Valparai Vattaparai - By Anushual as Usual

August has always been a month where ive always explored the tug of wander-lust – in this case, more specifically the call of the wild. Somehow I always felt traveling during the heart of monsoon season in south-west peninsular India was to be avoided at all costs.

Im happy to say that this was a risk worth taking.What started as a trip for 3 friends turned out to be an adventure of sorts with family!

Ironically, I chose – let me put it this way – I HAD my choice of way as far as location was concerned. Since I was quite fascinated with the as-yet unspoilt beauty of Valparai so lovingly captured by the Sun TV neenga keta padal forays). One must understand that to see such a place, it’s the journey that counts & not the destination.

But we didn’t really start our trip from this picturesque little hamlet…

‘Viewing gallery’ proudly proclaimed the hand-painted sign just outside the arrivals terminal at Coimbatore airport. With a wry grin I acknowledged the truth of the ‘South Indian Stare Syndrome’ – henceforth referred to as SISS.The SISS is a disease found in members of the male species of the said race. The SISS syndrome is not within the scope of this write-up – neither it is localized to any particular geography as the name suggests – many odes have been written about it. Some I know even keep count of it!

We started off our Coimbatore chapter with Marudhamalai – I agreed to visit ‘Murugan only’ temples by the way. Why I like him is again beyond the scope of this chapter. But then I never feel the need to justify my strong likes – or dislikes - to anyone.
A nicely maintained temple – over-run by hawkers & tin-pot commercialisation as is any relatively famous temple in India.

We then set off for Isha Yoga centre – I can see that those familiar with my personality are already raising their eyebrows in disbelief. But I must say the scenic setting of the place was breath-taking. We did get a jolt of fright when we saw some extremely life-like metal snakes pouting their hoods at us from the ceiling.
I will gloss over this bit as there are only a few images that stand out..that of wet women of assorted sizes & shapes converging together like an army of bees on a single flower (the lingam). And same goes for the men. And the sight of a woman going into trance while jerking and contracting rhythmically...while we watched her in part-fear, part-fascination, but mostly suppressed laughter.
We set off for Valparai the next morning with 2 stopovers. One at the Aliyar dam, where after a lot of huffing & puffing we reached the summit and could take some beautiful pictures of the coconut, paddy field & sugar-cane checker-board field town of Pollachi – now of course on the world map on a/c of SRK’s presence – & mine to a lesser extent!

Just before entering the Ghat section one can also visit Monkey falls – I think the place draws its name from its simian inhabitants. We didn’t linger too long there as an abundance of wet and unfit men in the bare minimum of clothing is more than anyone can take. And by the way, sunglasses are not meant to conceal your identity – they draw attention. Now you know why anyone who is anyone sports an over-size pair.

40 hair pin bends – 40 hair pin bends..oft-parroted phrase by Raja many times in the course of planning this trip - & it was as good as it promised. We were lucky enough to spot the elusive Nilgiri Tahr – the beast was very camera-savvy and very nonchalant about the cameras aimed at it as it continued to lunch with a fellow Tahr.Certain celebrities would do well to take a leaf from its sure-footed book. A bird’s eye view of the valley & several pictures later, we continued our ascent.

As we climbed higher we could feel the distinct drop in the temperature and the nip in the air. And the air! An indescribable fragrance of pine, moist leaves and eucalyptus – a balm for city-bruised lungs. The only thing that disappointed me here was the basic bordering on primitive infrastructure. The hotel supposedly no 2 in the town, made you wonder ‘if this is silver medal, what would gold be like!?’
I got to understand the concept of ‘running hot water’ in an altogether different construct! it was the feet that were doing the running ferrying it all over the place..but that also had its part to play in us embarking on a totally different route map vis-à-vis the one planned.

As for the food from the ‘cheapest & best’ ? well whoever thought of the word ‘mess’ couldn’t have been more delicately sarcastic if they tried. It was a MESS. But then Green hills came to a rescue! But here is where we question ourselves on the delicate balance between civilization & over-commercialisation.For the record I will still say I am happy I visited this place while its still in its infancy.
Come next morning and we set off for Athirampally – a place where I think the journey assumes a significance out all proportion - that is laid to rest only by the magnificence of the destination.

