Macro issues for Micro finance

Shares in SKS Microfinance , India's only listed microfinance lender, tumbled to a record low on December 20, 2010 (and could go down further). There seems to be no end to the run of bad luck at India's largest microfinance player. Going by its last close, the SKS share has gone down more than 60% as compared to its peak of Rs 1491 on September 28, 2010. Recently, Citi had come out with a report on SKS with a target price of Rs 600. It is worthwhile to note that Citigroup Global Markets was one of the three lead managers to SKS' IPO (issued at Rs 985). Vinod Khosla, the billionaire venture capitalist and co-founder of Sun Microsystems, was among the early backers of SKS. Khosla’s is part of a new school of thought that believes that businesses and not governments or NGOs, could, and should, lead efforts to eliminate poverty. The idea being that sustainable businesses (which make profits) are better equipped to fight poverty than charitable institutions.

However, the current going for the microfinance industry (MFIs) in India has been very very challenging. After witnessing a large number of farmer suicides, the Andhra Pradesh government passed the the AP Micro Finance Institutions (Regulation of Money Lending) Bill, 2010. MFIs threatened to shut shop in AP and instead expand in other states like Orissa and Chattisgarh. But those governments are also working on a similar Ordinance, following the AP model. Separately, Nobel laureate Muhammad Yunus attacked companies for "misusing and abusing" his original concept and admitted that the reputation of microfinance had been damaged due to Indian companies that charge high interest rates and use heavy-handed tactics to collect repayments. On the business front, there have been no credit disbursements and funding has literally dried up.

Amidst this chaos, there are people who still swear by and believe in the microfinance model and think that the industry will bounce back, sooner rather than later. My friend from Intellecap, Atreya Rayaprolu, has very lucidly presented his thoughts on riding the new wave of microfinance. An interesting read –

Are Investors Ready to Ride the Third Wave of Indian Microfinance?

If the sector tides over the current crisis, in the next few months we could see a Third Wave of Microfinance.

How things change. Less than two months ago the Indian Microfinance industry was riding the crest of a wave, and excitement was palpable among industry stakeholders. Today, the sector is under attack, the almost miraculously reliable flows of repayment down to a trickle, and that of institutional credit virtually dry. And yet, we believe – maybe we are counter-intuitive investment advisers, maybe we are simply incorrigible optimists – that the sector could be on the point of return to a better balance between its commercial and social bottom-lines: a Third Wave.

Microfinance in India has roots in decades-old structures of informal and community financing, and more recently in chit funds and the SHG-Bank Linkage programs. But the modern private microfinance institution (MFI) operating on the Grameen/JLG model has evolved primarily in the last 10 years. The first half of the decade was an unmitigated struggle for them, dominated by not-for-profit NGOs and focused largely on social impact and sustainability via funding from Foundations and DFIs. In the last five years, the sector – or at least the news – has been dominated by for-profit NBFCs, with a focus on rapid growth and scale, fuelled by huge amounts of capital from PEs and backed by professional management.

These phases are what we would refer to as the first and the second wave of Indian Microfinance. The current crisis, triggered by the AP Ordinance, has helped everyone realize that neither a bullock-cart nor a Ferrari is appropriate, and in the real world one needs to find an appropriate balance.

If the sector tides over the current crisis, in the next few months we could see a Third Wave of Microfinance evolving with this balance. Investors with a deep understanding of the drivers and risks of this sector, we firmly believe, should view the current period as the second inflexion point for the sector, and as an excellent opportunity to make ‘value’ investments and ride on this Third Wave.

It is incredible how events in a few months have changed perceptions of an entire sector. A year ago, VC/PE investors who had not made an investment in the microfinance industry felt left out, and rued missing the bus. The SKS IPO – the first in the Microfinance sector - was around the corner and everyone in the financial markets was waiting with bated breath. We were fielding calls from people who had forgotten our existence, wanting to spend time understanding the microfinance business. We spent even more time meeting people at all levels from other NBFCs, the Retail Banking sector, and Business schools, all of whom were stumped by the simplicity of the Microfinance model.

