Good News: Pulses See 34% Growth in Sowing, Prices Likely to Cool Down

We’ve seen prices of dals soaring to over Rs. 200 per kg. And the only way to solve that problem … (Read On…) The post Good News: Pulses See 34% Growth in Sowing, Prices Likely to Cool Down appeared first on Capital Mind .

We’ve seen prices of dals soaring to over Rs. 200 per kg. And the only way to solve that problem … (Read On…) The post Good News: Pulses See 34% Growth in Sowing, Prices Likely to Cool Down appeared first on Capital Mind .

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Inflation Crosses 6%, Trajectory Looks Dangerous Despite A Good Monsoon

Rain or no rain, food prices only seem to be going up. In July High food prices took inflation to … (Read On…) The post Inflation Crosses 6%, Trajectory Looks Dangerous Despite A Good Monsoon appeared first on Capital Mind .

Rain or no rain, food prices only seem to be going up. In July High food prices took inflation to … (Read On…) The post Inflation Crosses 6%, Trajectory Looks Dangerous Despite A Good Monsoon appeared first on Capital Mind .

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Macronomics: There Are Many Reasons to Cut Rates, But 3 Solid Reasons Not To

Raghuram Rajan’s last monetary policy statement as governor comes tomorrow, and the big question is: Will he go out with a bang, by cutting rates? The post Macronomics: There Are Many Reasons to Cut Rates, But 3 Solid Reasons Not To appeared first on Capital Mind .

Raghuram Rajan’s last monetary policy statement as governor comes tomorrow, and the big question is: Will he go out with a bang, by cutting rates? The post Macronomics: There Are Many Reasons to Cut Rates, But 3 Solid Reasons Not To appeared first on Capital Mind .

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Charts: The “Real” Nifty After Inflation Is Struggling To Beat Its 2007 High

You have inflation and you have investments. You want your investments to beat inflation. We have a special thing at … (Read On…) The post Charts: The “Real” Nifty After Inflation Is Struggling To Beat Its 2007 High appeared first on Capital Mind .

You have inflation and you have investments. You want your investments to beat inflation. We have a special thing at … (Read On…) The post Charts: The “Real” Nifty After Inflation Is Struggling To Beat Its 2007 High appeared first on Capital Mind .

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Inflation Stretches to 5.77% in June 2016 as Food Prices Spike

Inflation seems to be going up yet again, as it hits a 5.77% level in June. This is the highest … (Read On…) The post Inflation Stretches to 5.77% in June 2016 as Food Prices Spike appeared first on Capital Mind .

Inflation seems to be going up yet again, as it hits a 5.77% level in June. This is the highest … (Read On…) The post Inflation Stretches to 5.77% in June 2016 as Food Prices Spike appeared first on Capital Mind .

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Inflation Peaks to Highest Since Sep 2014 at 5.76%, And Fuel Price Hikes Not Yet In

Consumer Price Inflation for May 2016 is at a near-two-year high at 5.76%. This is the highest we’ve seen this … (Read On…)

Consumer Price Inflation for May 2016 is at a near-two-year high at 5.76%. This is the highest we’ve seen this … (Read On…)

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CPI Inflation Rises to 5% in October, On a Lower Base Last Year

Consumer Price Inflation came in at 5% for October, the highest in four months. A good reason was the base effect – last year, the index had tapered off and the difference shows in the higher inflation numbers. What we should really worry about is that if the slope of the inflation curve continues as is, we will easily see 7% inflation. Components: They’re Starting To Go Up Again While it’s not a major source of worry just yet, here’s how the Inflation numbers stack up on a component wise look – it seems like food is going back up, as are fuel costs, personal care, and even transport. Fuel costs are up largely due to higher taxes.     Rural Inflation Outstrips Urban In the countryside there’s a much higher concentration of food prices in the commodity basket used, so a spike in food prices means higher inflation for the villagers.… (Read On…)

Consumer Price Inflation came in at 5% for October, the highest in four months. A good reason was the base effect – last year, the index had tapered off and the difference shows in the higher inflation numbers. What we should really worry about is that if the slope of the inflation curve continues as is, we will easily see 7% inflation. Components: They’re Starting To Go Up Again While it’s not a major source of worry just yet, here’s how the Inflation numbers stack up on a component wise look – it seems like food is going back up, as are fuel costs, personal care, and even transport. Fuel costs are up largely due to higher taxes.     Rural Inflation Outstrips Urban In the countryside there’s a much higher concentration of food prices in the commodity basket used, so a spike in food prices means higher inflation for the villagers.… (Read On…)

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The Nifty Adjusted For Consumer Price Inflation Is Still Lower Than 2008