Again a stop-over at Sholayar dam & the scenery duly noted we hit the road again.
‘90 kms’ reads the first (& possibly only!) sign-board to Chalakudi.Barely were we through the border-checkpost (and how do they draw state-lines in forest areas anyway) than the forest extended its leafy fingers around us almost immediately. I have always been a nature lover (except for stray dogs and rats) and an avid follower of all the animal channels and so I was totally entranced at first by the beauty of the route.My 7th std geography came back to me as I classified it as an ‘evergreen forest’ while Raja on the other hand was filled with morbid thoughts and insisted on calling it a ‘Jurassic park’.
More particularly, the orchids growing on the barks of trees, the delicate fuzz of moss on tree-trunks, the bird-calls were a treat. So much a treat that the relative isolation in which we were traveling was very slowly evident to all of us – and we secretly feared it.

Fear was writ large in the face of bikers, in the face of people in vehicles who generously gave us way, in the way I unconsciously rolled up my windows, in the way Vetri’s eyes kept sliding to the left and right – casual but alert for the slightest movement Since here was a place where the lie of the land dictated the route. A route as yet unknown to him – skilled though he was, although he had taken the tamer, longer way around in previous journeys. Imagination becomes the scariest predator in such a journey when an overhanging thick vine can look like a snake, an extra large black cow like a bison & a large, fat grey rock exactly like the rump of a resting elephant. And the worse part about fear is seeing it mirrored on the faces of others – or knowing that their brains are also working on the same lines as your over-heated one.

For all that we even stopped to take pictures of the valley where the mist was rapidly being dissipated by the morning sun. But the sense of urgency in everyone’s actions got communicated to me through some invisible telegraph and we hurriedly got back into the car as the first, lazy drops of rain began to hit the already-pock-marked road.

Oh the road! For those people who complain about navigating Mumbai’s pot-holes or ‘craters’ as some remark, I would say navigating them in a concrete jungle is better than a real, live jungle where you are the intruder and the sound of silence is deafening. At some places, where the forest canopy eased and we were able to see a clearing with a long, wide lake, I relaxed a bit only to stiffen at the thought that the clearing might not be man-made. And our fears were proved right when we saw piles of elephant dung decorating the road edge. Seeing it is one thing, hearing a numerical narration was too much for my frayed nerves and I snapped to relieve some of my tension.

Finally after 3 hours on the knife-edge of tension, we visibly sighed when the journeys end was imminent. Although I have always felt that the only animal to attack without provocation is man (or woman) – im glad we didn’t have any encounter to prove me wrong.

Once you enter the place, there is a crudely painted sign which says ‘Full view of falls’ – note the word ‘view’ again….you can enjoy the placid waters, take a long soak in them & follow it up with a short trek to the bottom. Getting down is a treacherous path, it can turn into a slippery mud-slide if not careful. Finally we reached the base and were awed by the fury of the falls. Funny how a gentle gurgling river can turn into a raging monster, all thanks to gravity and by way of being suspended a few odd metres above level ground. It might not be as wide or as famous as Niagara, but its beauty was enhanced 10-fold by the dangers we passed through in reaching such a place. We clambered onto the rocks and felt the spray lash us like rain, I fall short of prose to describe the exhilaration we felt then, since it had to be experienced.

We then took the longer route to our last stop Palani…somewhere I think I must have dozed off as well, since I woke up when I felt the car slowing down at the check-post and with a click & a snap Vetri released the catch of his seat belt – all signs of entering Tam land. From then on it was a smooth run..although that winch gave me some anxious moments, because all said and done, gravity is a pretty powerful force to be working against! Another thing that amuses me is people cry out from the roof-tops at milk adulteration but when the white stuff is diluted to the point of watery tastelessness following the same principle when poured over the idol of a young boy who strikes a pose like a super-model – one hand negligently jutting out from one hip.oh no, then its called ‘abhishekam’!

We took the stairs down as I felt it’s the least I could do for my favourite and I came away with some souvenirs & lots of memories of the temple & trip in general. Maybe it was divine forces in HIS name that protected us, starting with Kartik travels, Marudhamalai, Palani & Vetri.Could that be a coincidence? You decide…

Market outlook for Monday

The markets may continue their positive tone for monday provided the 200 day moving average is violated on the upside. The 200DMA stands at 10913 and beyond that we can expect the markets to continue their upward journey to 11600 despite the markets appearing overbought.

Tomorrow's picks

IRB infra ..above 105 the stock can touch 120
Cautious approach to Reliance infra advised

Greed and fear analysis of a typical Indian investor

Sensex at 12000: Ah! I should buy!

