Playing with fire--by Grantham a must read

 It was a not a great weekend though i will remember it for years to come(its not related to IPL ok)..anyway that's not what i  intended to post here

While surfing i came across this guy by name Grantham Jeremy , chairman of
a Boston based AMC well known among institutional investors, but relatively unknown to retail investors.
He has a reputation over his long career by correctly identifying speculative market "bubbles" as they were happening and steering clients' assets clear of impending crashes

Most of his letters are read by Wall Street  and here is what he says in latest quarterly report in the link below
Playing with Fire

Take some time and read in particular if you invest in stocks

More can be found in this article
http://www.businessinsider.com/henry-blodget-grantham-this-crazy-market-could-go-roaring-right-back-to-its-old-highs-2010-4

For a Change

 Just came across this Telugu song in you tube....It will be somewhat touchy for people who miss there dearest ones

http://www.youtube.com/watch?v=no3mSlynVhs

Musings of Options Trading..loaded with confusion,absent mindedness and excitement

Day:22-April
Location:Same Office Desk


Its another day of confusion , absent mindedness and bit of excitement coming together on same day
First it started with myself as usual at 9.30 am, got up switched on mini with  eyes closed..and as u know opened rediff.com to see the initial trend of market and was not surprised to see it in flat below previous close value . opened cnbc and same guy udyain with his usual stare at monitor told about the rising stocks ,falling stocks and upcoming results....

Have seen a tamasha for first time..they called up a young CEO of ZEE News am not sure of his name..and they (Udayain and some other lady) asked him about to tell about this companies performance this year and future growth prospects...and as u know CEO will generally say that there growth is better than industry growth and it will be same going forward..blah .blah...Now this Growth caught the attention of lady and she asked him to elaborate on this revenue ..like which channel in ZEE News is giving how much revenue..(ZEE News is DTH chanel and it has few other regional channel under its belt and its a paid Hindi news channel )... And the CEO was bit hesitant to provide these details..now CNBC people tone changed a bit and were asking him questions in a interrogation way and that guy was feeling uneasy ..and he said ZEE news delivers information to public in the same way other news channels does...this brought CNBC people a bit angry and the CEO dared to say that you(TV18.....CNBC is part of TV18) also does the same...this made the CNBC people to close the call the ZEE News CEO...vow..what a pity...fighting over media...any way...that's not what i  am expecting  from news channel.....

so i started looking at options value and still NIFTY 5200 put was around 25 to 30 and already i am holding it at 40 rs thought of averaging it and the same way nifty 5300 Call was around 20 Rs holding it 25...
This happend at A u can see it in the picture attached ...and its not making me intrested somehow...so while watching the news..i slept off again till 11.30...

Surprised to see the market went up by .8% i guess some confusion would have happened and market went up and nifty 5200 put decreased to 15 i guess..and now i am concentrating 5300 put as it came to 60 Rs...so at location B (in the pic) i got 5300 put at 55...

Now i have at B position in figure
5200 put @ 40
5300 put @55
5300 call @25

total : 5500
so i started to office..and by the time i came here...

1 lot 5200 put @ 10
1 lot 5300 put @35
1 lot 5300 call @45
total : 4000
but disappointed as i was in loss

and at position C  i aggressively purchased one more put of 5300 at 30 rs...and sold 5300 call which gave me return bit it could have been given much more

Now the real excitement happened after me coming from lunch and market is in final 30 mins of trading and the slide started ...market was falling with a slope of near 90( bit of exaggeration)..and all of a sudden from my loss positions i was into profit in few mins..

This is at position D
1 lot 5200 put @ 40
2lot 5300 put @80
total :10000

total profit of 4500 rs MTM

in a bit of madness i just closed 5300 put at 60 Itself and closed 5200 put at 41
effectively trimming my profits...Lesson learn

thats all for todays confusion and excitement and coming to Absent Mindedness

First  :
i started to office i locked my room and came down..then i remembered that i didn't do brush in morning ..hahah .so started back again to my room ....

Second :
After brushing i locked room and started to office again...after going some distance i have a habbit if eating choclates and to take money  i kept my hand on my back to my surprise there is no purse ..hehe..again i went back and took the purse and started to office again...

Steel Index

 I found this in bloomberg website which tracks steel companies in europe.

