Avoid Noise in long term investing!

Yesterday I had an interesting chat with one of our customers. We discussed various news and events. He suggested that we should include these into our research process. While its very valid point that we should keep track of news and developments, but getting influenced by this is very foolhardy. Few days back, another customer was of opinion that Tata Motors has very poor product line and service of Passenger vehicle segment. Why would you recommend us to buy the company? But Passenger Vehicles forms less than 5% of the company’s sales, why should I worry. Unless large capital is employed, I wouldn’t worry about that segment. Another query was, one of the battery companies uses promoter’s land for its plant, isn’t it bad corporate governance? But the business model doesn’t get affected and valuation doesn’t change. And yet another one was, cash was found in premises of one of the leading conglomerates […]

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Category:Learn

Caution is the word for the year 2016

We have seen high volatility in equity markets in first four months of CY2016. Chinese macro-economic data, US/EU/JPY monetary policies are in focus by money managers to make tactical changes in asset allocation. Since the government bonds in developed economics are trading at near zero or even negative interest rates, the institutions are going lower in risk curve to earn slightly better returns. This is evident from the response Argentina’s Sovereign bonds received despite very bad credit history. Asset allocation has increased towards emerging markets ETF (primary mode of investment for FIIs). Source: Top EM ETFs AUM. We have seen phenomenal rally in Indian Equities in March and April. This is nothing to do with Indian Economy or Feb. Budget. We saw large FPI inflows in last two months, while Indian domestic institutions like Insurance and MFs were net sellers in the same period. We do not predict market levels but focus […]

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Category:Learn
Nifty@MRP Trends Lower, What Should Investors Do?

Nifty@MRP Trends Lower, What Should Investors Do?

What is Nifty@MRP? As investors, we constantly track the Nifty movements. To make investing more profitable and not a game of mere chance, we need a solution, a solution which could help us identify whether the market is grossly depressed or irrationally exuberant. This is exactly what Nifty @ MRP is for! What is the latest value of Nifty@MRP? For Dec’15, considering the free float market capitalization at the MRP of individual stocks and the share price data as of 18th Mar, the Nifty@MRP is at 8297. On 18th Mar, NSE Nifty index closed at 7604, which is ~9% or 693 points below the Nifty@MRP. It indicates that the index is undervalued. On similar lines, the Sensex@MRP value is at 27766. On 18th March, the Sensex closed at 24953, which is about 11% or 2813 points below Sensex@MRP. Future Outlook After a strong correction in Feb 16, Indian markets have […]

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Casinos are better than today’s Stock Market!!

Corporate India has had one of the terrible quarters in terms of growth. Rather, last few quarters have consistently came in below expectations. Investors have been waiting for some meat but alas they have got a raw deal! They have bet money at very high valuations that even God would find difficult to justify. In return, did they get any profits from the investee business? We are seeing large amount of funds flowing into the mutual funds on hopes. An illusion that the economy is on the cusp of turnaround has misled many. We do not expect the economy to change course abruptly. We see the process to happen more gradually than what the market expects. Don’t you think the longer it takes, lower will be the yield from the investment made today? Given the stress in the economy, are we asking for enough risk premium? As opposed to what the market feels, the economy […]

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Nifty undervalued as compared to Nifty@MRP, is it the time to Buy?

Nifty undervalued as compared to Nifty@MRP, is it the time to Buy?

What is Nifty@MRP? As investors, we constantly track the Nifty movements. To make investing more profitable and not a game of mere chance, we need a solution, a solution which could help us identify whether the market is grossly depressed or irrationally exuberant. This is exactly what Nifty @ MRP is for! What is the latest value of Nifty@MRP? For Dec’15, considering the free float market capitalization at the MRP of individual stocks and the share price data as of 18th Sep, the Nifty@MRP is at 8385. On 18th Sep, NSE Nifty index closed at 7981, which is ~5% or 415 points below the Nifty@MRP. It indicates that the index is undervalued. On similar lines, the Sensex@MRP comes out to 28094. On 18th September, the Sensex closed at 26169, which is about 7% or 1925 points below Sensex@MRP.   Future Outlook For the past few months markets have been jittery. […]

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