Sensex at 16500: Wait and watch

Sensex at 14500: The price is falling, I will wait.

Sensex at 18000: Uff!, I missed the rally.

Sensex at 20000: I can’t wait. All my friends have already bought. Buy!

Sensex at 21000: Wow, what a great pick!

Sensex at 14000: No problem, fundamentals are very strong. Let me average at this price.

Sensex at 12000: I am a long term investor, nothing to worry.

Sensex at 10000: There is something wrong. Should I sell and enter at lower price? What is the government and SEBI doing about small investors like me?

Sensex at 9000: I can not wait, sell!

Sensex at 8000: Thank God. I got out in time. I will never buy stocks again.

Sensex at 9800: Fundamentals are bad. There is no justification in the rise. I will stay away.

Sensex at 9200: I told you. It will fall further.

Sensex at 14000: It seems the economy is doing very well. Should I buy?

Sensex at 20000: Bought

Sensex at 12800: Ohh christ..they sold me all the junk at higher levels.

whats he gonna do

Assume that Mr.X has won Rs.1 crore in KBC.. what should he do with the money

A. Invest the entire amount in old economy stocks because they are back in favour
B. Invest the entire amount in Equity index fund as the index is at the lower end of the trading range
C. Invest the entire amount in liquid funds until a proper financial plan is devised
D. Invest the same in real estate stocks as they have been beaten out of shape and appear attractive at low levels.

Your answers to the same are awaited:)

Larsen and Toubro at the cusp of danger

im also worried..it will have a negative impact on LnT if it emerges as the winner..I hope Lnt exits satyam after pushing up the bid price to 100 levels if possible..The average cost comes to around 80 for larsen. so anything above 80 if they can offload their holdings, it will be great for the company and will ensure that the counter moves forward sharply from here.

The only reason iam worried for Lnt is they have already invested 650 crore in satyam. Now add to this a bid price of even Rs.80 will entail 2700 crore of additional outflow to acquire 51% majority stake in the company. The story doesnt end here. Satyam is bankrupt basically with no significant assets on the balance sheets to match up to their possible liabilities. A careful analysis of their Profit and loss account shows that the company would need anywhere between 1000-1200 crore to run its operations every quarter be it payment of employee salaries or administration and selling expenses. So the potential acquirer will have to foot this burden also going forward. The restatement of accounts to know the real status of satyam may take a lot of time as close to seven years have to be restated. For a company of satyam's size and magnitude it would take anywhere between 6-8 months to complete this process as a typical statutory audit of an MNC will take atleast 2 months to review the prev year financial statements and audit the current year financials. So we are looking at somewhere beyond october for giving the final shape to the satyam saga whereby the actual truth shall emerge. Therefore until October we are typically looking at two quarters whereby the acquirer might have to support the company which again means an outflow close to 2400 crore. (assuming 2 quarters * 1200 ).
Assuming Larsen does buy out satyam we are looking at a total outflow of 5750 ( Initial investment 650 + Acquisition cost 2700 + Administration cost 2400 )

Almost 60% of larsen's networth of 9555 crore as per latest audited balance sheet goes into Satyam's rehabilitation. Is it worth the exercise at all. How will larsen supports its core businesses if such huge chunks of money go into satyam

Therefore its pretty clear, Larsen will not, cannot and should not buy out satyam. If it does take the risk of acquiring satyam, it puts its existing businesses under immense peril and danger

Larsen's participation in the bidding process should merely be restricted to pushing up the bid price if the open auction route is taken.

Maybe the market is also beginning to realise that Larsen might not ultimately buy out satyam and that maybe explains the recent upmove we are seeing in the counter that continues to be constrained by the satyam saga which hangs like an albatross around its neck

I would conclude by saying it may even be worthwhile for larsen to sell or offload satyam's shares in the open market even at a marginal loss in case the share price does not breach Rs.80 (which is LnT's average cost of acquiring satyam shares). Whatever be the case satyam cannot be a strategic fit for larsen and toubro given the current circumstances. The long term costs of this acquisition will outweigh the benefits. Accepting a mistake and rectifying the same is much more prudent than repeating it by throwing good money behind bad

King of good times

From a valuations standpoint yes the stock is cheap..Noone knows when it can come up...it needs a trigger say in the form of FDI being allowed in airlines or a stake sale by mallya to plough in funds into the company

the company presently requires capital to wipe out its losses and if crude oil remains or stabilises at lower levels, these two can act as good triggers in the medium term

and one more important point in favour of KFA is that if u take its absolute market cap, its available at just 800 crore for a populous market like india. If u take US as an example for comparison or benchmarking, one will find that even a bankrupt company like United airlines commands a market cap of 4000 crore.

