Invest Without Emotions
China recovery continues…
Europe has the best quarter in two years: Manufacturing PMI at 31-month high…
Germany is crushing it: Manufacturing PMI at 30-month high…
France not looking too hot: Manufacturing PMI falls to 47.1 (48.4 in November), 7-month low…
Source: Markit Economics
Previously: November Roundup.
–HBR
We have been discussing Behavioral Investing on our blog for a while now and whats fascinating is that study-after-study shows that humans are the worst decision makers out there. We have the mind of a Lemming, we over trade, and we fall for stories.
Entrepreneurs are often advised to write their business plan on pen and paper. They may not have a profitable plan, but the very act of writing something down clarifies thoughts. To act clearly and rationally, it seems, we need to write a program. The very act of programming an investment strategy leads to a deeper thinking and clarifies risk, uncertainty and reward.
In fact, 2 out of the top 5 performing Investment Themes have been quantitative portfolios.
Investors should focus on writing a better model and developing the courage to allow it to do its job. If it fails on pre-defined statistical measures, debug the model and try again.
We have been tracking different investment strategies through our Themes – a handy way to create, track and allocate capital to different investment strategies. As our frequent readers know, we do a “doodh ka doodh pani ka pani” theme whenever analysts come out with portfolio recommendations. Add to the mix our own value and quantitative strategies, and we have a fairly wide array of investment options for investors to choose from.
Here’s a roundup of how the different Themes performed, and the performance of ETFs over the same time-frame. Because at the end of the day, if the Nifty ETF out-performs the bheja-fry, why bother?
From 2013-9-13 to 2013-12-13
| Quality to Price | +38.83% |
| Prabhudas Lilladher Midcap 10-Sept-2013 | +24.02% |
| CS Midcap 28-Aug-2013 | +17.48% |
| DB Rupee Depreciation 3-Sept-2013 | +16.18% |
| Balance-sheet Strength | +15.88% |
| Growth with Moat | +12.13% |
| Financial Strength Value | +11.60% |
| ADAG Mania | +8.86% |
| Prabhudas Lilladher Largecap 13-Sept-2013 | +6.85% |
| Momentum 200 | +3.62% |
| Efficient Growth | +3.20% |
| Market Elephants | +3.01% |
| Magic Formula Investing | +2.28% |
| Globe Monthly Monitor | +0.22% |
Should you have invested in ETFs, these are the returns over the same period.
| BANKBEES | +11.56% |
| JUNIORBEES | +10.57% |
| PSUBNKBEES | +10.08% |
| NIFTYBEES | +5.64% |
| INFRABEES | +2.82% |
| GOLDBEES | +1.71% |
From 2013-10-15 to 2013-12-13
| Quality to Price | +32.57% |
| Prabhudas Lilladher Midcap 10-Sept-2013 | +11.44% |
| CS Midcap 28-Aug-2013 | +10.28% |
| Balance-sheet Strength | +10.12% |
| Growth with Moat | +6.74% |
| DB Rupee Depreciation 3-Sept-2013 | +6.36% |
| ADAG Mania | +5.01% |
| Financial Strength Value | +4.76% |
| Enterprise Yield | +3.15% |
| Betting on Bharat October-2013 | +3.04% |
| Magic Formula Investing | +3.01% |
| Prabhudas Lilladher Largecap 13-Sept-2013 | +1.74% |
| Globe Monthly Monitor | +0.05% |
| Momentum 200 | -0.91% |
| Efficient Growth | -1.58% |
| Market Elephants | -2.72% |
Should you have invested in ETFs, these are the returns over the same period.
| PSUBNKBEES | +15.93% |
| BANKBEES | +9.91% |
| JUNIORBEES | +4.38% |
| NIFTYBEES | +1.53% |
| GOLDBEES | +0.20% |
From 2013-11-14 to 2013-12-13
| Quality to Price | +19.35% |
| Emkay’s Picks Nov-2013 | +6.83% |
| Ashwani Gujral’s Top 5 Picks – Nov 2013 | +6.41% |
| Microsec’s Diwali picks – 2013 | +4.99% |
| Kotak Securities’ Diwali picks – 2013 | +4.31% |
| Prabhudas Lilladher’ Diwali picks – 2013 | +4.09% |
| CS Midcap 28-Aug-2013 | +4.02% |
| Growth with Moat | +2.81% |
| Betting on Bharat October-2013 | +2.64% |
| Prabhudas Lilladher Midcap 10-Sept-2013 | +2.60% |
| DB Rupee Depreciation 3-Sept-2013 | +2.34% |
| Globe’s Diwali Picks – 2013 | +2.28% |
| ADAG Mania | +2.25% |
| Prabhudas Lilladher Largecap 13-Sept-2013 | +1.14% |
| Enterprise Yield | +1.02% |
| Balance-sheet Strength | +0.78% |
| Momentum 200 | +0.50% |
| Globe Monthly Monitor | +0.09% |
| Financial Strength Value | -0.38% |
| Market Fliers | -0.65% |
| Velocity | -0.74% |
| Market Elephants | -0.89% |
| Magic Formula Investing | -1.81% |
| Efficient Growth | -1.83% |
Should you have invested in ETFs, these are the returns over the same period.
| BANKBEES | +5.11% |
| PSUBNKBEES | +4.72% |
| NIFTYBEES | +2.01% |
| INFRABEES | +1.50% |
| JUNIORBEES | +0.61% |
| GOLDBEES | -2.82% |
Well, three months is a very small window to draw any meaningful conclusions but here are some observations:
The euphoria of anti-Congress soon gave way to the reality of stagflation: Nifty ended the week -1.46% (-2.19% in USD terms)
Risk off… Infra and Banks took it on the chin.
| GOLDBEES | -1.00% |
| NIFTYBEES | -1.71% |
| JUNIORBEES | -2.20% |
| BANKBEES | -2.92% |
| INFRABEES | -3.98% |
| PSUBNKBEES | -4.50% |
Rate hike priced in. The only silver lining is that it has a positive slope…
| Quality to Price | +1.83% |
| Financial Strength Value | -0.67% |
| Balance-sheet Strength | -0.91% |
| Momentum 200 | -0.93% |
| Velocity* | -1.10% |
| Efficient Growth | -1.10% |
| Enterprise Yield | -1.30% |
| Growth with Moat | -1.32% |
| Market Elephants | -1.47% |
| Long Term Equity* | -1.48% |
| Consistent10* | -2.16% |
| Magic Formula Investing | -3.36% |
| ADAG Mania | -5.03% |
| Market Fliers | -6.34% |
*Contributed Themes
Source: Why Do Forecasters Keep Forecasting?
Related: Forecasting is a Sham – Prepare – Don’t Predict!
We had written about Apollo Tyre’s acquisition of US based Cooper Tyre & Rubber here. It looks like the delay is causing Cooper to shit the bed…
Cooper Tire says in a new court filing that Apollo Tyres still doesn’t have an agreement in place with the United Steel Workers. The company also says it doesn’t know for sure when its Q3 financials will be finished due to issues it can’t control. (SA)
While the market seem to like Apollo Tyer’s trying to back out of the deal…
Stay tuned!