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"Global Cues in 5 minutes
Every morning you wake up thinking - what happened overnight and how it is going to impact Indian stock market. Well, here’s a quick way you can review what happened overnight in less than 5 minutes.
All you have to do is - quick glance of nine indicators and you are ready for the trading day. These are the nine must see charts every morning.
S&P 500
The S&P 500 is one of the most followed/traded equity indices in the world. It is an index of 500 stocks - popular benchmark for overall stock market. It is market value weighted index, unlike Dow Jones which is price weighted. It means each stock’s weightage is based on market value of the companies and not the price of individual stock.
For chart, click here - http://stockcharts.com/charts/gallery.html?$SPX
US CBoE VIX
Also Known as Fear index. The VIX tells us the market’s expectation of 30-day volatility. It is constructed based on implied volatilities of various S&P 500 index options. It is a forward looking indicator and a measure of market risk. VIX values less than 25-30 are considered ok, but any value above that is considered as big warning sign. Remember, during Lehman collapse - it shot upto 80.
For chart, click here - http://stockcharts.com/charts/gallery.html?$VIX
USD Index
It is a measure of the value of US dollar against a basket of currencies: Euro, Japanese Yen, British Pound, Canadian Dollar, Swedish Krone and Swiss Franc. The index was started in 1973. In last couple of years - dollar has become an important lead indicator of Global capital flows and risk aversion.
For chart, click here - http://stockcharts.com/charts/gallery.html?$USD
CRB Index
CRB stands for Commodity Research Bureau. It is also known as commodity index. The index was designed to tack the directional movement of prices in overall commodities. Since, most of the commodities are priced in dollars, they move in opposite direction to Dollar. CRB index is also a play on strength of Global growth; and remains at center of inflation watch.
For chart, click here - http://stockcharts.com/charts/gallery.html?$crb
Crude Oil and Gold
Crude Oil and Gold have been two most watched and traded commodities in last five years. It pays to track their movement; as they tend to be volatile and make sharp moves
For Crude chart, click here - http://stockcharts.com/charts/gallery.html?$WTIC
Gold chart - click here - http://stockcharts.com/charts/gallery.html?$Gold
BDI Index
Baltic Dry Index - measures the state of shipping industry. It is one of the best indicators of Global trade and economic growth. I have covered this index many times before in State of the market. I consider this index to be very important as it is non speculative in nature; and is based on true economic activity.
For chart, click here - http://stockcharts.com/charts/gallery.html?$bdi
Chinese stock market
It’s not only the US stock market that matters now-a-days. China is becoming big with every passing day; and occupies big mindshare of global investors. Hence it becomes an important index to watch purely from sentiment perspective.
The best index to watch in China - SSE Composite. The SSE composite is made up of all the A-shares and B shares that trade on the Shanghai stock exchange - and gives a broad view of the overall chinese stock market.
For chart, click here - http://stockcharts.com/charts/gallery.html?$SSEC
Impact on India: SGX Nifty
SGX Nifty gives the best view on how Nifty will open early morning based on all global cues; and key domestic data released after market hours. It prepares a trader on how he/she should position for the market.
For quote, click here -
http://www.sgx.com/wps/portal/marketplace/mp-en/prices_indices_statistics/derivatives/delayed_prices/infe
I hope this article will help you get ready for a trading day in a much better fashion. Do share your feedback and input.
Disclaimer - The state of the market notes is Deepak’s perspective on the market. The column is purely for educational purpose. Nothing contained herein is a solicitation to trade or a recommendation of a specific trade. By reading this publication you agree to make no trade relying in whole or in part on the comments of the writers
source: http://www.stateofthemarket.net/blog/?p=6585"
Monday, August 31, 2009
Tuesday, June 16, 2009
Print Article - livemint
Print Article - livemint: "Entrepreneurship Lessons | Ten tips on raising funds for the first time
It’s also very unnerving, besides time-consuming, for the entrepreneur to explain his business to an outsider multiple times, without being sure whether a deal will finally get closed
Sanat Vallikappen
Most entrepreneurs fly blind in their first fund-raising. They don’t know what it involves. A lot of them don’t have friends on the investor side, and there are a lot of misconceptions about what investors are looking for. It’s also very unnerving, besides time-consuming, for the entrepreneur to explain his business to an outsider multiple times, without being sure whether a deal will finally get closed.
