Uncle Scrooge's Economics

    ECONOMY, MARKETS AND EARNINGS - The unbreakable relationship             The stock market is the word of the hour. Everyone wants to make a lot of money via investing. People are on the constant lookout for a multibaggers that would turn around their lives. The Indian markets are booming, and everyone is looking for an opportunity to wash their hands in the flowing water. While this is great, one has to understand why our markets are booming. At the end of the day, the relationship between markets, the economy, and earnings is what describes the path of the markets and your portfolio. Markets are a reflection of earnings as well as the state of the economy. As for the relationship between markets and earnings, as said earlier, markets and earnings are positively correlated. Meaning, if Indian companies report poor or negative earnings, then the markets are supposed to fall. This phenomenon takes place because we value companies based on thei...

  Recently news came in which says that MR Gautam Adani hostilely bought 29.18% stake in NDTV while the promoters had no idea about the transaction. The takeover was against the will of  Pranay Roy and Radhika Roy, promoters of NDTV. How did MR Adani manage this act of uncanny business move? Let's dive in.  Adani bought a company named VCPL which had a 29.18% stake in NDTV. One of the largest shareholders of NDTV is RRPR holdings ltd. RRPR Holdings had borrowed a loan of Rs 403 Cr from VCPL. Instead of asking RRPR holding to pay interest on their loan, VCPL asked them for 29.18% stake in NDTV in terms of convertible Warrants. Now a warrant is a type of instrument which allows the holder to either sell or buy shares of the underlying company before expiry at a certain price. And convertible warrants are once's that can be converted into shares. So, for example, if I have warrants of say Reliance at Rs 2000 and currently if the share is trading at around Rs 1800, I can conv...