Vlada, from the Czech Republic (stockweb.blogspot.com), posted a great link.
Vlada looked at several international ETFs and calculated the PEG ratio (Price Earnings Ratio to Growth Ratio) based on a countries 2008 GDP growth and a countries P/E Ratio (the Economic PEG).
The countries with the highest 2008 GDP growth include China (9.3%), India (7.9%) and Russia (6.8%).
The countries with the lowest 2008 GDP growth include Italy (0.3%), the US (0.5%) and Canada (1.3%).
The countries with the lowest PE ratio are France and the U.K. (11) and Italy (11.1).
The countries with the lowest PEG ratios are China (1.6) and India (2.3).
The countries with the highest PEG ratios are Italy (37) and US (26.8)
While one could look at the Economic PEG on its own, I think one additional thing we can look into is the rate of GDP growth, or the direction of P/E ratios. At some point, will China and India growth slow? And will Italy and US Growth start to increase?
Showing posts with label india. Show all posts
Showing posts with label india. Show all posts
Monday, May 5, 2008
Monday, March 3, 2008
Finally an Exchange Traded Fund (ETF) focusing on India
WisdomTree now has an Exchanged Traded Fund (ETF) that focuses on Indian Investments. The ticker is "EPI"
Expense Ratio is 0.88%
Top Ten Holdings include (as of March 3, 2008)
There are a total of 146 Components in the Index.
Top Sectors:
WisdomTree does not use market cap weighted ETFs. Instead, WisdomTree weights the index based on dividends or earnings.
If you want to invest directly in some Indian Companies in the United States, you can check these resources.
Expense Ratio is 0.88%
Top Ten Holdings include (as of March 3, 2008)
- Reliance Industries (13.18%)
- Oil and Natural Gas Corporation (6.39%)
- Infosys Technologies (5.43%)
- Bharti Airtel Limited (3.75%)
- Housing Development Finance (3.18%)
- ICICI Bank Ltd (3.14%)
- SAIL (2.40%)
- Sterlite Industries (2.31%)
- Tata Steel Limited (2.25%)
- Indian Oil Corporation (1.99%)
There are a total of 146 Components in the Index.
Top Sectors:
- Energy (25.05%)
- Materials (15.86%)
- Software and Services (11.78%)
- Banks (10.67%)
- Capital Goods (7.43%)
- Utilities (5.79%)
- Telecom Services (5.69%)
- Automobiles and Components (4.00%)
- Pharma, Biotech and Life Sciences (3.74%)
- Food, Beverage, and Tobacco (2.40%)
WisdomTree does not use market cap weighted ETFs. Instead, WisdomTree weights the index based on dividends or earnings.
If you want to invest directly in some Indian Companies in the United States, you can check these resources.
Tuesday, July 31, 2007
Emerging Market Wireless Telecom Boom
The stock prices of wireless handset makers such as Research In Motion (RIMM) and Apple (AAPL) have been soaring. Buying the handset makers would be one way to profit from the Wireless boom, but there are many other overlooked and profitable ways.
Investing in Emerging Market Wireless Telecom Companies is a great way to enjoy the growth.
Emerging market wireless telecom companies are enjoying better growth than Developed Nations. According to the CTIA - The Wireless Association -, the United States as of late 2006 has a 72% wireless penetration rate. Many countries such as Italy, Sweden and the UK already have over 100% wireless penetration (multiple phones per person). It becomes more difficult to grow revenue in these countries.
In Emerging Markets, however, wireless penetration is much less, allowing more opportunities to grow revenue. As an example, in Latin America and South America, wireless penetration is expected to be 60% by 2010.
In Emerging markets, landline phones can be very limited and wireless can be the only way to make calls. Wireless telecommunication is becoming more important worldwide and people in emerging markets such as India are more willing to use the technology including Short Message Service (SMS, or Texting). Mobile phones are easily becoming part of the worldwide culture.
Here are four good ways to profit from the boom in emerging market wireless telecom:
1. America Movil (AMX):
America Movil is the dominant player in the Mexico and the Latin America and South America region. This $107 Billion company has a forward PE of 14.48 and a five year estimated growth rate of 32.1% for a very cheap PEG of 0.45 (less than 1 is very cheap!) According to a research report from Research and Markets, key drivers are low wireless penetration in Latin America, Increasing Demand of Mobile Internet, and Revenue Growth from Mobile Content.
