Election results and markets

Every one seems to be of the opinion that India is going to have a fractured mandate in the elections and the market will correct 10-20% after the results are out. The percentage of the fall is to be determined by the group that comes to power with the maximum fall reserved for a combination of the Left and Mayawati!!
I wonder. In my experience markets rarely, if ever, oblige the popular opinion. Will the markets see a steep decline or will it witness a runaway rally? Only time will tell. For you and me, its best we reserve some cash to take care of opportunities that may come tomorrow.

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Old friends reunite

This weekend was great. Saturday we went to the Alumni Association of our school (AGCS). I met a lot of old friends after over 14 years. I met Irshad, Tabish, Hemant, Debarshi Ganguly, Durjoy Sengupta, Rajni and Kavita after 1995. It felt really nice to see these people. Sandip (Das) is now in Calcutta for a vacation. So, today we met at Tung Fong, Park Street. Sandip and his wife, Sudipta and his wife, Biswajit and me. Sanjoy and Chotu came late, nearly the time when it was time for Bishu and me to leave. It's nice and cold in Calcutta now, so it was good to go to Park Street in the evening. The good thing was I managed to come out without eating a lot, so the new year resolution is on track.

Oil, Liquidity and the Sensex @ 12K

The BSE Sensex – the default benchmark for the Indian equity market – touched 12,000 on Friday last week. There is a sense of euphoria, disbelief and caution in people depending on which group they belong to. There are people who have been waiting for a correction from 6000 and are amazed to see the sensex at double that. There are others who are perennial optimists and expect the market to continue giving them the returns in the way it has in the last 3 years. Milestones like 12000 are a nice point to just stand back and access the overall situation. So, what is the reality of the day? Today, the price of oil is hovering around $70 with the political situation in Iran not getting a whole lot better. Don’t think its going to come down in a while. Interest rates are showing signs of hardening. Prices of gold, silver, steel, aluminium, copper, zinc and sugar are in multi year highs. Real estate prices are going through the roof. So, in a way all asset classes are seeing handsome app...

Porfolio Structuring (PS) Step 1: Evaluate Current Status

The first step to any long term investment plan is to understand where we are at present. So, to start with you need to list down your existing networth. For example, you can have a list as follows: Provident Fund 100,000 PPF 50,000 Bank FD 50,000 Mutual Funds-Equity 150,000 Mutual Funds-Debt 50,000 Cash In Savings Account 30,000 House 2,000,000 Housing Loan -4,000,000 Others 0 Total -1,570,000 A couple of things to note here. 1. I am not calculating the value of any gold/silver jewellery that you may be having. Indians, typically are not very keen on selling their family gold/silver so it really does not count as investment. You can think of it as an additional bonus if you do have gold/silver. 2. I am including the housing loan you may have as a negative here under the assumption that that is your primary home and not a second home bought for investment purpose. Also, I am ...

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