Posted at 6:30 PM , on September 21, 2015
What should be your investment theme post the Fed status quo…
The Fed decision to maintain the status quo on rates was received with celebratory applause by global markets. Indian markets (Nifty) crossed the 8000 mark although it finally closed below that psychological mark. The Fed decision to maintain status quo has opened up a new approach to investing in Indian equities.
Ideally, investors need to adopt a 3 pronged approach to equity investing. There is the very short term approach with a 2-3 months perspective. Then, there is a medium term approach from 6-12 months perspective. And finally, there is the long term approach from 1-3 years perspective. So how do you calibrate this strategy.
Posted at 4:57 PM , on August 21, 2015
A successful self trader – Rule # 21
You must be aware that certain stocks have turned up incredible performances over the years. Had you invested in the Infosys IPO, appreciation would have been 85 times in 6 years. TTK Prestige had moved from Rs.105 in 2007 to Rs.4500 in 2012. A relatively low profile Bharti listed and went down to Rs.18 in 2002. By 2006, it was quoting at a whopping Rs.900. How do you identify a multi-bagger? Continue reading
Posted at 4:28 PM , on August 3, 2015
How ETFs got the better of hedge funds, globally
What would be the biggest investment story of the last decade? Forget about gold, oil and equities. The biggest story has been the way exchange traded funds (ETFs) have overtaken hedge funds in terms of assets under management (AUM). Consider the numbers! Back in 1999, ETFs were less than a 10th of the hedge fund industry. Currently, ETFs have an AUM of $3 trillion, a tad more than the hedge fund industry. How did this shift happen? Continue reading
Posted at 3:33 PM , on June 4, 2015
Penny stocks have a broad range of definitions. In the US, penny stocks are the ones quoting below $20. In India, stocks quoting below Rs.20 are normally classified as penny stocks. There are some amazing penny stock success stories in India. Eicher, Crompton Greaves, SAIL were all penny stocks before they became multi-baggers. But the key question is how to identify them and trade them?
Penny stocks can be a tricky game…
Back in 2001, at the peak of the 9/11 equity paranoia, I remember a couple of large steel traders aggressively accumulating SAIL at Rs.3/-. Although, I was never a great fan of penny stocks, I was quite intrigued by their sudden interest in SAIL. More so because, as steel traders, they understood steel much better than most others. Not surprisingly, they made a real killing! Continue reading
Posted at 8:19 PM , on May 15, 2015
In a way this rule sums up the beginning and the end of all trading and investment rules. It applies equally to a trader and an investor. Like the old quote, “If you don’t know where you are going, it does not matter how fast you run”. Your objective should be defined clearly. Are you looking to beat the index? Are you looking to better debt? Are you only keen on capital? Or do you want multi-baggers?
Defining your investment goal
This rule, in a way, sums up the crux of trading and investing. When I had asked a retired officer, why he wanted to trade in the market, his off-the cuff response was, “I have a lot of spare time”. This kind of a goal can be disastrous. You need to clearly define what you plan to achieve in the market. If you do not define your goal, you are unlikely to have a target to work towards. Continue reading