A year later, the sector has become one of the most maligned and viciously attacked. The build-up to the SKS IPO saw a number of debates not only on the merits of a ‘social’ organization (with an intended mission of alleviating poverty) accessing the capital markets, but also on the ethics and morality of stakeholders who realized financial gains before the listing. Meanwhile, the growing flow of capital into the sector fuelled a seeming mania for higher valuations that overtook the customers’ needs. The post-listing euphoria was cut short by the unceremonious firing of the SKS CEO, and threw up a host of issues around corporate governance and transparency.

Finally, the linking of suicides in AP to over-indebtedness and coercive practices led inexorably to the AP Ordinance and the current crisis. The founding father of the Microfinance industry in India, the still redoubtable Vijay Mahajan, has spoken about ‘an imminent collapse of the industry’, ‘death of the Microfinance model in its current form’ and ‘a lot of things not [being] right about the sector'.

As an eventful 2010 draws to a close, murmurs are still audible about some of the largest companies in the sector being on their death-beds. However, there is an increasing sense that the dust is beginning to settle, at least from a media attention viewpoint. It may take a few more months of coordinated effort to tide over the liquidity crisis, and several months of introspection and intellectual sweat to evolve the model for the next stage, but there is sufficient evidence on the ground to suggest that Microfinance as a business is here to stay, albeit with significant changes in strategy and business models.

In the first wave of Microfinance, promoters were central to the success of the organizations (mostly NGOs) and creating a social impact on the ground was the key focus. In the second wave, the focus was on the organization, with investors infusing huge amounts of capital and professional implementation of systems and processes with the objective of achieving growth and scale. In our view, we could now see the birth of a Third Wave, with the client at the center of the model, and everything that the Promoter or the Company does driven by her needs.

In this model, we expect to see many client-centric innovations. Organizations are likely to develop a product portfolio that consists of a far wider offering than the “any-color-as-long-as-it’s-black” Grameen product (Customizations to cash-flows of the client? Partnerships for non-financial products?). Operating and delivery models should see plenty of redesign (JLGs and centers giving way to individual lending? Banking Correspondents operating with MFIs?), and credit-appraisal systems will be strengthened and formalized. All of this will eventually lead to a range of services being offered to the client (both financial and non-financial), based on a more complete understanding of the needs of the end-customer, and more sophisticated service offerings and transaction types. Delivering these improved services will require significant changes in the way data is captured and mined.

The current transition period presents, we believe, a tremendous opportunity for those investors who wish to come in at attractive valuations and ride on this Third Wave. Investors in the sector during this period are likely to reap rewards that provide a far more equitable balance between generating financial returns and having a real positive social impact on the client, her communities and the country. Now that is something worth investing in.

One year of Entrepreneurship

Wikipedia defines entrepreneurship as follows - Entrepreneurship is the act of being an entrepreneur, which is a French word meaning "one who undertakes innovations, finance and business acumen in an effort to transform innovations into economic goods". With the state of the economy and the nation where it is, entreprenuership is clearly a hot topic in India. There are innumerable startups that are coming up in this country, and virtually in every conceivable sector, be it manufacturing, telecom, Information technology, energy, infrastructure, real estate, financial services. Almost everyday one hears about people leaving their safe corporate careers to tread into the murky waters of entrepreneurship. It seems that a wave of entreprenurship has been unleashed in this country and nothing, not even the global economic crisis, can stop or even slow this. Amidst, this a friend has completed one year of a start venture in India. This is his insightful message for all of us, a worthy read-

Dear Gang,

I completed a year of entrepreneurship, this month. The year was extremely exciting and offered edge of the seat drama (but no horror episodes, thankfully). There is never a dull moment when you need to figure out how to get revenue through the door or pay the bills or convince an employee to stay on. As we complete one year, we realize that we had aimed for soo much more in this year (after all we were highly ambitious folks). But, we realize that we have learnt soo much more this year (after all we didn't know much of what we were getting into). The journey has been exciting, so I thought I should share some insights from this journey

a. When we started, we were negotiating an agreement which would cover us for two years and had future upside.. We ended up only "negotiating". We gave up in January and we understand that the client is still negotiating.. Thank God for our low patience levels...

b. Our initial strategy was to enter Africa and South East Asia as that was the buzz word in the investor circle. Though we had initial success, these markets took a long time to decide. We needed to keep the cash box ringing and therefore had to continue to build on India. This focus on India has helped us gain a lot more confidence and keep the cash box ringing.. Don't go by strategy & excitement of investors, the cash box is king..

c.Some team members who were planning to join us on this journey, took much longer to decide (some haven't yet). While others who we felt would not join, have been essential elements in our growth. Everyone has a different view of risk and return, be prepared for surprises on both elements.

d. Our business plan executed more of less as per plan. However, any line item in the plan (either on the revenue or expense side) does not match with the plan. Its just sheer coincidence, not the plan.. By the way, revenues are always delayed and expenses are always early..

e. The support for entrepreneurship has been immense. I have met many of my friends over the last year (I took advantage of their hospitality) and also got insights for free. The support from all quarters is truly amazing..