Early action:Helix Investments’ Cyrus Driver says it’s important not to defer raising funds till the firm runs out of money.
Early action:Helix Investments’ Cyrus Driver says it’s important not to defer raising funds till the firm runs out of money.
Cyrus Driver has experience both as an entrepreneur—he founded Calorie Care, a calorie-counted meal delivery service in Mumbai in mid-2004—and as an investor—he is director of Helix Investments, an India-focused private equity fund sponsored by the Culbro and Bloomingdale families of the US.
Driver offered 10 tips to around 200 entrepreneurs who gathered at a forum organized by Yourstory.in, an online platform committed to providing visibility and networking opportunities to entrepreneurs, start-ups and self-made professionals, on 29 May in Mumbai.
Here are his 10 lessons, shared seriously, yet in a lighter vein.
1. Pitch directly to the person who has the power to say ‘yes’
In a venture capital (VC) or private equity (PE) firm, there are so few people that there’s an element of title inflation. I myself fall in the middle of the hierarchy. My business card will say director, but the reality is that there’s an investment committee in the US that takes the call. It is important for an entrepreneur to know who is the real decision maker. If he has to wait for a few weeks to pitch to that guy, it’s better, especially if it’s an early-stage idea. If you get the top guy interested, then everything else falls into place. All of us in a PE/VC team have the power to say “no”, but very few have the power to say “yes”. Pitch directly to those that have the power to say “yes”.
2. Don’t listen to your uncle and his grandfather about valuations
Fund-raising takes months in a normal environment. In this particular year, not more than 1% in this room will raise funds. It’s important that you don’t defer fund-raising until the firm is running out of money. Also, when not sure how much to raise, it’s safer to raise more than required. There’ll always be more heartburn (in this) as there’s more dilution. And finally, you’ll always have some uncle, cousin or friend who claims that valuations are this and that. The reality is that for every business, the value you will get this year will be less than that you were getting last year. Either you get real about that or you’ll just keep negotiating.
3. You need a CFO. Now.
Any company with a turnover of more than Rs4-5 crore will need a good chief financial officer (CFO) or a head of accounts. I’ve yet not met an entrepreneur who does not think his CFO is worth the salary being paid. A good CFO will help you with fund-raising. And more importantly, investors speak the financial language which first-time entrepreneurs rarely speak. Investors don’t want to hear anecdotes about what your customers said. They want to see the business by segments, margins and understand what drives margins. That’s the language the CFO speaks. Also, while interacting with an investor, the CFO takes a lot of pressure off the entrepreneur.
4. Bargain hard for a good price, but don’t believe your own spiel
In most negotiations, the entrepreneur says his company is worth so much even though it has a limited profit margin now because next year this is going to happen, and the year after that is going to happen, and so margins will expand. But the investor says he can pay value only for what the entrepreneur has already achieved. As a compromise, they link the value to the profits one or two years from now. In 99% of the cases, the entrepreneur goes through sleepless nights because he’s missing targets. I would suggest entrepreneurs take fixed valuations. Bargain as hard as you want, but don’t start believing your own spiel if you want to close a deal. Everyone has to market themselves, but you need to know where to draw the line.
5. Don’t fight investors’ exit rights, there’s no escaping them
If an entrepreneur reads through each line of a shareholders’ agreement from the day he starts fund-raising, it’s more likely that he’d stop the process immediately. Because, in theory, you can’t scratch your nose without the investor’s permission, you cannot sell your shares to anyone, sometimes you cannot sell your shares for three years, and in some cases, if you don’t do (an) IPO (initial public offering) in a certain period, the investor has the right to sell the entire company. These clauses are very unnerving. Most of the times, these are not used. The broad rule is if the entrepreneur is honest, these will never be used. If he is cheating, then it’s the stick hidden behind the investor’s back. So don’t fight it, you can’t win.
