Well i am not really surprised that there are so many flaws and suspicious things in their fundamental revenue model that one who has a little bit of financial knowledge like me can also rip them apart.  The most important thing is company has already announced on national TV that what they are charging is not against surveys but for the e-zine which is absolutely worth nothing.  Speakasiaonline’s CEO has said that they do not guarantee any x amount of earnings after paying sum of Rs 11k  against the ezine. Now this must have surely caused ripples for the people who have invested their hard earned money in the company just dreaming about getting easy money without doing anything (well doing surveys is as equal to do nothing).

I am also amazed how their management said sorry to the brands and confessed that they are not doing any surverys for them.

After doing some research about the company, i have got an explaination of how this whole sceheme works

1) They take 11k from you through list of channels called franchises, they do not include themselves directly in to this , the biggest question here is , they are an online .com based company and still they do not have online registration and subscription, they are getting millions of hits, they must have generated billions of Rs in few months with online subscription but they do not have that. Why? They are using third party survery tools for their surveys why? Well the answer lies in future. Lets see

2) After accepting money, they issue a receipt that this money is agains the yearly subscription of e-zine, they do not state any survery related payments or no. of surveys or anything else in the receipt which is again questionable cauz they are selling their schemes just cashing their survery model.

3) They pay you in USD, well they have to since till this time they do not have a single office in India which is highly questionable. I wonder why RBI have not raised his eyebrows when millions of Rs. is coming to india from overseas courtesy speakasiaonline.com .

4) People are getting paid only when there are surveys , what if surveys fade down? , what if there will no surveys? How do they generate revenues? and how do they pay the people doing surveys? this is very fishy indeed!

5) What if they shut down the entire survey system, lets take the worst case scenerio and see what you can do to get your money back. You can sue them! , well the truth is you have no evidence that they have duped you by survey scheme since they never in any written document tell you that you can make money while doing surveys.

6) So how are they operating? Well , the answer lies in the buffer period of 3 months when you get your investment back. So They are passing the bucks from new registrations to old one and also keeping some money in hand for expensive IPL ads.  They are just continuing to do so due to enormous amount of registrations , the bubble of the possible scam is getting bigger day by day

Well to all my friends who have invested in this scheme. I hope you atleast get paid back your investment money atleast if not profit. There are no free lunches in this world, and always remember money saved is money earned.

Best of Luck!

I have a 15 years’ crude oil seasonal price chart. This chart says that from January to September, crude oil prices increase substantially, mainly because of the summer vacation-driving season. Then, in September- October, it becomes sluggish and then in the month of November- December, demand for crude oil weakens because of the reduction in driving and more moderate temperatures between the summer cooling and winter heating seasons, thus, crude prices see correction.

During the last 15-year period, January has typically been the month, in which, the seasonal oil price starts moving up again as markets prepare for the summer driving season. It is interesting to note that, while crude oil prices are usually soft during December, energy stocks begin to strengthen in December, offering the investors an opportunity to capitalize the favorable seasonal demand.

The OPEC meeting just concluded in Angola. We found two take aways from the event: first was that Asian demand is strong, mainly from China and second take away was that $70 is the new floor in oil prices. i.e. oil between $70-$80 is perfect for OPEC. So, this implies that, anyhow, OPEC will attempt to keep the oil above $70. At present, crude oil is trading at $75. So, may be ?a new uptrend has begun.

So, if 2010 also, follows the pattern of the past 15 years, then we are approaching the start of a seasonal climb in the crude oil prices that could present a good investment opportunity in energy-related stocks.

Currently, the crude oil is trading near US$ 75 per barrel. Going forward, according to this chart, crude should move further up. This would result in higher realizations to upstream companies like RIL, ONGC, Cairn India. But at the same time, higher crude prices would also impact the profitability of downstream companies like HPCL, BPCL (Oil Marketing Companies) as retail oil prices are Govt. driven and OMCs cannot pass on the higher cost to the end users. It would also lead under recoveries.

Natural Gas

Currently, the natural gas is trading at $5.7 per mmbtu, below its average rate of US$ 8 per mmbtu. In the economic recovery, it would be preferred as cheap energy alternative. But there is huge surplus inventory buildup in natural gas; so, we expect that the upside is limited to US$ 8-8.5 per mmbtu. Given the vast demand-supply gap in natural gas, gas transmission companies like GAIL India, Indraprastha Gas and Gujarat State could be highly benefited in 2010.