Brief description of this index :

The Bloomberg Europe Steel Index is a capitalization-weighted index of all companies involved in the steel sector of the Bloomberg Europe 500 Index. The index was developed with a base value of 100 as of December 31, 1996. The parent index is BE500. 

http://www.bloomberg.com/apps/cbuilder?ticker1=TPIRON%3AIND


Now what we can do is if this can give any clue to metal companies which are trading in india , hope i  will track this index with the steel sector in india and will publish in another post

Todays Pick

Today i bought birla power solutions for long term hoping that it will go ahead with its fund raising plan and improves the business by investing in solar energy in coming years...Will be Tracking this closely in coming days and will post more about solar energy and its future in india and in particular Birla Power Solutions



Disclaimer:

These are my picks and that and you are solely responsible if u take any position based on the posts over here :)

Attention:

I know that i am making simple grammatical mistakes and am trying hard to eliminate them and incase if reader finds any please excuse me

Musings of Options Trading

Date :20-04-2010
Place: Office Desk

As the Readers(if any) know  that am jobless today also...so i  kept my hands on options. It started from 8.45 am when i switched on my mini and started seeing the news channel. Gentlemen over there in white shirt and Red tie was telling that NIFTY will be in range bound... hahaha...wow..we got to know that nifty now 5200 will be in range bound from 4900 to 5450 from this guy...hehe ....thats +_5%..any lame person who sees market movement can tell this..whats the big deal...this is how i thought after hearing that from a guy of well known brokerage firm..

Today is special day coz many people are coming in this news channel with a white shirt and red,black,green etc TIE and shouting in there microphone that market direction in shortterm will be decided by the RBI monetary policy which is going to come  later in the day...(by the time i wrote this..already they announced the policy , will talk on that later...) Now i also know this and closed all my positions in options the other day...coz anything can happen after the announcement .

BTW am watching CNBC news channel over web...and Udyain i guess he is the main reader.he looked very smart form my observation on his knowledge about different sectors and wide indepth analysis of questions he asks the speakers . i cam to know that rbi policy will be around 11.15 am ..and was watching the market trend as it approaches 11 ....and its unable to break 5225...for quite some time..so i bought nifty 5200 put at 55 and waited for the rbi announcement....even though many speakers said that RBI will go for normal hike of 25 bps..in expectations of market...but some how i was not convinced by that..and was expecting RBI to make some tougher stand of going for 50 bps..coz of the inflation and run up of metal ,oil prices..some how it didn't happen..i guess RBI  were under different assumption(May be of uncertainty of monsoon and growth in private demand)..

The announcement of policy was taken in positive way and market reacted by jumping 30 points instantly and premium went to 40 rs ...so am on loss of 750 rs.(MTM..Market to Market)....l was bit disspointed coz intially i placed order at 40 and later changed it to 55...so a bit disappointed coz i missed that oppourtinity..anyway its over..so went to office..and from there..i did watch nifty for some time..and it was finding difficult to break 5250 and again i went for another lot nifty 5200 put for around 41 rs...in a matter of few mins...market started feeling the pressure and it dropped..a few points..and due to volatility premium again went back to 56 ..after drop of 20 points..to 5235...so i squared of here..for 56 rs and got a profit of 750 Rs and my second lot....now market at end of day is not going down..and struggling to go up or down..and i placed nifty 5300 call for 25 rs and got executed and later in day it went to 30..but still i didnt squared it off...

I hold 5200 put and 5300 call for now...just that i don't want to square 5200 for now..

hope market opens in Green in morning...so that i will square my call and again buy at lower price...

Thats all for now..c ya again later


PS: Office Desk is my IT Company Office Desk

Watch List

Posting these stocks over here so that i want to keep track of it .

Texmo Pipes & Products Ltd.	72
Indage Vintners Ltd.	37
Blue Bird (India) Lt	17
PVP Ventures Ltd.	17

• texmo came up with IPO and failed at box office..Need to see the business model  of this company which entered into industry which has high competition
  
• Indage is wine making company and the promoters instead of making wine and selling it to us themselves consumed it inturn there balance sheet went into red
• Fell from 600 levels to 40+ levels
  
• BlueBird india is into printing books and in the world of digitization they don't have a back up business plan and started getting less orders
• Fell from 60+ levels to 15+
  
• PVP Ventures is by a NRI business man who had a large properties in and around chennai, This guy has a uncanny ability of picking companies at low valuation and improving the business and sells at high value( example is Aircel..which is well used in South india)
• Fell from 70+ to 20+ levels
  

GoldMan Sachs Credibility at Risk

I always belived that if some one losses money then there is always some one to gain it.
Say on particular Transaction if make a bet then you should be knowing of risks involved in it .i think
bettiing is not the right word here but still i use it cause thats how its frameworked .Anyway lets carry on..Betting in markets means u go by certain rules ..which if violated mean that we are cheated..thats exactly what happened with Goldman Sachs and its facing a serious crisis and its credibility is at stake.

