Weekly Recap: Munger on Risk

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world.2015-09-04.2015-09-11

Equities

Major
DAX(DEU) +0.85%
CAC(FRA) +0.57%
UKX(GBR) +1.24%
NKY(JPN) +2.65%
SPX(USA) +2.36%
MINTs
JCI(IDN) -1.24%
INMEX(MEX) +0.34%
NGSEINDX(NGA) +0.60%
XU030(TUR) -2.08%
BRICS
IBOV(BRA) -0.20%
SHCOMP(CHN) +1.27%
NIFTY(IND) +1.75%
INDEXCF(RUS) +1.17%
TOP40(ZAF) -0.22%

Commodities

Energy
Brent Crude Oil -3.80%
WTI Crude Oil -3.66%
Heating Oil -3.50%
RBOB Gasoline -3.51%
Ethanol +2.12%
Natural Gas +1.02%
Metals
Palladium +2.49%
Platinum -2.16%
Silver 5000oz -0.68%
Copper +6.47%
Gold 100oz -1.58%

Currencies

USDEUR:-1.62% USDJPY:+1.40%

MINTs
USDIDR(IDN) +1.06%
USDMXN(MEX) -0.51%
USDNGN(NGA) +0.00%
USDTRY(TUR) +1.12%
BRICS
USDBRL(BRA) +0.57%
USDCNY(CHN) +0.30%
USDINR(IND) +0.11%
USDRUB(RUS) -0.22%
USDZAR(ZAF) -2.15%
Agricultural
Coffee (Arabica) -2.16%
Cotton +2.60%
Sugar #11 +4.19%
White Sugar -0.09%
Corn +7.38%
Cocoa +2.20%
Feeder Cattle -0.42%
Lean Hogs -2.41%
Soybean Meal +0.22%
Soybeans +1.34%
Wheat +3.44%
Cattle +0.06%
Coffee (Robusta) -3.02%
Lumber +6.22%
Orange Juice -5.97%

Credit Indices

Index Change
Markit CDX EM -0.04%
Markit CDX NA HY +0.30%
Markit CDX NA IG -1.02%
Markit iTraxx Asia ex-Japan IG -5.46%
Markit iTraxx Australia -2.71%
Markit iTraxx Europe -2.42%
Markit iTraxx Europe Crossover -11.48%
Markit iTraxx Japan -1.82%
Markit iTraxx SovX Western Europe -0.17%
Markit LCDX (Loan CDS) +0.00%
Markit MCDX (Municipal CDS) -0.27%
Markets ended in the green after the brutal beating it took the previous week. The VIX ended below 25 but is still way about its long-run average. The next week is going to be all about the US Fed – and maybe a short-covering rally ahead of Thursday’s meeting.

Nifty Heatmap

CNX NIFTY.2015-09-04.2015-09-11

Index Returns

For a deeper dive into indices, check out our weekly Index Update.
index.performance.2015-09-04.2015-09-11

Market Cap Decile Performance

Decile Mkt. Cap. Adv/Decl
1 (micro) -5.60% 60/73
2 -3.21% 59/74
3 -3.70% 58/76
4 -2.97% 59/74
5 -2.98% 59/74
6 -3.00% 63/71
7 -3.32% 57/76
8 -2.20% 65/69
9 -1.38% 59/74
10 (mega) -0.37% 65/69
Overall, markets were down – NIFTY’s performance did not bleed into the rest of the market…

Top Winners and Losers

CONCOR +9.40%
YESBANK +9.85%
RCOM +11.02%
INFRATEL -8.11%
MOTHERSUMI -4.99%
ADANIPORTS -4.83%
A mixed bag of a market…

ETF Performance

INFRABEES +3.37%
PSUBNKBEES +3.17%
BANKBEES +2.16%
NIFTYBEES +1.50%
CPSEETF +0.00%
GOLDBEES -1.08%
JUNIORBEES -1.17%
Gold continued to tank…

Yield Curve

yield Curve.2015-09-04.2015-09-11

Bond Indices

Sub Index Change in YTM Total Return(%)
0 5 +0.01 +0.12%
5 10 +0.03 -0.01%
10 15 +0.02 +0.02%
15 20 +0.04 -0.18%
20 30 +0.01 -0.02%
Bond yields ticked up marginally…

Investment Theme Performance

ADAG stocks +6.75%
High Beta +3.48%
Financial Strength Value +3.06%
Momentum +2.43%
Magic Formula +2.07%
CNX 100 Enterprise Yield +1.83%
Velocity +1.43%
PPFAS Long Term Value +1.06%
Low Volatility +0.69%
Next Trillion +0.25%
Balance Sheet Strength +0.22%
Quality to Price +0.05%
Tactical CNX 100 +0.00%
ASK Life -0.62%
The RBI Restricted List -4.39%
Hopefully, in the first stages of recovering from their drawdowns…

Equity Mutual Funds

Best
Mirae Asset China Advantage Fund – Regular Plan Growth Option +4.21%
Kotak Global Emerging Market Fund – Growth +3.13%
HDFC Core and Satellite Fund – GROWTH +2.90%
HDFC Premier Multi-Cap Fund-Growth +2.69%
Franklin India Feeder – Franklin U.S. Opportunities Fund – Growth +2.61%
HSBC Emerging Markets Fund – Growth +2.52%
JM Core 11 Fund – Growth option +2.47%
Worst
Sahara Wealth Plus Fund-Variable Pricing Option-Growth Option -0.32%
Sahara Wealth Plus Fund-Fixed Pricing Option-Growth Option -0.33%
LIC NOMURA MF MIDCAP FUND – REGULAR PLAN – GROWTH -0.35%
DSP BlackRock 3 Years Close Ended Equity Fund – Regular Plan – Growth -0.35%
SBI MAGNUM GLOBAL FUND – REGULAR PLAN -GROWTH -0.47%
Birla Sun Life Commodity Equities Fund – Global Agri Plan – Growth – Regular Plan -1.40%
HSBC Brazil Fund-Growth -4.36%

Bond Mutual Funds

Best
SBI INFLATION INDEXED BOND FUND – REGULAR PLAN – GROWTH +0.25%
DWS Inflation Indexed Bond Fund – Regular Plan – Growth +0.24%
HDFC Inflation Indexed Bond Fund – Regular Growth +0.21%
L&T Gilt Fund-Growth +0.16%
HSBC Gilt Fund – Growth +0.13%
ICICI Prudential Dynamic Accrual Plan – Regular Plan – Growth +0.11%
DSP BlackRock Constant Maturity 10Y G-Sec Fund – Regular Plan – Growth +0.10%
Worst
L&T Triple Ace Bond Fund-Growth Plan -0.02%
Birla Sun Life Dynamic Bond Fund – Growth – Regular Plan -0.02%
HDFC Income Fund-Growth -0.02%
Axis Income Fund – Growth Option -0.03%
DWS Medium Term Income Fund- Regular Plan- Growth -0.06%
Sundaram Flexible Fund -Flexible Income Plan Regular – Growth -0.08%
Reliance Corporate Bond Fund – Growth Option -0.16%

Thoughts for the weekend

Charlie Munger on Risk:

  1. Risk to us is a) the risk of permanent loss of capital, or b) the risk of inadequate return.
  2. Using a stock’s volatility as a measure of risk is nuts.
  3. Volatility is an overworked concept. You shouldn’t be imprisoned by volatility.
  4. Someone will always be getting richer faster than you. This is not a tragedy.
  5. When any person offers you a chance to earn lots of money without risk, don’t listen to the rest of their sentence.

Source: A Dozen Things I’ve Learned from Charlie Munger about Risk

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