Category: Your Money

Weekly Recap: Randomness and Time

world equity markets 2014-03-28.2014-04-04

The Nifty ended the week more-or-less flat.

Major
DAX(DEU) +1.13%
CAC(FRA) +1.66%
UKX(GBR) +1.21%
NKY(JPN) +2.50%
SPX(USA) +0.53%
MINTs
JCI(IDN) +1.88%
INMEX(MEX) +1.20%
NGSEINDX(NGA) +0.99%
XU030(TUR) +4.94%
BRICS
IBOV(BRA) +2.55%
SHCOMP(CHN) +0.84%
NIFTY(IND) -0.02%
INDEXCF(RUS) +2.85%
TOP40(ZAF) +0.86%
Commodities(CME)
Gold Futures $1303.20 +0.73%
Silver Futures $19.93 +0.78%
Platinum Futures $1449.40 +3.18%
Copper Futures $3.04 -0.52%
Nymex Steel Futures $653.00 +2.19%
Brent Crude Oil Last Day Financial Futures $106.72 -1.25%
E-mini Natural Gas Futures $4.44 -1.03%

Nifty Heatmap

CNX NIFTY heatmap 2014-03-28.2014-04-04

Index Performance

index performance 2014-03-28.2014-04-04

Top winners and losers

SAIL +10.20%
UPL +10.62%
RANBAXY +26.30%
BHEL -8.30%
CONCOR -6.22%
GAIL -4.98%
Who will Bhel the cat as it Sails away?

ETFs

JUNIORBEES +3.93%
PSUBNKBEES +0.94%
NIFTYBEES +0.24%
GOLDBEES -0.82%
BANKBEES -1.01%
INFRABEES -2.59%
Midcaps rocked, infrastructure back in the red…

Investment Theme Performance

Sector Performance

sector performance 2014-03-28.2014-04-04

Yield Curve

Year-end cash crunch?

yield Curve 2014-03-28.2014-04-04

Thought for the weekend

The professional investor’s average or below-average years will dilute the benefit of his “winning” years as mean reversion knocks his lifetime track record back down to earth. Peter Lynch must have known this when he retired in 1990 at the top of his game – he left the magic intact before reality and probability could strip him of it.
 
Randomness and Time team up to take almost all of us down, one way or the other.

Source: The Best and Worst Thing About Investing

Reel Life vs. Real Life

Jim Jubak, beginning in 1997 and continuing for twelve years, wrote one of the first and ultimately the best-read stock picking column on the Internet, “Jubak’s Journal,” for Microsoft’s MSN Money. His initial boss, a hotshot software guy, said: “If you’re so good as a stock picker why don’t you do what no one else does and issue clear buys and sells and then track the results.” That resulted in what we believe was the first online, daily-priced stock portfolio on the Internet, Jubak’s Picks.Jim Jubak

In 2010, Jubak apparently decided that investment management looked awfully easy and so launched his own fund.

Which stunk. Over the three years of its existence, it’s trailed 99% of its peers. And so the Board of Trustees of the Trust has approved a Plan of Liquidation which authorizes the termination, liquidation and dissolution of the Jubak Global Equity Fund (JUBAX).

Ben Carlson over @awealthofcs notes:

There is a constant barrage of people they throw at you in the financial media, each one a seeming expert in their field. The majority of these people spend their time making endless predictions about stocks, the economy, interest rates, company earnings, etc.

Because these are all intelligent-sounding people, it’s very easy to get sucked into believing every single forecast they put out there. Some will be right some of the time. Most are wrong most of the time.

What’s surprising is not that Jubak setup his own mutual fund, but the fact that it still has $16 million in assets. Go figure…

Source:

Related:

Growth for Poorer Groups Outpaces Middle Class

EM Middle Class

Alliance Bernstein’s research shows that poorer people were generally more hopeful than the middle class about new opportunities and keen to seek better education in order to pull their families out of poverty.

Forty-something, middle income professionals frequently expressed concern about the employment market. And poorer people were typically much more upbeat about their prospects for growth. The optimism tends to reflect the scale of improvement in their lives in recent years—which has often been more pronounced for lower income households.

Is reaching lower income consumers — who have demanding tastes for quality goods at a fair price — the key to success?

Source: Beyond the Emerging Middle Class

Monthly Recap: Save More

world equity markets 2014-02-28.2014-03-31

The Nifty was up a whopping 6.81% (10.31% in USD terms) in March.

