Reblog: Seth Klarman – Beware of Value Pretenders


With so many articles dedicated to the debate on value stocks vs growth stocks I think it’s a good time to revisit what Seth Klarman calls ‘Value Pretenders’ in his best-selling book, Margin of Safety.

Here’s an excerpt from that book:

“Value investing” is one of the most overused and inconsistently applied terms in the investment business. A broad range of strategies makes use of value investing as a pseudonym.

Many have little or nothing to do with the philosophy of investing originally espoused by Graham. The misuse of the value label accelerated in the mid-1980s in the wake of increasing publicity given to the long-term successes of true value investors such as Buffett at Berkshire Hathaway, Inc., Michael Price and the late Max L. Heine at Mutual Series Fund, Inc., and William Ruane and Richard Cunniff at the Sequoia Fund, Inc., among others. Their results attracted a great many “value pretenders,” investment chameleons who frequently change strategies in order to attract funds to manage.

These value pretenders are not true value investors, disciplined craftspeople who understand and accept the wisdom of the value approach. Rather they are charlatans who violate the conservative dictates of value investing, using inflated business valuations, overpaying for securities, and failing to achieve a margin of safety for their clients. These investors, despite (or perhaps as a direct result of) their imprudence, are able to achieve good investment results in times of rising markets.

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Sensex reclaims 36,000, Nifty ends at 10,860 led by financials


Firm global cues and buying in financial and pharma counters helped domestic benchmark indices settle in the positive territory for the third consecutive session on Friday.

The S&P BSE Sensex gained 269 points or 0.75 per cent to close at 36,077 while the NSE’s Nifty50 index ended at 10,860, up 80 points or 0.74 per cent. Out of 50 constituents on the index, 38 ended in the green and rest 12 in the red.

Volatility benchmark India VIX declined over 6 per cent to 15.03, indicating lower volatility in the market.

As many as 8 stocks hit 52-week high on NSE including names such as Bata India and SPL Industries. On the contrary, 48 securities hit their one-year low.

On a weekly basis, both the headline indices rose around 1 per cent.

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Trading Holidays 2019 – NSE, BSE


 

Hello Traders,

The list of trading holidays for the calendar year 2019 has been announced by BSE. Here’s a one-page list of all trading holidays for NSE & BSE

Holidays Date Day
Mahashivratri March 04, 2019 Monday
Holi March 21, 2019 Thursday
Mahavir Jayanti April 17, 2019 Wednesday
Good Friday April 19, 2019 Friday
Maharashtra Day May 01, 2019 Wednesday
Id-Ul-Fitr (Ramzan Id) June 05, 2019 Wednesday
Bakri Id August 12, 2019 Monday
Independence Day August 15, 2019 Thursday
Ganesh Chaturthi September 02, 2019 Monday
Muharram September 10, 2019 Tuesday
Mahatma Gandhi Jayanti October 02, 2019 Wednesday
Dussehra October 08,2019 Tuesday
Diwali Balipratipada October 28,2019 Monday
Gurunanak Jayanti November 12,2019 Tuesday
Christmas December 25,2019 Wednesday

Following Holidays are Falling on Saturday / Sunday

Holidays Date Day
Republic Day January 26,2019 Saturday
Ram Navami April 13,2019 Saturday
Dr.Baba Saheb Ambedkar Jayanti April 14,2019 Sunday
Diwali * Laxmi Pujan October 27,2019 Sunday

Muhurat Trading shall be held on Sunday, October 27,2019 (Diwali – Laxmi Pujan). Timings of Muhurat Trading shall be notified subsequently.

Source: Zerodha.com Link


Reblog: The Curse of Intelligence


Before I really knew anything about human behaviour, incentives, and how the markets really work, I was always blown away by the sheer amount of intelligence I would come across in the investment world.

Most of the people I’ve interacted with throughout my career are highly educated at some of the best colleges and universities in the world. Many continued their education by getting advanced degrees or prestigious industry designations. They can speak eloquently, hit you with reams of data, can sell a ketchup popsicle to a person wearing white gloves, and have the utmost confidence in their own abilities.

After a few years of being impressed by the sophistication and above average IQ of the various portfolio managers, strategists, analysts, and marketing people I came into contact with, I finally had a realization – intelligence can only take you so far in this world. I didn’t exactly have an epiphany on the topic, but over time the shine began to wear off.

It became apparent that the smartest person in the room isn’t always right. In fact, most of the time their intelligence works against them because they’ve become so sure of themselves and their investing abilities that they’re unable to change their mind or accept the fact that the markets don’t care what your IQ is.