America Movil is also the company that made Carlos Slim Helu the richest man in the world. Jim Cramer has said that we should "start copying the best guy with the best stock ... Carlos Slim."
2. NII Holdings (NIHD):
NIHD is a spinoff from Nextel and serves the Latin America region including countries such as Mexico, Brazil, Argentina, Peru and Chile. This $13.8 Billion company has a forward PE of 22.48, and a five year estimated growth rate of 40% for an inexpensive PEG of 0.56. Together with America Movil, these two companies offer great growth in the Latin American and South American Wireless market.
3. Vimpel Communications (VIP):
Vimpel Communications services Russia and countries in the Commonwealth of Independent States (CIS), countries that were part of the former Soviet Union. This $21 Billion company has a forward PE of 13.40, and a five year estimated growth rate of 24.1% for a low PEG of 0.56. Major competitors include MTS, and MegaFon, but since VIP is an American Depository Receipt (ADR), VIP remains the easiest Russian Wireless Telecom company to invest in from the United States.
Wireless penetration rates in Russia and Ukraine are a little over 100% but wireless penetration is much lower in Kazakhstan (51.7%), Tajikistan (11.9%), Uzbekistan (10.4%), and Armenia (37%).
Vimpel has a 31.7% market share in Russia, 49.5% in Kazakhstan, 3.8% in Ukraine, 8.9% in Tajikistan, 28.2% in Uzbekistan and 38.2% in Armenia.
4. China Mobile (CHL):
China Mobile is now the world's largest mobile operator with its subscriber base exceeding 300 million. This $233 Billion company's five year expected growth rate is 23.85%. With wireless penetration in China at around 30%, there is still a lot of growth.
Julie Pohlig, senior analyst at Vital Wave Consulting, offers interesting insight into Chinese subscribers. Chinese subscribers rely on pre-paid phone cards and pay 80% less than Americans for mobile phone service but their monthly investment per month represents 7% or more of their salary. This says "a lot about the perceived importance of telecommunications in that society," Julie Pohlig points out.
There are many other good emerging market telecom companies out there, but the four companies above represent good wireless telecom companies that cover a good portion of the emerging markets.
Investing in Emerging Market Wireless Telecom Companies is a great way to enjoy the growth.
Emerging market wireless telecom companies are enjoying better growth than Developed Nations. According to the CTIA - The Wireless Association -, the United States as of late 2006 has a 72% wireless penetration rate. Many countries such as Italy, Sweden and the UK already have over 100% wireless penetration (multiple phones per person). It becomes more difficult to grow revenue in these countries.
In Emerging Markets, however, wireless penetration is much less, allowing more opportunities to grow revenue. As an example, in Latin America and South America, wireless penetration is expected to be 60% by 2010.
In Emerging markets, landline phones can be very limited and wireless can be the only way to make calls. Wireless telecommunication is becoming more important worldwide and people in emerging markets such as India are more willing to use the technology including Short Message Service (SMS, or Texting). Mobile phones are easily becoming part of the worldwide culture.
Here are four good ways to profit from the boom in emerging market wireless telecom:
1. America Movil (AMX):
America Movil is the dominant player in the Mexico and the Latin America and South America region. This $107 Billion company has a forward PE of 14.48 and a five year estimated growth rate of 32.1% for a very cheap PEG of 0.45 (less than 1 is very cheap!) According to a research report from Research and Markets, key drivers are low wireless penetration in Latin America, Increasing Demand of Mobile Internet, and Revenue Growth from Mobile Content.
America Movil is also the company that made Carlos Slim Helu the richest man in the world. Jim Cramer has said that we should "start copying the best guy with the best stock ... Carlos Slim."
2. NII Holdings (NIHD):
NIHD is a spinoff from Nextel and serves the Latin America region including countries such as Mexico, Brazil, Argentina, Peru and Chile. This $13.8 Billion company has a forward PE of 22.48, and a five year estimated growth rate of 40% for an inexpensive PEG of 0.56. Together with America Movil, these two companies offer great growth in the Latin American and South American Wireless market.
3. Vimpel Communications (VIP):
Vimpel Communications services Russia and countries in the Commonwealth of Independent States (CIS), countries that were part of the former Soviet Union. This $21 Billion company has a forward PE of 13.40, and a five year estimated growth rate of 24.1% for a low PEG of 0.56. Major competitors include MTS, and MegaFon, but since VIP is an American Depository Receipt (ADR), VIP remains the easiest Russian Wireless Telecom company to invest in from the United States.