Now people will suspect of  any transaction or product it makes...
they might go for head of Blankfein

God Bless Goldman

More can be found at this location

http://www.sec.gov/litigation/litreleases/2010/lr21489.htm

What is IIP? How it affects stocks?

Every month the stock markets wait with bated breath to hear the IIP numbers. These numbers decide the market movement. But what is IIP? What is its relationship to the stock markets?

IIP, the key tracker of industrial production

IIP or the index of industrial production is the number denoting the condition of industrial production during a certain period. These figures are calculated in reference to the figures that existed in the past. Currently the base used for calculating IIP is 1993-1994.

Importance of IIP

As IIP shows the status of industrial activity, you can find out if the industrial activity has increased, decreased or remained same. Today it is important because with the news of recession hovering over the horizon, better IIP figures indicate increase in industrial production. It makes investors and stock markets become more optimistic.

Its relation with stock markets

The optimism amongst the stock markets and investors translates into the markets going up. This is because the markets expect the companies' performance to increase. This ultimately leads to the growth in the country's GDP. It implies improvement in country's economy, thus making it an attractive investment destination to foreign investors.

Computation of IIP

The first time IIP used the year 1937 as its reference point. It contained only 15 products. Since then, the criteria for the base year as well as the number of products have been revamped 7 times.

Currently, IIP uses 1993-94 as the reference year and includes items whose gross value of output is at least Rs 80 crores and Rs 20 crores at gross value added level. The products included are the ones used on consistent basis and can comprise of small scale sector as well as unorganized production sector.

They are segregated into 3 sections: manufacturing, mining and electricity. They are also classified on the basis of usage: capital goods, basic goods, non-basic goods, consumer durables and consumer non-durables.

The numbers for IIP are released within 6 weeks after the end of the month. This data is collated from 15 different agencies like Department of Industrial Policy and Promotion, Indian Bureau of Mines, Central Statistical Organisation and Central Electricity Authority. But at times, the entire data may not be easily available.

Hence some estimates are done to generate provisional data, which is then used to calculate provisional index. Once the actual data is available, this index is updated subsequently.

Though IIP does indicate the condition of the country's economy, it should not be taken as the sole basis for investment. This is because some sectors may show higher performance as compared to others. This was evident in the recent past when realty sector showed higher performance, pharma sector lagged behind.

 So you need to check the reason behind the increase/decrease in IIP figures before investing.

Here is the link where we can see the latest IIP results

IIP-Index of Industrial Production

Musings of Options Trading

Date 30/03/2010

Even though i started doing option trading from some time back this is my first post where am doing post Morten of what i did on that day , since my memory is leaking this might act as proof of what i did .

few days ago i bought 5300 put when market was around 5300+ on last friday or monday at around 90. I got this brilliant idea of selling a put( which in fact is destructive idea) at 25 Rs. so when i did the same with icici they asked for margin of 16K for it though probability of loosing that position is very less since i am holding  5300 put . so after lot of thinking  went ahead and sold a put for which i got around 1000 Rs after brokerages . Now for the past two days market went down..so my 5300 put went from 90 to 130 and i thought pf taking that  profit and renter again to buy 5300 put at 90..so in my desperation to square of 5300 put i closed at 125 Rs at around 3:10 PM expecting that market will not go down much from there since another 15 mins is there for market closing .To my utter surprise market fell in last 15 mins and premium went to 130+ Rs .I felt disseminated at my self for waiting till end of day . And the biggest surprise came after another 3 hrs and before US markets opened they released ADP report which gave a bad signal to markets and Europe almost drop 1% and dow and S&P dropping half a percentage and this started my worst nightmare of the year which made me to write this post. Problem is i am having naked 5000 put which can go completely wrong if markets go down..and i don't have a 5300 protection ,so for whole night i was praying that market (nse) should not open in down...and my prayers were answered for now...I feel am lucky to survive for today Will see from where i will head and ob markets head