Invest Without Emotions
We ramped a reference portfolio this week using our proprietary algorithms. The goal is to generate absolute returns by investing in a portfolio comprised of the 100 most liquid stocks in the National Stock Exchange, rebalanced daily. Here’s a sneak preview. More later.
The NIFTY ended on a negative tone, drifting down -0.56% for the week.
Biggest losers were JPASSOCIAT (-4.73%), CAIRN (-3.90%) and AMBUJACEM (-3.25%).
And the biggest winners were TATASTEEL (+8.49%), HINDALCO (+7.79%) and JINDALSTEL (+5.42%).
Advancers lead decliners 26 vs 24
Gold: -1.20%, Banks: -0.75%. Infrastructure: -2.12%,
Net FII flows for the week: $824.80 mm (Equity) and $68.43 mm (Debt)
Buffalo Bill Cody rode on the Pony Express at the age of 14, fought in the American Civil War, served as a scout for the Army… and filed for bankruptcy.
Buffalo Bill as a very successful showman. In 1883 he organized his first Wild West show. He was in a show with real Cowboys and Indians. Buffalo Bill’s Wild West show was a successful show for over 30 years. Over the years the show prospered.
But eventually competition, the need to outspend that competition, and dwindling returns from a public tired of his style of entertainment forced him to merge with his major rival, Pawnee Bill’s Historic Far West and Great Far East Show, in 1909. But the combined show continued to run up debts and was closed by bankruptcy in 1915.
If Buffalo Bill were alive today, he would probably consider us a bunch of pansies, sitting behind workstations all day, punching away at the keyboard. But we are sure he would love us for our decidedly un-showman-like, unbiased and bland advice to quit when your trailing stop loss is triggered!
How are you protecting your profits?
Today’s pick is COALINDIA [stockquote]COALINDIA[/stockquote]. The stock had a real good start of the year with an uptrend till May, but it could not sustain the momentum and crashed to its support levels at Rs. 300. The stock has been in an uptrend since June, touching its 52 week high around Rs. 380. In the last three months, the stock has moved – 4% vs. 5% of the Nifty’s.
Oscillators RSI and CMO are in no man’s land suggesting no direction for the stock.
The MACD line and the signal line are moving close to each other – directionless. Both long-term and short-term GMMA lines are seeing a constrained movement leading to an indecisive future for the stock. Short-term technical gave an 18×9 bearish signal for the stock last week.
COALINDIA’s average correlation with the Nifty is zero. The scrip will be not be replicating the movement of Nifty. [stockquote]NIFTYBEES[/stockquote]
COALINDIA has a historical volatility in the range of 0.3 to 0.9. The scrip’s volatility currently is in the lower range.
To conclude, given these technicals, the stock is a short-term HOLD. However, given the current up-trend in the progress, the scrip is a long term BUY with a resistance level close to Rs. 380.
Did you know that even though Mark Twain made a substantial amount of money through his writing, he lost a great deal of it through investments, mostly in new inventions and technology? He lost not only the bulk of his book profits but also a substantial portion of his wife’s inheritance. So much so that he had to file for bankruptcy!
Twain lost $300,000 (equal to $8,058,462 today) on the Paige typesetting machine. He also had a publishing house that went broke trying to sell a biography of Pope Leo XIII.
His state of affairs turned for the better after he befriended the financier Henry Rogers, a principal of Standard Oil, who helped him completely reorganize his personal finances.
If he were alive today, we would’ve advised Twain that just because you are good at one thing, it doesn’t mean that your expertise automatically translates to investing money. He would have loved StockViz for that advise. And Tom, Huck and Joe Harper would have had all the time in the world to be the pirates that they wanted to be!