Wireless penetration rates in Russia and Ukraine are a little over 100% but wireless penetration is much lower in Kazakhstan (51.7%), Tajikistan (11.9%), Uzbekistan (10.4%), and Armenia (37%).
Vimpel has a 31.7% market share in Russia, 49.5% in Kazakhstan, 3.8% in Ukraine, 8.9% in Tajikistan, 28.2% in Uzbekistan and 38.2% in Armenia.
4. China Mobile (CHL):
China Mobile is now the world's largest mobile operator with its subscriber base exceeding 300 million. This $233 Billion company's five year expected growth rate is 23.85%. With wireless penetration in China at around 30%, there is still a lot of growth.
Julie Pohlig, senior analyst at Vital Wave Consulting, offers interesting insight into Chinese subscribers. Chinese subscribers rely on pre-paid phone cards and pay 80% less than Americans for mobile phone service but their monthly investment per month represents 7% or more of their salary. This says "a lot about the perceived importance of telecommunications in that society," Julie Pohlig points out.
There are many other good emerging market telecom companies out there, but the four companies above represent good wireless telecom companies that cover a good portion of the emerging markets.
Tuesday, July 17, 2007
Investing in Indian Stocks from the U.S.
The Indian Economy is the second fastest growing major economy of the world, with a GDP growth rate of 9.2% (as of 2nd quarter 2006-2007). When measured in terms of purchasing power parity, it is the third largest economy of the world. When measured using US Dollar exchange-rate terms, it is the tenth largest in the world. Goldman Sachs expects India to overtake France and Italy by 2020.
For a US investor, investing in India becomes more difficult. There are plans for Indian ETFs, and there are some closed end funds, but the selection is not good.
Another way to play the Indian trend (besides investing in an emerging market ETF such as ishares EEM), is to buy Indian companies as American Depository Receipts (ADR).
Indian Banks
1. Icici Bank (IBN) -- Icici Bank has a market cap of 23.5 Billion, and a 5 year estimated growth rate of 24%.
2. HDFC Bank (HDB) -- HDFC has a smaller market capitalization than IBN with a 9.88 Billion market cap and a 5 year estimated growth rate of 29.6%.
Telecom
3. Videsh Sanchar Nigam (VSL) -- VSL is a 3.41 Billion telecom company with a forward PE of 29.70, a 5 year estimated growth rate of 10% for a PEG of around 3.
4. Mahangar Tel (MTE) -- MTE is a 2.52 Billion telecom company providing fixed-line, wireless, and other telecom services. It has a forward PE of 22.91, and a 5 year estimated growth rate of 10% for a PEG of around 2.3.
Business Process Outsourcing (BPO) and Information System Services
5. Infosys Technologies (INFY) -- Company has a market cap of 30 Billion, a forward PE of 22.82, and a 5 year estimated growth rate of 26.5% for a PEG of 0.86.
6. Patni Computer Systems (PTI) -- Company has a market cap of 1.79 Billion, a forward PE of 16.53, 5 year estimated growth rate of 21.4% for a PEG of 0.77.
7. Satyam Computer Services (SAY) -- Company has a market cap of 8.91 Billion, a Forward PE of 19.64, estimated 5 year growth rate of 26.83% for a PEG of 0.73.
8. Wipro (WIT) -- Company has a 22.86 Billion market cap, Forward PE of 22.71, 5 year estimated growth rate of 23.18% for a PEG of about 0.98.
9. WNS Holdings (WNS) -- Company has a 1.16 Billion market cap, a Forward PE of 27.41, 5 year estimated growth rate of 34.25%, for a PEG of 0.80.
Internet
10. Rediff.com (REDF) -- Company has a 626 Million market cap, Forward PE of 47.82, 5 year estimated growth rate of 45%, for a PEG of 1.06.
11. SIFY Limited (SIFY) -- Company has a 402 Million market cap, and a forward PE of 47.30.
Automobiles
12. Tata Motors (TTM) -- Company has a 7.10 Billion Market Cap and a 5 year estimated growth rate of 20%.
Drugs
13. Dr. Reddy's Laboratories (RDY) -- Company has a 2.83 Billion Market Cap and a 5 year estimated growth rate of 15%.
Trends in India, a personal take from two Indians
For a US investor, investing in India becomes more difficult. There are plans for Indian ETFs, and there are some closed end funds, but the selection is not good.
