Power of Wind - Coming of Age

In this century, apart from water, we are bound to face tremendous problems in power generation to meet the exploding power requirement? We will have to explore alternative sources to oil for meeting the burgeoning demand. All avenues have to be explored seriously - from nuclear to hydro to even ethanol. I say seriously because that's what the situation warrants. And that is exactly what the West is currently doing - seriously investing mega bucks into developing alternative sources of energy. Why the sudden seriousness? To find answer to that please take note of the following points:-

• US alone has to import oil worth $ 10 trillion to meet its demand over next 10 years.
• US economy can ill afford such ugly oil bill with real economy in tatters and debt situation getting out of control.
• With demand rising the existing oil fields may not be able to cope up with it, which can trigger a runaway oil price situation.
• The Wall Street Journal reported that output from existing oil fields is dropping by about 4.5% every year and by up to about 18% in some of the biggest oil fields in the North Sea, Alaska and the Gulf of Mexico.
• New York Times reported that many of the major oil exporting countries may have to begin importing oil within a decade to meet the rising energy demands from within their borders.

The scenario as sketched above has prompted US President Barack Obama to give Wind Energy a top priority for his administration. US is deftly positioning itself in Wind Energy to be ahead of the pack in the next revolution after IT. Researchers at Stanford University concluded that even if 20% of available wind can be harvested, it will meet the global energy demand seven times over. This is how serious US is about wind energy:-

• Green Chip Review estimates that by 2020 wind capacity in US will have grown by 360%.
• US Department of Energy recently confirmed that 20 % of America's electricity requirement can be met through wind energy by 2030. Presently only 1% is being met through wind energy.
• The wind industry in US is about to explode 20 times.
• New York mayor Michael Bloomberg has unveiled plans to outfit dozens of the city's skyscrapers, waterways and bridges with wind turbines.
• A cluster of wind farms south of Los Angeles will soon supply a large part of its electricity.

With so much seriousness how can the serious investors stay away. Bill Gates has picked up 9% stake in a wind energy company. Also consider the following investments in US:-

• British Petroleum is teaming up with Clipper Windpower to build a 5050 megawatt wind farm in eastern South Dakota.
• The Blackstone group, one of the top US private equity firms, has committed $ 1.6 billion to construct an offshore wind farm.
• Shell and TXU Energy have joined hands to build a 3000 megawatt wind farm in Texas.
• J P Morgan has already invested $ 4.4 billion into more than 40 US wind farms.
  

It seems that wind energy has finally arrived on the scene. Since 1990s cost of generating electricity from wind has dropped by about 80% and it is further getting more and more cost efficient by the day. That is why this industry is growing worldwide at a fast clip of 30% year on year. Experts feel that over next 5 years the number will further go up to 50% per year, thereby generating some $ 300 billion in revenues.

If you believe in this next revolution in offing, then do invest in some wind energy companies for at least 5 years. Returns can be astronomical!

PORTFOLIO ANALYSIS - SAMPLE 8 (Jalal Basha)

Here we have a very unique portfolio of Mr Jalal Basha which comprises of some rare gems and is also well diversified. I hope it will serve some of you to select a few scrips from the portfolio to add to your own. Lets begin the analysis then.

3iinfotech
Holding 250 shares @ Rs 88.5. Closing price on 29 Sep 09 was 83.25

6 mnth tgt- 135, 1 yr tgt- 172

You should plan to exit the scrip with no profit no loss. You should re- enter the scrip at 70 and keep accumulating till level of 60.

Alembic Ltd

Holding 250 shares @ Rs 49 . Closing price on 29 Sep 09 was 52.3

6 mnth tgt- 72, 1 yr tgt- 100

Alembic can run up to 65 so keep holding till at least 62. Exit there and be ready to pick up the scrip again between 45 and 50. You can than look forward to sell your holdings at one year's target of 100.