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Reblog: 10 Things You Can Learn From The World’s Best Traders


Today’s lesson is a virtual treasure trove of wisdom and insight from some of the best trading minds of all time. We are going to go on a journey of discovery and learn a little about some of the best traders ever and dissect some of their famous quotes to see what we can learn and how it applies to our own trading.

The way to learn anything is to learn from the greats, have mentors, teachers, study and read; you must make a concerted effort to absorb as much knowledge from the best in your field as possible, for that is truly the fastest way to success, be it in trading or any other field.

Below, you will find a brief introduction to 10 of the best traders of all time, followed by an inspiring quote from them and how I view that quote and apply it to my own trading principles. Hopefully, after reading today’s lesson you will be able to apply this wisdom to your own trading and start improving your market performance as a result…

George Soros

George Soros gained international notoriety when, in September of 1992, he invested $10 billion on a single currency trade when he shorted the British pound. He turned out to be right, and in a single day the trade generated a profit of $1 billion – ultimately, it was reported that his profit on the transaction almost reached $2 billion. As a result, he is famously known as the “the man who broke the Bank of England.”

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Sensex drops 690 points on Friday, Nifty ends below 10,800; RIL falls 3%


After opening marginally lower, the domestic equity market saw a sharp decline in the trade on Friday as investors booked profit across-the-board. The S&P BSE Sensex was trading nearly 600 points lower, slipping below the 36,000 mark in late noon deals, while NSE’s Nifty50 slipped below the crucial 10,800 level, down over 150 points.

IOC, UPL, Adani Ports, Maruti Suzuki and Indiabulls Housing were top losers among Nifty50 stocks, which fell 3.5-4.5 percent.

HPCL, BPCL, Coal India and NTPC were only gainers, up 1-2 percent.

About two shares declined for every share rising on the BSE.

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Reblog: Seth Klarman, David Abrams, and Howard Marks on Value Investing: Great Read


One of our readers shared the transcript of a roundtable talk among Seth Klarman, David Abrams, and Howard Marks almost 10 years ago. It is a very long read (22 pages) but if you’d like to learn about these great value investors and their investment approaches, it is a great read. I will share some excerpts from each of these investors and share the link at the bottom of this article. Here is how Seth Klarman summarized what Baupost does:

“In terms of investing I would say that there is no exact formula for what we do. We try to use all the value investing principles we know. The world is imperfect. The world doesn’t just dish up net, nets all the time. The world doesn’t dish up stocks trading below cash all the time, doesn’t deliver fine businesses at eight times earnings all the time. So we look very hard for mis-pricings, for information asymmetries. for supply/demand imbalances, and we find ourselves at various times heavily in distress debt or no position in distress debt, significantly involved in equities and uninvolved in equities, very focused on private markets or uninvolved because you can create the same assets cheaper in the public market. So in a nutshell that’s our approach. Very opportunistic. We try to be not siloed the way many people are. We don’t have industry analysts we have generalists who can move quickly from working one day on a drug stock to another day on the distress debt of a bank, and another day even potentially on a mortgage security or real estate investment. That’s not easy but it does provide constant stimulation, a lot of cross-training, which people enjoy, and it also means that our resources will always be deployed in the most interesting areas all the time. So that’s Baupost in a nutshell.”

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Reblog: Do You Have What It Takes To Successfully Trade Financial Markets?


Over the course of 15 years working as a performance coach with traders and investors, from day trading shops to hedge funds and investment banks, I’ve enjoyed an unusual front row on the factors that contribute to success and failure in financial markets. During that time, I’ve conducted numerous interviews, directly observed hundreds of traders and administered countless personality tests. That experience has convinced me that much of what we think we know about trading success is just plain wrong. In this article, I tackle three myths of trading success and offer alternate perspectives.

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Indices end flat on Friday, Nifty holds 10,800; Max India rallies 20%


After witnessing a rangebound session throughout the day, the domestic equity market ended with marginal gains on Friday, led by buying in telecom, IT and energy stocks. The S&P BSE Sensex added 33 points or 0.1 per cent to settle at 35,963, with Bharti Airtel (up 5 per cent) being the top gainer and HDFC (down nearly 2 per cent) the worst laggard. The broader Nifty50 index of National Stock Exchange (NSE) closed the day at 10,805, up 14 points or 0.13 per cent. Out of 50 constituents, 29 ended in the green while 21 in the red.

A total of 2,704 companies traded on BSE, out of which 1,260 advanced and 1,300 declined while 144 stocks remained unchanged.

Among the sectoral indices, the Nifty Pharma index is trading around 0.5 per cent lower weighed by Aurobindo Pharma and Divi’s Laboratories.

The broader market indices are moving in line with benchmarks. S&P BSE Midcap index is trading 0.16 per cent lower at 15,139 levels, while S&P BSE SmallCap is ruling 0.1 per cent lower at 14,483 levels.

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