The Power of equities
History has shown that equities are the best way to build long-term wealth.
-Shelby M.C. Davis
16th May to 20th May
It's a blow sharp and hard. Just digest these numbers. A staggering 6,000 points have been knocked off the Sensex in the past one month alone (April 11-May 11)! Investors' wealth is a clear barometer who have lost a whopping Rs 34 lakh crore. So far this month too, the picture is not pretty either.How to make sense of this wild gyration in stocks? Is it a phase of consolidation taking hold? After a big bull run for almost 2 years, the bears are coming back with a vengeance.The available signs on the ground all point to more market swings ahead as India VIX is trending up.
The April CPI inflation, at 7.8 percent, is an 8-year high, which is stuck above RBI's tolerance level of 6 percent for the fourth month in a row. Even though the March IIP reading remains lacklustre, the macro data points have in a way justified RBI's out of cycle 40 bps rate hike last week and are giving it more space for a back to back rate increase in its next policy meet in June.
LI CLIC listing today
Expectations is soft listing, grey market showing discount. Listing below the issue price.What could happen,The mood of millions of investor is on test today.Government will try everything to make the listing day positive and build on the process for further public companies to list.However, market is demand and supply - no one can make or break the marketThe global sentiment is weak,Inflation, inflation, inflation everywhere - no one likes inflation.Inflation likes economy.Trading in stock on listing day, when everyone eyes on one single stock.
It's going to be toughDefinitely opportunities would be available, but be ready to take the risk.LIC Listing Done.
As indicated by its GMP moves, it listed in discount.Right now all shareholders (HNIs, Retail and Policyholders) are in Loss.Listed at 872/- at NSE against IPO price of 949/-
Cost of acquisition for Retail was 904/- and for Policyholders was 889/-Vinod Nair, Head of Research at Geojit Financial Services on LIC listingThe subdued listing of LIC is in-line with expectations in context to the drop in market dynamics from the opening of the IPO to the listing date. The listing price has fallen in tandem with the fall of insurance sector valuations, maintaining the discount of about 70% to the industry’s average. Positively, the stock was brought at the dip. We believe that LIC is a decent investment opportunity in the short to medium-term considering its strong market presence, improvement in future profitability due to the changes in surplus distribution norms and strong sector growth outlook. LIC can perform well when we have a bounce in the market and positive performance in the insurance sector.
20th may
CLOSED - 04:04 PM | May 20, 2022
SENSEX
54,326.39
+ 1,534.16 (2.91%)
NIFTY
16,266.15
+ 456.75 (2.89%)1. Strike Rate is Overrated: Nifty has been right only 55 per cent of the times and despite that delivered a handsome 11.31 per cent CAGR. Hence, there's no need to be right all the time. Half the time is good enough.2. Let your winners run: Nifty’s average winning position is 1,500 per cent and average losing position is 45 per cent. A position in profit is proof that you were right. Let it run without the urge of constant profit-booking.3.Not only ride, let your winner’s age: Nifty’s average winning position is held for an average of 12.5 years and the average losing position is held for about 4 years. Give your winners more time.4.Don't need to be hyper-active to make money: In its long and continuing lifespan Nifty has undergone only 150 trades with an average of 4 stock rejigs in a year. Despite such a low churn, it has managed to deliver an over 11% CAGR return.Nifty 50 closed positive this week and both the benchmark index as well as Bank Nifty bounced back from the lows formed last week. Despite the bounce, we believe the market has not completely bottomed out, as the price patterns on Nifty reflect that the up-trend has been severely damaged. Even if we look at the weekly chart of S&P 500 index, a Head and Shoulder breakdown has been witnessed. Having said this, a short term bounce cannot be ruled out. Whether the bounce will unfold as a relief rally or the start of a new bullish move is not evident as of now. So considering all these factors, going into the next week we suggest traders maintain a cautiously bullish outlook as long as Nifty does not break below 15,700 levels.
Stocktale updates
RBI releases Credit Card Spend data for March 2022:
7.3 crore credit card holders spent Rs 1.07 lakh crores .
Online spends Rs 68,327 crores
Merchant POS spends Rs 38,377 crores
Cash withdrawals Rs 343 crores.
Around 22.1 crore transactions.Text
FII FLOWS
Most of the current US inflation is being driven by higher energy and food costs, which the Fed can’t really control. The only way for the Fed to bring the headline inflation rate down is to clamp down on demand—in other words, to stop shoppers from spending so much at stores.Most of what you worry about never happens. Maybe a recession this year will be something to add to that list.Govt steps now targeting food inflation hard- Wheat export banned
- Select Edible Oil import Duties/Cess removed
- Sugar export to be done via limit quota
- Fuel excise duty cut (reduces logistics cost)Good for consumers. Lets see what more steps come ahead.
TRADER AND INVESTOR RAKESH JHUNJHUNWALA IS NO MORE
Rakesh Jhunjhunwala is known as Indian Warren Buffett , investor, trader, and chartered accountant.Famously known as Big BullHe manages his own portfolio as a partner in his asset management firm, Rare Enterprises.Few of his nteresting quotes / thoughts Have learnt two things about the press and wives. When they say something – don’t react. Markets are like women —— always commanding, mysterious, unpredictable and volatile. Anticipate trend and benefit from it. Traders should go against human nature. Successful investors are Opportunistic and Optimistic ones. Respect the market. Have an open mind. Know what to stake. Know when to take a loss. Be responsible. Growth comes out of chaos. Chaos leads to growth opportunities. Maximize profits and minimize losses. Market is above individuals. An individual can never be smarter than the market. Invest in a BUSINESS not a company. Emotional investment is a sure way to make loss in stock markets. When in doubt, listen to your heart. Boldness has genius, power & magic in it. Aspire but NEVER envy. Never take success for granted. Do realize that success can be temporary and transient. Cyclical. Build a fighting spirit — learn to take the bad with the good. Have some cash always in hand so that you can grab the opportunity when it occurs. Such opportunities come out of nowhere. Blindly following stock picks by big investors is not a wise thing to do. Give your investments time to mature. Be Patient for the World to discover your gems. Make an investment when the stock is not popular. Trading always keeps you on your feet, it keeps you alert. See the world as it is, rather than what you would like it to be.ThanksRakesh Jhunjhunwala Sir thoughts are immortal.Credit # Anybodycanfly