16TH MAY 2012

Dear Friends, If you are new to the concept of the Dividend High Yielder Investing, I highly recommend you read up my Previous Newsletters on this issue. See HERE http://www.scribd.com/doc/87868739/Dividends-High-Yielder-Out-Performance-Continues-31st-March-2012 & See HERE http://www.scribd.com/doc/92746711/Dividends-High-Yielder-Out-Performance-Continues-5TH-MAY-2012 & See HERE http://www.scribd.com/doc/93325498/BSE-Notes-May-2012

The Dividend High-Yielders List continues its Decisive out- performance this Year. A Portfolio built out of Only Dividend High-Yielders would have decisively Out-performed the Wider Sensex This Year once again continuing the Trend that has been in place since November 2009. 2% Nahin Toh Kuch Bhi Nahin!!! 48 stocks are up more than 40% and the Stocks IVRCL(55% UP),VST INDUSTRIES(70% UP), DENA BANK(68% UP), IFCI(57% Up) and BGR Energy have gone up like rockets(53% UP)!!! Other Big Gainers include Bajaj Steel, HEXAWARE TECHNOLOGIES, INDIABULLS FINANCIAL SERVICES, TORRENT CABLES, SOBHA DEVELOPERS, HONDA SIEL POWER PRODUCTS,etc(All Up 40% or more). If you applied a Filter to my Dividend High Yielders List back on 1st January 2012;so that you bought only those stocks which would Yield in excess of 2%;you get over Two Hundred stocks. The Average Gain on those Stocks is 16.20 %( Way Superior to the Sensex which is up only 4.6% in that time period) and the Average Dividend Yield is 3.82%. Of that list there are only eleven stocks which are down significantly (more than 10%) Gujarat Gas Company (DOWN 19%) ALKALI METALS(DOWN 13%) SRF LTD (DOWN 15%) ALCHEMIST (DOWN 40%) SUDARSHAN CHEMICAL INDUSTRIES (DOWN 21%) TITAGARH WAGONS (DOWN 22%) TRANSCORP INTERNATIONAL (DOWN 15%) LKP FINANCE (DOWN 24%) ICSA-INDIA (DOWN 19%) OPTO CIRCUITS INDIA (DOWN 13%) RPG LIFESCIENCES (DOWN 21%)

More importantly even today there are over 190 stocks which are yielding in excess of 2%. Not Happy with these Gains & the Yield??? If you applied a Filter to my Dividend High Yielders List back on 1st January 2012; so that you bought only those stocks which would Yield in excess of 4%; you get over a Hundred stocks. [Not an Approach I recommend as you miss out on some really Amazing Stocks which Yield between 2 and 4%] The Average Gain on those Stocks is 17.1 %( Again Way Superior to the Sensex which is up only 4.6% in that time period) and the Average Dividend Yield is 5.23%. Of that list there are only FIVE stocks which are down significantly (more than 10%). Gujarat Gas Company (DOWN 19%) ALKALI METALS (DOWN 13%) SRF LTD (DOWN 15%) LKP FINANCE (DOWN 24%) ICSA-INDIA (DOWN 19%) More importantly even today there are 98 stocks which are even today yielding in excess of 4%. I know its still early days but from the stocks that are on my list today, the Picture on Dividends has just gotten better and better.[We will get a full and clear idea only by the end of June when more than 75% of the companies on the BSE would have paid out their entire Dividend Payout for 2012] Of the 228 stocks that have paid full or Partial Dividends for 2012 already, only 17% have cut Dividends this year. 55% of the Stocks have raised Dividends so far this Year. When you look at it simply, the reasons for this Out-performance are simple-Investors everywhere like a Degree of Predictability about their Returns. And what better way to get this Predictability than through Assured Annual Dividend Payouts? When you see such a Decisive out-performance for such a Simple Model(we consider only One Criteria here-Dividends) and still return More than Twice as much as the Broader Sensex and with much-much less risk (since you will always pocket the Dividends) ;you know you need to relook how you invest in the Stock Market today. Specifically, Debt-laden stocks which have not paid Dividends of atleast 2% annually for the last Three-Five years straight should be simply rejected outright. Regards Ashish.Ulhas.Mehta Email:technoconsulting4smbs@gmail.com

P.S All Data used here is current as of 14th May 2012.You can find it HERE http://www.scribd.com/doc/93812612/Bse-Dividend-High-yielders-List-as-on-14th-May-2012

Taking Care of Shareholders versus Throwing Them under a Bus.