World Equities

Major
DAX(DEU) -0.78%
CAC(FRA) +0.50%
UKX(GBR) -2.52%
NKY(JPN) -0.33%
SPX(USA) +0.27%
MINTs
JCI(IDN) +5.49%
INMEX(MEX) +4.69%
NGSEINDX(NGA) -3.17%
XU030(TUR) +14.45%
BRICS
IBOV(BRA) +7.06%
SHCOMP(CHN) -0.43%
NIFTY(IND) +7.08%
INDEXCF(RUS) -5.10%
TOP40(ZAF) +1.37%

Commodities

CME
Gold Futures $1283.40 -2.88%
Silver Futures $19.73 -6.93%
Platinum Futures $1418.50 -1.92%
Copper Futures $3.05 -5.93%
Nymex Steel Futures $639.00 +1.91%
Brent Crude Oil Last Day Financial Futures $107.76 -1.20%
E-mini Natural Gas Futures $4.37 -5.16%

Nifty Heatmap

CNX NIFTY heatmap 2014-02-28.2014-03-31

Index performance

index performance 2014-02-28.2014-03-31

Top winners and losers

PNB +34.72%
YESBANK +35.74%
ADANIENT +44.74%
GLAXO -15.50%
INFY -14.17%
HCLTECH -11.73%
Beta is in, Defensives are out…

ETFs

PSUBNKBEES +25.62%
INFRABEES +16.88%
BANKBEES +16.63%
JUNIORBEES +8.70%
NIFTYBEES +5.61%
GOLDBEES -5.02%
PSU bank rallied on RBI’s decision to postpone Basel III…

Advancers and Decliners

advance-decline line 2.2014-02-28.2014-03-31

Investment Theme Performance

Sector Performance

sector performance 2014-02-28.2014-03-31

Yield Curve

yield Curve 2014-02-28.2014-03-28

Interbank Rates

mibor 30days 2014-03-31

Thought to Sum up the Month

[iframe src=”http://embed.readtapestry.com/s/kBU8bUWHY/” width=”600″ height=”338″]
 

Saving a little bit more is going to have a bigger impact than telling ourselves a story that we’re the next great hedge fund manager. So why keep wasting time on returns when there are so many other questions we can ask that will make a difference?

Source: Here’s a Money-Making Strategy: Save More

HFT: The debate goes mainstream

HFT

Michael Lewis’ new book “Flash Boys” is all about High Frequency Trading (HFT.) High Frequency Traders, he says, with advanced computers make tens of billions of dollars by jumping in front of investors. ”

The United States stock market, the most iconic market in global capitalism, is rigged.

I am not sure “rigged” is the right word. Traders have been trying to get ahead of the “flow” for ages. Its just that technology finally caught up recently and now allows firms to do what they used to do more efficiently. Barry Ritholtz of TBP points out that trading has always been a zero-sum game.

One trader’s gain is another trader’s loss. Only in the case of HFT, the losers are the investors — by way of their pension funds, retirement accounts and institutional funds. The HFT’s take — the “skim” — comes out of these large institution’s trade executions.

The defense came hard and fast. William O’Brien, president of BATs Global Markets: Its like GM writing a book saying it’s unfair for the automotive industry that Elon Musk created a new car.

We welcome anyone that is building a better mouse trap for our nation’s investors but I don’t think blind accusation is the right way. I know he has a business model that says everybody but him rips you off.

High-frequency traders account for 40 to 70% of all trading on every stock market in the US. The numbers for India are said to be similar. And since HFTs only intermediate trades, it is hard for them to lose money. Tradebot, one of the biggest high-frequency traders around, had not had a losing day in four years.

How can individual/retail investors protect themselves from getting skimmed by HFTs? First, understand that you can’t avoid them. So stop trying to trade intra-day and lengthen your investment horizon to at least a couple of months. Second, know that the “skim” is a few pennies/paisas and affects you in a meaningful way only if you make a lot of trades.

Josh Brown of TRB:

The bottom line is this – there have always been insiders, unscrupulous dealers and some participants with unfair advantages over others. HFT is just the latest in a long line of shenanigans and the moment you outlaw it or modify it or babysit it out of existence, there’ll be a new broad-daylight robbery format waiting right behind it.
 
The stock market hasn’t become rigged, IT STARTED OUT RIGGED.

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