So that shows the valuation difference and the opportunity that lies therein for indian investors

One way of making money is buying whats unpopular and this stock perfectly fits the bill

MTNL Analysis

Assuming the bottom for this stock is around 50 levels, The trigger going forward for this stock seems to be the merger with BSNL once the new govt comes into power..The ultimate eventuality has to be the merger of these two companiesto beat competition as both are bleeding from the loss of market share. As can be seen already, MTNL is already showing degrowth in its bottomline. Being a navratna, the govt will not allow it to become loss making.

Secondly the real estate and tower business may be demerged into separate companies to bring in cash into MTNL as the management is very clear that they do want to maintain their debt free status.So even if MERGER WITH bsnl takes time due to employee union issues, This demerger is definitely going to happen

MTNL also holds significant stake in ITI ltd and there are plans to sell some stake in that loss making company to alcatel lucent. That may be a near term trigger for the stock

Ultimately u cant have this company restricted to just mumbai and delhi in the long run , it will have to scale up to sustain its growth and profitability or else competition will end up squeezing it. The govt has two options, allow it to merge with BSNL or vice versa and create a telecom behemoth or atleats allow MTNL to expand its international operations even further. Right now MTNL has a presence in Mauritius.

Even on pure liquidation value with net current assets close to 4000 crore (leaving out its investment, real estate and other fixed assets), MTNL`s value comes to Rs.63.

Strategies for the govt are :

Delist MTNL, merge wit BSNL and list it again

Reverse merger of BSNL with MTNL and follow on IPO. The valuations will be totally at a different level for this combined entity(one can only imagine) and MTNL shareholders will already be at an advantage as they would get additional shares in the merged company before the IPO.

If none of the above happens, the govt may atleast allow MTNL to demerge its real estate and tower business whilst the same allowing the company to expand internationally

The company already has reserves close to 11000 crore and as long as it keeps adding to its reserve every year and as long as dividends are maintained at 40% or so, the investors should not worry abt this stock given the attractive dividend yield

Maybe if one has a 5 yr outlook and immense patience, u may definitely be sitting on a goldmine

Is this a new bull market rally

i dont think so because of the following reasons

1. Bull markets have never started with a V shaped recovery in the history of equity markets so far. This rally is typically V shaped and has taken everyone by surprise by the speed of its recovery

2. Bull markets will start only after long periods of consolidation and the evidence we have is only of one higher bottom at 8100 levels which cannot be substantive evidence to conclude that the bear market is over

3.Bear markets typically take 18 m to get over and by that coincides with election time this year..so this sounds scary to me

4.This rally has come up at a time when everyone was pessimistic that markets wil fall further..so there is every chance that this rally might continue to convince people that we are out of the bear market..for eg if it goes to 11500 levels im sure every man on the street will start saying its a bull market and maybe thats the time we will have another sharp correction to confirm that we are still in a bear market
4. Problems in the US are just not over..the global rally now is just based on pure sentiment that geithner`s plan is going to work wonders for the banking sector but the hard truth is we still have huge losses hidden in banks and even the regulators donot know the size of losses in the system..So this throwing of good money over bad money has never ever worked in the history of credit markets. we may still have a couple of institutions that might collapse later in the year..so the bear market is very much on and i still believe the lows are not in place and we may go below 7000 levels

Even our domestic story is not looking so sanguine..all the data we get in feb n march are pre election govt spending and capital spending by corporates at the year end for depreciation purchases..we need to see how the data pans out in the next quarter as the entire govt machinery will stop working for the next 4 m until the new govt stabilises..there will be no policy action or reforms until then at this crucial juncture

yes i will change my opinion if by the time of the next vicious correction that we have, if we make a higher bottom above 8100 and reverse sharply, that will make me think over my analysis. Bear markets end in revulsion and not in denial..we havent seen a capitulation of sorts in certain sectors because the last time in october when markets looked close to capitulation, segments like banking and cap goods were still at higher valuations

so im still with the bears at this moment