6. Stick to your business area, investors love more of the same
Focus, core competence, etc., are clichés thrown around, but most private equity investors do not have the confidence in their own ability to spot a winner. And it is a rational decision to back a company that is going to do more of what it has already done. They’ll probably back a company that sells baby powder and shampoo, and now wants to get into soaps. But investors will not take a risk with a company which sells soaps and powders and now wants to start a film studio. Private equity investors love more of the same. Entrepreneurs, when they approach funds, should not have a fund requirement for some unrelated business. It dramatically reduces their chances of success.
7. Don’t pay more than 3% to your investment banker
Bankers get joked about a lot, but a good investment banker will go a long way. First, he speaks the language of the investor, so he’ll summarize your business into a document that the investor can understand quickly. Most investors, in their first instance, want to understand your business in half an hour to an hour. A good banker will also negotiate on your behalf and get you the best terms, and he’ll give you access to a lot of investors. But first, you should get a banker who has actually done deals. Second, there’s a lot of opaqueness around the fees. Anything above 3% of the funds raised is too high, no matter what the banker says. The bankers also use the “bait and switch” technique where they’ll start by promising you a very high valuation, but later say, “What can I do, the market is like this.” So don’t get fooled by big talk.
8. Investors always ask the right questions; you look for answers
Investors are typically non-risk-taking, highly informed professionals who can add value in mergers and acquisitions, get information about similar businesses around the world, and help you with future fund-raising. In India, they typically do not have operational experience. So they are not going to be your mentor or guru. Many will claim value-addition, but entrepreneurs need to look deeply whether that value is there or not. What investors are good at is asking the right questions. Don’t expect them to provide the right answers. If they could, they themselves would be running the business. The entrepreneur himself has to eventually come up with the answers. Investors ask searching questions and they are not afraid to ask them because they are not emotionally involved.
9. Being honest helps; give your investor bad news early
In dealing with the investor, it really helps to be honest, especially after investment. Whoever you’re interacting with—in every investment firm there’s one guy who’s managing one investment—he will very soon become your ambassador. He will look good if your business does well. So, he’s really on your side. And the worst thing you can do is not to give him bad news early enough and make him look stupid. Then you stand the risk of losing your ambassador. There’ll be decisions later on—whether to raise more money or not, whether to enforce these scary rights or not—when you need this liaison person to stand by you. So just be honest with him. People expect that something will go wrong in the business every now and then, but what is unacceptable is giving bad news later than when it should have been shared.
10. Don’t give ‘hockey sticks’ to investors: avoid overused terms
A lot of entrepreneurs and their small bankers always throw in some terms that do not at all convince the investor. In fact, they reduce the credibility of the business plan. “Hockey sticks” is a favourite, which means some metric that has been falling in the past, is suddenly going to turn around and rise very sharply. And then there’s this phrase of “inflexion point”, which means the magical point that every industry is at the cusp of, where suddenly everything will start going right and growth will be fast. And finally, there is the argument of “low penetration per capita”. Whether you’re selling shoe laces, motorcycles or aircraft, penetration per capita in India will be lower because we’re a Third World country. That alone does not justify the business.
Illustrations by Jayachandran / Mint"
It’s also very unnerving, besides time-consuming, for the entrepreneur to explain his business to an outsider multiple times, without being sure whether a deal will finally get closed
Sanat Vallikappen
Most entrepreneurs fly blind in their first fund-raising. They don’t know what it involves. A lot of them don’t have friends on the investor side, and there are a lot of misconceptions about what investors are looking for. It’s also very unnerving, besides time-consuming, for the entrepreneur to explain his business to an outsider multiple times, without being sure whether a deal will finally get closed.
Early action:Helix Investments’ Cyrus Driver says it’s important not to defer raising funds till the firm runs out of money.
Early action:Helix Investments’ Cyrus Driver says it’s important not to defer raising funds till the firm runs out of money.
Cyrus Driver has experience both as an entrepreneur—he founded Calorie Care, a calorie-counted meal delivery service in Mumbai in mid-2004—and as an investor—he is director of Helix Investments, an India-focused private equity fund sponsored by the Culbro and Bloomingdale families of the US.