Satish can be reached at satishkashyap@gmail.com

Optimism Bias

Optimism bias is a well-established illusion of being over- optimistic about future events. The basic idea is that when people judge their chances of experiencing a good outcome they estimate their odds to be above average. But when they contemplate the probability that something unpleasant will happen to them, they estimate their odds to be lower than those of other people. A great number of academic studies have been done on this subject. Some of the well established cases of optimism bias are as follows:

- People expect to complete personal projects in less time than it actually takes to complete them

- Second-year MBA students overestimated the number of job offers they would receive and their starting salary

- Vacationers anticipate greater enjoyment during upcoming trips than they actually expressed during their trips.

- Newlyweds almost uniformly expect that their marriages will endure a lifetime despite the large proportion of marriages that end in divorce.

- Most smokers believe they are less at risk of developing smoking-related diseases than others who smoke.

Optimism bias is also quite common in financial markets. Equity analysts are known to consistently overestimate the earnings and growth potential of companies. In financial appraisal of projects, optimism bias is demonstrated in the systematic tendency for appraisers to be over-optimistic about key project parameters; be it capital costs, works duration, operating costs and revenue. 

In the last 4-5 years, the real estate investment community seems to have been a victim of optimism bias. This is most exemplified in the severe under estimation of time/duration required for construction/operation of project investments. For fund managers who have made investments in major parts of Asia (China, Vietnam, India, Indonesia) in the last 4-5 years, under estimation of timelines is the one area in which they all concede to have erred. The experience has shown how easy it is to fall into the optimism bias trap and start believing that once the finance is secured and the contracts awarded, things just roll on in an automode. Following are some of interesting reasons (these are all true) by which projects have gone significantly delayed:

-  The approvals have been delayed because the municipal corporation has switched from a manual system of approvals to an electronic system of approvals and there is a bug in their software. We have submitted the building plans in a CD but their software is unable to read it.

-  There is labour shortage because of the Commonwealth games being held in the country. All the labourers from the neighbouring states have been called in for the Commonwealth games and hence work on the site has slowed down.

-  Number of labourers have gone down because many labourers have registered themselves under the NREGA scheme (a rural employment scheme implemented by the government) and are unwilling to work

-  After we submitted the Building Plans, the parking laws have changed and the new parking regulations are yet to come out; once the new regulations come out, we have to revise our plans and resubmit the application

- This is the first such project of this scale in the city limits and the officers in the municipal corporation are unable to understand whether to give or reject approvals. They require more time to evaluate the plans

-  The municipal corporation will not give the operational clearance to the building unless it is cleared by the irrigation department. The irrigation department is yet to establish its own standards setting the benchmarks for giving its clearance

- The contractor has turned rogue and is asking for more advances and has threatened to slow the work if we don’t pay up quickly

- The Building plans require approval by both the urban development body and the municipal corporation. Since political adversaries are currently running these bodies, one body always delays or blocks the scheme approved by the other

There is no way a fund manager investing in projects could have foreseen such situations; and such situations sometimes do have an impact on the IRRs. But the harsh reality is that such unique events do happen with regular regularity. Therefore, in every investment, an investor has to incorporate for the unknown event that could have an unknown impact, against his optimism bias!

P.S: It is believed that the only section of the population that isn't susceptible to the optimism bias are people with major depressive disorder. Probably funds should consider hiring some of them. 

Shopping Centres

2010 - It was the best of times, it was the worst of times.. for the retail market in India.

India’s Retail story is one of long-term growth. According to a report by India Brand Equity Foundation, the Indian retail sector had an estimated total market size of USD 330 billion in 2007, which is expected to grow to USD 427 billion by 2010. This growth has been manifested not only in the growth of the organized retail trade, but also in the large scale construction of new retail environments - shopping centers. The growth of shopping center development in the country is visible from the significant increase in its volume.

