India Cricket: IPL out of India (Part 2)

IPL Shift: Congress says no Politics Involved

The decision was taken after state governments of Maharashtra, Andhra Pradesh, Delhi and Rajasthan told the organisers that it would be difficult to provide security due to the General elections.

One slight problem with this statement:  all of the above mentioned states are ruled by the Congress party...Gujarat, Madhya Pradesh, Karnataka, Tamil Nadu, Bengal, Himachal Pradesh have no problems hosting the IPL....but they are NOT ruled by Congress.

This is politics and it is rotten..let us hope the Indian polity which is unmoved by performance will be moved by losing its "religion"..and boot these clowns out of office decisively.

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India Cricket: IPL out of India

In a rude but deserved slap to the Congress-led UPA government, the BCCI today announced that the IPL tournament will be held in either South Africa or England..(South Africa is my bet).  The Congress controlled states Maharashtra and Andra Pradesh refused to give permission because of security concerns...laudable but laughable.

This Congress-led UPA has managed to bring this country to its knees; the richest cricket tournament in history cannot be held in India because of security concerns...this is unimaginable...and the people of India will deliver their verdict at the polls in April and May.  In a country where cricket is religion, the Congress-led UPA is in for carnage at the polls...

In 2010 India is the host country for the Commonwealth Games....this is an event where the number of athletes will be approximately 5000 compared to 200 for the IPL....would you consent to come to India given the debacle which we have just witnessed.

Expect a disaster for the Commonwealth Games of 2010...it would not surprise me if that is also moved out of India as participating countries start voicing their concerns, starting NOW.

My personal view is that the Congress and its boys were holding out for a bigger share of the revenues from IPL...Sharad Pawar decided to show everybody who is BOSS...and he gets my vote.

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2009 Outlook for Nifty/Sensex

India beat Australia by 320 runs in the second test...the outlook is for better in 2009.

Game 6 of World Chess championship Anand-Kramnik tonight; Anand is +2

On a more sombre note, current Sensex EPS is about Rs 825 per share and Rs 250 for Nifty. It would be hard to argue for growth beyond these figures given the amount of investment at the peak in Land, buildings and foreign acquisitions. Further, the middle class consumer in India will retrench somewhat given the hit to their mutual fund holdings and headlines about job losses.

My outlook for 2010 is a 10% reduction in EPS to about Rs 750 per share Sensex and Rs 225 per share Nifty.

The liquid market has transmitted a clear message to promoter groups to clean up the balance sheets and remove uncertainty. Sooner or later, the red ink will have to be reported. Unlike past episodes, foreign investors will take a long time to recover from their domestic disasters, and even longer to value new investments. The groups that leave uncertainty on their balance sheets will end up last in line in this 'new risk averse/aware world'.


At the projected EPS outlooks and a generous multiple of 11, we have the following:

Sensex: 8,250 Nifty: 2,475

www.partymarkets.com

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A Refresher on Market cycles

First: Anand won game five of World Chess Championship against Kramnik and leads by 2 points.!

Second: Australia is 141 for 5 chasing 516 going into the fifth day!

(click to enlarge)
This is the typical cycle from boom to bust converted into simplified mass investor psychology.

It is instructive today as we try to determine whether we are at the bottom or is there more pain ahead and hence more opportunity?

We are not at the bottom...

In my opinion we are now in the capitulation stage of this cycle; denial, fear, desperation and panic are behind us. Too many talking heads are still forecasting better times ahead; the despondency and depression stage have obviously not been reached...

It seems to me that a prudent investor would wait till late spring 2009 before committing money to the markets. This should give enough time for market conditions to stabilize and clarify. If you are still thinking you don't want to miss the bottom then we are in the infancy of the capitulation stage.

Be patient; sit on your hands. Let the talking heads prognosticate; its your money and not theirs you will risk. Environment will become conducive for a proper risk-reward investment climate; wait for it.


Compare the above chart with the Deflation cycle chart at left:

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