Apollo Tyres

Holding 100 shares @ Rs 39.5 . Closing price on 29 Sep 09 was 46.2

6 mnth tgt- 55, 1 yr tgt- 85

Book your profit in Apollo Tyres at current market price. Wait for correction and buy it again at 30 level for 1 year's target.

Crompton Greaves

Holding 15 shares @ Rs 300. Closing price on 29 Sep 09 was 311.7

6 mnth tgt- 440, 1 yr tgt- 560

Play safe and exit your position from Crompton Greaves at current market price. Close below 300 will be disastrous for the scrip. It can find support at 260 level but at that point if market shows consistent weakness it may even revisit 180 level. So its better not to take any chance since you are still not in loss by exiting at CMP. You can start buying from 220 till 180 and then hold the scrip for one year's target of 560.

Ess Dee Aluminium

Holding 60 shares @ Rs 359 . Closing price on 29 Sep 09 was 352.8

6 mnth tgt-550 , 1 yr tgt- 700

Ess Dee Aluminium can touch 385 in current run-up or even higher. But on the flip side it may even drop down to 250 during market correction. But if you are not hard pressed for capital then you can cling on to it for one year's target of 700.

Exide Industries

Holding 100 shares @ Rs 88.5 . Closing price on 29 Sep 09 was 89.9

1 yr tgt- 160

You should consider off loading this scrip at current market price. You may like to pick it up again at level of 65 for its one year target of 160.

KSK Energy Ventures

Holding 100 shares @ Rs 210. Closing price on 29 Sep 09 was 203.4

Frankly speaking there can be explosive move either way in this stock. Below 195 it can tumble to a zone between 110 to 140. Above 210 it can race to 280. Since the probability to move southwards is more, exiting the stock at CMP will be more prudent play.

Mahindra Lifespace

Holding 50 shares @ Rs 373 . Closing price on 29 Sep 09 was 385.1

6 mnth tgt- 500, 1 yr tgt- 650, 2 yr tgt- 900

Mahindra Lifespace can move up to 400 but you may be better off to exit the scrip while still in green. You will then have the option to re- enter at 225/250.

Nava Bharat Venture

Holding 15 shares @ Rs 433 . Closing price on 29 Sep 09 was 380.7

1 yr tgt- 850

Though Nava Bharat Venture can correct a great deal, but in my opinion you should keep holding the scrip and plan to double your holding at 260/280. Then you can profitably exit your complete position at one year's target of 850.

NHPC

Holding 785 shares @ Rs 36 . Closing price on 29 Sep 09 was 34.6

1 yr tgt- 42

NHPC can fall down to 22. Keep accumulating from the level of 30 right up to 22. By averaging so you can plan to exit from the scrip in one year's time with a decent profit.

Noida Toll

Holding 300 shares @ Rs 44.3 . Closing price on 29 Sep 09 was 41.9

6 mnth tgt- 60, 1 yr tgt- 85

Noida Toll should correct from here up to 32. Double your position at around 32 level and hold for one year til the target of 85 is achieved.

Praj Industries

Holding 150 shares @ Rs 107 . Closing price on 29 Sep 09 was 102.1

1 yr tgt- 180

Praj Industries can witness serious selling below 96 which may take it all the way down to the zone between 60 and 70. Plan to accumulate the scrip at that level and book profit at its one year target of 180, which may even stretch up to 200.

Tinplate

Holding 200 shares @ Rs 69 . Closing price on 29 Sep 09 was 55.25

1 yr tgt- 145

Keep picking up the scrip from 50 right up to 45 , and just in case it falls further down to 40 do add some more to your portfolio. You can then plan to sell your complete holding at one year's target of 145.

