TCS, Infosys, Wipro & HCL Tech build $8 billion cash chest

PTI Apr 21, 2013, 02.08PM IST
From http://articles.economictimes.indiatimes.com/

NEW DELHI: The country's four top IT firms -- TCS, Infosys, Wipro and HCL Technologies -- have seen their combined cash chest swell to a whopping $ 8 billion (Rs 43,200 crore), even as the overall business trends remain sluggish for the entire sector.

While TCS and HCL Tech managed to post strong financial numbers for the quarter ended March 31, 2013, the results were mostly disappointing from Infosys and Wipro.

However, all the four companies have maintained a strong cash balance as on March 31, 2013.

Tata group's IT arm, N Chandrasekaran-led TCS ( Tata Consultancy Services) closed the latest fiscal with total cash and cash equivalents of USD 1.24 billion with an increase of USD 100 million during the year ended March 31, 2013.

Its closest rival, S D Shibulal-led Infosys also saw its cash balance soar by $300 million to a humongous $4.34 billion at the end of fiscal year 2012-13.

Azim Premji-led Wipro, which posted slowest sequential growth in revenues in the quarter ended March 31 among the four companies, also managed to end the fiscal with cash and cash equivalents of $1.56 billion.

HCL Technologies, the country's fourth largest IT firm, ended January-March quarter with cash and cash equivalents, (including deposits) of $762 million, a sharp rise from $398 million at the end of March, 2012.

TCS has posted annual revenue of more than Rs 50,000 crore for 2012-13, as against about Rs 39,000 crore of Infosys and Wipro's Rs 34,500 crore.

HCL Tech follows a financial year of July-June and its total income in the last fiscal ended July 30, 2012 stood at about Rs 9,000 crore. In the quarter ended March 31, 2013 -- the third quarter of the current fiscal 2012-13, it posted total income of over Rs 3,000 crore.

PTI Apr 21, 2013, 02.08PM IST

From http://articles.economictimes.indiatimes.com/

The Best Portfolio Balance

Greg McFarlane, provided by

Wednesday, April 11, 2012

Article from San Francisco Chronicle

There isn't one. Wasn't that easy? 

In the same manner, there isn't one diet that fits everyone. Depending on your body fat makeup and what you're trying to accomplish (increasing endurance, building muscle, losing weight), the proportions of protein, fat and carbohydrates you should consume can vary widely. 

Balancing Act

Thus it goes for balancing your portfolio. A former client of mine once stated that her overriding investment objective was to "maximize my return, while minimizing my risk." The holy grail of investing. She could have said "I want to make good investments" and it would have been just as helpful. As long as humans continue to vary in age, income, net worth, desire to build wealth, propensity to spend, aversion to risk, number of children, hometown with its concomitant cost of living and a million other variables, there'll never be a blanket optimal portfolio balance for everyone. 

That being said, there are trends and generalities germane to people in particular life situations; many investors don't balance in anything approaching the right mix. Seniors who invest like 20-somethings ought to, and parents who invest like singles should, are everywhere, and they're cheating themselves out of untold returns every year. 

Fortune Favors the Bold

If you recently graduated college - and was able to do so without incurring significant debt - congratulations. The prudence that got you this far should propel you even further. (If you did incur debt, then depending on the interest rate you're being charged, your priority should be to pay it off as quickly as possible, regardless of any short-term pain.) But if you're ever going to invest aggressively, this is the time to do it. Yes, inclusive index funds are the ultimate safe stock investment, and attractive to someone who fears losing everything. (The S&P 500's minimal returns over the last 13 years is a testament to its "safety.") Still, why not incorporate a little more unpredictability into your investments, in the hopes of building your portfolio faster? 

So you put it all in OfficeMax stock last January, and lost three-quarters of it by the end of the year. So what? How much were you planning on amassing at this age anyway, and what better time to dust yourself off and start again than now? It's hard to overemphasize how important is to have time on your side. As a general rule of life, you're going to make mistakes, and serendipity is going to smile on you once in a while. Better to get the mistakes out of the way early if need be, and give yourself a potential cushion. "Fortune favors the bold" isn't just an empty saying, it's got legitimate meaning.

Retirement Years

Fortune doesn't favor the reckless, however. If you're past retirement age and think that going long on mining penny stocks on the TSX Venture Exchange will make you wealthy beyond measure, well, hopefully at least one of your children has a comfortable couch for you to sleep on.

