This is a post written by Mastermind, SanaSecurities. The original post appears here.
Let me assure you – No matter how positive (or negative) you are about something, there will always be much which will not be in your control.
There are things you cannot change and things that are totally in your control. The hard task is to understand the difference between the two.
When I started writing this post, the idea was to list in order of importance, habits which set apart successful investors from those who achieve substandard returns. Naturally, such a list would require me to first state who would qualify as a ‘successful investor’ and what’s ‘substandard’.
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Banks led the major support with the PSU Bank index surging 6.5 percent. State Bank of India and Bank of India rallied 8-9 percent due to stable asset quality in Q1.
Shares of public sector undertaking (PSU) banks have rallied by up to 11% in intra-day trade after the State Bank of India (SBI) and Bank of India (BOI) reported June quarter results in line with the analyst forecast.
SBI and BOI rallied more than 8% each, while Indian Bank, Punjab National Bank, Union Bank of India, Dena Bank, Canara Bank, Oriental Bank of Commerce, Vijaya Bank, Allahabad Bank, Bank of Baroda and Syndicate Bank were up between 3%-6% on the National Stock Exchange (NSE).
The market has ended on a strong note with support from index heavyweights. The Sensex ended up 292.80 points or 1 percent at 28152.40, and the Nifty was up 80 points or 0.9 percent at 8672.15. About 1246 shares have advanced, 1413 shares declined, and 181 shares are unchanged.
SBI was up 7 percent, Axis Bank, Tata Motors, M&M and HDFC were top gainers while Cipla, Infosys, Sun Pharma, Asian Paints and Lupin were losers.
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The original article has been authored by Sam Ro, managing editor at Yahoo Finance and appears here in Yahoo Finance.
The most popular way to measure value in the stock market is to take the price of the stock or a pool of stocks, and then divide that by earnings. This is the price/earnings (PE) ratio. When the PE ratio is above some longer-term average, the stock is considered expensive. When it’s below average, it’s considered cheap. Importantly, PEs have been shown to revert to those averages.
But this is not to say that expensive stocks are doomed to see prices fall as PEs shrink. Conversely, a stock price doesn’t necessarily have to go up to become more expensive. To believe otherwise is an unfortunate mistake. And it’s arguably the dumbest math mistake investors make in the stock market.
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The original post appeared on the website of Economic Times and can be found here.
The Nifty50 rallied over 4 per cent in July and the trend may continue in August too. Technical charts and options data show a bullish picture as off now, which means if the market managed to sustain the momentum, Nifty may very well touch the 9,000 mark in August.
But here is the spoiler. Data for the past 10 years shows August has not been great for the bulls. On an average, the Nifty50 has given a negative return of nearly 1 percent in last 10 years. The index saw deep cuts of over 5 percent in August in three out of last 10 years.
In 2011, the Nifty50 saw a vicious cut of 8.8 percent in August, followed by a deep cut of 6.6 per cent in 2015. In 2015, the Nifty50 plunged 5.8 per cent.
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The original blog post is written by Hemant Parikh and can be found here.
RBI’s policy outcome, corporate earnings and macroeconomic data to dictate trend.
Next batch of Q1 June 2016 corporate results, progress of monsoon rains, macroeconomic data, trends in global markets, investment by foreign portfolio investors (FPIs) and domestic institutional investors (DIIs), the movement of rupee against the dollar and crude oil price movement will dictate market trend in the near term.
The major domestic event in the upcoming week is the Reserve Bank of India’s (RBI) third bi-monthly monetary policy meeting scheduled on Tuesday, 9 August 2016. The central bank had left its benchmark repo rate unchanged at 6.5% at its last meeting.
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The market has ended on a strong note with the Nifty above 8650. The 50-share index is up 132.05 points or 1.5 percent at 8683.15. The Sensex is up 363.98 points or 1.3 percent at 28078.35.
About 1820 shares have advanced, 915 shares declined, and 171 shares are unchanged. Hero MotoCorp, Bajaj Auto, M&M, Axis Bank and Tata Motors are top gainers while Bharti, Sun Pharma, Infosys, TCS and Wipro are losers in the Sensex.
The domestic stock market rose in line with other Asian markets, which were trading higher after the Bank of England (BoE) lowered policy rate to 0.25 per cent from 0.5 per cent earlier for the first time in seven years and announced big stimulus package to support growth.
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The original post is written by Rajat Sharma from our Mastermind, Sanasecurities and can be found here.
Goods and Service Tax (“GST”) is a comprehensive tax on manufacture, sale and consumption of goods and services, that will absorb most of the indirect taxes levied by Central and State Government. Currently the GST is adopted in over 150 countries. If passed, GST Bill would be THE biggest tax reform by the Indian government since inception of the Indian constitution.
How Will GST Work?
