Archive

Archive for the ‘News Analysis’ Category

Is your mutual fund outperforming sensex?

Sunday, November 25, 2007 6 comments

Read this story to understand how mutual funds are hugely under performing the sensex. Sensex has created 5 times more wealth than the MFs. I feel that this shall trend shall continue as “buy and hold” strategies on some stocks might no longer work. Do you know that Infosys was one of most over owned stock in MF portfolios?

Mutual funds have long stopped innovating because they were getting easy money into the funds. This is good for guys like us who are individual investors and have more flexibility.

Advertisements

Banker's write-downs in the US

Saturday, November 10, 2007 4 comments

Here are some figures for write-downs by US banks due to subprime issues. The total till date is about $45 billion.Looks like worst is yet to come!All these folks are sitting on many credit derivatives whose value is likely is fall further.This spells more trouble for dollar and US markets. Check out the latest stories on US mortgage market on “Mortgage Blues”.

Citigroup *$13.7 bln
Morgan Stanley $4.6 bln
Deutsche Bank $3.1 bln
JP Morgan $1.6 bln
Wachovia Bank *$1.1 bln
Lehman Bros. $0.7 bln

Data: Companies, since Q3 * Est.

Categories: Market View, News Analysis Tags:

Banker’s write-downs in the US

Saturday, November 10, 2007 4 comments

Here are some figures for write-downs by US banks due to subprime issues. The total till date is about $45 billion.Looks like worst is yet to come!All these folks are sitting on many credit derivatives whose value is likely is fall further.This spells more trouble for dollar and US markets. Check out the latest stories on US mortgage market on “Mortgage Blues”.

Citigroup *$13.7 bln
Morgan Stanley $4.6 bln
Deutsche Bank $3.1 bln
JP Morgan $1.6 bln
Wachovia Bank *$1.1 bln
Lehman Bros. $0.7 bln

Data: Companies, since Q3 * Est.

Categories: Market View, News Analysis Tags:

FIIs buy $3.15 billion in 10 days!

Wednesday, October 10, 2007 11 comments

If you thought that $5 billion in a year was good for Indian markets, consider this- FIIs have bought stuff worth $3.15 billion in just 10 days! No wonder the markets are sky rocketing due to this surge in liquidity. As long as the global conditions remain stable, expect some more dollar inflows. And just in case Fed goes for another rate cut, floodgates might open. So do not underestimate the strength of these strong moves.

Also remember that currently less than 5% of household savings are invested into equities. I am wondering as to what might happen if that percentage increases to say 10% over the next couple of years. Although a lot of domestic money is finding its way into the equity markets through Unit Linked Insurance Plans offered by the likes of ICICI and LIC. (Although thats a bad and inefficient way to invest in the markets)

Its an irony that foreigners are more bullish on India than the Indians themselves!

Categories: News Analysis Tags:

Only 11% of Indian Middle Class Invested In Equities!

Friday, September 7, 2007 9 comments

Read this interesting survey by CLSA aptly named Mr. and Mrs. India.

Some of the interesting findings:

  • 91% of middle class owns mobile phones while 100% owns TVs
  • 70% own homes
  • 51% of investments in land(not surprising!)
  • 11% in equities
  • 30% in cash and fixed deposits
  • 84% have NOT taken loans

I think they describe a “middle class home” as the one with annual income less than 10 lakhs.(though not mentioned in the news story).

Does it mean there is still lots of growth still left for our banks and mutual funds? Most of the growth in telecom sector is now coming from “rural areas”.

Can we say that in coming years our markets shall be more driven by “domestic money” than the “FII money”?

Categories: News Analysis

Mr. Greenspan sees a crash similar to 1987 and 1998!

Friday, September 7, 2007 3 comments

Mr. Greenspan sees a crash similar to 1987 and 1998. Read this. Whether the crash happens or not, these statements have the potential to spook the global markets. Looks like Mr. Greenspan is short on the markets!

I feel that it is so difficult to “predict” a crash! We can just keep the focus on our “risk management”, as we cannot control the unseen “events” .

CNBC Expert- Market to fall 400 points

Thursday, September 6, 2007 12 comments

Read what our dear CNBC expert VK Sharma had to say on CNBC this morning-“Markets will fall 400 points“. Looks like markets were listening and they responded by going up 200 points. Rest 200 might be due for tomorrow!

Sometimes I fail to understand how these experts make their “predictions”. What kind of background do these guys actually have? I feel all of them are ‘driven” by vested interests. Seeing the US markets,he might have recommended his clients to go short in the morning.Then he comes on TV trying to make a small investor nervous by making such comments. You should notice the “lack of confidence” in his voice when this guy speaks. I feel he should have been interviewed again at 3:30 to know what he thinks now!

Just because markets were taking time to cross 4500 doesn’t necessarily mean that markets are looking “tired”. It is only because of such “expert opinion” that people go short and markets go up! Good for us and bad for CNBC viewers.

Keep watching the CNBC but only for “entertainment’.For “investment” use your own head as it is your money which is at stake.

Categories: News Analysis