Oct 10, 2016 11:41 am
Summary The big news this week is the change in policy methodology by RBI. We look at the implications for markets and the economy. Further, the dichotomy in prospects for emerging versus developed economies is becoming evident in institutional investor rhetoric and is a net positive for India. Diverging Economic Prospects Consider the current rhetoric…
Read MoreOct 5, 2016 7:15 am
Policy Action: Rate cut by 25bps to 6.25%; Accommodative stance continues Under the first review of the newly formed Monetary Policy Committee (MPC) of the RBI, key policy repo rate was cut by 25bps to 6.25%; which was decided unanimously by all the 6 members. The policy tone remains accommodative, with the MPC reiterating the…
Read MoreSep 26, 2016 12:10 pm
“Successful investors tend to be unemotional, allowing the greed and fear of others to play into their hands. By having confidence in their own judgement, they respond to market forces not with blind emotion but calculated reason.” – Seth Klarman Summary This month we look at earnings revisions in the Nifty 50 and broader market,…
Read MoreSep 12, 2016 11:37 am
Summary A resurfacing of global risks and high domestic valuations are driving the recent market correction. We provide data that support the thesis that the Indian consumer remains strong, and the economic recovery remains in place. We discuss strategies for investors in the current scenario. Valuation Markets broke 24.5 times on the trailing P/E…
Read MoreAug 29, 2016 1:52 pm
“Far more money has been lost by investors preparing for corrections, or trying to anticipate corrections, than has been lost in corrections themselves.” – Peter Lynch Summary Equities With 43 companies in the Nifty 50 having reported earnings so far this quarter, 56% of companies have reported a positive surprise versus their expected numbers, while…
Read MoreAug 16, 2016 11:47 am
Summary With the Nifty 50 trading at stretched valuations, it’s instructive to look back and analyse the effectiveness of a high P/E based strategy. Equities The Nifty 50 is at a trailing P/E multiple of 23.7 times earnings. The chart at the bottom of this page highlights prior periods that the index traded at…
Read MoreAug 9, 2016 11:17 am
The RBI kept the policy repo rate under the liquidity adjustment facility (LAF) unchanged at 6.5% today, maintaining an accommodative stance while awaiting developments. The RBI stated it will continue to provide liquidity as required but progressively lower the liquidity deficit in the system to a position closer to neutrality. The RBI continues to believe…
Read MoreAug 1, 2016 6:01 am
Summary The Gambler’s Fallacy has implications for Indian equities and bonds. India is a clear consensus favourite today. We look at valuations and the best strategy forward. The Gambler’s Fallacy… In the summer of 1913, crowds at a roulette table in Monte Carlo witnessed an incredible event. The ball had landed on black 15 times…
Read MoreJul 25, 2016 12:15 pm
Summary Perceptions of global risk are shifting. Domestically, valuations on the index are rising. We look at various factors in formulating our investment strategy ahead. A Shifting Landscape… Developed markets, by their very definition, are supposed to demonstrate stability, sound governance, transparency and lower risk. Throw that playbook out the window. Brexit shifted perceptions. We…
Read MoreJul 5, 2016 6:04 am
Quarter end is the time we look into the rear-view mirror to evaluate trends and gain insights from past performance. The Nifty 50 Struggled to Deliver a Base 12 % Hurdle Return Over the Past 12 Months A 12% hurdle rate is an accepted long term return benchmark for Equities. For the Nifty 50, 16…
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