Reblog: ICICI Lombard IPO review


 

 

 

ICICI Lombard General Insurance Co. Ltd. (ILGI) is a general insurance arm of ICICI Bank group. The Bank is in the process of unlocking value of its arms via public issues and listings. Last year the group came with first life insurance sector arm ICICI Prudential Life Insurance IPO that after initial hiccups surged and continues to do well. Now it is coming out with a maiden offer for its general insurance arm which is ranking first among private sector general insurance companies with better product mix and having better business on all fronts.

ILGI is the largest private-sector non-life insurer in India based on gross direct premium income in fiscal 2017, a position it has maintained since fiscal 2004 after being one of the first few private-sector companies to commence operations in the sector in fiscal 2002. The company offers its customers a comprehensive and well-diversified range of products, including motor, health, crop/weather, fire, personal accident, marine, engineering and liability insurance, through multiple distribution channels. It was founded as a joint venture between ICICI Bank Limited, India’s largest private -sector bank in terms of consolidated total assets with and Fairfax Financial Holdings Limited, a Canadian based holding company which, through its subsidiaries, is engaged in property and casualty insurance and reinsurance and investment management.

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Reblog: The Importance Of Time Horizons For Investing (And Beyond)


The Importance of Time Horizons

 When it comes to evaluating market risk, your time horizon is a key factor to consider. As a general rule, shorter time horizons require more caution than do longer ones. I would also argue, however, that this concept applies to many areas of investing—and beyond.

Long-term investing

Let’s start with why longer-term results can be more predictable than shorter-term ones. The answer is, simply, averaging. One data point might be noisy, but as you accumulate more and average them, the outliers tend to offset each other. As a result, the signal starts to dominate the noise. The more data points you have, the closer you get to the expected result. Investors with 40 years, for example, can look at longer-term return goals with a reasonable expectation of actually getting them. But for shorter time frames, the noise can dominate. Hence, the extra caution needed as you get closer to retirement.

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Sensex pares gains to turn flat, Nifty below 9,950; L&T up 4%


Equity benchmarks ended flat with a positive bias on Friday. L&T, HDFC Bank and ITC helped the market close higher but Infosys and HDFC capped upside.

The 30-share BSE Sensex was up 24.78 points at 31,687.52 and the 50-share NSE Nifty gained 4.90 points at 9,934.80.

The market breadth turned negative in afternoon trade today as about three shares declined for every share rising on the BSE.

IDBI Bank shares gained a percent as the board of directors has approved divestment of its stake in SIDBI.

Glenmark Pharma shares dropped more than 3 percent after brokerage house Credit Suisse slashed its target price on the stock to Rs 650 from Rs 750 per share.

Bajaj Finance shares fell more than 3 percent in the afternoon as the company raised funds through QIP at a discount to its floor price.

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Reblog: 8 step basic fundamental analysis for beginners


In this post I will present a simple 8 step fundamental analysis template which can be used to analyze if a a stock is investment-worthy or not.

For any stock to merit investment, the most important thing is the financial stability of the business. It is important that a company has manageable debt levels and generates enough operating profits to easily pay interest on its loans and has sufficient cash for day to day operations while delivering decent growth in revenues and profits.

I use the first four ratios described below to assess the financial stability of a company when i consider investing in its stock.

  • Long term Debt/Equity Ratio 
    Debt/Equity Ratio is a debt ratio used to measure a company’s financial leverage, calculated by dividing a company’s total liabilities by its stockholders’ equity.
    Companies (excluding financial institutions) with D/E of less than 1 to be stable and can easily cope with short term downturns as they have higher reserves than what they have borrowed.
    D/E= Sum of non current debts/Shareholder Funds.

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Reblog: Psychology of fear


 

The stock market has a long history of humbling investors. The Investment Masters understand the need for humility. Ordinarily, when investors have had a good run they risk getting over-confident and letting down their guard, only to have the stock market deliver them losses.

Many of the Investment Masters maintain a psychology of fear.

“It is better if you invest scared, if you worry about losing money, if you worry about being wrong, if you worry about being overconfident because these are the things you want to avoid. They should be foremost in your mind.” Howard Marks

“We are big fans of fear, and in investing it is clearly better to be scared than sorry.” Seth Klarman Continue Reading


Nifty ends above 9,950, up 1% for the week; Sensex settles 161 pts higher


Benchmark indices rose on Friday and gaining for a third straight week after much weaker-than-expected economic growth data raised hopes the central bank would cut interest rates at its next policy meeting in October.