While there were only a couple of built shopping centers covering around half a million sq ft in 1999, it has been projected that as of end-2009, more than 50 million sq ft of shopping centers would be operational throughout the country. The ownership of these shopping centres is distributed amongst 100s of local developers scattered through out the country. There are very very few developers who can claim to be pan India shopping centre players. Meanwhile, big shopping centers become even larger. One of the motivations of the expansion activities is that the inclusion of more entertainment and food courts should give shopping centers more retail traffic and increase the sales of other retail stores, though its effects are doubted by some researchers that consumers who are drawn by entertainments are less likely to visit shops rather than food courts.

However, by end-2008, shopping centres and their owners came face to face with increasing vacancy and falling footfalls. Getting the retailers to sign the dotted line, pushing them to start the fitouts and then chasing them for unpaid rents have since become a part of daily life for shopping centre owners. The harsh realities of global recession affected everyone in the Indian economy, including the retail sector and its physical construct - shopping centers.

Given this background, does it make sense for shopping centre owners to consolidate? For the shopping centre industry, does it make sense to have a few large national players rather than many many small local players? Lets examine the benefits of consolidation:

Bargaining power with retailers

Organized retail industry in India is largely an oligopsonic market. (An oligopsony is a market form in which the number of buyers is small while the number of sellers in theory could be large. It contrasts with an oligopoly, where there are many buyers but just a few sellers. An oligopsony is a form of imperfect competition. One example of an oligopsony in the world economy is cocoa, where three firms (Cargill, Archer Daniels Midland, and Callebaut) buy the vast majority of world cocoa bean production, mostly from small farmers in third-world countries.)

Shopping centres in India have well defined product categories. These including the multiplex, the food court, the hypermarkets, the departmental stores (loosely referred to as anchors) and then the vanilla stores. In each of the anchor product categories, there are virtually 4-5 established players that all the retailers have to go to. This gives rise to an oligopsonic market with the retailers having the relationship power balance tilted in their favour. Also, with shopping centres being capital intensive (with large amount of debts) and the retailers working on negative working capital, the cash flow pressures are that much more on the shopping centre owners than the retailers. It gives retailers much more time to play hardball in their negotiations with the shopping centre owners.

If shopping centres in India could consolidate into 4-5 pan India players (rather than the 100 local players), the power balance could be restored and would provide shopping centre owners with a good amount of bargaining power vis a vis retailers. With a few buyers (shopping centre owners) and few sellers (retailers), one can expect a fair power balance in the industry.

Economies of Scale

For shopping centres, expenses can be saved from efficient operations.

CAM is the largest operating expense and is customarily recovered by tenants, but these expenses are not simply a pass-through, it requires the shopping center owners to control CAM and utility expenses that are also reimbursed by retailers to make a win-win situation. A stronger bargain power of a larger shopping center to negotiate better deals in procurement such as cleaning service could lead to scale economies. If the CAM expense elasticity with respect to gross revenues is lower than one, shopping centers could achieve benefits by efficient CAM and utility management.

General &Adminsitration expenses are likely to follow a stepwise increasing pattern as shopping centers expand and there are certain economies of scale expected to be achieved there. Insurance expenses are very likely to be the source of economies of scale for big shopping centers. Generally speaking, a larger shopping center is better placed to negotiate for favorable insurance contracts, and thus it will take benefits as the center size increase. Marketing expenses are certain to exhibit strong economies of scale.

Externalities

Externalities may have be huge source of competitive advantage to a shopping mall owner. Because of its large presence, it may attract retailers looking for quick expansion and because of the large amount of leasing available, the shopping centre might expand further. Large scale also give an organization the ability to invest in high quality personnel, which results from of its size; and implies that larger shopping centres, with higher quality management, will be better positioned to acquire properties and position them for rent growth.

So, how is this consolidation possible? REITs seem to be the only solution.

Reference:
Economies of Scale in Shopping Center Industry, Qiong Wang

Retail Asset Management – Empowering Indian Shopping Centres, JLLM

Real Estate Accounting

Real-estate accounting is a complicated business! It is difficult to comprehend and understand. Needless to say, real estate companies in India have been criticized by analysts for a lack of transparency in their property dealings and in how they account for projects.