Start with the three traditional classes of securities - in decreasing order of risk (and of potential return), that's stocks, bonds and cash. (If you're thinking about investing in esoteric like credit default swaps and rainbow options, you're welcome to sit in on the advanced class.) The traditional rule of thumb, and it's an overly simple and outdated one, is that your age in years should equal the percentage of your portfolio invested in bonds and cash combined. (Which is why George Beverly Shea has -3% of his portfolio in stocks.) 

It's unlikely that there is someone on the planet who celebrates his birthday every year by going to his investment advisor and saying, "Please move 1% of my portfolio from stocks to bonds and cash." Besides, life expectancy has increased since that axiom first got popular, and now the received wisdom is to add 15 to your age before allocating the appropriate portion of your portfolio to stocks and bonds. 

That the rule has changed over the years should give you an idea of its value. The logic goes that the more life you have ahead of you, the more of your money should be held in stocks (with their greater potential for growth than bonds and cash have.) What this neglects to mention is that the more wealth you have, irrespective of age, the more conservative you can afford to be. The inevitable corollary might be less obvious, and more dissonant to cautious ears, but it goes like this: the less wealth you have, the more aggressive you need to be. 

The Bottom Line

Investing isn't a hard science like chemistry, where the same experiment under the same conditions leads to the same result every time. Investing's most exciting chapters are still being written, and the one that states that there are exactly three possible portfolio components needs to be put through the shredder. Real estate is neither stock, bond nor cash equivalent, and the same goes for precious metals. The former can increase your wealth rapidly with sufficient leverage, and the latter can maintain your wealth regardless of whether inflation or deflation besets the underlying currency that you conduct transactions in. As for the best portfolio balance, it's the one that fits the criteria you determine, but only when you assess your unique situation and regard your capacity for risk and reward with the utmost frankness.

Article from San Francisco Chronicle

Be aware of potential Fed policy issues

11:00 PM, Apr. 7, 2012 

Article from Daily World

On March 26, Ben Bernanke, Federal Reserve chairman, reaffirmed the Fed's desire to continue to keep interest rates low for the foreseeable future.

Annual price inflation is currently about 3 percent and 90-day Treasury Bills yielding about 0.10 percent, it appears investors will continue to confront negative real returns on cash equivalent investments for some time.

The Fed has a dual mandate: maximum employment and price stability.

Based on recent actions, the Fed has clearly chosen to pursue maximum employment at the expense of investors who rely on cash and cash equivalent assets: Treasury Bills, CDs and money market accounts.

Sarah Raskin, who serves on the Fed's board of governors recently said in a speech that —» Instead, the bulk of household wealth is held in stocks, retirement accounts, business equity and real estate" and that "for these other types of assets, rates of return depend primarily on the strength of the economy and how fast the economy is growing.

Thus, these returns should be supported, over time, by the accommodative monetary policy that we have in place."

To put the quote in context, she said in the speech that less than seven percent of household assets were in short-term instruments.

To translate her quote, "Don't worry, buy stocks." It appears Ms. Raskin is not very concerned that stocks, business equity, and real estate are much riskier than cash equivalents.

It is true that these assets have provided rates of return that have outpaced inflation over time; however, they have done so with more volatility.

In essence, the Fed is trying to encourage (force) savers to speculate with their savings.

Economic research shows that 15 percent annual price inflation is not unlikely by 2014, depending on monetary velocity and future Fed policy.

Therefore, as bad as low interest rates are for savers, it could get worse.

Current Fed policies have left investors with a trade-off — accept negative real returns on cash equivalent securities or take a chance by increasing portfolio allocation toward stocks.

It is prudent to have domestic stocks, foreign stocks, real estate, and gold (riskier assets) in one's portfolio.

However, these more volatile asset classes should be offset with short-term bonds and other cash equivalents, which are intended to provide a hedge against short-term price inflation.

Investor's best defense against price inflation remains a portfolio allocated across various asset classes according to needs, risk tolerance, and investment horizon.

One should be careful to reach for yield by overweighting high yielding stocks or below-investment-grade bonds.

Craig C. Le Bouef, MBA, CPA/PFS, CFP, Shareholder of Going, Sebastien, Fisher, & Le Bouef, LLP, Certified Public Accountants, Registered Investment Advisors, and Consultants, 2811 South Union, Opelousas, LA. Website: www.goingcpa.com. E-mail: craig@goingcpa.com

Article from Daily World