I often get asked by My Friends why I never talk about RIL(Reliance Industries) and what do their future prospects look like. The Polite answer is because they are Not Shareholder Friendly; I ignore them. [If you meet me in Person, I will give you the Full Deal!!!] Anyways, Long-term Readers of Newsletter will remember when I first recommended Going Long the Dividend High Yielders [In November 2009].I had made the reason very clear back the as will; We were about to Hit such a massive Wave of Debt Deleveraging brought on by all the excessive Debt Burdens the Worlds Nations have taken on over the Years; that only those companies which are Profitable and Return their Profits to Shareholders reliably will do well. Anyways Lets See how RIL has done since then. RIL 30th November 2009-Closing Price-1090. 16th May 2012-Closing Price-676 Return to Date- NEGATIVE 38% Dividend Payout-Rs 23.5/share [7+8+8.5] Dividend Return- 2.15 %( To Date) Total Return- NEGATIVE 36% RIL has returned a NEGATIVE 36% since then. A Retail Investor could have done much-much better than that by buying an Index Tracker (which just Tracks the BSE/NSE); that way they would simply track the BSE(rise and Fall with the BSE). THE BSE 30th November 2009-Closing Price-16926. 16th May 2012-Closing Price-16030 Return to Date- NEGATIVE 4.5% Compare this Disastrous Performance to that of the Company Brand Finance calls the 4th Most Valuable IT Services Firm in the World-TCS [After IBM, HP and Accenture]. TCS 30th November 2009-closing Price -689 16th May 2012-Closing Price-1223 Return to Date- POSITIVE 77.5% Dividend Payout-Rs 55/share [20+16+19] Dividend Return- 8 %(To Date) Total Return- POSITIVE 85.5%

Or, the Most Valuable Paints Company in the World-Asian Paints ASIAN PAINTS 30th November 2009-closing Price -1685 16th May 2012-Closing Price-3753 Return to Date- POSITIVE 123% Dividend Payout-Rs 100/share [27+33+40] Dividend Return- 6%(To Date) Total Return- POSITIVE 129% Allright, you might still say that Yes these companies are leaders in their Respective Fields but they are not in the same Industry as RIL.Fine, compare RIL's performance with that of the Much-Maligned PSUs in the Same Industry(ONGC,BPCL). Please Note-These Companies are not strictly Commercial Businesses; they have a Social Angle too as they have to Sell Refined Products and Crude at Losses because the Indian Govt orders them too....

ONGC 30th November 2009-closing Price -1198[ 300 AFTER STOCK SPLIT] 16th May 2012-Closing Price-248 Return to Date- NEGATIVE 17.33% Dividend Payout-Rs 41/share [16.5+16.75+7.75] Dividend Return- 13.67%(To Date) Total Return- NEGATIVE 3.67 % BPCL 30th November 2009-closing Price -595 16th May 2012-Closing Price-752 Return to Date- POSITIVE 26.4% Dividend Payout-Rs 42/share [14+14+14] Dividend Return- 7.1%(To Date) Total Return- POSITIVE 33.5% Please Note-In the case of ONGC,BPCL and TCS they have not yet made Full Dividend Payouts for 2012,I have assumed that payouts stay constant(compared to 2011) the numbers most probably they will show a strong rise; especially in BPCL's case the Final Dividend Payout will probably be around Rs 18/share this year and TCS's case it will be close to Rs 35/share!!! So lets face some facts, Inspite of having ZERO SOCIAL RESPONSIBILITY,RIL still Severely Underperforms Companies which have a massive Social Purpose like ONGC and BPCL!!!!

What's the point of having Billions of Dollars on the Balance Sheet, if you plan to Blow it away on one Hare-Brained Scheme after another and do everything except return it to Shareholders???? The Guru of Value Investing -Mr Benjamin Graham talks about these issues extensively in his legendary Book-The Intelligent Investor (A Must, Must read in my humble opinion). He says very simply, after a Company has taken care of whatever its Day to Day expenses are (Capital Expenses, Employee Salaries and Loan payments) and after retaining a portion of Cash on the Balance Sheet for Competitive Reasons; Majority of Cash should be returned back to Investors in the form of Dividends. If Cash is retained on the Balance Sheet most Company Management simply tends to waste it on pursuing Useless Acquisitions which have no Competitive Rationale. And he has seen Data over more than a Century on the S&P 500!!! Do you still wonder, why I don't like or talk about RIL???? I often hear Investors talk about RIL monetizing all its various Investments in the Near Future and that will ensure that the Market price will then appreciate like crazy. To them I have only one Answer-DREAM ON. A Company which Inspite of having (even today) Billions of Dollars on the Balance Sheet does not return anything to Shareholders (and instead proceeds to progressively DESTROY shareholder Value) will NEVER be a Good Long-term Investment. Do not forget its your hard-earned Money on the line here. You have every right to expect and demand Out-performance. And if a Company is not delivering out-performance you are perfectly within your rights to take your Investing Capital elsewhere. Still if I was pressured to pick a point at which I would buy RIL,then I would say Simple -Let RIL fall to Rs 400/share. At that price it will be a Good Long-term Investment. Till then, it will simply be a Drag on most Small Investor's Portfolios.

DISCLAIMER: I do not work for any of the following organizations A Mutual Fund, Investment Bank, Bank, Analyst Firm, Brokerage House, Any Government or any other related firm with links to the Financial Services Industry. I am a retail investor and I write because I Love writing about Finance and Economics. Please do your own due-diligence before investing anywhere.

ORIGINAL DOCUMENT CAN BE FOUND HERE http://www.scribd.com/doc/93813360/Dividends-High-Yielder-Out-Performance-Continues-14TH-MAY-2012