As the industry struggles, investors are scrutinizing companies' accounting methods and transparency. The Institute of Chartered Accountants of India (ICAI) has, in the meantime, issued a Guidance note on Recognition of Revenue by Real Estate Developers. It has suggested that companies recognise revenues for real estate sales on the basis of the percentage of completion of the project at the time of reporting. In residential real estate projects, apartments/units are typically sold before they are constructed. A significant amount of money could also have been received even though construction might not have even commenced.

Under the percentage completion method, companies do not recognise revenues until a certain minimum cost threshold is reached, which can vary from 5-10% of total budgeted costs to as much as 25% being followed by some real estate companies. Some companies include the cost of land in estimating the progress achieved, whereas other companies do not take this cost into account in determining the percentage of work done or progress made. A change in these variables can have a significant impact on the revenues and profits reported by various real estate companies that follow the percentage completion method.

At a recent real estate seminar, I met the CFO of a large real estate company and we were discussing the intricacies of the interpretation and implementation of the percentage completion method. He gave me an interesting example. Suppose you have a project with a total size of 1,000,000 sq ft out of which 200,000 sq ft has been launched and about 50,000 sq ft has been sold. Assume that the land cost is Rs 500 sq ft, estimated construction cost is Rs 1500 sq ft and the actual cost incurred till date is Rs 200 sq ft (on the 200,000 sq ft). Now, suppose you had to compute the percentage completion, the logical way would be to compute the land cost of 200,000 sqf (Rs 100 million) add the cost incurred ( Rs 40 million) and divided it by the total estimated cost (Rs 100 million land plus Rs 300 million). This comes to approximately 35% (140/400). However, there is an another method. Since you have already paid for the 1 million sq ft of land, you can essentially include the entire land cost of 1 million (Rs 500 million) in the percentage completion computation. This means the ratio becomes (Rs 500 million + Rs 40 million)/ (Rs 500 million + Rs 300 million), ie 68% instead of 35%. Essentially, you can frontload the entire land cost on a smaller phase of the project to boost up the percentage completion ratio. This enables companies to book a higher revenue since revenue booking is directly dependent on the percentage completed. Such accounting policies are technically not incorrect and have been approved by the auditors of the company !

Lords of Finance

I have been reading the Lords of Finance for some time now and have completed approximately half of the 500 page book. I must admit that it is an extremely well written book on The Great Crash and Depression. It is a lively and fascinating "event by event" look at the slow motion lead up to The Great Crash, and the four men that could have prevented the Depression.  Liaquat Ahamed describes the four men as follows: ‘Four men in particular dominate this story: At the Bank of England was the neurotic and enigmatic Montagu Norman; at the Banque de France, Emile Moreau, xenophobic and suspicious; at the Reichsbank, the rigid and arrogant but also brilliant and cunning Hjalmar Schacht; and finally, at the Federal Reserve Bank of New York, Benjamin Strong, whose veneer of energy and drive masked a deeply wounded and overburdened man.’

One of the important point the book makes is how factors other than purely economic issues play a role in making economic decisions and how the consequences of those economic decisions then bounce back onto the wider political arena.

Ahamed's central thesis is that the critical decisions made by these four bankers not only caused the Great Depression but also created the conditions for World War II.

The book beautifully explains the complexities and the workings of the financial system at the macro level and throws light on some extremely interesting facts. Some of these are as below:

Gold Standard

The book intricately explains how the gold system used to work till the late twentieth century and the issues with it. The most fateful event of all the events during the early twentieth century was the decision to adhere to the gold standard. In retrospect, tying the amount of currency a country has in circulation to the amount of gold it has in its vaults appears arbitrary and nonsensical. However, it seemed like a good idea at the time, it provided a universal standard against which countries could stablize their currencies. It was a ruinous decision. As Liaquat Ahamed notes, all the gold mined in history up to 1914 "was barely enough to fill a modest two-story town house." There simply was not enough of it to fund a global conflict or to allow economic recovery afterward. 

Federal Reserve

The US was without a central bank until Woodrow Wilson signed the Federal Reserve Act on December 23,1913. The reason for not having a central bank, it was argued, was that it put too much power in the hands of one institution and was therefore undemocratic and un-American. However, in October 1907, the US was rocked by a severe financial crisis caused by the failure of unscrupulous characters to corner the market in the stock of a copper company, resulting in a severe run on the banks. Through some decisive action by JP Morgan, the panic was finally contained. It was only after this incident that an effort was made to create a central bank.