- In India, GST would work on dual model which will include – C-GST collected by Central Government + S-GST collected by State Government on intra-state sales. GST reform would also feature an Integrated GST (IGST) collected by Central government on inter-state sales, which is to-be divided between Central and States Government in a manner decided by the Parliament on recommendations by GST Council.
- By doing away with several Central and State Taxes, GST would diminish the cascading effect of tax (or double taxation, whereby the same product is taxed at the stage of manufacturing as excise, then as VAT/ sales tax on sale and so on.), which is prevalent in the current tax framework. Being a consumption-destination-based tax, GST would be levied and collected at each stage of sale or purchase of goods or services based on the existing input tax credit method. Current tax structure works on production-origin-based system i.e. goods and services are taxed differently on each stage of production.
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The original article appeared on the blog of Stocktwits and can be found here.
People say it all the time.
Controlling risk is one of the most important things anyone can do when investing or trading. How much money are you comfortable losing on a single investment? How much of your portfolio is concentrated in one or two equities? These questions are only a few examples of what some risk managers might ask. There are many more.
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The Sensex continued to struggle around the 28,000 mark to finish lower on Friday even as benchmark indices gained on the week. The weakness in Indian equities was in line with the subdued mood in Asian markets.
The Sensex closed at 28,051.86, down 156.76 points over its previous close, and the Nifty shed 27.80 points to close at 8,638.50.
For the week, the Sensex rose 0.9 percent, and the Nifty by 1.1 percent.
About 1221 shares have advanced, 1462 shares declined, and 209 shares are unchanged.
- Nifty 50 closed at 8638.5 with 0.3% loss today. 24 stocks advanced whereas 26 stocks declined and 1 stocks unchanged
- With 6.6% increase EICHERMOT was the top gainer in Nifty. ADANIPORTS, ZEEL increased 3.3% and 2.9% respectively
- ICICIBANK with a loss of 3.6% was the biggest loser in the Nifty. BHARTIARTL , BHEL lost 2.8% and 2.4% respectively
- FIIs bought net 84.6 crores worth of index futures and bought net 1392.9 crores worth of index options
- FIIs sold net 865.8 crores worth of stock futures and bought net 7.2 crores worth of stock options
- Daily volume in ICICIBANK surged 116%, highest growth among NSE stocks
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The original post appeared in Economic Times and can be read here.
If you had invested in a bank fixed deposit (FD) or Kisan Vikas Patra (KVP) three years ago, you would not have been even halfway through towards your goal of doubling that investment over eight to nine years. But had you invested the same money in the top 100 stocks, it would have already doubled by now. Here’s how:
But had you invested the same money in the top 100 stocks, it would have already doubled by now.
Here’s how:
On June 10, 2013, it would have cost you Rs 80,541 to buy one unit each of the Nifty100 stocks. Today, that amount would have become Rs 1.63 lakh, growing at a compounded annual growth rate of 26.43 per cent.
“We are all familiar with the phrase, ‘Do not put all your eggs in one basket’. That way, a diversified portfolio could have resulted in higher returns. One can’t eliminate risks completely, but manage the risk level,” said Dhruv Desai, Director and COO, Tradebulls.
Diversification reduces stock-specific risks and gives better risk-adjusted return, said Rahul Jain, Head of Retail Advisory at Edelweiss Edelweiss Broking
The return offered by the 100 stocks is higher than most fund managers managed to generate with their multicap funds during the same period.
While sectors from banking, IT to consumer goods carry more than half of Nifty100’s weightage, strong performance by some stocks priced in four digits did the trick for the Nifty100 portfolio.
For example, Eicher Motors, which quoted at Rs 3,600 on June 10, 2013, has surged 5.2 times to Rs 18,800 by now. Bajaj Finance has surged 5.1 times over the past three years. The stock now trades at about Rs 7,700 against Rs 1,500 three years ago.Britannia Industries, Shree Cement and Bajaj Finserv are some of the other high-value stocks whose prices have surged 3-4 times over the past three years.
Britannia Industries, Shree Cement and Bajaj Finserv are some of the other high-value stocks whose prices have surged 3-4 times over the past three years.
“Some growth stocks such as Eicher Motors have performed well because of their niche businesses with dominance play. So they come with higher valuations,” said Mustafa Nadeem, CEO, Epic Research.
Desai said the market usually looks for companies with visible earnings growth. “As soon as they are discovered, investors start chasing them until their valuations become expensive. One should remember that many a times, investors get trapped chasing higher valuations,” he said.
Jain said, “The stocks look expensive on the valuations front, “But the right way is to look at valuations vis-a-vis their growth profile, quality of franchise, earnings visibility and sustainability of margins. Hence, if one looks at these stocks on the parameters mentioned, I believe these are good investments with a long-term horizon.”
The return offered by the Nifty100 stocks was higher than a 12.88 per cent CAGR (or 43 per cent return) growth clocked by the NSE100 index during the same period. It even beat the 14.41 per cent CAGR (or 47 per cent) registered by NSE100’s equal weight index during the same period.
