Sign up for Equitymaster's free daily newsletter, The 5 Minute WrapUp and get access to our latest Multibagger guide (2017 Edition) on picking money-making stocks.

This is an entirely free service. No payments are to be made.

Download Now Subscribe to our free daily e-letter, The 5 Minute WrapUp and get this complimentary report.
We hate spam as much as you do. Check out our Privacy Policy and Terms Of Use.
Obamanomics to take centre stage - Views on News from Equitymaster
  • E-MAIL
  • A  A  A
  • Jan 21, 2009

    Obamanomics to take centre stage

    Worsening economy greets the new US President
    The dust is finally beginning to settle. Barack Obama, the 44th US President took his oath of office yesterday and as was expected of him, gave an articulate enough inaugural address. But the time has now come to transform his words into action. A nation, whose economy is the worst it has been in many decades, is looking upon him as a beacon of change. And he will have to quickly set the ball rolling.

    Dark clouds have begun to reappear on the global economic horizon as fears of a deepening financial crisis sent shivers down the Asian stock markets yesterday and the sentiment today has been equally bad, with most of them trading in the red. In fact, the US markets also traded deep in the red yesterday and closed to a two-month low as investors chose to pick a badly bruised economy over Obama’s inaugural ceremony.

    The US$ 850 bn stimulus package might be the only last chance he may have and if it does fail to have the desired effect then even his hands would be severely tied in the future years on account of the huge deficits that would have piled up by then. Here’s wishing him all the best.

    Hero Honda’s positive surprise
    Hero Honda, the first auto bellwether to go off the blocks in the current result season, beat the street estimates and has posted a 9% YoY growth in profits during the quarter. This was on the back of a 5% growth in topline. Although volumes suffered a decline of 4%, it managed to extract higher price per unit of two-wheeler sold on account of a better product mix as well as strong realisations. Operating margins also showed a marginal improvement, edging higher by 0.3% as compared to corresponding quarter of the previous year. Certainly, the auto industry, crushed under the weight of economic downturn and tight liquidity squeeze could not have asked for a better start.

    Realty is deeper pain
    Things are not likely to be hunky dory on the realty front. As per a leading daily, most of the major real estate companies are likely to report sharp fall in both revenues as well as net profits during the September-December 2008 quarter as low demand, falling prices and high financing costs have plagued the industry during the December quarter.

    Most of the problems are of the companies’ own making as a boom in real estate in the three years preceding the December quarter led them to the belief that prices will continue to rise forever. The optimism and the greed of making a fast buck made them leverage their balance sheets to the hilt. But the drop in cash flows has been so sudden that the servicing of debt has become a problem. They have been left with no other option but to liquidate their assets at lower prices and incur a steep fall in profits. Hopefully, better sense will prevail next time around.



    Equitymaster requests your view! Post a comment on "Obamanomics to take centre stage". Click here!


    More Views on News

    How to Ride Alongside India's Best Fund Managers (The 5 Minute Wrapup)

    Jun 10, 2017

    Forty Indian investing gurus, as worthy of imitation as the legendary Peter Lynch, can help you get rich in the stock market.

    You've Heard of Timeless Books... Ever Heard of Timeless Stocks? (The 5 Minute Wrapup)

    Aug 19, 2017

    Ever heard of Lindy Effect? Find out how you can use it to pick timeless stocks.

    Why NOW Is the WORST Time for Index Investing (The 5 Minute Wrapup)

    Aug 18, 2017

    Buying the index now will hardly help make money in stocks even in ten years.

    Trump Takes a Beating (Vivek Kaul's Diary)

    Aug 18, 2017

    Donald J Trump, a wrasslin' fan, took a 'Holy Sh*t!' blow on Tuesday.

    How To Read Your Mutual Fund Account Statement Correctly (Outside View)

    Aug 17, 2017

    PersonalFN simplifies the mutual fund account statement for you.

    More Views on News

    Most Popular

    Demonetisation Barely Made Any Difference to Tax Collections(Vivek Kaul's Diary)

    Aug 7, 2017

    The data tells us quite a different story from the one the government is trying to project.

    A 'Backdoor' to Multibaggers: It's Like Investing in Asian Paints Ten Years Ago(The 5 Minute Wrapup)

    Aug 10, 2017

    Don't miss these proxy bets on growing companies or in a few years you will be looking back with regret.

    Should You Invest In Bharat-22 ETF? Know Here...(Outside View)

    Aug 8, 2017

    Bharat-22 is one of the most diverse ETFs offered so far by the Government. Know here if you should invest...

    Signs of Life in the India VIX(Daily Profit Hunter)

    Aug 12, 2017

    The India VIX is up 36% in the last week. Fear has gone up but is still low by historical standards.

    7 Financial Gifts For Your Sister This Raksha Bandhan(Outside View)

    Aug 7, 2017

    Raksha Bandhan signifies the brother-sister bond. Here are 7 thoughtful financial gifts for sisters...

    Copyright © Equitymaster Agora Research Private Limited. All rights reserved.
    Any act of copying, reproducing or distributing this newsletter whether wholly or in part, for any purpose without the permission of Equitymaster is strictly prohibited and shall be deemed to be copyright infringement.

    LEGAL DISCLAIMER: Equitymaster Agora Research Private Limited (hereinafter referred as 'Equitymaster') is an independent equity research Company. Equitymaster is not an Investment Adviser. Information herein should be regarded as a resource only and should be used at one's own risk. This is not an offer to sell or solicitation to buy any securities and Equitymaster will not be liable for any losses incurred or investment(s) made or decisions taken/or not taken based on the information provided herein. Information contained herein does not constitute investment advice or a personal recommendation or take into account the particular investment objectives, financial situations, or needs of individual subscribers. Before acting on any recommendation, subscribers should consider whether it is suitable for their particular circumstances and, if necessary, seek an independent professional advice. This is not directed for access or use by anyone in a country, especially, USA or Canada, where such use or access is unlawful or which may subject Equitymaster or its affiliates to any registration or licensing requirement. All content and information is provided on an 'As Is' basis by Equitymaster. Information herein is believed to be reliable but Equitymaster does not warrant its completeness or accuracy and expressly disclaims all warranties and conditions of any kind, whether express or implied. Equitymaster may hold shares in the company/ies discussed herein. As a condition to accessing Equitymaster content and website, you agree to our Terms and Conditions of Use, available here. The performance data quoted represents past performance and does not guarantee future results.

    SEBI (Research Analysts) Regulations 2014, Registration No. INH000000537.

    Equitymaster Agora Research Private Limited. 103, Regent Chambers, Above Status Restaurant, Nariman Point, Mumbai - 400 021. India.
    Telephone: +91-22-61434055. Fax: +91-22-22028550. Email: info@equitymaster.com. Website: www.equitymaster.com. CIN:U74999MH2007PTC175407

    Become A Smarter Investor In
    Just 5 Minutes

    Multibagger Stocks Guide 2017
    Get our special report, Multibagger Stocks Guide (2017 Edition) Now!
    We will never sell or rent your email id.
    Please read our Terms


    Aug 18, 2017 (Close)