Invest Without Emotions
The near-term USDINR contract is currently trading at 62.8525. That’s a -1.42% swing thanks to Larry “Leisure Suit” Summers withdrawing from consideration to succeed Federal Reserve Chairman Ben Bernanke. Here’s USDINR in charts:
[stockquote]ATULAUTO[/stockquote]
The Nifty rallied 3% (in INR) and 6.5% (in USD) in a week that saw the rupee rally and hope return to the Indian growth story.
All indices, except for IT, ended the week in green.
| PSUBNKBEES | +8.05% |
| INFRABEES | +4.77% |
| NIFTYBEES | +3.12% |
| BANKBEES | +2.71% |
| JUNIORBEES | +2.61% |
| GOLDBEES | -3.14% |
Bulls see hope in the A/D ratio…
Long-term rates rose but the curve continues to be inverted…
Most sectors ended the week in the green…
Surprise is information. So an organization that puts all its effort into planning, tracking, monitoring and documenting to minimize surprise and the chance of failure prevents itself from acquiring and spreading information, and consequently from learning.
Source: Why Organizations Should Embrace Randomness Like Ant Colonies
In a paper published in January 2002, Joseph Piotroski explored whether a simple accounting-based fundamental analysis strategy can give better returns to an investor. He came up with a way to score balance-sheets based on financial strength – the higher the score, the better were the prospective returns. Scientifically curious readers can take a look at Value Investing: The Use of Historical Financial Statement Information to Separate Winners from Losers (pdf)
We created a Theme based on this score. Basically, balance-sheets are scored based on current profitability, stability and operational improvements for two years (using 3 years of data.) The rationale is that stocks that score high on these criteria should out-perform over a period of time.
You can take a look at the this theme here: Financial Strength Value
Similar themes: Magic Formula Investing, Quality to Price, Balance-sheet Strength.
[stockquote]PRECOT[/stockquote]
Prabhudas Lilladher came out with a research report yesterday that picked 15 large-cap stocks that looked good. Can these stocks out-perform the Nifty? How would a portfolio of these stocks perform over a period of time? Is the hit ratio any better than 50/50? Well, we created a Theme that tracks this portfolio. So dood-ka-dood, pani-ka-pani.
Check out the Theme here: Prabhudas Lilladher Largecap 13-Sept-2013
Previously: Prabhudas Lilladher Midcap 10-Sept-2013
[stockquote]PRECOT[/stockquote]
We saw how you can use quantitative methods to score balance-sheets with the STA, SNOA and PROBM models. When you put them all together, you get a portfolio of stocks with incredibly strong (and believable) balance-sheets. We put together a Theme that tracks such a portfolio of stocks.
Check out the “Balance-sheet Strength” theme – a portfolio of 20, equally weighted stocks for the value investor in you.
Stocks to avoid based on this model:
PIIND [stockquote]PIIND[/stockquote]
TTKPRESTIG [stockquote]TTKPRESTIG[/stockquote]
SHASUNPHAR [stockquote]SHASUNPHAR[/stockquote]
APARINDS [stockquote]APARINDS[/stockquote]
CCL [stockquote]CCL[/stockquote]
EIDPARRY [stockquote]EIDPARRY[/stockquote]
VINATIORGA [stockquote]VINATIORGA[/stockquote]
NAVNETPUBL [stockquote]NAVNETPUBL[/stockquote]
APLAPOLLO [stockquote]APLAPOLLO[/stockquote]
AVTNPL [stockquote]AVTNPL[/stockquote]
Note: we ignored stocks that don’t had 3 years worth of statements.