How to Select a Mutual Fund Scheme?

(Cartoonist: Doug Pike; cartoonstock.com)(Sunday, 22 May 2016) How does one select a Mutual Fund Scheme to invest?  The current practice is that investors just buy what is sold to them. Surely, that cannot be the best way of benefitting from mutual fund investing. How to Select a Mutual Fund Scheme? There are many metrics to consider before one can allocate money to a Mutual Fund Scheme. I have highlighted just two of them. (A) Does the Manager of the Mutual Fund Scheme eat […]

How to Read the Mutual Fund v/s Benchmarks Outperformance?

(Cartoonist: Wise and Aldrich; Cartoonstock.com)(Sunday, 8 May 2016) Mutual Fund investments have gained in popularity and are now the preferred route for a retail investor. While deciding to invest in a mutual fund, investors compare the degree of outperformance between the Mutual Fund returns and their stated benchmarks. Mutual Fund v/s Benchmarks Before reading the table below and the analysis, I need to highlight the following: Mutual Funds in India are unconstrained. What do I mean by ‘unconstrained’? Mutual Fund managers are […]

Sizzling Stocks – All Time Highs & All Time Lows

(Cartoonist: Dave Carpenter; Cartoonstock.com)(Sunday, 24 April 2016) The Nifty is light years away from making a new All Time High. Stocks, however, are behaving differently. Many stocks are hitting new All Time Highs and new All Time Lows. A new All Time High or a new All Time Low is not the same as a 52-week high/low. The words ‘All Time’ are used to highlight a price that has never been seen before in the trading history of the respective stock. […]

HOW TO TRADE MOMENTUM?

(Cartoonist: Doug Pike; Cartoonstock.com)(Sunday, 10 April 2016) Momentum investing or ‘Big Mo’ as it is popularly called, is the strategy of buying something that is going up and trying to sell it even higher. In reality, it is what most of us end up trying to do.   How to Trade Momentum? Momentum investing is buying stocks that are appreciating relative to peers and selling those that are falling relative to peers in the broader market. The logic is that […]

DISTRESSED DEBT: IS THERE AN OPPORTUNITY?

(Cartoonist: Fran; Cartoonstock.com)(Sunday, 27 March 2016) Distressed Debt is the debt of companies that have filed for bankruptcy or have a significant chance of doing so shortly. Hitherto the Indian retail investor never had the option of investing in a distressed debt fund, now they do. Is it worth biting the bait? What is Distressed Debt Investing? Any discussion about Distressed Debt Investing would be incomplete without referring to Howard Marks, Chairman and Co-founder of Oaktree Asset Management in the […]

ARE NEGATIVE INTEREST RATES, POSITIVE?

(Cartoonist: Harley Schwadron;Cartoonstock.com)(Sunday,13 March 2016) Negative interest rates represent an upside-down world. There is something about negative interest rates that makes one uneasy; it ‘s almost visceral.   FII flows & Negative interest rates Emerging Market (EM) financial assets are considered as risk assets by the Foreign Institutional Investors (FII’s). FII flows to EM’s, and the Indian stock market is a function of how risk averse FII’s are. Have negative interest rates accentuated risk aversion or alleviated it?  The following […]

QUO VADIS: INDIAN PUBLIC SECTOR BANKS?

(Cartoonist: Grizelda; Cartoonstock.com)(Sunday, 28 February 2016) After a torrid start to the month, global equities bounced back. However, Indian equities did not participate. The reason: Public Sector Banks in particular and the banking sector, in general, proved to be a drag on the benchmark.   Operation Clean-Up in Public Sector Banks   According to guidelines issued by the Reserve Bank of India (RBI), India’s Public Sector Banks (PSB) are in the process of recognizing non-performing loans by the end of […]

CHAOS THEORY & MARKETS: DOWN THE RABBIT HOLE?

(Source: www.shutterstock.com/cartoonresource)(14 February 2016) The Chaos Theory seems to have the answer for much of the market mayhem that we have been witnessing. To me, the Genesis seems to be the falling price of oil.    How correlated are Oil Prices, Stock Prices & Inflation? There is a definite positive correlation between oil prices and stock prices. However, the correlation is too random to be predictable. Currently, the correlation between oil prices and stock prices is between 0.9 and 1.0. […]

LOW VOLATILITY STOCKS: THE WAY OUT & WHAT LIES AHEAD

(Source: www.shutterstock.com/cartoonresource)(31 January 2016) Is Volatility a friend or an enemy? When the markets are going up volatility is the investors friend. On the way down, Volatility is a sworn enemy. As a result, I prefer to call Volatility a frenemy. Is there any such thing as a ‘Low Volatility’ stock? Volatility: The Way Out   The National Stock Exchange of India (NSE) disseminates a Nifty Low Volatility 50 Index as part of its ‘Strategy Indices’. The image below shows […]

FAT LADY SINGING – NIFTY SMALL CAP 100 INDEX

                        (Source: www.shutterstock.com/cartoonresource)(24 January 2016) After a tumultuous start to the new year, the last week finished off with a relief rally. Are we done with the correction? ‘It isn’t over till the fat lady sings’ is a colloquialism classified as a proverb. It is used to caution against the following: Assuming that the present state of an event is permanent in nature. Trying to draw a conclusion as to […]