On Slack: Black Day, Fat Tails, Globe Trotting, Household Portfolio, Mindless Robots, Reality Check, Tax Base Conundrum, Unicorn Ranch 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.
#general: Decoding India’s Low Tax Base Conundrum
India is an extremely poor country with a per capita GDP of Rs. 105,815, i.e. the average Indian earns roughly Rs 1 lakh per year. The exemption threshold for paying income tax in India is Rs 2.5 lakh. Which means people earning below Rs 2.5 lakh need not pay any income tax. Bloomberg Quint
#general: Government may roll back 10 per cent LTCG tax proposed on ESOPs
The government may be looking to roll back or tweak a budget announcement, imposing long-term capital gains (LTCG) tax on holders of ESOPs and private equity investors, people close to the development said. Economic Times
“We made strategic mistakes”
Yeah no shit, you spent 200 crore making a pink logo. #Snapdeal
— Arnav Gupta (@championswimmer) February 22, 2017
#macronomics: Nasdaq Now More Overbought Than At 2000 Bubble Peak
#general: Haldirams FY15-16 revenue is more than the combined revenue of Domino’s and McDonalds
While Indian foodtech startups are still trying to find out the tech in food, snacks maker Haldiram’s FY15-16 revenue has crossed Rs. 4,000 crores. Next Big What
#bonds: SEBI likely to allow mutual funds to trade in commodities soon
With an aim to deepen the nascent commodity market, SEBI is likely to give mutual funds the go-ahead to trade in commodity markets in a month, while the regulator is also in talks with the RBI to allow institutional investors like banks and FPIs to trade in the segment. New Indian Express
@assortZ and the model I follow for planning is taken from @QBtrades simple but very powerful to manage the random moves of market 1/2 pic.twitter.com/NVAwOMsU1o
— RK (@assortZ) February 21, 2017
#general: Factor Zoo or Unicorn Ranch?
Asset pricing models look at long-term long/short returns without taking into account the price impact of trading. Factors that looked good on paper may be lacking in robustness, pervasiveness, persistence, or intuitiveness. Let us see. Dual Momentum
#general: Scrappage scheme can boost commercial vehicle sales 65% by 2020: Report
The Voluntary-Vehicle Modernisation Programme (V-VMP), announced by the Ministry of Road Transport and Highways, can boost commercial vehicle (CV) sales volume by a cumulative 65% (over sales in fiscal 2016) between fiscals 2018 and 2020. However, the government needs to provide a cash discount, or make tradeable the V-VMP incentive certificate issued to transporters, says a research report. Money Life
#general: Fat Tails and Expecting the Unexpected
Given enough time, the market will make a fool out of anyone basing their expectations for the future on a normal (or Gaussian) distribution. Why? Because financial markets do not follow a bell curve. Pension Partners
Matrix and Nexus-backed online homestay startup Stayzilla suspends operations, reports @nsd308.https://t.co/1EdlNrsP1m pic.twitter.com/l1yymp6wrA
— BloombergQuint (@BloombergQuint) February 25, 2017
#stocks: India Ratings Downgrades Ballarpur Industries to ‘IND D’ & its NCDs to ‘IND C’; Off RWN
#macronomics: Is it time for RBI to go for a rate hike?
The ingredients are all there—a stubborn inflation, likely US Fed interest rate hike, rising commodity prices. But will RBI’s monetary policy committee take the plunge? Livemint
Anatomy of a Bull Market https://t.co/QLIIYAFgtg pic.twitter.com/or2D3Un2BG
— Newfound Research (@thinknewfound) February 13, 2017
#stocks: Softbank looks to pick up stake in the proposed Vodafone-Idea combine
Masayoshi Son’s Softbank, which is about to close its mega $100 billion Vision Fund, could emerge as a new investor in the proposed Idea-Vodafone combine, according to four people aware of the development. Economic Times
#macronomics-from the past: Stocks in the Household Portfolio: A Look Back at the 1990s
The growing prominence of stocks as a household asset in the 1990s encouraged the view that the United States had become a nation of zealous investors alert to every market development and eager to acquire new stocks. New York Fed
#stocks: Airtel To Buy Telenor India As Norwegian Telecom Operator Exits
Bharti Airtel said that the acquisition will boost its spectrum footprint with the addition of 43.4 MHz spectrum in the 1800 MHz band. The deal is subject to clearance from regulatory agencies. NDTV Profit
25 out of 33 Patanjali Ads Were False & Misleading - Advertising Standards Council of India https://t.co/kv1rXUybqO pic.twitter.com/OCNrps7SIr
— Reddit India (@redditindia) January 21, 2017
#general: Black Day For Indian Ecommerce
Snapdeal Founders Admit Mistake, Confirm Mass Lay-Offs; YepMe Will Fire 90% Of Their Staff. Trak
