Blood bath in Indian markets

by Merlot Daruwala Mon Aug 19, 2013 4:52 am

I thought it would bounce back after the massive 770 point fall on Friday, but no! Another 400 + points down today with another hour of trading left...

Bought some ICICI Bk shares (down 5% today). Hope it pays off in the long run.

by Captain Bhankas Mon Aug 19, 2013 5:04 am

the market has shut chidambaram up after he prescribed what it should do. the people have already shut him up by continuing to buy gold.

by Captain Bhankas Mon Aug 19, 2013 5:44 am

i think the following financial instrument is the only one that will give me good returns in three months...

Blood bath in Indian markets Onions

... so that i become as wealthy as this gent.

Blood bath in Indian markets Onooon

by truthbetold Mon Aug 19, 2013 6:18 am

Onions bringing tears to rahul's eyes.

by Merlot Daruwala Mon Aug 19, 2013 6:43 am

Captain Bhankas wrote:i think the following financial instrument is the only one that will give me good returns in three months...

... so that i become as wealthy as this gent.

Sadly, the farmers don't seem to have benefited from the pop at all. The wholesalers benefited some but biggest beneficiaries have apparently been the retailers.

by Hellsangel Mon Aug 19, 2013 6:46 am

What is causing the latest drop?

by Merlot Daruwala Mon Aug 19, 2013 7:05 am

1. Capital controls
2. Rupee's slide
3. Loss of faith in the Govt's ability to stop #2
4. Global cues on Fed's tapering off of liquidity (most mkts are in the red - Jakarta index closed 5.6% lower

by goodcitizn Mon Aug 19, 2013 8:20 am

Between January and July of this year, the federal govt has hiked import duty on gold 3 times from 4% to 10% as if that will reduce importation when the market is demanding more gold as a hedge against inflation, falling stock market and continuing devaluation of the rupee.

It's laughable if this is the strategy to reduce the current account deficit. With the value of coal imported being even higher than gold and with India having significant coal reserves, why can't the government speed up coal mining, removing tedious regulations and providing financial incentives for environmentally safe mining methods? If coal is vital to power generation in India, it's all the more reason to focus on this than band aid strategies with gold.

by Merlot Daruwala Mon Aug 19, 2013 8:25 am

goodcitizn wrote:Between January and July of this year, the federal govt has hiked import duty 3 times from 4% to 10% as if that will reduce importation when the market is demanding more gold as a hedge against inflation, falling stock market and continuing devaluation of the rupee.

It's laughable if this is the strategy to reduce the current account deficit. With the value of coal imported being even higher than gold and with India having significant coal reserves, why can't the government speed up coal mining, removing tedious regulations and providing financial incentives for environmentally safe mining methods? If coal is vital to power generation in India, it's all the more reason to focus on this than band aid strategies with gold (or, issuing oil bonds, agriculture bonds or food bonds as accounting gimmicks to hide the problem).

1. Miscellaneous environmentalists breastbeating about loss of invaluable forest cover, biodiversity, rarest of rare species etc
2. Miscellaneous NGOs breastbeating about loss of tribal lands, traditional way of life, sacred mountains etc
3. A waffling, spineless government pulled in every which direction, reluctant to antagonize any group of votes..er..people
4. 3-word summary: Essence of Democracy. EOD.

by goodcitizn Mon Aug 19, 2013 8:31 am

Merlot Daruwala wrote:
1. Miscellaneous environmentalists breastbeating about loss of invaluable forest cover, biodiversity, rarest of rare species etc
2. Miscellaneous NGOs breastbeating about loss of tribal lands, traditional way of life, sacred mountains etc
3. A waffling, spineless government pulled in every which direction, reluctant to antagonize any group of votes..er..people

Amen to that.

by goodcitizn Mon Aug 19, 2013 8:51 am

Merlot Daruwala wrote:I thought it would bounce back after the massive 770 point fall on Friday, but no! Another 400 + points down today with another hour of trading left...

Bought some ICICI Bk shares (down 5% today). Hope it pays off in the long run.

