This blog is about finance and investing in general. To be more specific, we talk about almost anything that relates to finance and money, directly or indirectly.
Additional $1.5 Trillion in Write-Downs Forecast by End of 2010 despite Rising Securities Prices
Rising global securities prices reduced the International Monetary Fund's estimate of bank losses, but banks around the world -- especially in Europe -- still are likely to face additional write-downs of $1.5 trillion by the end of next year, the IMF said.
Overall, the IMF calculates that the global financial crisis will produce $3.4 trillion in losses for financial institutions, between 2007 and 2010, a chunk of which already has been recognized.
Fixed Deposits have always been an integral part of every individual's portfolio.
But, it's apperent that some recent changes demand for a review in this strategy.
Investors need to keep a close eye on the interest rate movements so as to get adequately benifited from Fixed Deposits.
Last year (i.e in 2008) we witnessed high rated on fixed deposits. This was partly due to liquidity crunch banks were dealing with. Just see this in light of increasing inflation we have seen.
Banks were easily offering higher interest rates for your deposits, for certain period deposits.
For example, interest rates for period of 365 days (or 780 days and 1000 days) were upto 10% p.a.
It made perfect sense to lock in money, then.
Now, the trend has completely reversed!
Over the past few months, interest rates offered by most banks on fixed deposits have reduced drastically.
Some of the data below, will prove this:
Term Deposits (Below Rs. 1 Cr.)
Banks
365 to 729 days
730 to 1094 days
State Bank of India
6.50%
7.00%
Bank of India
6.50%
6.50%
HDFC Bank Ltd.
6.00%
6.00%
ICICI Bank Ltd.
6.50%
7.00%
HSBC India
4.75%
5.00%
Axis Bank Ltd.
6.75%
7.30%
(Source: Interest Rates from respective banks' website)
Everyone knows, last year's "super spike" in oil prices was no joke.
Well, believe me, it’s coming again.
Oil prices could bounce back quickly, according to Dow Jones.
Why? Here goes the theory..
Because there's no known cure for the world's 80 million-barrel-a-day oil habit. And OPEC continues to slash production - setting the stage for another oil price shock.
So if you want to invest Rs 1,00,000 for 3 yrs in any bank and you happen to belong to 30.9% tax bracket . It would filter out the the list of best Banks for you , that provide best returns, It would also enlighten you with final profit after tax deductions and what will be your gain after adjusting inflation. (obviously, based on your expectation of inflation percentage) .
Screenshot for the above figures. (click to enlarge)
It gives tells you that the best Fixed Deposit will be from "Oriental Bank Of Commerce" which offers 7.75% interest . It gives other information like
Maturity amount
Interest Earned
Interest After Tax
Gain After Inflation
Note: Currently information on this website is updated two times in a week.
IPOs have been in the news for a while. With the India government considering dis-investments, market seems to have been flooded with IPOs.
We recently had the Government company National Hydro-electric Power Corporation (NHPC) listing its shares with a lot of fanfare.
There was drama when the CMD of that company and the owners of the two Merchant Banks Enam ( Vallabh Bansali ) and Kotak Securities ( Uday Kotak) rang the Bell and the stock started trading.
And then we saw a lot of grim faces as the issue had one of the flattest of openings and finally the share ended just a bit above the issue price.
This brings us to think, focus why Merchant Bankers again and again bring out issues at prices which are so investor unfriendly.
It’s true that they get paid by the Issuer and not by the investor, and so they are loyal to those who pay them.
But, as market intermediaries, isn’t it also important for them to keep the interests of the market at large and small investors also in mind?
I wonder if the memory is so short that we/they tend to forget the disastrous effect the over pricing of Reliance Power in Jan 08 had on the whole market?
This has been told again and again and can't be emphasised any more.
Thank to insurance agents around us, who always do their best to skew our decisions for their own interests.
Just use this post to remind you always that Insurance is NOT Investment.
Before I go into more details, just remember that these two things are meant for entirely different purposes and should never ever be mixed.
Financial companies usually take common people for a ride. They have floded the market with a plathora of product which can be confused with investments and insurance. Agents cant be more happy with this costly products. After all they get hefty premiums.
Please try to understand basics and realise how bad it is an idea to consider buying insurance policies like ULIPS etc.(with some investing component).
These products are not only costly, but are not viable for long term investments.
Not only that, buying these high premium products would essentially leave you under-insured as well.
Instead one should consider buying a simple term insurance plans, which are not only cheap but effective enough to provide you ample of coverage. Buying these would give you more room to have high life cover (and this is what an life insurance is meant for). and the left over money can be used for prudent investing
in real investment products that suits you (based on you risk profile etc..).
Bonus Question: Do you know how much percentage of your premium goes to insurance agent if you buy a policy (specifically a ULIP)?
