Legacy of corruption

  At the time INDIA is waiting for a apt time to announce its arrival as a super power, at the time CONGRESS is announced as one of the richest political party in the world, at the same time India is announced as a place where this great nation has more poor and pitiable people than in AFRICA. What a shame when our country's GDP is approaching 9% . At the same time rollicking corruption charges were made against CWG committee which is supposed to be a flagship event for INDIA to showcase her power. No wonder in our country no high grade corrupt babus are punished. The legacy of corruption is the only one major phenomena where it cut it across all party lines from Congress to RJD, DMK to BSP. From  J&K to TN integrity is seen only is bribery and corruption.

Corruption in India is a consequence of the nexus between Bureaucracy, politics and criminals. India is now no longer considered a soft state. It has now become a consideration state where everything can be had for a consideration. Today, the number of ministers with an honest image can be counted on fingers. At one time, bribe was paid for getting wrong things done but now bribe is paid for getting right things done at right time. Our democracy is itself based on corruption and nepotism. This is not the democracy we longing for!!!!!!!

  Indian administration is tainted with scandals. India is among 55 of the 106 countries where corruption is rampant, according to the Corruption Perception Index 2004 Report released by Transparency International India. Corruption in India leads to promotion not prison. It is very difficult to catch big sharks. Corruption in India has wings not wheels. As nation grows, the corrupt also grow to invent new methods of cheating the government and public.


Corruption is a global problem that all countries of the world have to confront, solutions, however, can only be home grown. We have tolerated corruption for so long. The time has now come to root it out from its roots. We need people like  P.SAINATH to take the initiative and up the ante.

Some food for trading thoughts......

prognosticating share trading is a tricky business if have the prudence and diligence one can earn enormously in a very short span of time. Strategies and practices should go with one another. Following are Some of these little things which may be useful while homeworking.

  Low Price compared to Earnings: Stocks bought at low price-to-earnings ratio (i.e. price per share divided by net profit of the company per share) are cheaper than stocks bought at higher ratios of price-to-earnings. Almost all of my multi-baggers (stocks that multiplied in value) were purchased at a price/ earnings ratio of less than 15. Paying a low price for a stock in relation to its earnings, means you don’t overpay for growth in earnings of the company. So when growth does happen, it leads to a non-linear increase in the share price. This is particularly true when low price-to-earnings is accompanied by ‘high dividend yield’ and ‘low price-to-cash flow’.

Low Price compared to Book Value: Stocks priced at less than book-value can often be purchased on the assumption that, in time, their market price will reflect at least their stated book value (value of all assets in the balance sheet minus all liabilities). During a few rare occasions, I have also been able to find stocks selling at discounts to their current assets minus liabilities (i.e., cash and other assets which can be turned into cash within one year, minus liabilities) - a measure of the minimum liquidation value of the business. This was a stock selection technique successfully employed by the founder of the Value Investing concept - Benjamin Graham (the guru of Warren Buffett)

Significant purchases by Insiders: Managers, directors and promoters (referred to as Insiders) often buy their own company’s stock when it is depressed in relation to the estimated intrinsic value of the company. Insiders usually have special “insight” about the company and the industry, which they believe will result in an increase in the underlying value of the company. Often such insider buying happens in companies, whose stock is available at low price-to-earnings or at low price-to-book value. Using knowledge of insider purchases (available in exchange filings) along with fundamental stock evaluation criteria makes a powerful combination that’s hard to beat.

Significant decline in share price: A severe decline in share price is often accompanied by a decline in earnings of the company or earnings that failed to meet expectations. What most market participants fail to understand or anticipate - is the possibility of the company’s performance reverting to mean. More often than not, companies with a strong balance sheet (and promoter track record) but whose recent performance has been poor, tend to perk up and improve, generating tremendous returns to the contrarian investor who was bottom fishing.

Small market-capitalization: Most publicly traded companies are small in terms of their market capitalization (total number of shares multiplied by share price). In fact if you remove the top 100 firms (by size) from the stock market, the combined market capitalization of the others contributes only to a third of the overall market capitalization of all listed firms in the exchange. Small and mid-cap companies, if selected prudently, often display higher rates of growth and may be more easily acquired by larger corporations – providing a double benefit for shareholders who buy cheap.

Each of the above characteristic is loosely connected to the other. A confluence of all the above characteristics is a strong pointer to an undervalued stock that has potential to yield high returns.