Blogs

Feb 2011 Inflation at 8.3%: Visualized!

February 2011 Inflation came in at 8.3%, with a pick-up in manufacturing goods. I had written earlier that the danger remains of inflation moving from primary items to secondary items and now that seems to be happening.

Super Hot TataCoffee! What's Roasting?

Unbelievable move by Tata Coffee over the last week or so. The stock's up from 570 to 907 in five days, a ridiculously massive move. I've been caught in this stock before - lost about 10% - but got back in a couple days back. It's very flaky, so you have to stay nimble.

The strategy here is all about position size. It's a volatile stock, so you have to keep wide stop losses. With a large position, you can't afford wide SLs, so you cut the volume down dramatically. Where a regular stock would be 5 to 10% of your portfolio, this stock will end up being 3 to 4%, perhaps pyramiding in with 2% as your first entry. First stop is 740 (see, that's a 20% loss right there) and the subsequent one is between 600 and 630.

TTKPrestige: Still At All Time Highs

ttkprestigelogo A kitchen appliance company, TTK Prestige seems to be really strong. Despite the broader market having come down 20% or more, this stock is pushing to new highs. I've held the stock, on and off, over the last year or so.

They have very good cash flow. According to an interview with Moneycontrol, the promoter said they will be adding substantial capacity in the next year, just with internally generated money. Low debt in a high interest rate situation is always good.

Third Quarter results were excellent, with their nearly doubling EPS from 13.54 to 25.87. Their TTM EPS is 70, which makes their P/E nearly equal to 30 - a very good price for a company that's just been growing and growing.

10 Tax Saving Avenues : MV Chronicle

At the March 12, 2011 MarketVision Chronicle, we present 10 Tax Saving Avenues for you to consider. And, of course, all else at MV.

 

You need to register (free).

Primary Articles Inflation Down To 13.96% for Feb 26, 2011

Primary Articles Inflation for Feb 26, 2011 has mellowed down to 13.96%. This is the lowest figure since November 2009, which is a good sign.
image

You Can Trade 91-day T-Bills Soon

Every regulatory body in the Indian market woke up recently and decided to allow Interest rate futures on treasury bills. SEBI said ok, and RBI said ok.

What does this mean? The Indian government keeps borrowing short term money as "Treasury-Bills". The 91-day T-bill sold on 09 Mar 2011 was at 98.25, where the yield was an annualized 7.1443%. The T-Bill is bought at a discount (say 98.5 or something) and on maturity (91 days later) you get the full Rs. 100. The difference is the interest you expect, and it's multiplied by 4 to get an annual yield.

The idea now is to buy (or sell) a futures contract that trades on the "yield" piece - that is, you trade on the direction of this yield. But it's a little complex: What you'll see on the screen is something like 95 (which indicates a 5% yield - the distance from 100 being the yield).

Each contract is for 2000 bills, cash-settled. Let me construct an example - this is how I imagine it working:

Video: Open and Closed Ended Funds

We've got a new (Free) video over at MarketVision on Open and Closed Ended Mutual Funds.

(9 min)

New Companies Bill: One Woman In Every Five Directors

The new companies bill which is supposed to be passed in Parliament this session will mandate women directors on many boards.

Companies having five or more independent directors would have to necessarily have at least one female independent director, Corporate Affairs Minister Murli Deora said.

Vietnam Hikes Rates From 7% to 12%

WSJ reports that Vietnam hiked its rates today.

HANOI—Vietnam's central bank Tuesday raised two of its key policy rates on dong-denominated loans in another bid to tame inflation.

What I Learnt At Two Value Investing Meets

I attended a couple of interesting meets, consisting of a number of value investors, over at Delhi. They were two separate groups - "Perfect Research" and "InvestmentSuperGrowth" which met, but there seemed to be a significant overlap.

Note: I am a beginner at this "value" investor concept.

Let's get to the interesting stuff.

Mistakes

First, a presentation by Sanjay Bakshi, a famous value investor and Professor at MDI Gurgaon. He spoke about a few mental habits to get killed in the stock market. He's a value person so he abhors trading; there was a time when I would find that view silly because it ignores the excellent returns traders have made. But now I think everyone should be allowed their biases, and if hating trading is what makes him a better investor, more power to him.

He mentioned a great example of how our mind plays tricks on us. If you were in a shop for a lamp costing Rs. 10,000 rupees, and the salesperson said, "Listen, we have another store that we're shutting down, just a mile down the road, and the same lamp's available at Rs. 9,000". Will you go?

Many of us in the audience, including the stingy me, raised our hand.