I am sure the answer would surprise you and would explain why they run after you to sell these products.
Anyone new to day trading will have these basic questions in mind:
Buy or Sell? What to do?
How many shares?
Where to put the stop-loss?
Where do I book the profits?
Well if you understand Candle Charts, it's not that difficult to answer these.
I believe the following basic rules can help a lot..
Set the chart settings to 5-min candlestick charts.
(Now, If you do not know what candlesticks are, please take time to learn them first. Google search for 'candlestick charts' will help. Candlesticks are very simple and uncomplicated, so please take some time and study them first. You need not know all the patterns. Just have an idea of how they are constructed and how to set them up in your trading software.)
Spot the most recent candle with the highest volume. Let’s call it 1st candle.
Wait till the NEXT candle, say 2nd (to the 1st candle) is fully complete.
If the body of the 2nd candle is clearly above the body of 1st candle, the momentum is likely to be continued. Make sure that the second candle is fully complete before you check this. Have patience...give it some time to complete.
Buy on a decline. A stop-loss must be placed below the low of the 1st candle.
If the 2nd candle fails to maintain above the body of the 1st candle, it is likely to be a blow-off pattern which is a termination pattern. EXIT.
SELL(short) the stock on a rally and keep a stop-loss above the high of the 1st candle. Remember, in this case…we are going against the trend and hence a stop-loss is compulsory.
When the stock is in a downward momentum, the same rules apply but in the opposite direction.
Keep booking profits continuously in small chunks. This is IMPORTANT.
Assume that the stop-loss will be hit while calculating what quantity is to be traded.
Always ask yourself, "How much loss is comfortable to me if my stop-loss gets hit in this trade? So, how many shares should I trade?" This is very important to keep volumes under control and for an objective trading approach. Once placed, the stop-loss should NEVER be modified.
Always UnderTrade. UnderTrade. UnderTrade. Trade only 50 shares when you feel like trading a 100. This is the secret to Long term profitability in trading.
Never regret missed opportunities. Never chase a stock. In the stock market, when one door of happiness closes another opens. Don't keep looking at the closed door. Move on. Continue your search for new opportunities.
This also means, DO NOT GET ATTACHED TO ANY SINGLE STOCK. If you like any company, this should not mean you keep chasing it. Move ON.
Mind you..it could just turn out to be a risky one.
..mainly in textiles, fibers & Nylon. Hd been showing loss for long. But the reason why this is tempting is...it now plans to move to develop Real Estate on the vast land holdings in Goregaon Mumbai.
<---snip--- The K. Raheja Developers group is said to be developing the Real Estate, and they have picked up 4% stake in the company though the stock market route during the May crash at throwaway prices. Also Videocon International has already bought 3.35 per cent stake in the company.
According to the corporate announcements of the company, the company has confirmed that it is no longer a sick company as per the provision of the Sick Company as per the provisions of the Sick Industrial Companies (Special Provisions) Act, 1985 (SICA). Also it has confirmed media reports that it is developing real Estate on the company's land banks.
The value of these developments comes around Rs 1000 crores which suggests a target of around Rs 200/Share in the months to come. ---snip--->
the stock is showing movements and is rising now... from 20s to.. 30s and into the 50s now.
The latest Buzz in the markets are the Real Estate stocks...hence my first pick would be a Real Estate stock, which, *I think*... can give good returns....without making purists (read Fundamental Analysts) uncomfortable...
Stocks like Mahindra Gesco and Unitech have shown dizzy valuations....which would make any Fundamental analyst go dizzy...
My pick for the sector is: Ansal Housing and Construction Limited *** Current Market Price: 340 *** EPS for the First Half'07 : 11 *** Last Quarter on Quarter growth in EPS: 22%. *** Current P/E Ratio: 17.
Notes: >> The profits have doubled when compared to the same quarter of the last year. >> One Year Price target for it going forward based purely on earning : 22*22= 484. (and this target shouldnot make anyone uncomfortable given that the PEG ratio remains 1). >> Just to add...it plans to invest over 2000 crores in the Real Estate projects in times to come...the valuations can only go up.
More about it: here >> Value of Land Bank as per Kushagra Ansal, President at Ansal Housing and Constructions : 900 Crore >> No. Of Outstanding shares : 1.492 crores. >> The value of land bank works out to be around Rs 600/share.
If one considers the value of the landbank, the price target could work out to be around 1000 with a year's time frame in mind.
Its been over an year now since I have been following the Stock Markets. Its very easy to sit on the fences and make calls where the prices should go in the times to come but its a different thing to put it in ink and let the markets decide your fate.
So, this is what i came up with: have a blog which would serve the purpose of listing out my picks from the market and to put it in ink so that over a period of time I may be able to evaluate how much I have been able to fathom the moods of the market.