Another way to play the Indian trend (besides investing in an emerging market ETF such as ishares EEM), is to buy Indian companies as American Depository Receipts (ADR).
Indian Banks
1. Icici Bank (IBN) -- Icici Bank has a market cap of 23.5 Billion, and a 5 year estimated growth rate of 24%.
2. HDFC Bank (HDB) -- HDFC has a smaller market capitalization than IBN with a 9.88 Billion market cap and a 5 year estimated growth rate of 29.6%.
Telecom
3. Videsh Sanchar Nigam (VSL) -- VSL is a 3.41 Billion telecom company with a forward PE of 29.70, a 5 year estimated growth rate of 10% for a PEG of around 3.
4. Mahangar Tel (MTE) -- MTE is a 2.52 Billion telecom company providing fixed-line, wireless, and other telecom services. It has a forward PE of 22.91, and a 5 year estimated growth rate of 10% for a PEG of around 2.3.
Business Process Outsourcing (BPO) and Information System Services
5. Infosys Technologies (INFY) -- Company has a market cap of 30 Billion, a forward PE of 22.82, and a 5 year estimated growth rate of 26.5% for a PEG of 0.86.
6. Patni Computer Systems (PTI) -- Company has a market cap of 1.79 Billion, a forward PE of 16.53, 5 year estimated growth rate of 21.4% for a PEG of 0.77.
7. Satyam Computer Services (SAY) -- Company has a market cap of 8.91 Billion, a Forward PE of 19.64, estimated 5 year growth rate of 26.83% for a PEG of 0.73.
8. Wipro (WIT) -- Company has a 22.86 Billion market cap, Forward PE of 22.71, 5 year estimated growth rate of 23.18% for a PEG of about 0.98.
9. WNS Holdings (WNS) -- Company has a 1.16 Billion market cap, a Forward PE of 27.41, 5 year estimated growth rate of 34.25%, for a PEG of 0.80.
Internet
10. Rediff.com (REDF) -- Company has a 626 Million market cap, Forward PE of 47.82, 5 year estimated growth rate of 45%, for a PEG of 1.06.
11. SIFY Limited (SIFY) -- Company has a 402 Million market cap, and a forward PE of 47.30.
Automobiles
12. Tata Motors (TTM) -- Company has a 7.10 Billion Market Cap and a 5 year estimated growth rate of 20%.
Drugs
13. Dr. Reddy's Laboratories (RDY) -- Company has a 2.83 Billion Market Cap and a 5 year estimated growth rate of 15%.
Trends in India, a personal take from two Indians
Trends in India
When investing in stocks or countries, it's a good idea to get a background in the country and the culture:
Question:
Answers:
A: "Sony" answers:
1. Are Indians savers or spenders?
It depends upon how the person is earning....if he is earning more than his EXPECTATION, then he will splurge too much...
otherwise, if he is earning the hard way, same way he spends.
Generally, people are savers here, they save more to invest in ways to produce more money.
2. Do you know how fast India's GDP is growing?
check here http://en.wikipedia.org/wiki/India
3. How many cars does an average Indian own?
There is HUGE difference in equality. More than 90% don't have a car at all.
4. What's the approximate interest rate in a bank?
In a savings account, its around 8%.
5. How many Indians own a home? Is it still affordable?
Number of people owning a home is increasing, but the real estate prices are considered high. In metro cities, the prices are considered a BOMB, but still people are buying, as i said, there is a vast difference in equality.
6. What do you think of:
TTM -- Tata Motors
SAY -- Satyam
INFY -- InfoSys
IBN -- ICICI Bank
They are top companies in their sectors, they are market leaders in india with an excellent management.
7. Is the middle class growing?
VERY MUCH!!! A common middle class person has a cellphone, watches Movies in malls, eats in Dominoes, buys international brand garments often, wears a swiss watch, has a computer etc. etc.
8. How many people have cell phones?
Even beggars ;-)
9. How many people have DSL or Cable modem?
Not sure. But less than 1%.
10. Are internet cafes popular?
They used to be, but now cos of government's strict rules over some issues, their is very less income left to owners. The internet cafe people are now more interested in group gaming.
11. Is there a lot of traffic in India?
Only in Metros. But throughout india, the road infrastructure SUX!!
12. Is there a lot of pollution?
Only in Metro cities.
