Macro Tsimmis

intelligently hedged investment

SELL Sterlite Industries India Ltd. (SLT)

Posted by intelledgement on Wed, 10 Sep 08

We still like Sterlite Industries long term. However, while we have been expecting the markets to remain stable-to-bullish through the US presidential elections, last weekend’s move by the federal government to take over Fannie Mae and Freddie Mac—in effect, undertaking potentially $1 trillion in obligations by guaranteeing those failed companies’ obligations—is a wake up call that the market is going to have to attend to some serious issues sooner rather than later. Accordingly, the risks just got a lot higher that a lot of air is going to be deflated from the economic activity balloon, and a mining company such as Sterlite has nowhere to hide in such circumstances. We are in the red here, but we expect to have a chance to get back in here at even lower levels.


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