. Currently her ask would be in the range of 20 – 40 lakhs per ad. It can surely climb up to a crore per ad if she bags the numero uno position. I hope money won’t corrupt her game. She’s been promised 101 gold coins if she wins us the World Championship in Paris this August. Then there are the Commonwealth Games and the Asian Games due this year as well. Lets see. Gopichand had turned down endoresment offers from the cola companies citing moral resposibilities of sportsmen since they are role models. Maybe he did not want young Indians to take to colas or maybe the money offered was not good or maybe there was the political fear given the drama that kicked out the cola giants out of India and gave us our Thums Ups. Saina’s priorities seem to be clear:

“Todays generation wants to drink everything. I am also one of them. Gopi sir took a very brave decision because he believes if we do anything, the public follows. I don’t see it that way that if I drink, others will also start drinking it”

Very logical and all fine. I also agree with her observation that today’s generation wants to “drink everything”. But I only wish Saina to drink success and more success. Money or no money. It’s all understandable considering that her winnings have been very paltry till a few years back and most of her money was spent in telephone bills since she had to pick up the hundreds of congratulatory calls on her cellphone while being on international roaming! Its not funny really.

Track her please, whether you understand badminton or not. This kid, whose caller tune (till some time back at least) used to a peppy Punjabi number, is the purest and totaly deserving world class sports performance to come out from this land of over 1 billion. How I wish India is a world beater in a team game as well – cricket does NOT count as a team game at all.

ctrl, SHIFT, delete

I am squeezing in a quick obligatory post since The Third I opens (i.e. has new posts) every 3rd day….

Shifted to Hyderabad – yesterday. New work. New chapter. At first glance, the city seems good….but to me, personally, the Maximum City is just that – max. Always.

Will be staying alone, so cooking, cleaning, etc get added to my resume! I do not have unfettered access to the internet to start off with, therefore this pathetic looking first post from a new city. Hope to get regular quickly. Got to go….need to find something to eat. Then to find someplace to stay.

BTW, have not even as much glanced at whats happened to the markets since Monday. Unless the floor has given in I think I’m good. It’s a virtue to develop – especially if you are deeply long equities. To develop the ability to breathe normally if one is shut off from the tickers for an extended period of time. And yet sleep blissfully. Learning that money should be driven by you and not the other way around.

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