13. Do people text on cell phones (SMS) or use their voice?
Most people SMS :D
14. What are the major trends in India right now?
I think everything is booming. IT sector, public services, Electronics Media, BPO's etc are on top.
15. Are workers leaving India in large numbers?
No, not sure. The ones who have been out want to come back, but people who have never been out, become highly excited about going out.
16. How popular is McDonald's or other American Fast Foods?
Very Very Famous. Anything which has rocked the west needs no publicity or hype to make them a success in india.
17. What kind of foods are popular?
People just love to experiment. Everything is welcomed. Mostly pizzas, chinese food etc.
Source(s):
I have answered just in a casual way, don't mind. But the information is true to my knowledge nevertheless. I liked answering ur questions ;-)
B: "For Fun" answers:
answeer to question no 5: if u want to know the answer of this question please take in to consideration the indian culture
everybody dreams of one of his home his ideal home !
it is a thing of pride and respect to construct or purchase his dream house
depending upon what is his financial capacity and where he is living
every indian feels it is his dutry to give this house to his son/s so his sons etc are comfortable and live nicely the way he spent his life !
the house is a great emotional attachment to him and his family and he rarely leaves that place or sells unless he is in great trouble.
if the son sells that house it is shame !
u can say it is deep rooted desire of every indian to have his own house and he will do all possible things to have it!
he dreams the house there for hundred years and his children and grand children living and thanking him for what he did in his life time !
it gives great mental satisfaction and he feels one of his very big duty is carried out by him and is always proud of it
now as the banks and other institutions r givning easy loan for the dream house many peopel r taking advantage of that
it is my estimate that atleast 40% people do have their own home or r in process of getting the same
we can consider the up side % as 55%
the income has gone up very rapidly in last 10/15 years and surely more r in line to have their dream come true!
remeber indian population is one billion + and the people r from all different standerds
Credits
Thanks to the nice people at Yahoo Answers.
Question:
I'm interested in learning more about India and Indian trends (may affect my investment):
1. Are Indians savers or spenders?
2. Do you know how fast India's GDP is growing?
3. How many cars does an average Indian own?
4. What's the approximate interest rate in a bank?
5. How many Indians own a home? Is it still affordable?
6. What do you think of:
TTM -- Tata Motors
SAY -- Satyam
INFY -- InfoSys
IBN -- ICICI Bank
7. Is the middle class growing?
8. How many people have cell phones?
9. How many people have DSL or Cable modem?
10. Are internet cafes popular?
11. Is there a lot of traffic in India?
12. Is there a lot of pollution?
13. Do people text on cell phones (SMS) or use their voice?
14. What are the major trends in India right now?
15. Are workers leaving India in large numbers?
16. How popular is McDonald's or other American Fast Foods?
17. What kind of foods are popular?
Any help is appreciated.
Answers:
A: "Sony" answers:
1. Are Indians savers or spenders?
It depends upon how the person is earning....if he is earning more than his EXPECTATION, then he will splurge too much...
otherwise, if he is earning the hard way, same way he spends.
Generally, people are savers here, they save more to invest in ways to produce more money.
2. Do you know how fast India's GDP is growing?
check here http://en.wikipedia.org/wiki/India
3. How many cars does an average Indian own?
There is HUGE difference in equality. More than 90% don't have a car at all.
4. What's the approximate interest rate in a bank?
In a savings account, its around 8%.
5. How many Indians own a home? Is it still affordable?
Number of people owning a home is increasing, but the real estate prices are considered high. In metro cities, the prices are considered a BOMB, but still people are buying, as i said, there is a vast difference in equality.
6. What do you think of:
TTM -- Tata Motors
SAY -- Satyam
INFY -- InfoSys
IBN -- ICICI Bank
They are top companies in their sectors, they are market leaders in india with an excellent management.
7. Is the middle class growing?
VERY MUCH!!! A common middle class person has a cellphone, watches Movies in malls, eats in Dominoes, buys international brand garments often, wears a swiss watch, has a computer etc. etc.
8. How many people have cell phones?
Even beggars ;-)
9. How many people have DSL or Cable modem?
Not sure. But less than 1%.
10. Are internet cafes popular?
They used to be, but now cos of government's strict rules over some issues, their is very less income left to owners. The internet cafe people are now more interested in group gaming.
11. Is there a lot of traffic in India?
Only in Metros. But throughout india, the road infrastructure SUX!!
12. Is there a lot of pollution?
Only in Metro cities.
