Category: Excerpts

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FIIs may have Chinese instead of Tandoor

Most foreigners are very overweight on India, an investment stance that worked in 2014. However in 2015, India has begun to underperform, while China has been on a roll. With most investors underweight on the country, China’s surge is hurting money managers’ performance.

India is no longer the only game in town. In China, one can deploy large pools of capital, the government seems to be writing a put on the market, valuations are not yet over the top and momentum is very strong. It is only a matter of time before money moves, and the India overweight reduces among global emerging market as well as regional managers. The pain associated with remaining short on China is just too much.–wrote Akash Prakash,Amansa Capital

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The perfect stock idea

“The perfect idea for Curtis,” says Jim Vincent, a managing director at AllianceBern­stein who has been pitching ideas to Macnguyen for years, “would be a company that’s profoundly oversold and hated and has a new CEO who has a chip on his shoulder and a heavy ownership of stock that’s locked up for a long time, in a cyclical business that just troughed.”-from Bloomberg

Any such candidates in the Indian market?

 

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A powerful lesson for investors

Mr. Grantham heard a pitch for American Raceways, a company that was going to introduce Formula One racing in the U.S. “I got hooked,” he says. “We thought we would make money beyond our dreams.”

Mr. Grantham bought 300 shares for himself at $7 and went on vacation to Germany with his wife. When they came home three weeks later, the stock was at $21. He sold everything else he had, borrowed more money and soon owned 900 shares. Months later, American Raceways hit $100. “I figured I had the golden touch.” Were millions of dollars to come?

But the stock began tumbling. It dropped more each day, torturing Mr. Grantham. Americans weren’t ready to embrace Formula One racing after all.

The stock went down so fast that Mr. Grantham worried he wouldn’t be able to pay back his lenders. He managed to exit the position with just enough money to pay his debt.

THE LESSON: “I realized investing wasn’t a game,” says Mr. Grantham. “I swore off speculation for life. I became a cautious, value investor.” (Meanwhile, as the couple’s net worth soared and then plunged, Mr. Grantham’s wife refrained from pointing the finger at him—another “powerful lesson,” this time in the importance of marrying the right person, he says.)-from WSJ

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My takeaway from Narendra Modi’s interview

Narendra Modi gave a detailed interview to HT today.

My takeaway from that interview:

Q. You are heading for France, Germany and Canada in the second week of April. What are your expectations from the visit?

A. I like to combine visits to more than one place when I go on my international tours in order to get more done. I’m from Ahmedabad where we have a saying, ‘single-fare, double journey‘.

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Amongst private insurers,ICICI Lombard clocks highest business

(Disclosure:I am market making in the shares of ICICI Lombard)

Among the private insurers, ICICI Lombard clocked the highest health premium business of Rs 900 crore in April-November, FY15. This made up for 20 per cent of its total premium business in the same period. The corresponding health-to-total share in premium business for the other four private insurers were lower than that of ICICI Lombard — 18 per cent in the case of HDFC Ergo, 15 per cent for Bajaj Allianz, and 10 per cent each in the case of IFFCO Tokio and Tata AIG.

Clearly, ICICI Lombard’s relative higher focus on health insurance was also helping it record better business from it than private sector rivals covered in our analysis.

Among the analysed five private insurers, ICICI Lombard, Bajaj Allianz and IFFCO Tokio were the largest premium collectors from motor insurance with motor premium business figures of Rs 2,230 crore, Rs 1,880 crore and Rs 1,350 crore respectively. Their respective motor-premium-to-total-premium ratios were 50 per cent, 55 per cent and 64 per cent. Clearly, higher premium collections from motor insurance were seen dominating the total general insurance business of these three companies.-from MyDigitalFC