Category: Investing Insight

Investing insight to make you a better investor.

Investment Theme Performance Roundup

shyam June 18, 2014September 9, 2014

WHAT IS A “THEME”?

A StockViz Investment Theme is a portfolio of stocks that follows a particular strategy. It is a convenient way for you to:

stick to a strategy
follow a preset rebalancing schedule
think in terms of your portfolio strategy rather than individual stocks
avoid common behavioral pitfalls
systematically track your P&L and strategy performance

WHAT IS AN INVESTMENT STRATEGY?

An investment strategy is a specific way of going about the process of investing. It identifies specific variables that define a stock. Variables can be anything: risk, style, sector, balance-sheet items, etc..

By mapping specific Themes to your account, you ensure that you stay pure to your strategy allocation. And that there is no “flying by the seat of your pants” investing.

HOW HAVE YOUR THEMES PERFORMED?

Theme	Commencement	Performance	NIFTYBEES Performance	JUNIORBEES Performance
Market Fliers	2013-Oct-28	64.79%	24.5%	35.1%
Magic Formula Investing	2013-Aug-19	68.67%	39.89%	48.38%
Enterprise Yield	2013-Sep-16	49.51%	30.24%	46.46%
Pharma 10	2013-Jul-17	8.36%	27.88%	35.85%
Pharma Growth	2013-Jul-17	13.01%	27.88%	35.85%
Private Banks	2013-Jul-15	28.82%	26.61%	33.45%
Quality to Price	2013-Aug-28	132.47%	43.5%	54.91%
Gold and Jewellery	2013-Jul-15	-0.34%	26.61%	33.45%
Alcohol and Tobacco	2013-Jul-25	8.84%	29.05%	38.35%
Industrial Value	2014-Jun-02	13.57%	4.27%	1.36%
Market Elephants	2013-Sep-02	28.51%	37.15%	49.96%
Balance-sheet Strength	2013-Sep-11	93%	28.88%	45.66%
For-Profit Education	2013-Jul-25	81.33%	29.05%	38.35%
Momentum 200	2013-Aug-19	42.34%	39.89%	48.38%
Financial Strength Value	2013-Sep-13	56.54%	30.06%	45.69%

Detail of draw-downs can be found here.

Performance Charts

WHAT SHOULD I DO NEXT?

You should open a demat account with StockViz and invest through our Themes.

Categories Investing Insight, Your Money Tags returns, theme

Rates and USDINR Update

shyam June 17, 2014September 9, 2014

We recently pulled up a chart of Indian 10 year rates to show how the interest rate curve went all bullish on Modi. But given the all around bullishness, we were curious as to how the 10-year rate differential between US Treasuries and Indian GSecs looked.

UST vs. GSecs

The spread compression is nowhere near all-out bullishness and may have more room to run.

USDINR

The recent ISIS induced flight-to-safety notwithstanding, USDINR has tagged along the spread.

Even if ISIS ends up occupying Iraq, given that their primary source of revenue is going to be oil, they might just decide to pump more of it. Our expectation is that once we get past the current knee-jerk reaction, the above trends will reassert themselves.

It’s important to be politically agnostic and think about the potential market impact of the event. There are three sources of event risk that could cause the markets to swoon:

Iraq
Russia-Ukraine
Chinese financial crisis

“My conclusion is that the so-called tail-risk are wrong and the immediate threat posed by tail-risk is lower than the market thinks.”

Source: Apocalypse Later

Categories Investing Insight, Your Money Tags rates, USDINR

Interpreting Nifty Open Interest, Part II

shyam June 16, 2014September 9, 2014

The charts posted earlier makes more sense when seen along with the change in OI. Here are the updated charts:

To be continued…

Categories Investing Insight, Your Money Tags options, quant

Interpreting Nifty Open Interest

shyam June 14, 2014September 9, 2014

I am trying to develop a framework for interpreting open-interest with a goal of attaching a probability distribution to expiry values of the Nifty. The first step is to chart the open interest of the nearest-to-expiry contract to see the market in action.