Flash China Manufacturing PMI at 50.4 (50.9 in October). Two-month low.
Flash China Manufacturing Output Index at 51.3 (51.1 in October). Eight-month high.
Source: Markit
Author: shyam
I have been compiling and maintaining different investment themes for a while now. We have the Quant and Story themes that reflect investment strategies that have proved to be successful over different time-horizons and market conditions. I am proud to introduce a couple of themes that have come from contributors outside of StockViz. Now users of StockViz will benefit from different perspectives that outsiders bring.
Velocity
The Velocity Theme is an equally weighted momentum theme that will be re-balanced at most once a month. Our own home-grown Momentum 200 Theme uses an efficiently weighted portfolio and ignores stocks that have split over last year. It will be interesting to see how a slight tweaking of momentum setups impact performance over the long term.
Long Term Equity
The Long Term Equity Theme is a portfolio of stocks and ETFs for an extremely long time-horizon. “Set it and forget it” if you will. I am thrilled to have someone who thinks with a different hat – we are mostly quantitative in our approach, even our fundamental analysis is quantitative. But that doesn’t mean that a long-term buy-and-forget approach will not work.
You can follow each of themes by clicking on the “Follow” button under each of these themes.
Is there value in knowing what stocks were bought and sold by mutual funds?
We took a look at stocks that were exited by mutual funds and we ranked them according to the market value dumped. The 10 most hated stocks:
| NTPC | [stockquote]NTPC[/stockquote] |
| COALINDIA | [stockquote]COALINDIA[/stockquote] |
| IDEA | [stockquote]IDEA[/stockquote] |
| PETRONET | [stockquote]PETRONET[/stockquote] |
| RELIANCE | [stockquote]RELIANCE[/stockquote] |
| HEXAWARE | [stockquote]HEXAWARE[/stockquote] |
| CAIRN | [stockquote]CAIRN[/stockquote] |
| BAJAJ-AUTO | [stockquote]BAJAJ-AUTO[/stockquote] |
| BALKRISIND | [stockquote]BALKRISIND[/stockquote] |
| EXIDEIND | [stockquote]EXIDEIND[/stockquote] |
| POWERGRID | [stockquote]POWERGRID[/stockquote] |
And similarly, the 10 most loved stocks:
| AXISBANK | [stockquote]AXISBANK[/stockquote] |
| BHARTIARTL | [stockquote]BHARTIARTL[/stockquote] |
| WIPRO | [stockquote]WIPRO[/stockquote] |
| TATASTEEL | [stockquote]TATASTEEL[/stockquote] |
| RANBAXY | [stockquote]RANBAXY[/stockquote] |
| DRREDDY | [stockquote]DRREDDY[/stockquote] |
| SSLT | [stockquote]SSLT[/stockquote] |
| INGVYSYABK | [stockquote]INGVYSYABK[/stockquote] |
| MRF | [stockquote]MRF[/stockquote] |
| BHARATFORG | [stockquote]BHARATFORG[/stockquote] |
Its still early days to see if fund decisions have any meaningful impact after disclosure. We’ll keep you posted!
Note:
- Portfolio data as-of 2013-10-31
- Only open ended funds that were in the “accumulation” phase were considered
- Funds named “growth” and with the “direct” option alone were considered
- Market value as-of closing 2013-10-31
How can God be sure that this no Super-God?
There’s a strong instinct to abdicate that responsibility – to look at things like global warming, poverty, environmental destruction, human misery in all its forms and say “God will take care of that.” The truth is, whether you like it or not, it’s all on you. The responsibility for those weaker than yourself is not on God’s or the free market’s or history’s or evolution’s head, it’s on your head.
Privatization of Natural Monopolies
Textbook arguments in favor of privatization: Lower prices. Better service. Greater simplicity. Increased investment in infrastructure. More consumer choice.
Reality: The Average Russian, as opposed to the 135 oligarchs controlling 40% of Russia’s wealth, would have been better off had The Party remained in power.
So, the next time somebody tries to convince you of the benefits of privatizing your natural monopoly, remember that, adapting Frank Zappa’s apt words, there is a big difference between kneeling down before the altar of privatization and bending over.
Freedom To Choose (…to be buggered)
German vs. Swedish approach to prostitution
Germany: enacted a law to remove the stigma from sex work by giving prostitutes full rights to health insurance, pensions and other benefits. Employing sex-workers and providing them with a venue became legal. The idea was that responsible employers running safe and clean brothels would drive pimps out of the market.
Sweden: made it criminal to pay for sex (pimping was already a crime). By stigmatising not the prostitutes but the men who paid them, even putting them in jail, the Swedes hoped to come close to eliminating prostitution.
America: A case of secular stagnation?
During the period 1960-85, when the U.S. economy seemed able to achieve full employment without bubbles, our labor force grew an average 2.1% annually. In part this reflected the maturing of the baby boomers, in part the move of women into the labor force.
Now look forward. The Census projects that the population aged 18 to 64 will grow at an annual rate of only 0.2% between 2015 and 2025. Unless labor force participation not only stops declining but starts rising rapidly again, this means a slower-growth economy, and thanks to the accelerator effect, lower investment demand.
Secular Stagnation, Coalmines, Bubbles, and Larry Summers
The 8 Qualities of Cultured People
What is needed is constant work, day and night, constant reading, study, will… Every hour is precious for it.
Oh what a week! It took Rajan’s encouraging words to salvage what could have been a complete rout. Nifty: -1.38% (-1.90% in USD terms)
Index Performance
Top Winners and Losers
| TATASTEEL | +5.51% |
| DIVISLAB | +12.53% |
| ADANIENT | +12.58% |
| ASHOKLEY | -10.91% |
| TATAGLOBAL | -10.09% |
| RELINFRA | -8.49% |
Adani Enterprises continued to enthrall… Should call it Adani Entertainment instead.
Etfs
| JUNIORBEES | +1.11% |
| GOLDBEES | +0.98% |
| INFRABEES | -0.22% |
| BANKBEES | -0.53% |
| PSUBNKBEES | -1.42% |
| NIFTYBEES | -1.49% |
Midcaps outperformed Largecaps. Question for PSU banks: how much are you going to dilute existing investors?
Advancers and Decliners
Yield Curve
Holiday-shortened four day week. Can’t read much into this…
Interbank Rates
Sector Performance
Investment Theme Performance
| Financial Strength Value | +1.19% |
| Balance-sheet Strength | +0.37% |
| Magic Formula Investing | +0.04% |
| Growth with Moat | -0.31% |
| Momentum 200 | -0.38% |
| Efficient Growth | -0.40% |
| Market Elephants | -0.54% |
| Enterprise Yield | -2.28% |
| Market Fliers | -2.29% |
| ADAG Mania | -3.74% |
| Quality to Price | -6.21% |
Value themes beat everything else fair and square…
Thought for the Weekend
Tolstoy was a fox whose work was somewhat compromised, especially later in his life, by his belief that one ought to be a hedgehog. To choose Tolstoy is to accept that Pahom ought to have limited his ambitions and chosen to act dead rather than die trying to own the world.
Chekov is pure fox. He offers many conflicting, ambiguous and impressionistic takes on the human condition. But on one point he is unambiguous: in the acting dead/choosing life decision, Chekov is unwavering in his assertion that choosing life is the right thing to do, whatever that choice might entail.
Russia chose wrong, and ended up with the Soviet Union.
Source: The Gooseberry Fallacy