Bank of England

The Bank of England in the nineteenth and early twentieth century was run like a club. Its membership was drawn from closed inner circle of city bankers and merchants. Those who became governors were required to take temporary leave of absence from their own businesses. To be the governor of Bank of England, was therefore not a mark of particular merit, but merely sign of the right pedigree, patience, longevity, and the luxury of having a sufficiently profitable business with partners willing to let one take four years’ leave. The director of the bank did not pretend to know very much about economics, central banking or monetary policy. An economist of the 1920s described them as resembling ship captains who not only refused to learn the principles of navigation but believed that these were unnecessary.

Germany Hyperinflation

In 1923, Germany experience the single greatest destruction of monetary value in the human history. It was experiencing an economic depression after the first world war.  Prices rose 40 fold in 1922 and the mark correspondingly fell from 190 to 7600 to the dollar. By August 1923, a dollar was worth 620,000 marks and by early November 1923, 630 billion. Basic necessities were priced in billions – a kilo of butter cost 250 billion. It was not only the extraordinary numbers but the dizzying speed at which prices were soaring. In the last 3 weeks of October 1923, prices rose 10,000 fold. In the time it took to drink a cup of coffee in one of Berlin’s cafes, the prices might have doubled !

The book has taught me more about financial markets than all my academic studies in B school. It is utterly surprising that most B schools do not have a compulsory course on the history of financial markets. They would rather concentrate on teaching bogus models that never ever work in the real world. My advise to all B school students and participants of financial markets – the book is a must read!

Rather than splendid personalities and events, the book's real advantage is timeliness. 

More on this later when I finish reading the book.

Guide to successful investments

Paul Kedrosky’s research had pointed out, it takes a VC to invest $50 million and be in the industry for seven years to make a good VC. Since the last 4 years, I have been working in a real estate private equity fund. I have been involved in deals worth more than USD 100 millions and although I have not completed 7 years in the investments business, I would like to believe that I am nearly there in becoming a good investor.

Here are my key learnings of the last few years:

Understanding the business: This sounds so obvious and simple and yet is the most difficult part to achieve. Often it does not require very sharp intellect but rigour, perseverance and patience of a good learner. The best guide in understanding the business is not research reports but by actually experiencing the business. The best real estate fund managers have been developers, some of the finest VC investors have been technology entrepreneurs themselves. The rationale is obvious; people who have been there and done that know the nuances of the business better than others and hence can evaluate a deal much more easily. If you do not have the business experience it is a good idea to actually ‘work’ in such a company before hand. So you can work at a developer’s office, a solar power generating company, a bio gas plant etc for 10-15 days to get a first hand knowledge of the challenges faced in such businesses (before evaluating real estate or a clean energy deal). This is difficult to achieve, but if possible, is one of the best ways to evaluate a deal.

Understanding the business model of the customers of the business in which you are investing: Following are some of the basic questions that should be asked:

- Can they afford the product that your company is making?

- What choices do they have?

- How easy/difficult is it for them to substitute your company?

- What is the dependency on your company and the overall industry?

Conversations with industry experts are often an easy and quick way to have insights. This also gives an idea about the competitive scenario prevailing in the market and the kind of challenges your investee company could face. For example, if investors had the patience of studying the financial statements of retailers in 2005, 2006, 2007, it would have clearly shown the huge losses and the big problems that the retailers were facing. One need not wait for a Lehman crisis to understand the troubles of investing in shopping malls.

Entrepreneur: It is a well accepted fact that the biggest factor in an investment decision is the entrepreneur himself. Everything else becomes secondary. I wont dwell too much on this; just 2 points:

- Spending time with the entrepreneur. It is very important to spend atleast 50-60 hours with the entrepreneur before putting money on him. This need not be in serious meetings in the office but could be for a drinking session or a lunch/dinner meeting with friends. The idea is to know him personally. It is surprising how much information one can get in casual settings rather than a Q & A session in the Board Room.

- Another important factor is to also know about the circle of influence of the entrepreneur. Who are the key people that he/she listens to? It is very important to touch base and connect with such people.

All said and done, at the end of the day, there is some amount of crystal ball gazing that takes place and there is no substitute for great insight. Happy Investing !