Indian Budget 2009 - Road Map For Future Growth

There had been tremendous expectations on the street from Indian Budget 2009. That was purely on the assumption that with no millstone of Communist Party baggage around its neck, the UPA Govt would take the developmental plank in a big way. Hence the hoopla around Budget 2009. But when the day arrived, the package delivered was quite contrary to expectations of the market. And as it always happens, when market doesn't like some piece of news - it tanks. Imagine how badly hurt its sentiment would have been since it was waiting for this Budget with glee and a certainty of content therein? Hence on Budget Day of 06 Jul 2009, thoroughly annoyed with the Finance Minister, market did a Tandav Nritya - the dance of Anger. From intra-day high of 4480, Nifty crashed to day low of 4134 - a massive thumbs down of 346 Nifty points to Budget 2009. Thereafter it continued to fall and registered a low of 3919 on 13 July 2009.

Indian Budget 2009 has been criticised by all and sundry for lacking direction. It has been vilified as being neither developmental nor populist. Finance Minister has been accused of giving no tweak to the growth engines of India. But I was satisfied. Satisfied because what I had hoped for was finally delivered. Budget 2009 recognised the need to give impetus to two sectors - education and rural development. For acknowledging so, it can be termed as a watershed budget. The foresightedness of this budget needs to be appreciated. In the long run if India wants to be an economic superpower then these two sectors will have to be given due importance from now onwards. And Budget 2009 finally delivered on that score, albeit on an humble scale. I fully agree that such a tough decision was long overdue, but it is never too late to wake up. And India, it seems, is finally waking up!

Why I sound so emotional at this point is owing to the fact that I feel my prayers have been answered by Govt of India. In my blog post titled 'Indian Democracy - Road Ahead' on 16 Mar 2009, I had outlined two major areas, that is of education and rural development, towards which we should focus our energies. This is required to eradicate the ills that this country suffers from. And these ills have shackled us to a large extent from becoming what we richly deserve - a Global Superpower. I hope you can take some time off to revisit the blog post in order to co-relate my line of argument with the visionary provisions of Union Budget 2009. You may click the link for quick reference - http://archana-archdeb.blogspot.com/2009/03/indian-democracy-road-ahead.html

Now to business. If you agree to my point of view and that of Indian Govt, start investing in companies engaged in education and rural development sectors. Do a top down analysis and home on to scrips in these two sectors for long term investment. Not only will you be making a killing , but also be participating in the growth drivers of strong India. A win-win situation for all, wouldn't you say?

PORTFOLIO ANALYSIS - SAMPLE 7 (J P SHARMA)

Presently we are going to do an interesting portfolio analysis of Mr J P Sharma where the choice of companies is rather fascinating. There is immense scope in this portfolio for impressive gains over the next one year. Shall we begin then?

Unitech
Holding 500 shares at an average price of Rs 83. Closing price on 23 Sep 09 was 109
6 mnth tgt- 160, 1yr tgt- 200
Since you are sitting on profit and market correction is expected soon, you may like to sell 50% of your holding at about 120 and release your capital. After the correction you may like to pick up Unitech at 75/80 level. Then hold your position for one year's target of 200.

Suzlon
Holding 500 shares at an average price of Rs 96. Closing price on 23 Sep 09 was 94.6
6 mnth tgt- 180, 1yr tgt- 320
Suzlon should be bought at every dip. So be ready to add to your holding in small packets till level of 80. Such accumulation in the scrip will pay you handsome dividends in one year. Sell your complete position once the scrip reaches the price target of Rs 320.

DLF
Holding 90 shares at an average price of Rs 343. Closing price on 23 Sep 09 was 423.6
6 mnth tgt- 700, 1yr tgt- 900
DLF may correct till 300 and may on extreme conditions go down as much as 250. You can keep a stop loss of 385 and keep holding your position. You may then re-enter the scrip at 300 for the price target of 900 in one year or so.

Bhartiartl
Holding 50 shares at an average price of Rs 612. Closing price on 23 Sep 09 was 413.5
6 mnth tgt- 550, 1yr tgt- 750
Hold your position in this scrip and plan to add to your position during the correction. Fall below 390 can take the scrip to 340/350. Buy 50 additional shares at 350. Hold the scrip for one year's target of 750.