If you put Rs. 10,000 in the Nifty in 2000, and reinvest all dividends it will have grown to Rs. 69,410 today. (From the “Total Returns” index given by the NSE). This means you’ve just had a 7x return on the biggest index in about 15 years. However, if you consider the buying power of the rupee, it has declined due to inflation. If we take the Consumer Price  Index (CPI) and back-cast it all the way to 2000, and then run the same calculation on the Nifty (with dividends reinvested) our answers are very different: As you can see, after adjusting for inflation, even though the Nifty is close to an all time high, the purchasing-power adjusted Nifty is still only a little bit above levels seen in 2011 (the previous peak) and then, much below the effective level in 2008 January. This means all these returns we’re all proud of hasn’t even crossed the highs of the 2008 era, after adjusting for inflation .… (Read On…)

If you put Rs. 10,000 in the Nifty in 2000, and reinvest all dividends it will have grown to Rs. 69,410 today. (From the “Total Returns” index given by the NSE). This means you’ve just had a 7x return on the biggest index in about 15 years. However, if you consider the buying power of the rupee, it has declined due to inflation. If we take the Consumer Price  Index (CPI) and back-cast it all the way to 2000, and then run the same calculation on the Nifty (with dividends reinvested) our answers are very different: As you can see, after adjusting for inflation, even though the Nifty is close to an all time high, the purchasing-power adjusted Nifty is still only a little bit above levels seen in 2011 (the previous peak) and then, much below the effective level in 2008 January. This means all these returns we’re all proud of hasn’t even crossed the highs of the 2008 era, after adjusting for inflation .… (Read On…)

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CPI at Record Low in Oct 2014, But There’s Something Scary About the Inflation Data

CPI Inflation for October 2014 is at a record low of 5.52%, the lowest we have ever seen in the new CPI (which has only been collected since Jan 2011. Last year the same month showed inflation at over 10%, peaking in November 2013 at 11.16%.   You can see the light blue line (last year same time) sloping strongly up, while the dark blue line (current inflation index) is flattening out. Note however that the upslope will end in November (when inflation peaked last year). That means November inflation will be okay, but will December follow through? Every component looks good. Food inflation has fallen to 5.8%, which is on the back of a very high index last year. Fuel inflation too has fallen (but that might not last long if the government will increase taxes on fuel). Housing inflation too has fallen to 8%, and the only thing that’s marginally increased is “Transport” which is anyway at 2.7%.… (Read On…)

CPI Inflation for October 2014 is at a record low of 5.52%, the lowest we have ever seen in the new CPI (which has only been collected since Jan 2011. Last year the same month showed inflation at over 10%, peaking in November 2013 at 11.16%.   You can see the light blue line (last year same time) sloping strongly up, while the dark blue line (current inflation index) is flattening out. Note however that the upslope will end in November (when inflation peaked last year). That means November inflation will be okay, but will December follow through? Every component looks good. Food inflation has fallen to 5.8%, which is on the back of a very high index last year. Fuel inflation too has fallen (but that might not last long if the government will increase taxes on fuel). Housing inflation too has fallen to 8%, and the only thing that’s marginally increased is “Transport” which is anyway at 2.7%.… (Read On…)

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Hedonic Adjustments For Inflation: Shady Ways To Make Things Look Good

Here’s an interesting piece by Zero Hedge on Hedonic Adjustments – in other words, how a 400% increase in price actually becomes a 7% DECLINE in price! You start with this: Which then gets complicated and more complicated to compare, so you do a lot of up and down adjustments and try to put the price of Item A with the price of Item B. But you forget that Item A was 2001 and Item B was 2010, and in 2010 you couldn’t get item A even if you wanted to, or you would pay an obscene price for it. When you forget that and only do the math to equate them: Essentially you decide that in 2001 you would have paid $1345 for what was Item B. But consider this: if you get what is “entry level” in 2001 is different from entry level in 2010, you should be comparing the entry level prices only.… (Read On…)

Here’s an interesting piece by Zero Hedge on Hedonic Adjustments – in other words, how a 400% increase in price actually becomes a 7% DECLINE in price! You start with this: Which then gets complicated and more complicated to compare, so you do a lot of up and down adjustments and try to put the price of Item A with the price of Item B. But you forget that Item A was 2001 and Item B was 2010, and in 2010 you couldn’t get item A even if you wanted to, or you would pay an obscene price for it. When you forget that and only do the math to equate them: Essentially you decide that in 2001 you would have paid $1345 for what was Item B. But consider this: if you get what is “entry level” in 2001 is different from entry level in 2010, you should be comparing the entry level prices only.… (Read On…)

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