I don't have as good a crystal ball as our Captain Bhankas but I think Sensex will hit 17,000 soon. May even get lower by year-end.

by Marathadi-Saamiyaar Mon Aug 19, 2013 9:11 am

Captain Bhankas wrote:the market has shut chidambaram up after he prescribed what it should do. the people have already shut him up by continuing to buy gold.

If only the Govt. can force the jewelers to account for the source of money the customers are using to buy Gold, there might be some respite. Until then no matter how much duty is imposed, the Desis cannot be dulled when it comes to Gold.

People will have to hide all that (black) money they made in Land dealings in the last few years.

by Seva Lamberdar Mon Aug 19, 2013 9:22 am

Merlot Daruwala wrote:I thought it would bounce back after the massive 770 point fall on Friday, but no! Another 400 + points down today with another hour of trading left...

Bought some ICICI Bk shares (down 5% today). Hope it pays off in the long run.

Do you know how many points you will be ahead today if you had kept the money inside the pillow?

by Captain Bhankas Tue Aug 20, 2013 12:26 am

another 300 points. rupee at 64. congrats evvvwwyrryyyone!

by Propagandhi711 Tue Aug 20, 2013 9:59 am

Captain Bhankas wrote:another 300 points. rupee at 64. congrats evvvwwyrryyyone!

I wonder what this is going to do to banks, wont they be at risk for defaults due to degraded quality of the assets and such?

this is what happens when a tired old douche runs the show at the helm of a party which governs by giving sops to votebanks. oh, but they're "secular" so never mind.

by southindian Tue Aug 20, 2013 10:06 am

Propagandhi711 wrote:
Captain Bhankas wrote:another 300 points. rupee at 64. congrats evvvwwyrryyyone!
I wonder what this is going to do to banks, wont they be at risk for defaults due to degraded quality of the assets and such?

this is what happens when a tired old douche runs the show at the helm of a party which governs by giving sops to votebanks. oh, but they're "secular" so never mind.

They are secular?

by truthbetold Tue Aug 20, 2013 2:44 pm

Gc , merlot
i have to verify but consider this information:
1. Indian coal is law grade in both efficiency and environmental impact.
2. coal from usa is available at historical laws due to abundance of natural gas.
there may be some logic to coal imports.

by Captain Bhankas Wed Aug 21, 2013 1:00 am

Propagandhi711 wrote:
Captain Bhankas wrote:another 300 points. rupee at 64. congrats evvvwwyrryyyone!
I wonder what this is going to do to banks, wont they be at risk for defaults due to degraded quality of the assets and such?

yes. NPAs are on the rise. http://www.moneycontrol.com/news/results/hdfc-bk-q1-net30loan-growth-shrs-fallnpa-rise_919275.html

by Merlot Daruwala Wed Aug 21, 2013 1:06 am

Woo hoo, all in the green today. ICICI Bk up 3%; HDFC Bk up 5.6%.

The market is one bipolar mothafucka.

by Captain Bhankas Wed Aug 21, 2013 1:28 am

woo hoo! my folio was down 30% yesterday and it is down 28.7% today. what's not to yay about!?!

by Merlot Daruwala Wed Aug 21, 2013 1:40 am

I have some big turkeys in my portfolio too: MTNL, L&T and BHEL. I plan to hold on to all three - the latter two because they are good companies going through a tough patch and will eventually bounce back.

I hold MTNL for a different reason - so I never forget how not to invest. I bought it at Rs 200+ in 1998 (on some half-baked analysis about how the book value > market price). It's now at Rs 12. Lesson learned. And remembered every time I look at my portfolio.

by Captain Bhankas Wed Aug 21, 2013 1:49 am

200 to 12 is an epic fall. reminds me of suzlon.

i like the positive spin you have put on the lemon. i have two such lemons (135 --> 40, 98--> 30) in my portfolio and both are bleeding bad. they are the reasons why i have stayed away from the markets for more than a year now. thank you, lemons.

