Bought Titan at 320.
Reasons
1. Strong brands in watches, eyewear, jewelry.
2.  Eyewear and jewelry will slowly consolidate towards branded players in my opinion.
3. Good financials

Luck versus skill

Interesting study on luck versus skill among mutual fund managers. The paper suggests that investors are not better off by trying to choose fund managers. Instead, choosing a low cost passive fund might give the same level of performance.
Luck versus Skill

Equity risk premium for India

Nice article on equity risk premium for india
Notes on Equity Risk Premium for India by Ajay Shah

GlaxoSmithKline Pharma

Bought GlaxoSmithKline Pharma at 2230 Rs. Good strong balance sheet, no debt. Steady growth and monopoly in quite a few products.

Read this really nice book over the holidays..its called Bounce: How Champions are made

http://www.flipkart.com/books/0007363621?_l=CJHVEqJO3veuHytbACc9dw--&_r=JguruvnG7uFYIQl5riWhSA--&ref=141e7102-3320-4874-909d-946d1bf134a7&pid=5kw3fj33ne

The book analyzes the path taken by high achievers in sports (and some other fields but mainly sports) to try and figure out what it takes to excel
Takeaways from the book:
1. High achievers have put in long hours of practice - typically 10 years or 10,000 hours to get to that level of performance
2. They challenge themselves to take on things beyond their reach
3. Their practice tends to focus on specific areas that they want to improve on.
4. For parents, the message to send to children is that their achievements are due to hard work and not intelligence. When you teach a child that hard work is the secret to doing well, the child thinks that anything is possible with hardwork. When you focus on intelligence, the child thinks that some areas are beyond them or if they cant do something, they think it is because they are not good enough.

Infosys stock

I was looking at Infy's financials to see how much is it worth.

The five year CAGR in profits is 21% and revenue CAGR is 19%.

Suppose we assume that this can be maintained for another 5 years, slows to 15% after that.

I assumed a discount rate of 15%

At a perpetual growth of 5%, the fair value is 2332 per share

Perpetual growth of 10%, the fair value is 3500 per share

PEG of 1 implies 21 PE and at EPS of 109 price is Rs. 2289

In either case, current price of 3200 seems overvalued.

Inflation expectations and investment

Current inflation levels are around 15% as per official figures. The deposit rates are below 9%, so we are looking at negative real interest rates. The demand for food and commodities looks strong in India. Very strong unmet demand for housing, despite the murkiness of the real estate business. On the other side, the sales from the auto sector suggest there is demand for both low end and premium models. I would expect these companies to pass on price hikes to the consumer since the demand is so strong. The problem I see is that these sectors are very capital intensive and competitive so volume growth may not necessarily lead to high return on capital. Automobiles is more or less a commodity business since there is no brand premium really.
High inflation suggests its actually a good time to be invested in equities but overall the index is not very cheap. There will certainly be tightening of money supply by the RBI to control inflation but a countering factor will be the likelihood of more cheap money coming via the FII route. I think there will be a phase when the market corrects . Overall India is a good market to be invested in for local investors purely as an inflation hedge.
Having debated whether to go via mutual funds or pick stocks, I continue to take the SIP route via mutual funds. Stock picking is a fulltime activity and I dont think I have quite figured out how to do a good job. Meanwhile Indian funds continue to generate returns better than the index so at this point it makes sense to go with active funds.
The challenge is to figure out how to invest when there is a lump sum to be invested. I havent quite figured that out yet.

Sesa Goa is an interesting company since it has been beaten down but am still nervous about buying commodity stocks.
I had another look at Indian Hotels - low ROCE does not justify the valuation in my opinion.