The Last Attendant

Stock Market rallied since last three days and everyone is getting a call from there most preferred brokers.”Buy this buy that" ,but there is one very interesting call I got from my icicidirect account(I prefer it because it's a plain portal and does not flash stock tickers for you every one second or so, more about ticker experience later). Well there call was buy HUL above Rs.238. Confused, well anybody can get confused, that why the hell are they asking me to buy HUL above so or so price. Is this some kind of joke from icicidirect , i don't know but that's for sure if you can get something for Rs.10 and your neighbor offers you to sell it for Rs.11, in most of the cases you will deny. I though a lot about this call and was not able to digest the fact. So people don't get caught in such kind of calls.
About experience with tickers: Earlier whenever researching about any company I give a lot of thought to the moving averages and prices and which impacted my decisions. I researched a lot about the company, always remaining very conservative in my valuations but in the end was moved away by rising prices. And this was the cause of my failure. But I never lose hope and one day I got the answer from my buffets letter. I changed my philosophy and now I started analyzing companies first, Note all the good points in xls , do scuttlebutt and note these too in xls, do conservative DCF valuation (DCF valuation should be your last destination and I have read this from all great investors and it’s true also because you should always valuate a good business not a sub standard one.) I note the valuation also in xls and how I did it.

On Agriculture Business: I’m really bullish about agriculture and renewable energy business in India, more specifically agriculture because it’s one sector which has great potential and has been left unnoticed since long although our economy is based on agriculture. And I think it’s not Indian railway which is the world’s largest employer but it’s Indian Agriculture. Read this http://www.fao.org/docrep/u8480e/U8480E0w.htm Karuturi Global has already reached Africa, Advanta is into hybrid seeds making and Jain irrigation is into drip and sprinkle irrigation technology and tissue culture there is lot and lot going to happen in this sector but why I’m betting on karuturi and jain irrigation because they have see one complete business cycle and have come up really well. They have tasted success and can repeat it year on year, if the current management remains intact. Moreover these are owner managers who have made fortunes, investing in such off track businesses and became market leaders.

I’m constantly reading Warren Buffet letters and would like you to read and discuss with me, I’m always open for discussion because it has always helped me learn new stuff and hope it will help you also.

"If it’s not going to go forever, it will eventually stop”. A great saying but I read it in Warren Buffet Letters to shareholders. Well it applies to our water also which is used by us as if it will never end. Recent example is rented house where I was staying and later I was forced to move out because the boring which was serving around 10 houses in the building dried and owner was infrequent in providing water from external source. He tried to dig the boring again and again but the result was wet mud and only that even after spending lacs on the boring. Well while things were going fine nobody in the entire building including me thought about such a scenario and everyone was extravagant in spending water. Now I moved to a new well furnished house where there are two water sources, a municipal one and a boring. But I’m still wondering what if one day I will have to face the situation that people are facing in Delhi(Many of them) or Mumbai, and you know what I’m referring to.
Scientists expect water scarcity to become more common in large part because the world’s population is rising and many people are getting richer (thus expanding demand) and because global climate change is exacerbating aridity and reducing supply in many regions. What is more, many water sources are threatened by faulty waste disposal, releases of industrial pollutants, fertilizer runoff and coastal influxes of saltwater into aquifers as groundwater is depleted. Because lack of access to water can lead to starvation, disease, political instability and even armed conflict, failure to take action can have broad and grave consequences. The condition of our major rivers like Ganga is worsening and can be catastrophic in the years to come if measures are not take. Well there is lot to tell about the water problem and there is no limit to think where it can lead to.So let's finish up with this and come to point as a true chemical engineer and company analyst to discuss about the solutions and the companies working on them (Well offcourse listed and unlisted both):-

Solving the world’s water problems requires, as a start, an understanding of how much freshwater each person requires, along with knowledge of the factors that impede supply and increase demand in different parts of the world. Malin Falkenmark of the Stockholm International Water Institute and other experts estimate that, on average, each person on the earth needs a minimum of 1,000 cubic meters (m3) of water per year—equivalent to two fifths of the volume of an Olympic-size swimming pool—for drinking, hygiene and growing food for sustenance. Whether people get enough depends greatly on where they live, because the distribution of global water resources varies widely.

Providing adequate water is especially challenging in drier, underdeveloped and developing nations with large populations, because demand in those areas is high and supply is low. Rivers such as the Nile, the Jordan, the Yangtze and the Ganges are not only overtaxed, they also now regularly peter out for long periods during the year. And the levels of the underground aquifers below New Delhi, Beijing and many other burgeoning urban areas are falling.
Well I read a lot about the ways to limit water waste but they are not looking feasible in my view. Like increasing price of water which will only cause trouble to poor people and farmers and as usual indian middle class will adjust with it. When the goal is to save water, another key strategy should be to focus on the largest consumers. That approach places irrigated agriculture in the bull’s-eye: compared with any other single activity, conserving irrigation flows would conserve dramatically more freshwater. To meet world food requirements in 2050 without any technological improvements to irrigated agriculture methods, farmers will need a substantial rise in irrigation water supplies (an increase from the current 2,700 to 4,000 km3), according to the IWMI study.I think what Jain Irrigation(BOM:500219) is doing can be of tremendos help to farmers.I was reading an article in forbes asia about jain irrigation and came to know about the tremendous management team with Mr. Jain and his three sons taking charge of everything and have brougth the company from getting bankrupt in 2002 to a billion dollar company. I have studied a lot about this company and was waiting for the opportunity to invest in it and Mr.Market gave me my price.They have a future model of renewable energy which will be a combination of solar bio fuel and wind.Well while doing my analysis (extracting details from all possible magazines the one I personally love is SME world. It contains some of the possible future multi baggers (even if it is not listed) you can keep a watch on them . From these gems I have found Permionics(http://www.permionics.com/ . Check out the website and find yourself what it does,well it's desalination of sea water using membranre technology and is a market leader in it. Even Ion exchange tried to buy the company but there founders rejected it.Google it and find it what it is. Ion Xchange is another company which is working in waste water management but due to very tight profit margings of the company I'm not yet interested in it.
Finally there is a very interesting article I read while browsing internet and that is of virtual water. On the first go it was kind of difficult to get the crux of what it really is.The term relates to the amount of water expended in producing food or commercial goods. If such products are exported to a dry region, then that area will not have to use its own water to create them. Hence, the items represent a transfer of water to the recipient locale and supply them with so-called virtual water.Provision of goods—and the virtual-water content of those goods—is helping many dry countries avoid using their own water supplies for growing crops, thus freeing up large quantities for other applications. The virtual-water concept and expanded trade have also led to the resolution of many international disputes caused by water scarcity. Imports of virtual water in products by Jordan have reduced the chance of water-based conflict with its neighbor Israel, for example.
Well here I'll end my discussion becasue the topic is too vast to discuss in one go .The main motive to give you details about the water crises and give some idea of the companies which are working well in these area. With Indian economy still largely dependent on agriculture . The provision of providing water and in a managed way can inccreas the productivity of our land many folds. Also with depleting natural resources of water companies coming up with best and the cheapest ideas will thrive and continue to grow.


Note:- I have read many different magazines before writting this article still I have restricted myself in directly copying the materials from these magazines. I am only presenting those ideas which I liked the most.For any discussion about anything leave a comment.My motive is to create a community where people of different circle of competency advise each other in analysisn businesses.