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Quote xbox Replybullet Topic: Financial Services-Mother of all sectors!
    Posted: 19/Nov/2006 at 5:00am
I like one sector only. Which is mother of all the sectors. It is financial services.
One can ride on this sector without thouching any seasonal/cyclical sectors. This is evergreen sector and it's presence is felt in each booming/doming secotrs of the economy.
For example.. Retail sector may come and go. Real estate may come and go. Stell/sugar may come and go. With Financial services always remains in.
It gets only damaged when economy itself gets in trouble but then all other sectors do participate.
One can ride retail boom though Financial services in form of consumer loans, creadit cards, personal loans and retail deposits etc.
One can ride real estate boom though Finacial services in form of home loan, project funding etc.
One can ride Manufacturing sector though Financial service in form of corporate lending etc.
One can ride service sector though Financial service in form of consumer loans, personal loans, credit cards, insurance and co-alliance with target companies.
 
These are few examples, far from complete. Financial services are proxy to each and every other booming sector. One can enjoy multiple rides though this one. But all rides come to halt one day and that is recession/depression of economy.
Don't bet on pig after all bull & bear in circle.
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Quote vivekkumar_in Replybullet Posted: 20/Nov/2006 at 12:05pm
In US Finance industry is a major part of the market cap. In India that is yet to catch up.

It is said that the last leg of a typical bull market - 5th leg will be in finance, credit, AMC industries..

Leaders in the following sectors should do exceedingly well next 5-10 yrs:
 -  Lending Industry
 -  Banks
 -  Insurance
 -  Brokerages
 -  Asset Management
Often we forget there's a company behind every stock,and there's only one reason why stocks go up. Companies go from doing poorly to doing well or small companies grow to large companies.
P Lynch
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Quote basant Replybullet Posted: 20/Nov/2006 at 8:51am
SOme really good insights on the financial services. I think that more then 30% of the US GDP is contributed by this sector.
'The Thoughtful Investor: A Journey to Financial Freedom Through Stock Market Investing' - A Book on Equity Investing especially for Indian Investors. Book your copy now: www.thethoughtfulinvestor.in
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Quote vivekkumar_in Replybullet Posted: 18/Jan/2007 at 10:43am
Basanji,
  Why are'nt there stocks focussing on Brokerages or AMC  in the Equity Eleven(except HDFC & ICICI Bank which are part plays).
 
 Globally such companies do excellantly well in a Bull run right? Whichever sector is the flavor of the season, brokerages & AMCs benefit...
 
Anything worth looking in this sector other than India Bulls ? It has run a long way and don't know if it is a good buy at these levels...
 
Regards,
Vivek
Often we forget there's a company behind every stock,and there's only one reason why stocks go up. Companies go from doing poorly to doing well or small companies grow to large companies.
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Quote vip1 Replybullet Posted: 18/Jan/2007 at 10:55am
Kotak Bank  maybe ,can qualify as one which already is under discussion at TED.
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Quote basant Replybullet Posted: 18/Jan/2007 at 11:01am
I have always thought (till now wrongly) that brokerages are cyclical businesses. During the bear market returns get impacted very severely. One brokerage that I find very very interesting is ILFS Investmart. The parent (E-TRade) is probably the second largest in the world. Sooner rather then later Etrade would like to take control of this company. Apart from that there is Geojit but in any of thr brokerages we cannot say for sure that EPS will grow at 30% CAGR for n number of years. That is the worry for me. But maybe Vipulji who follows Indiabulls so closely could shed more light on ILFS Investmart.
 
See to succeed in a brokerage business as in insurance we need an audiance database. For example the Banks have credibility and customer database. Indiabulls came into prominence because it lent money to investors at 18% interest rate on security margin. In that way ILFS seems a bit behind now but the Etrade connection would surely help.Tv18's brokerage business with Centurion Bank and Ambit capital should also do well because the audiance base created by Tv18 could be monetised.


Edited by basant - 18/Jan/2007 at 11:03am
'The Thoughtful Investor: A Journey to Financial Freedom Through Stock Market Investing' - A Book on Equity Investing especially for Indian Investors. Book your copy now: www.thethoughtfulinvestor.in
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Quote xbox Replybullet Posted: 19/Jan/2007 at 12:30pm
But maybe Vipulji who follows Indiabulls so closely could shed more light on ILFS Investmart.
----------------
Basant jee, nice sharing thoughts as always. I don't track broking business. Recently you only told me how Indiabulls makes money by security margin etc.
I like Indiabulls entirely on separate factor and that is morgate business. I like this animal of financial jungle. Rest animals of Indiabulls like real-estate, broking, consumer finance were/is cushion to me.
Personally I am neutral on broking. Lots of players are venturing into and commission/fee is falling in heap. By the way now my Icici direct started giving intra day tips Wink TAU ??. Later than sooner Brokering biz of Indiabulls will be sold to Goldman Sachs. ILFS investsmart story may be over for now.


Edited by vipul - 19/Jan/2007 at 12:31pm
Don't bet on pig after all bull & bear in circle.
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Quote basant Replybullet Posted: 19/Jan/2007 at 1:17pm
Originally posted by vip1

Kotak Bank  maybe ,can qualify as one which already is under discussion at TED.
 
Excellent value. Kotak is the largest indian brokerage controlling about 9% of total volumes on NSE/BSE. That demerger could give a 3 bagger but we need to know the valuations of its different businesses.
 
'The Thoughtful Investor: A Journey to Financial Freedom Through Stock Market Investing' - A Book on Equity Investing especially for Indian Investors. Book your copy now: www.thethoughtfulinvestor.in
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