Mundra Port
Holding 50 shares at an average price of Rs 610. Closing price on 23 Sep 09 was 537.5
6 mnth tgt- 800, 1yr tgt- 1100
Mundra port can slide down to 400 if it closes below 520. Double your holding if the scrip touches 400. Hold your position for one year's target of 1100.

RNRL
Holding 200 shares at an average price of Rs 140. Closing price on 23 Sep 09 was 88.15
6 mnth tgt- 145, 1yr tgt- 190, 2 yr tgt- 250
RNRL can correct to 70 once it closes below 83. Keep accumulating the scrip from 70 downwards till 60. Hold your position till one year's target of 190.

Alok Industries
Holding 1000 shares at an average price of Rs 22.45. Closing price on 23 Sep 09 was 22.7
6 mnth tgt- 33, 1yr tgt- 42
Alok Industries can fall to 15 level but you should keep holding your position. You should start accumulating at dips right from 19 till 15. You can then sell your positions comfortably at one year's target of 42.

SBI
Holding 60 shares at an average price of Rs 343. Closing price on 23 Sep 09 was 2142
6 mnth tgt- 2300, 1yr tgt- 3200
You have SBI at IPO price so just keep holding it till its one year target of 3200.

GMR Infra
Holding 100 shares at an average price of Rs 143. Closing price on 23 Sep 09 was 140.7
6 mnth tgt- 200, 1yr tgt- 260
GMR Infra may correct to 110. You may start building up your position from 110 downwards. Hold the scrip for one year's target of 260.

RPL
Holding 160 shares at an average price of Rs 146. Closing price on 23 Sep 09 was 130.4
6 mnth tgt- 200, 1yr tgt- 235, 2 yr tgt 290
RPL can move down to 110 during the coming market correction. But you should only think of adding to your present position. Sell only when the scrip touches 290.

NTPC
Holding 260 shares at an average price of Rs 198. Closing price on 23 Sep 09 was 208.8
1yr tgt- 300
NTPC looks quite dicey below 200. You have a choice to move out of this scrip at current market price and re-enter at 170. It may go down to even 150 level, but over one year it will surely touch 300.

PORTFOLIO ANALYSIS - SAMPLE 6 (KOTHIWALA)

Continuing with our series of portfolio analysis , now we have portfolio of Mr Kothiwala. He has converted most of his portfolio into cash and wisely so. We have to learn to take profit home, otherwise there is no point in investing our time and money in the stock market. But my only piece of advice to Mr Kothiwala would be to start assessing the different sectors and good companies therein, so that he can re-enter the market after the expected correction. Be that as it may, let us now begin to analyse the portfolio or what remains of it!

GVK Power
Holding 2700 shares at an average price of Rs 46. Closing price on 22 Sep 09 was 46.6
6 mnth tgt- 65, 1 yr tgt- 100
You may consider exiting from 50 % of total holding of the scrip at current market price. This will be on a no-profit-no-loss basis, and will give you the capital to re-enter at lower level. This is because GVK power may test 27/30 level in the coming correction. Buy back your shares at 30 and hold for one year's target of 100. Exit complete position once target is achieved.

JP Associate
Holding 500 shares at an average price of Rs 220. Closing price on 22 Sep 09 was 249.8
6 mnth tgt- 390, 1 yr tgt- 500
JP Associate can correct to 170 level. If that happens then pick up 500 additional shares at around 170 and hold your total position of 1000 shares. Sell your complete position at the target price of 500.

Suzlon
Holding 200 shares at an average price of Rs 90. Closing price on 22 Sep 09 was 100.8
6 mnth tgt- 180, 1 yr tgt- 320
Suzlon is a bright candidate to be in any portfolio for the next one year. Hold the scrip and keep adding to your position in small tranches at every dip till 80. Accumulate at least 1000 shares in your portfolio for next one year. Exit your complete position at target price of 320.