The US Fed finally ended their quantitative easing (QE) program yesterday. The program consisted of the federal reserve printing money to buy a truckload of US Government Bonds and Mortgage Based Securities. This was intended so that the money that was put in the hands of banks who sold these products to the Fed, would have enough to then lend the money out to the economy. The rest of this content is only available to premium members. Register for a premium membership today ! Apart from this content you will get our proprietary research and weekly newsletter too! Already a subscriber? Log in now !… (Read On…)

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We know the Fed Ended QE earlier this week . But almost on cue, Japan’s jumped into the fray, running its printing machine for yet another extension of their Quantitative Easing program. Having printed money up the wazoo and not seeing any inflation that they richly deserve after 20 years (or so they believe), the Bank of Japan today voted to increase their quantitative easing program by 80 trillion yen ($724 billion) from the current level of 70 trillion yen. The Nikkei stock index was up nearly 5% after the announcement. The USDJPY trade went all the way to 111 (remember, it was as low as 78 post the last crisis). The weaker yen spurs Japanese Exports. Japan’s running at 1% inflation, after considering the sales tax increase recently (up from 5% to 8%). They plan to further increase the sales tax next year. We don’t exactly know why. What does this QE mean? … (Read On…)

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The US Fed finally ended their quantitative easing (QE) program yesterday. The program consisted of the federal reserve printing money to buy a truckload of US Government Bonds and Mortgage Based Securities. This was intended so that the money that was put in the hands of banks who sold these products to the Fed, would have enough to then lend the money out to the economy. This program started with $85bn a month of purchases, divided into $45 billion in government bonds and $40 billion in MBS. Additionally, any interest earned or principal repayments (on the MBS) have been reinvested. The QE has been “tapered” down from 2013, going down $10 billion at a time, to reach $15 billion a few months back. Now, it’s been taken off completely. The impact should have been heavily negative – according to the text books. They’re not printing more money! This should be a disaster!… (Read On…)

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The Big Mo Corner by Mohit Satyanand. The rest of this content is only available to premium members. Register for a premium membership today ! Apart from this content you will get our proprietary research and weekly newsletter too! Already a subscriber? Log in now !… (Read On…)

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You could be bullish for India: it’s been doing well. In fact, in 2014, the returns on the index have been ludicrously oversized in comparison. The Nifty is really the only index that has a huge double digit return, among the big guys around the world. The US, even with all it’s new found growth, saw the S&P 500 up only 6% for the year. (This is each index, in its own local currency) And India is the best performer in the BRIC set: The 27% return in 2014 puts us right on top of every thing else. Where will we be in December, though? It does look like a lot of expectations are built into India’s valuations. We better start showing results soon!… (Read On…)

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The markets have seen quite some euphoria over the last few months. Since May this year, the Nifty has been hitting unprecedented levels, touching an all-time high of 8173.9 at the close of the day of 8 th September . Ever since Election results came out in May, the markets seem to have taken very kindly to the mandate. The Sensex too saw an all-time high on the same day, hitting 27,354.99 . Since the Nifty is representative of all the industries put together, it would be interesting to see, sector-wise, which industries have seen maximum upswing during this period, and which have under-performed. Some sectors seem to have reacted very positively to the arrival of a new government at the centre, while others have under-whelmed. We do this by comparing the Nifty to other industry-specific indices (e.g. CNX Midcap, CNX Energy, CNX Pharma and so on). Since we’re interested in the movement of the shares since Election Results day, we tweak our analysis slightly.… (Read On…)

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Capital Mind wishes you and your family a Very Happy Diwali 2014! This is the first Diwali at Capital Mind Premium – we started just after Diwali in November 2013, so it’s almost a year of craziness gone by. The rest of this content is only available to premium members. Register for a premium membership today ! Apart from this content you will get our proprietary research and weekly newsletter too! Already a subscriber? Log in now !… (Read On…)

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Here’s wishing you a very Happy Diwali! Here’s the eighth edition of the Capital Mind Prediction Series, which tells you that it’s darn difficult to predict anything with reasonable success. Which is probably why last year I succumbed to the idiocy of making weasel rules – that is, making just two of three elements of Brilliant but Useless Predictions . What Happened In The Last Year Firstly, the markets went nuts. I mean absolutely nuts. The one year return, since last Diwali, on the headline Nifty Index alone, is 27% with the Nifty moving from 6,300 to 8,000. This has been a great year for stocks. The Biggest Sector Moves weren’t in the Nifty, really. Smallcaps did the best – over 58% since last Diwali, but Midcaps weren’t too far behind at 50%. The Nifty went up 27%. Outperforming everything else was Auto, which moved up over 50%. We really don’t know why because car sales have been flat through the period, and even though we’ve seen an excise duty cut, sales haven’t gone up quite that much.… (Read On…)

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Too many articles have come out decrying the order by the Government to merge FT and NSEL . They all quote the same thing – FT was just an investor and therefore it should not bear any liability greater than the amount of money they invested into it. It’s against the concept of limited liability. I would have believed this if there was no five letter word “Fraud” involved. For instance, I think that it’s perfectly fine that Vijay Mallya can spend his personal money while Kingfisher owes lots of money to banks. Because his personal liability is different from that of the company. He is not required to pay back the company’s debt. Of course, he could be, if any of two things happen: If Mallya has fraudulently embezzled Kingfisher funds or conspired with it to fraud someone else, it would not be an overreach to use this information to demand that he pay back such loans too. … (Read On…)

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I went to a Coffee Day today and it has the following notice, prominently displayed at the entrance: What it says is: As per instructions received from Economic Offense Wing – Crime Branch, Mumbai and Additional Commissioner of Police, Mumbai Entry is prohibited for representatives, Staff and Employees of: M/S Vihaan Direct Selling (India) Pvt. Ltd. M/S QNET Ltd. Hong Kong M/S Transview Enterprise India Pvt. Ltd. M/S Vanmala Hotels, Travel and Tourism Services Pvt. Ltd. By Order, Cafe Coffee Day…. This is very cool. The MLM scams being perpetrated by the QNet types have been pushed at all sorts of Coffee spots. Mostly, the way they operate is: Call people over to a Coffee day for a meeting to discuss “a business proposition” Hard sell them the scam MLM called QNet Make them pay a few lakhs for entry so they can find the next bakras to call to the Coffee Day next week Rinse, Lather, Repeat Coffee day has perhaps figured out this is a serious problem for their own image.… (Read On…)

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