Rupee

Another factor that can impact oil and gas industry is ?movement in Rupee?. We expect rupee is strong in the near term, on account of higher economic activities, FII inflows to India and the recent comment from FM that GDP growth in FY10 could reach 7.75%. This would be a positive factor for oil marketing companies like IOC, BPCL, HPCL etc. as it will reduce the oil procurement costs, thus reducing subsidy losses and it would also be good for Gujarat Gas as its procurement is dollar denominated and the selling price is rupee-based.

Whereas, rupee appreciation could be negative for stand-alone refineries like Chennai Petroleum as their GRMs are dollar denominated and for upstream companies – ONGC and OIL as crude realisation is US$ denominated but some negative impact is mitigated due to lower subsidies.

Overall, I remain constructive on energy stocks?supply and demand fundamentals for energy will tighten, given the improving economy and positive seasonal factors, heading into the New Year. So, the energy stocks will benefit in 2010.

Fuels and metals prices being far lower than last year, along with low demand in the economy gave this higher base year effect. Now, there are talks of Deflation. Market men are expecting the inflation will head towards zero level in 3-4 weeks and soon in negative territory for 4 to 5 months, which will open the way for the Reserve Bank of India to cut interest rates further to grow up demand and economic growth.

First of all, we need to know what exactly deflation is. In Inflation, money becomes relatively less valuable than goods. And deflation being the exact opposite of inflation, money becomes more valuable than the other goods in the economy. And when does deflation occur? It usually occurs when supply of goods is more than supply of money. So demand for money goes up and demand for goods goes down. Does this mean that we are now talking of a fall in inflation caused by falling demand? Well, if we see the IIP numbers of Dec/Jan, especially the falling growth rate of the manufacturing sector, it conveys the same. So, in the coming few months, market is expecting negative Inflation.

With inflation at its historic low, the consensus in the market are like in terms of policy response, RBI will ease the liquidity by cutting both the REPO and reverse REPO rates by 100 basis points by mid-2009. But RBI has already taken so many measures in the past few months, now the onus is on the banks. Rather than concentrating on what the central bank is doing, we have to really see is what the cost of funds is for the banks, and that requires lower deposit rates. The banks have reduced the interest rates on bulk deposits, which is at an average of 10% while it has not really reduced the lending rates, which continues to remain at an average of 12%, which is the PLR. Banks have become risk averse to the extent of being over cautious. Unless the banks are not able to redeem the high interest cost deposits, the rates are not expected to come down. One could see rates coming down in the slack season between April-September 2009. Once RBI reduces the rates, then deposit rates could come down further and it is only after that, that the banks will reduce lending rates. Then only we can see some industrial demand.

We cannot say that we will actually see Deflation very soon, because to some extent, the current condition is just an eyewash. The gap between WPI and CPI is further widening. WPI Inflation as measured by RBI is 0.44 %, but the Retail inflation as measured by the consumer price index has moved up to 10.45% in January, the highest since December 1998.

Now the question arises, why prices at the retail level are not coming down – in spite of the WPI based inflation coming to 0.44 %.

Well, when inflation goes down, the process starts from the supplier of raw materials like in case of housing industry, the process starts from the iron-ore–>Steel industry –>Trader–>Construction industry –> Home owner. So just imagine the effective time which inflation takes to reach to the ultimate real consumer. The iron ore just mined out may take around 1-2 years to reach our home, which is under construction. By that time, inflation goes up again, the trader, who purchased steel cheap, raises his prices to match the current prices and the steel becomes costly again so we don’t find the difference in our daily-lives.

So, the recessionary trends will not go away and demand will not pick up until things change at the retail level because ultimate buyer of everything is common man only. In addition to this, sentiments should improve.

The asset price bubble, which was basically built from the abnormal increase in the prices of real estate, heavy FII money in the equity markets etc. in the past, had made India as a “high cost economy”. So, the deflation at -5 to -10 % is required to restore competitiveness of the Indian economy. This rolls the current price levels to few years back and restores sanity in the market place.

But if deflation sustains for longer period of time, it will result in less demand, lower production and weak economic growth.

So, in this scenario, investors should invest in those companies where decline in prices lead to increase demand for their products, prompting them to produce more value-added products with greater economies of scale. Companies, operating in sectors like snacks and beverages, health care, utilities and telecommunications can be a good buy. Apart from this, companies with strong balance sheets, which do not have much debt on their books, can also be considered for investment like IT, health care and energy sectors.

Though negative inflation is not good from a growth point of view but India’s low inflation rate for 5-6 months will not be a cause of worry as it will enable policy makers to take more steps to stimulate a slowing economy and if some more monetary easing is done, economy can see some revival in demand due to decrease in lending rates.