- Wealth PMS (50L+)
The latest MarketVision Chronicle is about Fixing Open Offers with a small piece on Nifty Technicals, followed by all at MarketVision and Choices articles from the Internet.
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This letter dwells on open offers in a conversational format.
Recently many companies have chosen to sell entire units to other companies rather than have those companies acquire them.
The question that seems to be on many people’s mind is: If these companies are selling most of their business, why not sell the whole business? Then at least the current shareholders can see value?
Let me run through the answers as a businessperson, not as a shareholder. So what the good folks at TV channels, and other famous analysts suggest, is that the entire business be sold. I don’t think I agree in all cases – and especially not when the business they sell is just a part. Let’s assume for a minute that the acquirer is happy to buy it all (in many cases, he is not, but we’ll come to that) and take the questions. And in the process, understand how open offers work.
At 5750, the Nifty’s fallen quietly from the 5900 levels and is currently at the 200 DMA.
Ajit Dayal speaks of an interesting video in RE prices, one year back:
A set of links chosen just for you
I’m really bullish on stocks and the economy but I don’t think you should waste your money investing in stocks. You might as well flush it down the toilet. Or throw a big party. Don’t give it to charity either. We already went over that. And please don’t buy a home. Just relax a little bit if you have some extra money
Over the weekend I posted a brief item entitled The Dollar and Gold triggered by a couple of articles at the WSJ (Gold and Dollar). Here is the chart I created to illustrate the highly inverse Dollar-Gold correlation.
India, for example, has one of the world’s flattest yield curves, with the spread between one- and 10-year interest rates now only about 35 basis points. A year ago, that spread was over 250bp. By our estimates, India’s curve might invert over the next several months. Historically, inverted yield curves have consistently signalled significant economic slowdown, if not outright recession
We go through the five stocks we discussed last week and Deepak introduces four new stocks in a quick technical take. None of these are large caps, and this video is for education only, not advice.
Past Short Takes:
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Deepak and Shyam
The MarketVision Team