Market News - Aug 28

With all the bad news surrounding the capital markets, Investment banka, Private Equity, Real Estate who would have thought that there would be surge in demand for MBA. this article proves otherwise. I guess what must have happened is taht all the undergrads and non grads who were laid off are returning back to school as they could not park any where else..

If you had caught the bottom of FNM and FRE as Harish did you would be sitting with a 75% increase in your portfolio now. Today both the stocks were up more than 10%, with the analyst report from Lehman, reiterating what Citi had to say about their liquidity. Well, they do not need any core capital, but how do they intend to tackle rolling over +200 B within the next one month.. Lets face it, if at all the bail out happens, its a wipe out of equity holders and Preferred stock holders stake and the bond holders would be holding secured debt with higher yields.. and the FED or who ever it is, would pay the tax payers money as interest on these bonds.. My take - though it might be tempting to be long on these stocks, its better to stay short or even better - stay out of it..

Next in line to bring ARS onto their balance sheet is BAC.. They bought back 43 Bn of ARS that they sold as highly liquid and safe investment. They are no longer liquid - evident by the fact that there is no market for ARS.. Safe - lets see how much how it would be written off by BAC!! C, WB, MER had bought back about 55Bn of ARS on to their balance sheets prior to BAC. they are now faced with the reality that the bonds are only worth about $.80 on a dollar. The means the firms who were forced to take them off shareholder hands will probably have to account for $10 billion in losses.

Seems Hedge funds have come to terms with the volatility in the financial stocks.. Short financials and long commodities is no longer the theme of the trade. That does not mean that there is no room for financials to go any lower. In the next two-three months the trend would revert back to the same I guess..

I never have imagined that any business selling gas/fuel is a money losing proposition.. But I was wrong. Firms are fleeing refining business as there seems to be no margins in refining. The problem seems to be the same.. Input costs ( crude oil) remains at above 100 levels and this owuld require the gas to be at +$4 level. And the gas consumer do not wish to spend 4 bucks on a gallon and changes his/her travelling habits there by reducing the demand for the end products.. Result - refiners are squeezed.. But my opiion - this is a short term trend.

Predictions are that Gustavo is set to Gulf of Mexico, which is the oil and nat gas hub of US, producing about 10% of US nat gas and 1.3 million barrels a day. Bad news is that the infrastructure is not so reinforced to withstand the hurricane. If it does, oil is going to spike again - all the oil and gas companies, are going to spike. Airlines and retailers would lose some of the gains they had, alt energy plays would be in the spotlight again, dollar probably weakens and the gold shoots up, commodities would see the light again!!!!

Market News - Aug 27

Last couple of days action in FRE and FNM has been overwhelming.. some days, you just are not sure whether you know any thing of certian about equity markets. My guess is that they are sliding up beacuse of the optimism by Citi. But this article made me think on whose interests are best served by the upgrade.!! Citi ofcourse!!! Trade: Buy PUTS on FNM and FRE!

Ever wondered why it was JPM who came to the rescue of BSC?? Well, this proves the point.. BSC was the counter party for most of the credit derivative swaps on JPM balance sheet!!

Market News - 26 Aug

One year into the subprime - mortgage crisis, the consensus is taht we are not even half way through. Wallstreet analysts have been cutting the estimates and the writeoffs of other banks pushing the stocks of the banks to new low levels every day. Todays article in FT has additional information regarding the health of the wallstreet firms. Play - short financials..

Interesting article on the bail out of the Detroit Auto industry. Everything makes sense, but would the US govt be able to bear the brunt of 35000 odd employees that would lose their jobs if the bail out does not happen. Besides, why would Ford, 40% stake holder of F, keep mum when his stake is headed to zero. My take - Buy calls on F. In the current market, no news is good news. If the clouds are cleared, every thing that ford would do would drive the price up. Afterall, its the AMR of Michigan.

U2 3D

Yday I watched the long awaited U2 3D movie. It turned out to be a much more amazing movie than I expected it to be.
the whole experience of watching concert in 3d is awesome.

On Campus Job

Well, I thought this would be a nice thing to read about after a couple of years. So is this post, though nothing important.

During my first year of MBA i never thought of working on campus and make some easy money. My brothers credit card, hefty scholarhsip and a feeling that MBA is a hard nut to crack made me not to take up any parttime job.

Come second year and every thing turns negative.. My brother got married (well, not a bad thing in many ways), my tuition increased, realized that MBA is not tough after all.. Add many not-worth-mentioning reasons to it, and I decided to take up a on campus job to cover up my incidentals. My job is to sit through a couple of hours in the front office. Good thing, I can do waht ever I want to, diuring that time.. and in a way I am being paid for studying.. Though, in actual, I never made full use of the time at the part time job.

Other source of income I have is through tutoring lesser mortals :) ..( dont blame me.. I wasnt like that before I ended up with my current classmates.. To give you an example, one guy got a surprise ofhis lifetime when I told him that -2 times -2 is the same as +2 times +2. )..

Well, I could have written more about it, but how to go for U2 3D..
good night folks.

