Category: Observations

The Nifty index is the most popular index used to track the Indian equity markets.

The index was launched on November 3, 1995 with a base value of 1000.

Today Nifty closed at 7300 levels.

If one held the Nifty tenaciously for all these years,one would have got a return of around 12% p.a.

The average dividend yield on Nifty stocks has been around 1%-2% but the gain would have been negated  by the impact cost.

The impact cost of holding the Nifty would have been very high.In all these years, there have been 151 changes to the Nifty-that’s an average of 8 changes every year !!

So passive investing in India is actually active investing-a momentum play on the biggest market cap stocks.Here the “active” role is played by the index maintenance folks.

On a different note, is 12% pa that great a return in the Indian  inflation environment of 10% to justify the time,energy,money spent by investors to get the next multi bagger?

I am quite amused by the speed at which our Main Stream Media has started fawning over Narendra Modi. They had spent a good part of the last 14 years demonising him and now have only good words for him.

This reminds me (as a history nut) about how the French Press behaved in 1815.

Napoleon was imprisoned in the island of Elba.He escaped the island and marched onto Paris where he deposed King Louis XVIII and regained power.

The following is a list of Paris newspaper headlines reporting the journey of Napoleon across France, on his return from exile on Elba, March 9 to March 22, 1815:

March 9

THE ANTHROPOPHAGUS HAS QUITTED HIS DEN

March 10

THE CORSICAN OGRE HAS LANDED AT CAPE JUAN

March 11

THE TIGER HAS ARRIVED AT CAP

March 12

THE MONSTER SLEPT AT GRENOBLE

March 13

THE TYRANT HAS PASSED THOUGH LYONS

March 14

THE USURPER IS DIRECTING HIS STEPS TOWARDS DIJON

March 18

BONAPARTE IS ONLY SIXTY LEAGUES FROM THE CAPITAL

He has been fortunate enough to escape his pursuers

March 19

BONAPARTE IS ADVANCING WITH RAPID STEPS, BUT HE WILL NEVER ENTER PARIS

March 20

NAPOLEON WILL, TOMORROW, BE UNDER OUR RAMPARTS

March 21

THE EMPEROR IS AT FONTAINEBLEAU

March 22

HIS IMPERIAL AND ROYAL MAJESTY arrived yesterday evening at the Tuileries, amid the joyful acclamation of his devoted and faithful subjects

I have always maintained that it is impossible to keep secrets in a country like India.The reason is two fold-our sheer numbers makes privacy all but impossible and secondly, we as people, just love to gossip.

An interesting tidbit came to my ears via a banker friend.

A prominent political party gave a mandate for its poll advertising campaign to a leading ad agency.

The ad campaign was launched but soon enough, the “white” funds got exhausted.

The political party then insisted that the ad agency take funds in cash (i.e. black)

The ad agency demurred saying that even if it did, its media partners (TV Channels,Newspapers etc) will not.

A satisfactory solution was found for this knotty problem.

A leading industrialist stepped in-he makes all the payments in cheque on behalf of the political party to the ad agency !

This banker friend of mine is waiting for the results to come out.If this political party comes to power, he will go long the shares of this industrialist’s company.