13. Do people text on cell phones (SMS) or use their voice?
Most people SMS :D
14. What are the major trends in India right now?
I think everything is booming. IT sector, public services, Electronics Media, BPO's etc are on top.
15. Are workers leaving India in large numbers?
No, not sure. The ones who have been out want to come back, but people who have never been out, become highly excited about going out.
16. How popular is McDonald's or other American Fast Foods?
Very Very Famous. Anything which has rocked the west needs no publicity or hype to make them a success in india.
17. What kind of foods are popular?
People just love to experiment. Everything is welcomed. Mostly pizzas, chinese food etc.
Source(s):
I have answered just in a casual way, don't mind. But the information is true to my knowledge nevertheless. I liked answering ur questions ;-)
B: "For Fun" answers:
answeer to question no 5: if u want to know the answer of this question please take in to consideration the indian culture
everybody dreams of one of his home his ideal home !
it is a thing of pride and respect to construct or purchase his dream house
depending upon what is his financial capacity and where he is living
every indian feels it is his dutry to give this house to his son/s so his sons etc are comfortable and live nicely the way he spent his life !
the house is a great emotional attachment to him and his family and he rarely leaves that place or sells unless he is in great trouble.
if the son sells that house it is shame !
u can say it is deep rooted desire of every indian to have his own house and he will do all possible things to have it!
he dreams the house there for hundred years and his children and grand children living and thanking him for what he did in his life time !
it gives great mental satisfaction and he feels one of his very big duty is carried out by him and is always proud of it
now as the banks and other institutions r givning easy loan for the dream house many peopel r taking advantage of that
it is my estimate that atleast 40% people do have their own home or r in process of getting the same
we can consider the up side % as 55%
the income has gone up very rapidly in last 10/15 years and surely more r in line to have their dream come true!
remeber indian population is one billion + and the people r from all different standerds
Credits
Thanks to the nice people at Yahoo Answers.
Friday, July 13, 2007
Simplest Buy and Hold Portfolio
So you have some discretionary money that you can risk, don't need the money within five years, and want some growth. But you may not know too much about individual stocks and you don't have the time nor the inclination to follow individual stocks.
Here's a very simple and easy Buy and Hold Portfolio that you don't have to monitor often, and offers good performance and diversification. (Do know that while the stock market averages 10% per year over a long time, that during any individual year, you could lose or gain 40%?)
The strategy is based on buying and holding certain ETFs, or Exchange Traded Funds. An Exchange Traded Fund is essentially a mutual fund (mostly indexed to a particular index. The ETF company just mirrors the index, and doesn't make active stock decisions) that trades on the major exchanges just like a regular stock. You normally buy and sell them and pay commissions. For example, the stock symbol "DIA", isn't really an individual company. The "DIA" ETF represents the Dow Jones Industrial Average ETF. It holds the 30 stocks in the Dow Jones Industrial Average. However, from your point of view, you are buying and selling "DIA" directly, a single trading instrument. You lose money and profit just as if you were holding a single stock.
The Portfolio
Here's the recommended simple buy and hold portfolio that you do not have to monitor that often:
That's it! You are diversified throughout the US and the world. You can monitor your portfolio once a year, or twice a year.
If you don't have that much money, you can start with one or two ETFs first. I suggest SPY and EFA as your first two ETFs. The third ETF should be IWM. The fourth should be EEM, and the last MDY.
If you wish to learn more, or even start learning about individual stock investments, you might have to do some studying. You can read the books recommended here, or start browsing some good investment sites on the internet.
Here's a very simple and easy Buy and Hold Portfolio that you don't have to monitor often, and offers good performance and diversification. (Do know that while the stock market averages 10% per year over a long time, that during any individual year, you could lose or gain 40%?)
The strategy is based on buying and holding certain ETFs, or Exchange Traded Funds. An Exchange Traded Fund is essentially a mutual fund (mostly indexed to a particular index. The ETF company just mirrors the index, and doesn't make active stock decisions) that trades on the major exchanges just like a regular stock. You normally buy and sell them and pay commissions. For example, the stock symbol "DIA", isn't really an individual company. The "DIA" ETF represents the Dow Jones Industrial Average ETF. It holds the 30 stocks in the Dow Jones Industrial Average. However, from your point of view, you are buying and selling "DIA" directly, a single trading instrument. You lose money and profit just as if you were holding a single stock.