Knock Knock

Its been a while since I posted my last blog.
Well, a full year.. Time has gone past so quickly. I get a sense of shudder by the mere thought that in another 3 months I would be out of this school. I need to post some thing on how this course has shaped me up.. both good and bad..

Currently, I am looking for a full time job in Investments, Hedge funds, Investment banks or any other job.. (strictly in the same order). I hope I land in something that I want to do, and something I am good at. Things definitely look good, if not better. Job market is in a pretty bad shape, but well, I do find solace in my good academic credentials. COuple of interviews lined up in the next week. and a hell of people to mail to. (Mannu Bhai.. thank you very very much.. I owe you big time.. )

Living with Harish Raman.. Its been 8 wonderful months.. I dont think I am influenced more by any body else but him.. Awesome.. Harish Anna.. danke re. Well, ask him and he would say, I have a long way to go, before I be called as a RESPONSIBLE person.

Jai Ranga continue to be my best pals at SMU.. with some occasional glitches with J... After all that what makes friendhsip complete.. I guess !!:) .

Vamshi anna got married. Been 8 months.. I amso very happy for every one in my family, including myself, for the kind of wife he got.. cute, nice kid.. I dont think I am going to survive as a bachelor any longer. May or June I would join the band of Vamshi. SCARY, indeed... !! :)

Most of my friends either got married, or engaged or even worse have become proud parents. I have a lot of catching up to do.. :) .

Well, til next time.. bye.

class vetsuypens..

Amazing lines by our prof:
Why does a dog lick its balls,, because it can..
"The other day somebody sent me mail asking me what should he do to make sure he gets an A in my subject. I replied back "PRAY""
Valuation is an art


"Why are you sitting in my class.. you should not be here"

good/bad news

Good news:
My brother is getting married..
I am going to india to attend that..
In another two months I would be done with my First year of MBA.
I have an interview tomw.
I am happy

Bad news:
I have an interview tomw..
I am going to india and coming back right before the final exams..(one day into the exams,infact)
My brother is getting married.. and the next in line would be me.. and its scary that i SHOULD be married next year
Two months from now, I would be done with my first year of MBA.. but have I achieved anything that I thought I would.
I am happy, but am not sure how long it lasts..


Ample proof that I am a freaking pessimist

back from another long break

Its quite surprising that I am done with another two and half months of my MBA program (a module as we call it).. contrary to my expectations, I did farely well in the modules exams.. The best part of the module (or rather the whole course thus far) is my grade in Valuation class.. Its an AMazing A... I was quiet amazed, surprised, ecstastic about it. Our professor is pretty notorious to screw up the grades of students in his clas.. People who want to maintain a good GPA would not take his class, but the same class taught by a different prof. Vetsuypens, his name, is an amazing professor.. The way he explains the things would clarify all the doubts you have on anything related to valuation. He makes the subject apprear so simple.. Frankly, I didnt prepare as much as I prepared for my accouting exam- though both the subjects and the professors are equally hard nuts to crack.. Through out the exam, I was under the impression that I am screwing up the exam. At one point of time during the exam, I was considering the post effects of getting a F in the subject. But, alls well that ends well.. I got a good grade and people say that I worth it and I earned it..
The best sight is my answer sheet.. The professor actually did write a GOOD on the answer paper.. This is the second GOOD i got so far in my MBA.. How funny.. I used to count my GOODS, the V's before the GOODS when i was in my high schooll and now again.. It indeed is a good feeling to be back at school.

On the internship front, I havent turned lucky yet.. I screwed up some chances I got.. as my friend says, it is always better to screw up early and learn from the mostakes than to commit the mistakes later and getting screwed. I jus hope that I get an internship as soon as possible.. I wish myself all the best for the interview I have on Friday..

Spring break, we (me, J, Nanga) went to South Padre Island.. We also had been to mexico..

Harish anna moved to Dallas.. It is good to have his company around.. His presence made me a bit responsible and I have been changing myself for good. I know that there is more to be done with ME. I am eagerly waiting to start living in the same apt as his.

Hope this covers up the heitus i had in bloggin.. I should make it a point to blog regularly.

What are you doing in my class??

I feel bad for/about the student who asks stupid doubts in the class and becomes the center of fun/frustration of the professor/classmates. I feel even more bad if the student in context is ME.
This happened to me in my Valuation class.. Our prof is an amazing teacher. He makes the class interesting, thought provoking and challenging. The best part of the class is the case. Every class would be a discussion of one or more cases, and every case has a take away from it. Prof does not hesitate to humiliate you if he senses that you are not prepared with the cases. Well, enough of the prof.. Last week I felt that I almost had cracked the cases, and I was freakingly hyper active in the class. He asks the class a question, I ask him a question in response, which I later realized that the question is the most dumbest question you can ever ask in the Valuation class. His response was what I had as the title for this blog entry! I was embarassed like anything.. I didnt dare to speak in that class agian, though I infact my solution was close to his.
Lesson learnt: Never fart (with your mouth) in a class, and even if you do, make sure it is silent and unsmelly!!!! :)

Apart from that, every thing has been smooth and fine. One of my school friend is coming down from atlanta, So I hope to freak out this weekend. Internship fever is catching on. I should find myself a good internship in any chota mota investment bank or a hedge fund firm..

I wish i really do!