On Slack: Anxiety of Active Strategies, Auto Jobs in Jeopardy, Balance Sheet Problem, Credit Growth, Debt Profile Plunges, Real Life ’Trading Places’, Short-Term Credit Spreads and more….
Slack is where the daily action happens. We take pride in our diverse and always helpful member community which includes value investors, fund managers, and professional traders. Here is a brief summary of some of the interesting things discussed there in the last few days. Find all older ones here.
#macronomics: Thousands of auto jobs in jeopardy as U.K. faces Brexit
Global automakers support hundreds of thousands of jobs in Britain. Their workers are well paid, and many of their factories are located in communities where jobs are desperately needed. CNN Money
#macronomics: Is Credit Growth Really That Low In India? No, Says Nomura
After struggling along at just under 10 percent for almost a year, credit growth fell to under 5 percent starting November, according to fortnightly data released by the Reserve Bank of India (RBI). It has stayed at those levels. For the fortnight ended February 17, non-food bank credit rose a meagre 4.7 percent. Bloomberg Quint
Demonetisation to impact GDP in this quarter: RBI’s Viral Acharyahttps://t.co/MTynPZIsO3 pic.twitter.com/AnR0cIzhdT
— Deepak Mohoni (@deepakmohoni) March 7, 2017
#macronomics: Fed boss says US rates may rise in March
A rise in US interest rates could be “appropriate” as soon as this month, according to the chair of the US Federal Reserve. BBC
#macronomics: India’s twin balance-sheet problem
For a fast-growing economy, India is stuck in an alarming credit slump. Economist
Must read. What is the consensus and what is the reality?? pic.twitter.com/jZLl1AqD7X
— Sucheta Dalal (@suchetadalal) March 6, 2017
#macronomics: Hit by rating downgrades, India Inc’s debt profile plunges
Firms which saw upgrades in February were lowest since May 2016. Financial Express
#funds: FPIs pump in ₹15,862 cr in February
After four months of selling frenzy, overseas investors turned net buyers in February and pumped in a staggering ₹15,862 crore into the Indian capital markets, enthused by clarity on FPI taxation. Hindu Business Line
You’re better off missing both the best and worst days/months in the market https://t.co/PRvmbrb0I8 #TailRisk #Volatility #Momentum pic.twitter.com/PhvUOWUSlf
— ReSolve Asset Mgmt (@InvestReSolve) March 2, 2017
#general: How Bull Markets Affect Your Intelligence
#general: Narendra Modi govt looks to widen EPFO reach to cover more construction workers, set to cut employers’ liability to 10%
Driven by a policy to extend social security benefits to workers who are currently outside its ambit, the government is considering lowering employers’ liability towards Employees’ Provident Fund (EPF) in the construction sector to 10% of the basic pay from 12% now. Financial Express
What if one buys the top 2 stocks by weight in these 16 sectors? Here’s what the portfolio would look like. Will track an eq-wt PF of these. pic.twitter.com/6LxGXwErjP
— Uptickr (@uptickr) March 3, 2017
#options: A Couple Thoughts on Short-Term Credit Spreads
There are several ways for an option trader to approach selling credit spreads. But probably two of the most common, are comparing a shorter expiration to a longer expiration. In today’s blog, we will specifically focus on selling credit spreads that expire in about a week or less; essentially using weekly expiration. Market Taker
#general: SBI to hike minimum balance for savings account; move will hit 31 crore people
The monthly average balance (MAB) requirement has been increased to as high as Rs 5,000 for branches in six metros. The minimum balance is expected to be raised from April 1. The move will hit 31 crore depositors, including pensioners and students. Times of India
#general: A Watched Portfolio Never Performs
Perception is reality when it comes to your portfolio. Many investors feel like their portfolios are always underperforming. No matter how well diversified or how many best-in-class strategies they own, it rarely feels like they’re making progress.
The reason it feels this way is the same reason a watched pot never boils: the observer effect. By simply looking at our portfolios, we are affecting our performance. Reformed Broker
#general: Who are you competing with?
If you’re a professional in asset management, you’re competing against the market in general and your peers in the asset management business specifically. In some cases, it’s a monthly competition or quarterly or annual – but you’re always being measured and measuring yourself. The Reformed Broker
#general: Visualizing the Anxiety of Active Strategies
Last week, Longboard Asset Management published blog post titled A Watched Portfolio Never Performs. What we particularly enjoyed about this post was a graphic found in the middle, which applied prospect theory to demonstrate actual results versus perceived investor results based upon emotional experience. Think New Found
#general: Buffett on Valuation
#general: The Incredible True Story of the Real Life ’Trading Places’
If you have any interest at all in finance, then it’s mandatory to have seen the 1983 movie “Trading Places.” You remember, right? Two wealthy Philadelphia commodity brokers bet on whether anyone, even down-and-out Eddie Murphy, can be trained to become a successful trader. What you might not realize is that something very similar happened in real life. Bloomberg Odd Lots
#general: More than 30% of India’s youth not in employment, shows OECD report
The Indian economy may be growing more than twice as fast as the rest of the world but the story on job creation and employment fronts is just the opposite. Livemint
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