Gold does it AGAIN...

Gold does it every year and it is doing this again. It follows the yearly "Chinese Gold Rush Cycle" and shoots up during a 4 month period every year. This starts sometime in September every year, before the festive season in India and continues till the end of the Chinese New Year.


A previous post on Investorsteet stated this last year when gold was doing what I call "A habitual affair". This year, it is expected to finish the cycle during the 4th week of January and it is already at USD 1053.31 per ounce (Source: www.goldprice.org)

The average annual change in gold prices (in USD) has been 17.1% during the period 2004-2009 with a positive change in any given year.

F1: Days of the Underdogs

Team Red Bull was supposed to be the Minardi of the lot. The likes of Ferrari, Mclaren and BMW Williams assume Torro Rosso to be invisible to their scope of competition.

But the fact that Sebastian Vettel won the Japanese Grand Prix shows that improbable is what you can expect in F1 now. Some might argue that the 4 crashes on Saturday's qualifying session helped Vettel, but it takes nerves of steel and a bit of luck to emerge a winner in any F1 race.

On a personal note, I enjoy F1 more than ever now since it does not turn out to be another race that Schumacher would win. Though I miss seeing Schumi behind the wheels, I enjoy the flare that F1 has instilled in the drivers, due to Schumi's absence.

Image Source: www.espnstar.com

Demand for affordable housing pegged at 2 million by 2011

Affordable housing for the middle class segment, in the Rs 3-10 lakh income group, requires about two million homes by 2011, the Knight Frank study said. The requirement covers an area of 1,650 million sq ft and entails an investment of Rs 3,30,000 crore.

Of this, nearly 80 per cent of demand is expected to come from the Rs 3-5 lakh segment, it said. Over 32 per cent of potential buyers are looking at making purchases in the next 6-12 months.

The highest requirement is from Mumbai and the NCR, which require 0.4 million units and 0.54 million units, respectively, with corresponding investment of Rs 64,700 crore and Rs 87,600 crore.

Source: Property Pulse

Indian Property Boom Stalls as per Global Property Guide

The following article has been taken from Global Property Guide for Investor Street readers' reference:

Finally, it happened - Indian real estate has stalled. High interest rates and high prices have cooled the growth of the market, though there is no crash yet.

Prices have not risen in key areas of cities in the last six months. Speculators have withdrawn, end-users are being cautious. Property transactions have dropped, and developers are being forced to add sweeteners such as parking lots to attract clients. The State Bank of India, the country’s largest lender, saw a home loan portfolio growth rate of 16 per cent in 2007, slower than the 20 per cent growth witnessed in 2006.

Despite the recent opening of real estate development to Foreign Direct Investment (FDI), foreigners still have difficulty buying land and property in India (and need the approval of the (RBI).

The property must be used for residential purposes only. If foreigners earn rental income from property, the proceeds cannot be repatriated to their home country.

Non-resident foreigners simply cannot buy.

Taken from : Global Property Guide

200 Posts!!!!!!!!!!!

INVESTOR STREET CELEBRATES 200 POSTS!!!!!!!!!!!!!

Inside Insider Information

If someone told you that technical analysis is the reason you can earn 10+% in a day, then they were WRONG.
The fact is that market information will get you places faster than any analysis by the best of technical analysts who try to time the stock. Take for example my experience yesterday. ACC was a stock which gave a bommer of return yesterday due to exceptional results. A good friend of mine had gathered ACC on Thursday morning and gave me the info that the stock would shoot up on Friday on back of beating market expectations. He had been gathering the stock for 2 or 3 days now so that just tells you that he had some information that most out there did not, and he had that way before others too.
So your consitant capitalization on returns would be a direct function of how strong your contact network in the market is and more importantly how reliable it is. People often use insider information to reap superior returns in the markets and most do it quietly. But in all honesty, i recommend not using the insider way to make money cause you more often will attract a lot of unwanted attantion if you do so.
Bet on fundamentals and invest for the long run. I know its difficult to do when you look at easy money but its worth it cause it comes without all the trouble a short cut can get you into.

Cartoon Taken From: http://www.cartoonstock.com/

Mumbai Low on Yield for Residential Property

Taken from: Globalpropertyguide

"By international standards, the yields on residential property in India are low. This has long been the case in Mumbai, and despite the market correction, our research suggests that South Mumbai gross yields are still low, averaging 3.88%.

These yields are not completely unreasonable (at least, not as unreasonable as Mumbai yields used to be) and many European capital cities are on this yield level. But it does mean that if capital gains are your chief aim, Mumbai would not be a particularly inspired choice, in our view.

South Mumbai apartments remain breath-takingly expensive, at US$7,353 per square metre (sq. m.)

New Delhi apartment gross rental yields average 3.54%. This figure is of course distorted by rent control laws. The average price of the apartments that we surveyed in New Delhi is US$2,091 per sq. m.

Apartments in Bangalore have higher gross rental yields than either South Mumbai or New Delhi, with an average figure of 4.65%. Bangalore per square metre prices are low, at US$592 per sq. m., on average. This combination means that Bangalore appears to us the most attractive of these three major Indian cities, from an investment perspective."

Source: http://www.globalpropertyguide.com/Asia/India/Rental-Yields

Bangalore Property Rates

Click on the image to enlarge:

Click on the image to enlarge:

Sensex 16000? A New Bull Run....

A lot of people of late have asked me where are the markets headed. The recent run of15000+ has left many disappointed since they could not participate in the rally. So was it really such a big loss? Not really.

In terms of a risk reward approach, the chances of the Sensex moving beyond 15000 was a lot less than it testing 12000 levels. Mere quarterly improvements in the growth of key sectors and market sentiments fed by the Prime Minister's guidance are not enough to sustain the current market levels. The improvement in industrial production, sectoral growth and increased demand have to be consistent for at least 2 successive quarters in order to start a pegging point for a long term bull run. Another reason that is feeding the current frenzy is that amongst BRIC nations, India and China are still the most attractive investment destinations due to the slack in Europe and USA. As the global economy recovers from its lurid state, the BRICS will benefit the most due to the robust growth that they are capable of sustaining.

Investor street is of the opinion that if the Sensex rallies beyond 16000 then fresh positions can be taken since the rally is then expected to continue for a while. But until the market breaks the 16000 mark, fresh positions are very risky and the market might test 13000 levels again. We remain bullish on Power and Infrastructure.

Investor Street Confidence Index (ISCI)

The Investor Street Confidence Index or the ISCI takes into account more than 40 parameters while analyzing and rating the top sectors in the country.

Based on this we have rated the following sectors for the near term outlook. The rating is on a scale of 5 where a higher rating signifies more investor confidence towards the sector. The findings of the ISCI are as follows:

Investor Street is overweight on Power & Infrastructure and these two sectors would be the front runners during the upswing. Post March 2010, Real Estate could witness the maximum inflow coming in and the economy is expected to be at the peak of the recovery mode post November 2010.
We advise investors to stay away from IT and Oil & Gas for the near term. Fresh positions in Power and Infrastructure can be taken with a horizon of 12-18 months.