#stocks: Infosys buyback could happen in April, likely to be over $2.5 billion
In a crucial move, the board of Infosys today recommended the adoption of new Articles of Association of the company to conform with the Companies Act of 2013 and has sought shareholder approval via postal ballot. Economic Times
Here’s the sequel to Uber Cannibals, Beyond Buffett: How To Build Wealth Copying 9 Other Value Stock Pickers https://t.co/pVmg7bUjNr
— Mohnish Pabrai (@MohnishPabrai) February 22, 2017
#stocks: HDFC Bank trades settled smoothly, foreign holding cap intact
Trades have been settled smoothly in HDFC Bank shares while keeping the foreign holding limit intact and any trade annulment is unlikely after brokers took to their own proprietary books a ‘small’ quantity of excess shares bought on behalf of overseas clients. The Hindu Business Line
#general: ValueAct’s Ubben ‘disinvesting’ because of high valuations
Jeffrey Ubben, the chief executive officer of activist investor ValueAct Capital, told Reuters on Wednesday that his firm had been taking money out of the capital markets as valuations have become overextended, leaving it with $3 billion in cash. Reuters
#macronomics: Saudi Arabia’s Oil Wealth Is About to Get a Reality Check
Saudi Arabia has said oil giant Saudi Aramco is worth more than $2 trillion, enough to consume Apple Inc. twice, and still have room for Google parent Alphabet Inc. Bloomberg
Berkshire Hathaway’s 2016 Letter to Shareholders is out. Happy Reading…https://t.co/fuuS153A76
— Gaurav Sud (@gauravgsgs) February 25, 2017
#general: How Dangerous Is a Stock Market of Mindless Robots?
Could the millions of people investing on autopilot be pushing an already expensive market eve. WSJ
#general: India faces 1.5 mn white-collar job crisis in telecom, IT, BFSI
India is staring at an imminent jobs crisis as three leading service sectors — which have been engines of job creation for two decades now — get ready to shed jobs by the tens of thousands, each driven by its own dynamic. Money Control
S&P 500: 45 Trading days without a 1% intraday move, the most peaceful market in history. $SPX #Serenity pic.twitter.com/at8pJXUbNR
— Charlie Bilello (@charliebilello) February 22, 2017
#general: UIDAI lodges FIR against Axis Bank and two more firms for tampering with Aadhaar biometrics
UIDAI has lodged a criminal complaint with the cyber cell of Delhi Police. The entities under the scanner are Axis Bank, Mumbai-based Suvidhaa Infoserve and Bengaluru-based eMudhra and they have been served a “notice for action” under Aadhaar regulations. Economic Times
#stocks: How Bajaj Electricals uses blockchain to pay suppliers
The process cycle for bill discounting at Bajaj Electricals has come down from four-five days to almost real time after the implementation of blockchain. Livemint
#stocks: Current Level Of BPO Can Be 100% Automated: Infosys’ Pravin Rao
Infosys COO Pravin Rao has warned that BPO processes could be fully automated in the future, a stark prediction that could potentially impact millions of jobs in India. Boom
#general-from the past: Globe-trotting, with equities
Had you bought shares of the ubiquitous Google (now Alphabet) five years back, your money would have more than doubled by now. An investment in the Facebook stock would have more than tripled in this period. That’s a neat annualised return of 20-30 per cent. But these shares are not listed in India and you have to look beyond the borders to invest in them. The Hindu Business Line
#general: Here’s the scary truth: Almost every major Indian startup has made the same mistakes as Snapdeal
Here’s what flows look like if you categorize all mutual funds and ETFs by expense ratio.. pic.twitter.com/ScISNyCgXZ
— Eric Balchunas (@EricBalchunas) February 23, 2017
#general: Capital markets add 24 lakh investor accounts in 2016
In 2015, about 16.7 lakh investor accounts were added in total on the NSDL and the CDSL. Business Standard
#general: A Cognitive View of Trading Psychology
A common view, held among traders and coaches of traders, is that emotional factors account for the difference between trading success and trading failure. Some hold that emotions should be controlled, held in check, and made secondary to the discipline of rules. Trader Feed
#general: Here’s A Portfolio Based On JP Morgan’s 2017 Outlook
J.P. Morgan recently released its 2017 long-term capital market assumptions, a valuable resource for investors looking to leverage institutional research in their own asset allocation decisions. ETF
Active Versus Passive Investing: Can we End the Confusion? - https://t.co/YqSrMeMpz4
— Wesley R. Gray, PhD (@alphaarchitect) February 24, 2017
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