India’s gross domestic product (GDP) growth slid to a three-year low of 5.7% in the quarter ended June, a marked slowdown from a 6.1% growth in the previous quarter.

However, India’s factory activity unexpectedly expanded in August, snapping back from a contraction the previous month, as disruptions stemming from confusion over GST eased.

Broader markets outperformed the benchmark indices with BSE Midcap and BSE Smallcap up 0.9% and 0.8% respectively.

Shares of Gravita India touched 52-week high of Rs 134.65, rising 11% intraday on the back of strong Q1 numbers.

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Reblog: Why You Should Take the Profits and Run!


This article is for those traders (new or experienced) who have trouble booking profits. Do you often see large profits evaporate as the market reverses against you, leaving you feeling powerless and confused? If so, you know how frustrating it can be and you know exactly what I’m talking about.

Poor target placement, lack of experience, greed, arrogance and stubbornness are all issues that can cause traders to not take profits off the table.

I appreciate this article may conflict with some of my core beliefs and teachings on taking profits since typically I encourage people to aim for a 2 to 1 risk reward or greater and to set and forget stops and targets. In theory, this makes sense, but in the real world, as you likely already know, there are still a great number of trades that almost hit your profit target or where a trade has moved quickly in the right direction and you’re staring at a giant profit… and then the next day or week, the market goes the other way and your once giant profit has become a much smaller profit or even a loss.

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Reblog – How Anne Scheiber built a fortune?


Anne Scheiber was born in 1893.  Her father died when she was very young.

Due to poverty, she began to work in her teen years, saved money and graduated from law school. She joined IRS. IRS is ‘Internal Revenue Service’. It is the income tax department of US government.

Being a Jew and a woman in the early part of last century, she faced a lot of discrimination. She excelled in her work. But during her 23-year career, she never got a promotion due to discrimination. She retired in 1944 with a retirement corpus of $5000.

Though she retired at the age of 50, she lived until the age of 101; passing away in 1995.

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As markets end flat, over 70 stocks hit fresh 52-week highs


The Indian market ended the truncated week on a sombre note, posting mild gains on both indices. Strong movements by Infosys and pharmaceutical stocks helped the Street, but selling in HDFC group stocks, FMCG stocks capped upside.

The 30-share BSE Sensex was up 28.05 points at 31,596.06 and the 50-share NSE Nifty gained 4.55 points at 9,857.05.

The market was closed on Friday on account of Ganesh Chaturthi.

The broader markets outperformed benchmark indices as the BSE Midcap index gained 0.8 percent and Smallcap was up 0.4 percent on positive breadth. About five shares advanced for every four shares falling on the BSE.

However, among these times, there were over 70 stocks which had a good day and clocked fresh 52-week high milestones. Bajaj Finserv, Bajaj Holding, Chennai Petro, Deepak Fertilisers, Avenue Supermarts, Indiabulls Housing Finance, IndusInd Bank, JSW Steel, and Tata Steel, among others, were in that list of gainers.

Meanwhile, there were 28 stocks that also hit fresh all-time highs, thereby increasing investor wealth. Bajaj Finserv, Deepak Fertilisers, Avenue Supermarts, IndusInd Bank and Heritage Foods, among others were a part of this list.

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Reblog – Confirmation Bias: Can trading psychology affect investment?


We’re all susceptible to confirmation bias – paying more attention to our own preferred data and largely ignoring contradictory evidence. For investors, this psychological blind-spot can be very costly.

In every-day life, we like to think that our decisions are logical, rational and objective but often they are anything but.

Balanced analysis frequently goes AWOL as our pre-conceived beliefs take over. Let’s take a General Election as an illustration of this point.

Voters often seek positive news that shows their favoured candidates in a glowing light while paying scant attention to information that casts the opposing candidate in a good light.

Objectivity

If their existing belief is that their party is always strongest on say, maintaining law and order, they may place greater emphasis on campaign speeches reinforcing this claim than independent figures showing cuts in police or army numbers.

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