Tag: reading

Sunder’s List: QE Gift To Wall Street

Roundup: S&P -0.24%, Dow -0.21%, Nasdaq flat, London -0.02%, Germany -0.34%, France -0.61%. At pixel: Nikkei -0.16%, Hang Seng -1.11%

Finance Ministry is going to crush all currency punters out there. The rupee will stabilize, prices will stop rising, the economy will start clocking in double digit growth and the Congress will be voted back to power… (ET)

While we worry about inflation and fret about onion and potato prices, developing economies are facing deflation. U.S. inflation is at 1.2%, well below its 2% target. Euro-zone inflation is running at 0.7% – the ECB aims at near but just below 2%. Prices in the U.K. have started to move back as well. (WSJ)

Commodity update:

  • Iron ore is extending a bull market on record sales to China. Stockpiles in China were 74.4 million tons on Nov. 8, from 85.1 million tons a year earlier. Steel futures in Shanghai advanced 8.5% from a nine-month low in June. (Bloomberg)
  • Gold miners’ hedging activities might end up pushing gold prices over the cliff. The more producers hedge into thin forward demand, the more likely the curve is to backwardate. (FT) [stockquote]GOLDBEES[/stockquote]
  • The platinum market is heading this year for the biggest deficit since 1999 on the back of record demand for ETFs. (FT)

On average, private equity investors may just break even, net of management fees, carry, risk, and costs of illiquidity. (NBER)

A former Federal Reserve official responsible for executing the centerpiece program of the Fed’s first plunge into the bond-buying experiment known as quantitative easing, says he is sorry. “The central bank continues to spin QE as a tool for helping Main Street. But I’ve come to recognize the program for what it really is: the greatest backdoor Wall Street bailout of all time.” (WSJ)

Good luck!

Sunder’s List: There Is No Secret

Roundup: S&P +0.07%, Dow +0.14%, Nasdaq +0.01%, London +0.30%, Germany +0.33%, France +0.70% At pixel: Nikkei +1.19%, Hang Seng -0.72%

Nomura downgraded Tata Motors to Hold just a month after calling it a “top pick.” (previous, now) [stockquote]TATAMOTORS[/stockquote]

It looks as if developed economies’ central banks will unleash further monetary easing on their economies and hence the global economy. (BI)

But hedge fund are outta gold. Hedge funds cut bullish gold bets, adding the most short contracts in four weeks, as U.S. economic growth fuels speculation the Federal Reserve will trim stimulus. Holdings across commodities dropped the most since April. (Bloomberg) [stockquote]GOLDBEES[/stockquote]

Indra Nooyi, Pepsi’s chairman and CEO, announced a Rs.33,000 crore investment in India over the next six years. This is a must read article for those who are interested in India’s long-term consumption growth story. (LiveMint)

Seth Klarman: “The real secret to investing is that there is no secret to investing. Every important aspect of value investing has been made available to the public many times over, beginning in 1934 with the First Edition of Security Analysis (1934). That so many people fail to follow this timeless and almost foolproof approach enables those who adopt it to remain successful. The foibles of human nature that result in the mass pursuit of instant wealth and effortless gain seem certain to be with us forever. So long as people succumb to this aspect of their natures, value invest will remain, as it has been for 75 years, a sound and low-risk approach to successful long-term investing.” (ValueWalk)

Good luck!

Sunder’s List: “multi-bagger”

Roundup: S&P +1.34%, Dow +1.08%, Nasdaq -0.03%, London +0.17%, Germany -0.03%, France -0.48%, Gold $1,284.60. At pixel: Nikkei +1.16%, Hang Seng -0.10%

Is Goldman Sachs interfering in the country’s politics? In an analysts’ note on Tuesday headlined “Modi-fying our view: raise India to Marketweight”, Goldman Sachs cited politics as one reason for its increased optimism. “a BJP-led government may be beneficial for the investment demand pick-up.” (FT)

Speaking of Goldman, here’s an article in Forbes that speculates what Obama would’ve done if had worked for Goldman before becoming the President. For one, he wouldn’t have been so lax about letting others write and then create “Obama-care”, the very legislation that would carry his name. (Forbes)

When it comes to selecting bank chiefs, the government is following different rules for different banks at different times and there is no uniformity in its approach. (LiveMint)

Keep dreaming: Assocham has emphasised the need for creating a liquid municipal bond market in India. We don’t even have a decent corporate bond market, this looks like one of those 10-year plans… (ET)

About time: The government plans to establish a roads regulator to solve problems in resolving contractual disputes and renegotiation of future contracts. Approximately Rs.17,000 crore are stuck in arbitration and litigation public-private partnerships (PPPs) in the roads and highways sector. (LiveMint)

Fuhgeddaboudit: The right ingredients for a multi-bagger include a mix of good management, sector tailwinds and ability to scale up, sprinkled with a generous dose of luck. But the probability that an individual investor will stick to an investment to realize the “multi-bagging” is close to zero. (LiveMint)

Good luck!

Sunder’s List: Sleepless nights

Roundup: S&P -1.32%, Dow -0.97%, Nasdaq -1.90%, Gold $1,307.60, London -0.66%, Germany +0.44%, France -0.14%. At pixel: Nikkei -1.03%, Hang Seng -0.61%

The chronology of events over the last 24 hours:

  1. S&P maintains a -ve outlook on India, stocks dive
  2. Twitter IPOs with a nice +70% pop
  3. The European Central Bank announced a surprise rate-cut, the euro tanked, stocks jumped
  4. US GDP gave a +ve surprise (at 2.8%), stocks dived (good news => bad news)

Parsvnath plans to list its two million square feet of shopping malls as a real estate investment trust (REIT), potentially making it among the first firms in the country to use such a vehicle to raise funds. Meanwhile, Sebi is likely to propose tax breaks, incentives for REITs. This a widely important move that, if it becomes a trend, will allow commercial real-estate firms to lighten up their bloated balance-sheets. (ET, LiveMint)

Now foreign banks will find it easier to expand in India, thanks to new RBI rules. And we may finally see a round of consolidation in the banking space. (WSJ)

For emerging market central bankers, the real problem is not nodding off, but jolting awake in terror later. (Economist)

Good luck and have a nice weekend!

Sunder’s List: The Right to be Wrong

Roundup: S&P +0.43%, Dow +0.82%, Nasdaq -0.20%, Gold $1,316.20, London -0.08%, Germany +0.35%, France +0.79%. At pixel: Nikkei -0.50%, Hang Seng -0.62%

Sebi shows some big cahones: Sebi has initiated nearly 200 attachment proceedings for recovery of investors’ money and unpaid penalties from various defaulters. (ET, #SEBI)

Goldman on India: Some of the key data points and lead indicators related to investment demand have started to show signs of pick up. We may be close to a trough in the investment cycle given recent policy initiatives from the government and new approvals coming through in power and road projects. (FT, #economy)

The world economy is improving. October data from around the world are showing surprising strength. A nice roundup can be found here.

Ronald Barusch at WSJ discusses the lessons learnt from the Cooper-Apollo Tire imbroglio. A nice follow-up of our post discussing the buyer’s remorse.

RBI should learn a thing or two from Italy’s successful marketing of its inflation-linked bonds… when the whole of Europe is facing deflation! Italy’s latest sovereign bond (total size: $30 billion, Europe’s largest sovereign bond sale on record) has been sliced up into little chunks aimed at small mom-and-pop investors. And it’s been a roaring success. (WSJ)

Dennis Gartman: on becoming stinking rich… by being wrong. Or how to ride long-term trends. (CrossHairTrader)

Good luck!