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Optionalysis: Using the Put/Call Ratio on Stocks Near Expiry For Option Trades (Part 1)

by Paul Joseph July 30, 2015 Featured

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Portfolio: Rejig of the Long Term Portfolio, And Adding Two Stocks

by Paul Joseph July 27, 2015 Featured

We’ve decided to add two more stocks to the Long Term Portfolio. We’ll be adding more as times go by, but here’s the major segment of the change. 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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The Big Mo Corner: Money Buys Half?

by Paul Joseph July 23, 2015 Featured

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Premium: Of Sun Pharma, Infy and Some Results That Spooked The Day

by Paul Joseph July 23, 2015 Featured

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Optionalysis: Retail Traders Short Options More than Any Other Market Participant, and Smart Money OI Sets Direction

by Paul Joseph July 20, 2015 Featured

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Real Estate To Fall Big Time, Says Ambit. The Data Seems To Agree.

by Paul Joseph July 20, 2015 Featured

A big Ambit report is doing the rounds – they predict that real estate will fall big time . We are seeing a broad-based real estate pullback, with prices correcting in most tier-1 and tier-2 cities alongside sharp drops in transaction and new launch volumes. The drivers for this slowdown are a mix of supply-side factors (banks have pulled back lending to developers) and demand-side factors (the Black Money Bill has created fear amongst speculators). The result is not just a drop in demand for building materials and challenges for lenders with big mortgage, LAP and housing finance books, but also a generalised slowdown in GDP growth, as the sector which drives 50% of India’s capex and 30% of its jobs conks off. The drivers, they say: Heavy inventory (Mumbai and Delhi have over 10 quarters of unsold apartments) Property prices are falling in Tier 2 cities as well Foot falls at registration offices have fallen Banks have cut lending to RE esp commercial RE Subsidies have been cut, so pilfering and parking in RE has been curtailed Squeeze on black money through the black money bill Rise in the “guidance value” rates that increase the “white” component of a purchase Some Good Charts ICICI has the most exposure to RE: Indiabulls housing has the highest relative LAP (Loan against Property) portfolio: India has one of the highest spreads between rental yields and interest rates: Our view:A Fall is on the Cards We have been noticing a slow down in real estate for around a year now, and it’s looking rough.… (Read On…)

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Cloud Services Eat Up Indian IT Outsourcing Earnings

by Paul Joseph July 16, 2015 Featured

I’ve been bearish on IT in the longer term, and in a long post I explain why I think we are at an inflexion point for Indian IT . Over the last quarter, results have been pathetic: HCLTech , Wipro and Infy showed less than 5% earnings growth YoY, and TCS and Tech Mahindra actually showed -30% or lower earnings growth for the March quarter. While TCS had a one time component (bonus) we saw their recent results for the June quarter showing less than 5% earnings growth YoY. And Wall Street Journal has a story on how cloud services are eating up IT sector earnings : The value of outsourcing deals signed in 2014 shrank 17% to $120.4 billion from $145.5 billion a year earlier, according to consulting company KPMG LLC. Indian companies are losing business to firms that have led the way into the cloud, such as International Business Machines Corp., Amazon.com Inc. … (Read On…)

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RBI Makes Useless Prepaid Card Rules for Metro Transit Systems, What Were They Thinking?

by Paul Joseph July 15, 2015 Featured

The RBI has new “ Guidelines for Prepaid Instruments for Mass Transit System “. This is like telling people now, in 2015, that you are allowed to wear a seat belt inside a car. (Meaning: we’re doing it already!) Mass transit systems like the Mumbai railways, the Delhi Metro or even the tiny little Bangalore Metro have had prepaid cards or tickets for a very very long time. Bangalore’s bus system thrives on multiple layers of prepaid tickets (monthly, weekly, daily!). Season passes for many commute types have been available forever, so why these rules? Because RBI says the word “semi closed”. The Mass Transit system (like Railways) can have other merchants on their platforms, where you could potentially use the card to make payments. I presume this is for purchasing food or water from the platform vendors, for instance. Here’s the rules: The semi-closed PPIs will be issued by the mass transit system operator (PPI-MTS) after authorisation under the Payment and Settlement Systems Act, 2007 to issue and operate such semi-closed PPIs; The PPI-MTS will necessarily contain the Automated Fare Collection application related to the transit service to qualify as PPI-MTS; Apart from the mass transit system, such PPI-MTS can be used only at other merchants whose activities are allied to or are carried on within the premises of the transit system ; The PPI-MTS issuer will ensure on-boarding of merchants (only those permissible as under (iii) above) following due procedure applicable to any other PPI issuer; The PPI-MTS will have minimum validity of six months from the date of issue; The issuer may decide upon the desired level of KYC, if any, for such PPIs; The PPI-MTS issued may be reloadable in nature and at no point of time the value / balance in PPI can exceed the limit of Rs. … (Read On…)

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Greece Has To Kneel, Beg and Completely Capitulate, Says New Deal

by Paul Joseph July 13, 2015 Featured

Greece finally has a deal. We don’t know if this is agreed upon in pure exhaustion after 17 hours of negotiations, but it’s something that involved total capitulation by Greece . It is even worse than the deal that Greece was getting earlier (before the referendum). It gives Tsipras, the Greek PM, three days to get the major demands passed through the Greek parliament. We saw a few things earlier, in our post, which I’ll paste here: What Now? By July 15, Tsipras must do the following, through parliament: they have to raise the sales tax, and cut pensions. Any misses in the deficit/surplus expected will automatically trigger some very specific spending cuts Greece must keep the statistics and the privatization piece completely independent of the Greek government (or limit the influence) Once this is done, the parliaments of Germany, Austria, Holland, Finland and others that previously opposed a deal will have to say okay to doing the bailout.… (Read On…)

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CPI Inflation for June 2015 at 5.4%, Highest in 8 months But Not In Troublesome Zone Yet

by Paul Joseph July 13, 2015 Featured

Consumer price inflation picked up a little more than expected in June 2015, with the index moving up 5.4% more than the same time last year. This is the highest headline number since October 2014, and a little surprising since there wasn’t anything like this that was expected: Both Rural and Urban inflation have perked up, and the increase in inflation is much more in rural: Food inflation is up over the last month , but so are every other subcomponent  except education and housing. The upward pressure on inflation is surprisingly large. And finally, what is a serious worry: Core inflation comes back up to the highest level since October 2014. Remember that core inflation is the index minus food and fuel. If we remove those, core inflation is up to 4.6%, the highest since October 2014. This is important because in October 2014, crude crashed. That took a lot of prices down.… (Read On…)

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