INTELLECTUAL TRADING

Chapter two of the renowned investment book, Quantitative Value, is dedicated to Joel Greenblatt's very simple approach to investing - The Magic Formula. The chapter begins with a quote from Buffett about why it makes sense to stay away from the geeks bearing formulas with esoteric terms such as 'beta', 'gamma', and 'sigma'. Instead, the author of the book prefers the quantitative translation of Buffett's infamous quote 'It is far better to buy a wonderful company at a fair price than a fair company at a wonderful price'. A wonderful business earns strong return on capital. This is a better metric than the absolute figure of profits or revenues, or for that matter, growth rates. Sure, these are important, but their importance wanes if a company is not able to earn returns above its cost of capital. Greenblatt has defined return on capital as: ROC = EBIT / net property, plant, and equipment + non-cash net working                   ...

When share prices rise, everyone wants to know what share to buy. Investors are keen to be a part of the wealth creation process. Stock markets are engines of economic growth for a country. A vibrant stock market is essnetial for a country like India. There are multiple ways an investor could participate.   HOW ARE STOCKS CLASSIFIED Stocks can be classified into multiple categories on various parameters – size of the company, dividend payment, industry, risk, volatility, as well as fundamentals. ·           Stocks on the basis of ownership rules: This is the most basic parameter for classifying stocks. In this case, the issuing company decides whether it will issue common, preferred or hybrid stocks ·          Preferred & common stocks: The key difference between common and preferred stocks is in the promised dividend payments. Preferred stocks promise investors that a fixed amou...

Rec Price  = Re-commanded Price , Rec Date - Re-commanded Date, CMP = Current Market Price , SL = Stop Los Disclaimer -PLEASE NOTE THAT THESE VIEWS AND CALLS ARE AS PER THE ANALYSIS OF CHARTS AND MAY REVERSE ANYTIME. THIS POST IS PURELY FOR EDUCATIONAL PURPOSE ONLY AND NOT TO BE CONSIDERED AS A BUYING OR SELLING RECOMMENDATION. I AM NOT A SEBI REGISTERED RESEARCH ANALYST AND I REQUEST ALL STUDENTS AND READERS OF THIS POST THAT NOT TO TRADE THIS STRATEGY. THIS POST I HAVE POSTED ON THIS PAGE IS FOR MY FUTURE REFERENCE.

Rec Price  = Re-commanded Price , Rec Date - Re-commanded Date, CMP = Current Market Price , SL = Stop Los Disclaimer -PLEASE NOTE THAT THESE VIEWS AND CALLS ARE AS PER THE ANALYSIS OF CHARTS AND MAY REVERSE ANYTIME. THIS POST IS PURELY FOR EDUCATIONAL PURPOSE ONLY AND NOT TO BE CONSIDERED AS A BUYING OR SELLING RECOMMENDATION. I AM NOT A SEBI REGISTERED RESEARCH ANALYST AND I REQUEST ALL STUDENTS AND READERS OF THIS POST THAT NOT TO TRADE THIS STRATEGY. THIS POST I HAVE POSTED ON THIS PAGE IS FOR MY FUTURE REFERENCE.

Why Indian Stock Market is falling sharply? Nifty has seen 7% correction in January 2016 till date. There are so many factors for this downfall, but the main reason is Liquidity.       In Jan 2016 ,FIIs were net seller of Rs.12737 crores .  China problem was very well known from Year 2014 to mid of Year 2015,So China crissis is not main cause for India Down Fall. Actual Reasons behind this downfall First of all, when US FED hinted that they are going to raise interest rate in December 2015. If you look at FII data in Indian as well in emerging markets from May-2015, they started pulling money from all markets. Because of this, money that came from US has to go back, due to rise in interest rates in US. So, without FIIs money support, market was not able to move further positive and had seen selling pressure on every positive movement. Second reason is Crude. As crude price fell to 12 years low, many crude producing countries felt heat in their bu...

We are recommending based on below fundamental and basic/advanced techincal screeners. Our recommendations are for Short Term. Fundamental Screener:   EVA > 0   KB > 50%  0 < M2IV < 1 Intellectual Capital (IC) : Intellectual Capital is simply the sum total of all the Intangible Assets (intangibles) in an organization. It is commonly sub-classified into Human Capital, Structural Capital and Relational Capital. Knowledge Basis (KB) =Intrinsic Worth (IW)/Intellectual Capital (IC) Economic value added (EVA) : is an internal management performance measure that compares net operating profit to total cost of capital. M2IV  Market to Intrinsic Value  = Market Cap (MC)/Intrinsic Worth (IW) Basic Technical Screener :  10 DMA > 50 DMA  CMP > 50 DMA   Vol-Price trend should be raising Stop Loss : is based on 5 DMA , i.e If stock is trading below 5 DMA then exit. Support and Resistance lev...

Dec 21st Week Nifty Performance The Nifty managed to end the shortened trading week with gains of 1.3%. Buyers were able to muster up courage and pushed the index up by a percent on Monday. This was despite weak cues from global markets over the weekend. Broader markets followed through for the remaining days of the week. The index seems to be firmly placed to advance higher from current levels. Bulls will have their sights fixed on the psychological mark of 8,000.  FII & DII Trading Activity DATES FII (Rs. Crore)2 DII (Rs. Crore)2 Net Purchase/Sales Net Purchase/Sales 23-Dec-15 385.82 632.64 22-Dec-15 168.73 238.36 21-Dec-15 37.37 62.7 591.92 933.7 Last Week Highlights: 1)  During the week, the Reserve Bank of India (RBI) warned state-run banks to stop paying excessive dividends to the shareholders. The statement was made as the risk of bad loans has increased c...

GST will simplify the taxation structure, which will encourage third-party logistics in India, reduce compliance cost, reduce number of warehouses and allow tax credit across the supply chain, making it more efficient Crisil Research said once the timeline is announced, firms can plan to set up  warehouses. He added consumer durables will be the biggest beneficiary of GST  and insisted that an improvement in the distribution process of FMCG goods is a must to see the effectiveness of the tax system. ET has collated a list of stocks recommended by various brokerage firms which are likely to benefit most post implementation of GST According to Kotak, companies like Exide Industries, Amara Raja Batteries, Jubilant FoodWorks, Asian Paints, Pidilite Industries, Britannia Industries, ITC and Marico are expected to benefit from the bill. According to Sharekhan, Gateway Distriparks and Concor will be major beneficiaries. It points out that over the long ...