Financial Tsumani

Rampage, Carnage, Bloodbath.. all that on global markets as country after country falls. The cancer of the mortgage meltdown has subsumed banks in UK,Germany, Belgium, Iceland. And let me not be not be melodramatic, but ICICI Bank Ltd lost 12% in a single day on the Indian bourses. Its lost a staggering 65% and is at its 52 Wk low. And and, heres what I read on a blog about ICICI's health..

"At the same time there has been a rise in the Gross NPA from 4850 Crs to 8350 crs. This increase is more important for the bank and its valuation as retail assets account for around 60% of the bank’s assets. However the market did not react strongly to this important change as it is hidden in the Balance sheet. The NPA have increased further in the current quarter. In addition the provision are around 55% of Gross NPA. So there is still an exposure of around 3500 Crs, which could hit the P&L in the future"

If Washington Mutual, Wachovia could capsize, technically so can ICICI. Anyways what matters is all our money in ICICI and other Indian Banks. I did some research and found that RBI offers only up to Rs 1 Lakh as insurance against deposits in one bank. So those of you who are financially challenged and have no clue whats happening... simple, keep a very tight vigil on your hard earned money in whichever bank it is. Coz Mother India will only return Rs 1 Lakh, if misfortune french kisses you.

On my debt bed

Yeah.. I finally succumbed to the need for adding some fixed income flavor to Amun Ra. Helps it to balance the testing times around. I have added three debt mutual funds - Franklin International Fund, Birla SL MIP II Saving 5 and ICICI Pru Investment Plan to the already existing 9 funds in Amun Ra. That takes the tally to 12.. Maybe thats too much diversification. Lets wait and watch.. I am still learning these things. Amun Ra has been sealed and closed for a period of 3 years. No more capital infusion or liquidation.

The Lal Street

This was due for quite some time now. Today is an important day. I got my ICICIdirect online trading account. Yeah I know.. I am late, but still all my reading and research confirms however hard I may banish myself to senescence, I am still very young in the investing world. So as they say during the yagna .. swaha ! Who knows, you may be witness to the new Fischer, Lynch and Buffet all rolled into one. Ha ha just trying to pep myself up.

Off course my best friend in this world... my blog will silently witness my experiences in this domain akin to Laxman's common man. The posts would be tagged as 'The Lal Street'. Let me start with the basics. I would be disclosing my investments, rationale (or lack of it :-)), performance, sentiments, et al. Nopes not the amount invested. I am sure all my readers know I take discretion to its quintessence. So lets start with my latest crush .. my mutual fund portfolio. Lets give it a nice name.. umm.. some Egyptian god ... Amun-Ra. Let that be a trend.. I shall name all my investments after Egyptian God names. I know, I know I am maaaad.

Let me tell you more about Amun-Ra. Amun-Ra is a sophisticated fund of fund which I have carefully constructed by buying various mutual funds. Namely - Reliance Diversified Power Sector Fund, DSP-ML Equity Fund, Franklin India Prima Fund, IDFC Premier Equity Fund, Lotus India Contra Fund, HDFC Arbitrage Fund, ICICI Prudential Infrastructure Fund and HDFC Top 200 Growth Fund. The whole rationale here is wealth preservation. I dont see Amun-Ra appreciating more than 15% even in bullish times, but I think (hope!!) the downside risk is also 10-15% only due to that arbitrage fund which should provide some hedging. Amun-Ra has been constructed after careful detailed analysis including simlations on moneycontrol.com Things I have considered are performance over 3 years or more, fund manager track record, sector & cap exposure and compatibility with other brothers & sisters chosen in Amun-Ra. I am yet to buy into the efficacy of debt funds, so they will have to wait for offering obeisance to Amun-Ra. One certain addition expected is an ELSS for tax saving purpose. I am looking at a long term relationship with Amun-Ra min 3 yrs. Lets see wether it bears fruit.

Ohh I forgot Ben Franklin above :-)