A couple of years ago it was the Power sector which was in the limelight. Then came the telecom sector. After the spectacular rise and fall of Telecom stocks, there is a new sector which is now making rapid progress in the last couple of months. This is the Banking sector. Both public and private sector banks have seen their share prices rise like wildfire recently. This was further strengthened with SBI’s good results in the first quarter of 2010.

If we see the chart of Nifty and the Bank Nifty index for the last month, the difference is clearly seen. Given below are the 3-month and 1-month comparison of the Nifty vs Bank Nifty. Although the Bank Nifty has started its rise only in the last month, I’ve put the 3-month chart to show how much attractive it was a couple of months ago. That would have been the ideal time to enter the Bank Nifty (of course, this is all in hindsight)

As with telecom, I’m kind of late to catch on to the trend. It may be too late to enter good stocks in this sector – Bank of Baroda, HDFC Bank, UCO Bank and Yes Bank look good to me, but they are already trading above my buy price. So let’s wait until things cool down or we get a stronger recovery signal in the economy when it will be time to slowly get in to the market in bits and pieces.

PS. With this post, I’ve also created a new category called Financial Farziwada. Let me first explain the meaning of this word for all those not faimiliar with Hindi. The meaning of “farzi” is non-genuine in Urdu. So farziwada, means activities which are not genuine. The idea for the name of this category comes from a classmate of mine in IIT Madras, who was known for his investing skills. Even though he was from the industry, he knew that most of the so-called analysts and brokers are out to make their own money rather than genuinely advising retail investor. Moreover, finance is only playing with numbers, which in local parlance, translates to farziwada. This also means that you should not blindly believe what any financial analyst tells you even if “it is for your own good.”

For instance, this is what the lady had to say while quoting her rates.

Rs 400 – Washing clothes (assuming 4 people)
Rs 600 – Washing utensils, drying them and placing them in the cupboard (400 for washing and 200 for drying)
Rs 400 -Jhaadu pocha.
Rs 400 – Dusting furniture (excluding windows)
Rs 200 – Cleaning windows.
Rs 200 – Cleaning bathrooms.

That works out to around Rs 2200 for a month’s worth of work. And oh yes, before I forget, here’s the clincher – the paid-leave clause. The lady is expected to take 2 days of leave per month. But if she doesn’t, you have to give her that two days’ worth of pay.

Wow, even I have never gone into such a level of detail during my salary negotiations. Maybe this is not a bad strategy to adopt. After this level of detail, you just don’t have any room left for negotiation. You pick what you want to get done, and do the rest yourself. Obviously the wife isn’t too thrilled about this.

Let’s see, hoping the previous maid resolves all her family problems and returns. Else it is time to tighten the purse strings and make some difficult choices.