Conventional thinking says that the markets should go up when the Central bank, RBI drops interest rates. This belief stems from the ripple effect that a rate cut will have by making loans cheaper, leave more money in borrower’s hands and help companies generate more profits. But, the recent rate…
A weak rupee brought back fears of a widening CAD and high inflation. That virtually sealed hopes of a rate cut in June. RBI’s hawkish stance further toned down investor expectations on a rate cut. The markets turned soft through the week factoring in the fiscal worries, economic expectations and…
Equity aversion has been a natural option for investors who punted on sunrise sectors in 2008 and got badly burnt. The irony is that they chose to wait for their investment errors of 2008 to correct. The wait has hurt them terminally and there is little hope of recouping their…
Quick edit: Investment cycles are usually long and boring. Parallels to a long running soap opera aren’t out of place. One sees daily troubles unfold and engage unusual mind space of watchers. Most investors are too lost in the daily action and get bedeviled in a sea of detail. The…
The week that was has served an important pointer. The story certainly got tough for the risk averse investor. The fall in inflation triggered a sharp fall in bond yields. This effectively closed the option of investing in bonds as most of the gains already seem to be in the…
The favorite pastime that most investors indulge in – index gazing. Investors spend months watching one number for that elusive signal. Often, years pass by simply watching the Index and staying gloriously inactive. The idea of one number guiding decision making is irresistible to the investor who is struggling to…
Quick Edit: ‘The beast isn’t tamed yet’. The RBI governor said this in his own, long, pedantic style. The beast clearly is inflation. The markets didn’t get what it wanted. Rates wouldn’t go down too fast, too soon. Hardly surprising, isn’t it? The central bank makes decisions based on empirical evidence.…
2008 made most of us risk-averse. So, we thought the best way to steer clear from high risk was to stay off Equity. The investment options were limited to debt, gold, and realty. Most investors went for a mix of the three. The strategy worked very well till gold came…
Quick edit: The newspapers of yore and the newspapers of the present offer readers a very different experience. The typical reader would recall reading the headlines , moving onto the local news or other interesting pages in sports , business or entertainment. Today’s newspaper starts with the full page realty ads, followed…
Quick edit: Watching people shop for gold reminds one of how diabetics think at the sweet counter. They know that the buyer may turn bad but can do little about their urges. Between the lure of the metal and shopaholism, they hardly can differentiate what drives them. The knowledge that…
Free fall Friday it was. And, how? A day when safe havens crumbled like they never really were safe. Infosys, gold and silver as a threesome make for odd company. But, they send out a message which investors can ill afford to ignore. Safe havens are safe only at a…
Quick edit: A new high or a new low are not mere benchmarks. They are milestones around which investors reinvent their expectations. A new high catalyses over exuberance and breeds optimists by the dozens. A new low triggers more converts to the pessimists’ camp. Gold hit a 10 month low this week and…