The Portfolio
Here's the recommended simple buy and hold portfolio that you do not have to monitor that often:
- SPY -- The S&P 500 ETF representing 500 of the US biggest and most influential companies.
- MDY -- The Midcap US ETF representing the middle size US companies.
- IWM -- The Small Cap US ETF representing some of the smaller companies in the US
- EFA -- The iShares Developed International Market ETF representing investments in Europe, Japan and Australia
- EEM -- The iShares International Emerging Market ETF which covers international emerging markets such as Taiwan, Korea, China, Mexico, Brazil, Russia and India.
That's it! You are diversified throughout the US and the world. You can monitor your portfolio once a year, or twice a year.
If you don't have that much money, you can start with one or two ETFs first. I suggest SPY and EFA as your first two ETFs. The third ETF should be IWM. The fourth should be EEM, and the last MDY.
If you wish to learn more, or even start learning about individual stock investments, you might have to do some studying. You can read the books recommended here, or start browsing some good investment sites on the internet.
Wednesday, July 11, 2007
Growth in Online Computer Gaming: China, India, Korea, and Japan
China Gaming
The China Gaming market is a very big market. The Chinese middle class is growing and showing their increasing purchasing power. According to play.tm, and according to research from American Market research firm, DFC Intelligence, "analysts predict strong growth for online games in China. Following the trend of South Korea, online gaming is already one of China's favourite pastimes, but it is expected to be worth a great deal more by 2010: 1.7 billion USD we're told. That's up from a 2005 value of about 560 million USD. " "The game market in China is all about online play and charging by usage. There is even a growing market for the items used in games like weapons and characters," states Alexis Madrigal, one of the experts behind the new report."
The three main players in this market are Shanda Interactive (SNDA), The9 Limited (NCTY), and NetEase (NTES). Shanda Interactive and The9 Limited seem the most investable, having MyPEGs of 0.56 and 0.71 (very cheap). The9 Limited has the right to bring Blizzard's World of Warcraft to China. Shanda Interactive also has a good business model. According to a China online gaming survey conducted by Piper Jaffray, "55 percent of respondents said they prefer Shanda's business model, in which users can play games for free and are charged to purchase virtual items within the games. Shanda also tied with competitor The9 Ltd. as the company in its market that offers the best games."
(Analysis of Computer and Video Game Sector here.)
India
Now, what about the India online gaming market? According to a report by San Francisco based analyst and consulting firm Pearl Research (and reported by Gamasutra.com), " online games market in India will exceed $200 million in 2010, as part of a new “Online Games Market in India” report."
According to the report, the "rapid adoption of the Internet with 39 million current users; increasing broadband penetration; growth in Internet cafes with more than 100,000 outlets; and a sizable middle-class with rising disposable income. Most importantly, game operators are promoting and educating consumers about online games including MMOGs."
Local and International publishers are investing in the Indian online games market, as this is one of the few viable publishing models, where "software piracy rates exceed 85%".
However, the $200 Million Indian market by 2010 pales in comparison to China's estimated online gaming market of 1.7 Billion.
Allison Luong, Managing Director of Pearl Ressearch says that "India in 2006 is often compared to China in 2001, when China’s games market started to develop and an online games culture started to form. Within a decade, India has the potential to emerge as one of the top online markets in Asia, along with China, Korea and Taiwan."
India is slow to adopt Online Gaming
However, according to an article by John Ribeiro of IDG News Service (and reported by NetworkWorld.com), the Internet and mobile Association of India and research firm IMRB International (both in Mumbai, India), says the slow uptake in online gaming is partially caused by the "negative perceptions among parents and education institutions." Sohil Kunwar of IMRB says that "Online gaming is considered to be alien and disruptive, and to have an adverse impact on education."
In addition, Sohhil Kunwar says that India has too few broadband connections to homes. There are only 2.21 million broadband subscribers (February 2007), in a country of more than a Billion People.
Opportunity in Indian Mobile Games
In the same report, the big opportunity in India might be mobile games. According to TRAI, "India had 162.5 million mobile subscriber at the end of February. Currently, Indian mobile users can download games from Web sites but are unable to play online."
