Good investing reading – 28 December 2012

A much politicized industry sector – sugar in Uttar Pradesh. A nice read. Gives you an idea of the economics of sugar industry and how constant government ratified sugarcane purchase price increase affects the sugar companies. What this article does not cover in detail is what happens after the sugar companies make losses. Essentially, farmers do not get their money on time. Next year, they plant less or switch to other crops. So, now you have lesser sugarcane crop which leads to lesser sugar output. With supply getting reduced, sugar prices go up. Then again, the government tries to throttle prices when they go higher. With higher sugar prices, again more sugarcane is planted and the story continues. Its one crazy ride. You usually will see a 3-4 year cycle over which this plays out. In the last Good Investing Reading post I had shared an article on the sugar sector.

Bitter season awaits UP’s sugar mills – Business Standard


How are Dhanlaxmi Bank, Catholic Syrian Bank and some of the smaller banks doing?

Smaller private banks in fight for survival- Live Mint


I had written a post on Nestle and Britannia and possible threat to their revenues with re-introduction of standard weights. The Business Standard article talks about FMCG stocks that are at multi-year highs in terms of valuations, with little room for any negative earning surprises.
Encore for pharmaceuticals, FMCG outlook cautious – Business Standard


Check out what performed best – stocks, gold, real estate, bonds, or FDs?

The Best Investments of 2012 – Wall Street Journal

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