Day: August 27, 2012

Categories
Stock

The stock that went up 200% in two months

Consider the stock price of this stock on NSE:

27 June 2012:    10.45

27 July 2012:      20.1

27 Aug 2012:      30.25

And the stock is (sound of drumroll): Ashapura Minechem

Now here is an interesting aspect to this whole jacking up of prices.

In these two months, the value of the total delivered shares on NSE is around 9.92 Crores.Now assuming BSE has the same volumes, the value of the delivered quantity on both the exchanges is approximately 20 Crores.

Now the market cap of the company has increased by 160 Crores in the interim.

So an investment of 20 Crores (actually a fraction of that much due to circular trading) can increase the market cap of your company by 160 Crores.

No wonder John Bogle said “We live in a world in which it is far easier to hype the price of a company’s stock than it is to build the intrinsic value of the corporation itself”

 

Categories
Video

Giant spiders cause panic in India

Categories
Music

Raindrops keep falling on my head

Its raining pretty heavily here in Mumbai.Reminded of one of my all time favs

Categories
Quotes

What was that again?

While the industry seems loath to accept the idea that there should be any limits to its size, there are clear problems associated with scale. It becomes harder to devise distinctive strategies. Funds find it more difficult to trade in and out of markets without moving prices against themselves.

An even bigger concern is that size has turned the industry into what is known as a “loser’s game”. This is one in which victory goes not to the player with the best offensive strategy but to the one who makes the fewest mistakes – and has the lowest costs. Hedge fundery has become a loser’s game because the funds themselves are no longer the exotic and small offshoot of mainstream fund management they were in the 1990s. Increasingly, they are the market-wrote Jonathan Ford in FT

Categories
Links

Linkfest:Aug 27, 2012

Some stuff I am reading today morning:

My experiences with deep value investing (ValueInvestorIndia)

How have LIC’s ULIP plans performed so far? (AnandKumar)

Why the gold standard is the world’s worst idea (BusinessInsider)

Merkel tries to calm storm over ECB Strategy (Reuters)

Save your money, it won’t work (TRB)

How Warren Buffett is different from most investors (Aleph)

Beta Arbitrage Strategies:When do they work and why (SSRN)