Driver offered 10 tips to around 200 entrepreneurs who gathered at a forum organized by Yourstory.in, an online platform committed to providing visibility and networking opportunities to entrepreneurs, start-ups and self-made professionals, on 29 May in Mumbai.
Here are his 10 lessons, shared seriously, yet in a lighter vein.
1. Pitch directly to the person who has the power to say ‘yes’
In a venture capital (VC) or private equity (PE) firm, there are so few people that there’s an element of title inflation. I myself fall in the middle of the hierarchy. My business card will say director, but the reality is that there’s an investment committee in the US that takes the call. It is important for an entrepreneur to know who is the real decision maker. If he has to wait for a few weeks to pitch to that guy, it’s better, especially if it’s an early-stage idea. If you get the top guy interested, then everything else falls into place. All of us in a PE/VC team have the power to say “no”, but very few have the power to say “yes”. Pitch directly to those that have the power to say “yes”.
2. Don’t listen to your uncle and his grandfather about valuations
Fund-raising takes months in a normal environment. In this particular year, not more than 1% in this room will raise funds. It’s important that you don’t defer fund-raising until the firm is running out of money. Also, when not sure how much to raise, it’s safer to raise more than required. There’ll always be more heartburn (in this) as there’s more dilution. And finally, you’ll always have some uncle, cousin or friend who claims that valuations are this and that. The reality is that for every business, the value you will get this year will be less than that you were getting last year. Either you get real about that or you’ll just keep negotiating.
3. You need a CFO. Now.
Any company with a turnover of more than Rs4-5 crore will need a good chief financial officer (CFO) or a head of accounts. I’ve yet not met an entrepreneur who does not think his CFO is worth the salary being paid. A good CFO will help you with fund-raising. And more importantly, investors speak the financial language which first-time entrepreneurs rarely speak. Investors don’t want to hear anecdotes about what your customers said. They want to see the business by segments, margins and understand what drives margins. That’s the language the CFO speaks. Also, while interacting with an investor, the CFO takes a lot of pressure off the entrepreneur.
4. Bargain hard for a good price, but don’t believe your own spiel
In most negotiations, the entrepreneur says his company is worth so much even though it has a limited profit margin now because next year this is going to happen, and the year after that is going to happen, and so margins will expand. But the investor says he can pay value only for what the entrepreneur has already achieved. As a compromise, they link the value to the profits one or two years from now. In 99% of the cases, the entrepreneur goes through sleepless nights because he’s missing targets. I would suggest entrepreneurs take fixed valuations. Bargain as hard as you want, but don’t start believing your own spiel if you want to close a deal. Everyone has to market themselves, but you need to know where to draw the line.
5. Don’t fight investors’ exit rights, there’s no escaping them
If an entrepreneur reads through each line of a shareholders’ agreement from the day he starts fund-raising, it’s more likely that he’d stop the process immediately. Because, in theory, you can’t scratch your nose without the investor’s permission, you cannot sell your shares to anyone, sometimes you cannot sell your shares for three years, and in some cases, if you don’t do (an) IPO (initial public offering) in a certain period, the investor has the right to sell the entire company. These clauses are very unnerving. Most of the times, these are not used. The broad rule is if the entrepreneur is honest, these will never be used. If he is cheating, then it’s the stick hidden behind the investor’s back. So don’t fight it, you can’t win.
6. Stick to your business area, investors love more of the same
Focus, core competence, etc., are clichés thrown around, but most private equity investors do not have the confidence in their own ability to spot a winner. And it is a rational decision to back a company that is going to do more of what it has already done. They’ll probably back a company that sells baby powder and shampoo, and now wants to get into soaps. But investors will not take a risk with a company which sells soaps and powders and now wants to start a film studio. Private equity investors love more of the same. Entrepreneurs, when they approach funds, should not have a fund requirement for some unrelated business. It dramatically reduces their chances of success.
7. Don’t pay more than 3% to your investment banker
Bankers get joked about a lot, but a good investment banker will go a long way. First, he speaks the language of the investor, so he’ll summarize your business into a document that the investor can understand quickly. Most investors, in their first instance, want to understand your business in half an hour to an hour. A good banker will also negotiate on your behalf and get you the best terms, and he’ll give you access to a lot of investors. But first, you should get a banker who has actually done deals. Second, there’s a lot of opaqueness around the fees. Anything above 3% of the funds raised is too high, no matter what the banker says. The bankers also use the “bait and switch” technique where they’ll start by promising you a very high valuation, but later say, “What can I do, the market is like this.” So don’t get fooled by big talk.
