Moodys downgraded one tranche of SBI’s borrowing…but the Indian Media has downgraded SBI!!

Amazing what lack of training can do.

One small tranche of US $ 400 million borrowing has been downgraded by Moodys (which can do no wrong, because Warren Buffet is a shareholder) to D. However, rest assured this is surely a cheap publicity stunt – it will take SBI about 10 minutes to raise this kind of amount from the Indian public at 10% p.a interest rate….

However our great media has gone to town saying ..why FIIs will sell SBI (or have already sold) ..and SBI shares will go down etc. In fact there is always such a over reaction that more US $ 400 Million has been taken out of the market capitalisation of SBI.

What should you do if you are the shareholder of SBI with a longterm view?

Simple, switch channels.

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  1. It gives us (non share holders) a chance to buy. I hope Media spurns out more nonsense today. Missed my chance yesterday to buy as I had other work :(.

  2. Akshat it is really funny – I mean the post. You should know the author’s background first. He used to be a fund manager with IDFC. Secondly an architect who is paid say Rs. 2 crores salary for constructing a BUILDING costing Rs. 1000 crores looks poorly paid? Afterall he is getting only 0.2% of the asset value, poor chap!

    AMC profitability is a joke, I agree, but it is a function of effort, not of the AUM.

    What a joke this article is about IDFC which is a professionally run company – ask the shareholders how much they have suffered and is published on a blog owned by Network 18.

    You should ask the unit holders of funds managed by IDFC and the shareholders of both IDFC and Network 18 whether their investments been good.

    I am not a shareholder of IDFC, Network 18….caveat emptor…

  3. Agree with Visvanath…and the author has a website called investors are idiots or something like that. He used to manage a dynamic bond fund and did not have a great performance ever. All his articles sound like sour grapes. I do believe there is very little justification for so many fund houses, AND MANY OF THEM underperforming the index by a mile..but remember he was a fund manager. L O L.

  4. already bought 6 sbi share.
    but after reading this article , i bought more 5.
    noe total no. of shares today bought is 11 of sbi.
    looking for more down and will buy more.
    media and investor has to do their work respectively.

  5. @Visvanath, paramjit: yes, I had noticed that the author runs his own website for investors, so there is a case of his vested interests. just wanted to run it by ppl who are hopefully doing SIPs and take their opinion.

  6. sadly running an investment advisory business in an unbiased manner is a fantastic altruistic goal. Not seen any so far in 25 years of investing life..If you find, please let me know.

  7. Sir, I am very impressed by your advises and comments. I have started to read them very recently. Please suggest me a good book written about personal financial planning. I am very much interested about this and i want to follow them and keep myself and my family safe and happy

  8. I guess people have forgotten last quarter results of SBI. It was just 24 lacs. The CEO gets changed and organization starts big write-offs. It does not inspire confidence of the investors.

    Against RBI, these people went on with teaser loan rates and it has pay from its pocket. If we visit any suburban or rural branch, loan approval is saddled with corruption. Hardly it is able to create confidence among the depositors.

    The downrating is only an eye opener. Wake up SBI.

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