Good investing reading – 27 Dec 2012

A correction in the earlier post: Akbar, a reader, pointed out that the text in the article was misleading. I quote Akbar verbatim,

I do not agree with the Valuresearch article as the words are conflicting the chart. It is misrepresenting.
Cash flow from operating activities is the highest over the years as per the chart. What has slowed down is the growth in operating cash flows.
The Cash flow to Investments (considered as Capex) figures are also higher than 2009, 2010. Yes, they are lower than than 2011, but having lower capex will only increase the Free cash flow, which is again positive.

I agree with his observation fully. I was paying too much attention to the chart and not to the words when I shared this link. Thanks for pointing it out, Akbar!

Corporate India’s financial results have lead to not only a drop in profits, but investments are down too – Value Research

 

Herbalife is a US listed company. Bill Ackman, a hedge fund manager has gone short on the stock. In a completely dramatic way. Too bad we don’t see so much action in the Indian stock market. Recently Veritas did their bit. I would love to see a fund manager rip apart shady management of a listed Indian company in this way.  Oh yes, and if someone in the US says he fears for his life, in India these fears would be multiplied!

Herbalife Drops After Ackman Says He’s Shorting Shares

Bill Ackman’s presentation on Herbalife – complete PDF file

 

I like reading Kyle Bass’s views. He is the man behind Hayman Capital, one of the few funds that got it right during 2008. He is also a very outspoken man. He talks about why one must be cautious when investing in equities in the present-day world economy.

Kyle Bass on the End of the Debt Supercycle

 

R. Jagannathan of Firstpost nicely captures how inflation expectations are high and possibly are leading to low subscription rates for the recent issues of tax-free bonds.

Tax free bonds are flopping

 

Games the US plays with its inflation figures that tend to under-report the true inflation. In India we do not have the same adjustments but I sometimes wonder whether the figures reflect reality at all.

Do you think that that prices are only rising by 10% a year as per the government released Consumer Price Inflation (CPI) index. This has a bearing on measuring investment returns net of inflation. We need to get returns higher than the rate of inflation, else you are like a person on a running treadmill who risks falling down since he cannot keep up.

Why Reported Inflation Seems Different Than Reality – Financial Sense

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