by Guest Wed Aug 21, 2013 1:53 am

Merlot Daruwala wrote: I bought it at Rs 200+ in 1998 (on some half-baked analysis about how the book value > market price). It's now at Rs 12.

hahahahahahah! in 2008, after the equities crash, i withdrew totally from equities (in my MF portfolio) and turned to FMPs and debt schemes where i thought there was zero risk. with the recent spike in bond yields, my MF portfolio is bleeding: NAVs have crashed. there is no place to hide. Sad

by Captain Bhankas Wed Aug 21, 2013 5:23 am

uh oh.

by Merlot Daruwala Wed Aug 21, 2013 5:37 am

Same thought here. With this fall, we're back to Sep 2012. A full year's gain wiped off in a week.

by harharmahadev Wed Aug 21, 2013 9:28 am

I told you so.

I'm not very good at timing the market, but I get the trend right.

India is setting itself on a hyperinflationary spiral. The 'fixes' that India is attempting to deploy won't work. INR will continue to plummet and it might reach an exponential blow-out. If I have to make a wild guess, I'd say Rs 150 to Rs 200 to $1 before the government get's serious about taking action.

Why such a dire prediction, you ask? Let me explain.

Oil is subsidized by the government. With every Rs 1 drop, the Oil import bill goes up by 40k-50k crores. Currently, the govt's budget was based on an exchange rate of Rs 54. At 64+, the budget balloons and makes it unmanageable.

If the govt gets rid of subsidies, inflation will shoot up and that, in turn, will cause interest rates to spike. This will cause the budget to go up drastically (not sure of the exact figures). 6-month T-bill yield in India is upward of 11%.

In case that was not enough, the government announced further welfare/entitlement schemes like the Food Security Act.

There are only 3 ways India can get out of this situation:
1. Grow at 10%+ consistently for a decade (improbable but not impossible)
2. File for bankruptcy
3. Default through inflation.

No. 1 would require economically sound policies and good leadership. India doesn't have that. Plus, the hype about India is waning. So Mr Fickle Investor is looking elseway (say, Africa). I'm not going to bet on a 8-10% REAL growth.

No.2 may be politically unfeasible.

No.3 is the most likely outcome. RBI may try to prevent a hard-landing, but that might prove to be a costly exercise. When the new Govner takes over (Raghu Raman), he might let the Rupee free fall, since he is a believer in free markets.

Magic can happen if oil drops to $40 a barrel and FIIs suddenly fall in love will India again and invest all the money they pulled out of India and then some more. Maybe we can pray to God and crack open a few coconuts at the Siddhi Vinayak temple and see if that helps.

by Marathadi-Saamiyaar Wed Aug 21, 2013 10:18 am

harharmahadev wrote:I told you so.

I'm not very good at timing the market, but I get the trend right.

Magic can happen if oil drops to $40 a barrel and FIIs suddenly fall in love will India again and invest all the money they pulled out of India and then some more. Maybe we can pray to God and crack open a few coconuts at the Siddhi Vinayak temple and see if that helps.

In other words work on building Ayodhya Temple and some more temple and Govt subsidize Mega Yagnas at all temples.

With Egypt, Syria, Al Queda, etc.. Oil is not coming down anytimesoon. Unless Uncle Sam produces a whole lot of gas fast.... even then..

with elections coming no one is cutting back on freeTV and free Idlies.

so there...dont send any dollars to India... Razz

by Marathadi-Saamiyaar Thu Aug 22, 2013 12:22 am

Captain Bhankas wrote:200 to 12 is an epic fall. reminds me of suzlon.

i like the positive spin you have put on the lemon. i have two such lemons (135 --> 40, 98--> 30) in my portfolio and both are bleeding bad. they are the reasons why i have stayed away from the markets for more than a year now. thank you, lemons.

I was a super expert during DOTCOM burst...lost some $30K knew practically sympbols of all IT/net companies (that was the time I was a computer nerd). Luckily, I also gained just as much in Mutual funds...

so it sort of evened out. With that I lost all interest in day trading, computers, stocks, and money making...

Attained Nirvana..in 2001.

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