Korea online gaming
Online gaming in Korea is also very popular. Gravity (GRVY) and Webzen are two popular Korean online gaming companies. Gravity is a small cap publicly traded company (US exchanges) that provides online Games in Korea, but the fundamentals don't look very good. According to an MSNBC article, in Korea, 17 million people play games regularly in a country of 48 million. Close to 70 percent of South Korean households have broadband. And the transfer data speeds in Korea can be up to 50 megabits per second (Mbps). Compare this to AT&T Yahoo! Elite package (DSL) which has download speeds up to 6.0 Mbps. All these, plus the fact that the young people of the country have grown up with the technology help make online gaming in Korea big business.
What about Online gaming in Japan?
Japan, home of Nintendo, and Sony, are more console driven than China and Korea. So, online gaming in Japan is not as popular as it is in Korea and China.
The China Gaming market is a very big market. The Chinese middle class is growing and showing their increasing purchasing power. According to play.tm, and according to research from American Market research firm, DFC Intelligence, "analysts predict strong growth for online games in China. Following the trend of South Korea, online gaming is already one of China's favourite pastimes, but it is expected to be worth a great deal more by 2010: 1.7 billion USD we're told. That's up from a 2005 value of about 560 million USD. " "The game market in China is all about online play and charging by usage. There is even a growing market for the items used in games like weapons and characters," states Alexis Madrigal, one of the experts behind the new report."
The three main players in this market are Shanda Interactive (SNDA), The9 Limited (NCTY), and NetEase (NTES). Shanda Interactive and The9 Limited seem the most investable, having MyPEGs of 0.56 and 0.71 (very cheap). The9 Limited has the right to bring Blizzard's World of Warcraft to China. Shanda Interactive also has a good business model. According to a China online gaming survey conducted by Piper Jaffray, "55 percent of respondents said they prefer Shanda's business model, in which users can play games for free and are charged to purchase virtual items within the games. Shanda also tied with competitor The9 Ltd. as the company in its market that offers the best games."
(Analysis of Computer and Video Game Sector here.)
India
Now, what about the India online gaming market? According to a report by San Francisco based analyst and consulting firm Pearl Research (and reported by Gamasutra.com), " online games market in India will exceed $200 million in 2010, as part of a new “Online Games Market in India” report."
According to the report, the "rapid adoption of the Internet with 39 million current users; increasing broadband penetration; growth in Internet cafes with more than 100,000 outlets; and a sizable middle-class with rising disposable income. Most importantly, game operators are promoting and educating consumers about online games including MMOGs."
Local and International publishers are investing in the Indian online games market, as this is one of the few viable publishing models, where "software piracy rates exceed 85%".
However, the $200 Million Indian market by 2010 pales in comparison to China's estimated online gaming market of 1.7 Billion.
Allison Luong, Managing Director of Pearl Ressearch says that "India in 2006 is often compared to China in 2001, when China’s games market started to develop and an online games culture started to form. Within a decade, India has the potential to emerge as one of the top online markets in Asia, along with China, Korea and Taiwan."
India is slow to adopt Online Gaming
However, according to an article by John Ribeiro of IDG News Service (and reported by NetworkWorld.com), the Internet and mobile Association of India and research firm IMRB International (both in Mumbai, India), says the slow uptake in online gaming is partially caused by the "negative perceptions among parents and education institutions." Sohil Kunwar of IMRB says that "Online gaming is considered to be alien and disruptive, and to have an adverse impact on education."
In addition, Sohhil Kunwar says that India has too few broadband connections to homes. There are only 2.21 million broadband subscribers (February 2007), in a country of more than a Billion People.
Opportunity in Indian Mobile Games
In the same report, the big opportunity in India might be mobile games. According to TRAI, "India had 162.5 million mobile subscriber at the end of February. Currently, Indian mobile users can download games from Web sites but are unable to play online."
Korea online gaming
Online gaming in Korea is also very popular. Gravity (GRVY) and Webzen are two popular Korean online gaming companies. Gravity is a small cap publicly traded company (US exchanges) that provides online Games in Korea, but the fundamentals don't look very good. According to an MSNBC article, in Korea, 17 million people play games regularly in a country of 48 million. Close to 70 percent of South Korean households have broadband. And the transfer data speeds in Korea can be up to 50 megabits per second (Mbps). Compare this to AT&T Yahoo! Elite package (DSL) which has download speeds up to 6.0 Mbps. All these, plus the fact that the young people of the country have grown up with the technology help make online gaming in Korea big business.
What about Online gaming in Japan?
Japan, home of Nintendo, and Sony, are more console driven than China and Korea. So, online gaming in Japan is not as popular as it is in Korea and China.
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