8. Investors always ask the right questions; you look for answers
Investors are typically non-risk-taking, highly informed professionals who can add value in mergers and acquisitions, get information about similar businesses around the world, and help you with future fund-raising. In India, they typically do not have operational experience. So they are not going to be your mentor or guru. Many will claim value-addition, but entrepreneurs need to look deeply whether that value is there or not. What investors are good at is asking the right questions. Don’t expect them to provide the right answers. If they could, they themselves would be running the business. The entrepreneur himself has to eventually come up with the answers. Investors ask searching questions and they are not afraid to ask them because they are not emotionally involved.
9. Being honest helps; give your investor bad news early
In dealing with the investor, it really helps to be honest, especially after investment. Whoever you’re interacting with—in every investment firm there’s one guy who’s managing one investment—he will very soon become your ambassador. He will look good if your business does well. So, he’s really on your side. And the worst thing you can do is not to give him bad news early enough and make him look stupid. Then you stand the risk of losing your ambassador. There’ll be decisions later on—whether to raise more money or not, whether to enforce these scary rights or not—when you need this liaison person to stand by you. So just be honest with him. People expect that something will go wrong in the business every now and then, but what is unacceptable is giving bad news later than when it should have been shared.
10. Don’t give ‘hockey sticks’ to investors: avoid overused terms
A lot of entrepreneurs and their small bankers always throw in some terms that do not at all convince the investor. In fact, they reduce the credibility of the business plan. “Hockey sticks” is a favourite, which means some metric that has been falling in the past, is suddenly going to turn around and rise very sharply. And then there’s this phrase of “inflexion point”, which means the magical point that every industry is at the cusp of, where suddenly everything will start going right and growth will be fast. And finally, there is the argument of “low penetration per capita”. Whether you’re selling shoe laces, motorcycles or aircraft, penetration per capita in India will be lower because we’re a Third World country. That alone does not justify the business.
Illustrations by Jayachandran / Mint"
Friday, May 29, 2009
Having picked and made policies on his own terms, A. Raja is again our Telecom Ministers, probably to eat and make more money for himself.
Though Manmohan Singh was very particular on keept T.R Balu and A.Raja out his cabinet but could not do so owing to his strong linkages with DMK(Dravida Munnetra Kazhagam).
Though Manmohan Singh could successfully keep Arjun Singh out of the cabinet on his mayhem on the education ministry.
Though Manmohan Singh was very particular on keept T.R Balu and A.Raja out his cabinet but could not do so owing to his strong linkages with DMK(Dravida Munnetra Kazhagam).
Though Manmohan Singh could successfully keep Arjun Singh out of the cabinet on his mayhem on the education ministry.
India's 2008-09 GDP grew at 6.7% as on expected 6.5% owing to the strengthened service sector offsetting the dropping factory production in the country.
Markets cheered on looking that and the country showed earliest moves on the stabilizing economy and negating the effects of recession and downward economy.
RBI expects 6% growth all round the year but optimist economists expects a better growth in the second half of the year owing to the more governmental spending by the new stable govt.
Markets cheered on looking that and the country showed earliest moves on the stabilizing economy and negating the effects of recession and downward economy.
RBI expects 6% growth all round the year but optimist economists expects a better growth in the second half of the year owing to the more governmental spending by the new stable govt.
NEPL: New Exploration Licensing Policy VIII is about to come. Government and the Oil Ministry is currently focusing on the same and hence is trying to maintain calm and composure on the De-regulatory information on Oil and Gas marketing companies.
Murli Deora Retained Oil Ministry
http://www.bloomberg.com/apps/news?pid=20601091&sid=avV5Ic8x4rDY&refer=india
Murli Deora Retained Oil Ministry
http://www.bloomberg.com/apps/news?pid=20601091&sid=avV5Ic8x4rDY&refer=india
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