U.S.
By Lu Wang - Feb 25, 2012 10:31 AM GMT+0530
Saturday, February 25, 2012
LOOK for YEARLY HIGHS...ACROSS!!!!!!!
U.S. stocks rose this week, driving the Standard & Poor’s 500 Index to the highest level since 2008, after Greece got a bailout and better-than-expected data boosted confidence in the world’s largest economy……………..
--------The beauty part of markets is…every body
taliking about the US slow down, lack of growth and EUROPE crisis, IRAN-ISREAL
likely war, China growth may halve, emerging markets problems due to rising
CRUDE and so on….. Need not to mention again, I took DAX as my INDICATOR.
The markets across the globe have registered a
decent growth of around 15% from the beginning of the New Year, where as some
stocks rewarded more than double to the investors. The surprising part is, most
of the traders lost heavily but the institutions and the promoters who invested
gain the most.
The classic example, study the Bharti management
decisions to buy their stock. They bought at the lowest level. There are many
companies who bought their shares in open market at their lowest level. The regular
investors who are waiting on the sidelines finding difficult to take call are
soliciting for the good time to buy where as I suggested to buy during my New
Year greeting’s time. Some invested though small but enjoyed the rally.
Pls wait for the dips, this time till the market
settles around 5100 region and enjoy the up-move. The very chances are in
favour of the BULLS who could push NIFTY to cross the yearly HIGH.
Thursday, February 23, 2012
Leadership in Market Operation!!!!!
.....12 Leadership Traits You Need to Thrive in Tough Times
By Carol Tice Entrepreneur – Sat 18 Feb, 2012 12:09 AM IST
So what does it take to lead a small business through this ongoing economic mess? The blogosphere is humming with ideas lately. Here's a roundup of the important traits for entrepreneurs in 2012:
1. Listen. Tune in to what workers and customers are saying, and you'll find great ideas for how to move forward.
2. Give credit. Workers love leaders who acknowledge their ideas.
3. Be yourself. In our age of sound bites and phony smiles, tell your story honestly. It's rare and refreshing, and makes workers feel like they know you -- and want to help you succeed.
4. Communicate. So much company dysfunction can be prevented with clear communication. Otherwise, workers are in the dark. And soon, they won't care.
5. Don't be trendy. Avoid the "strategy du jour" problem. Choose a course and stick to it.
6. Beat anxiety. Stop worrying and turn your negative emotions -- regret, fear, sadness -- into teachers that help shape your character.
7. Be service-oriented. Leaders can be sort of self-involved, forgetting that they are in a position of leadership. To serve customers, shareholders and workers stay focused on others.
8. Be accountable. Define the results you want, and acknowledge when a screw-up is your fault.
9. Use empathy. Demographic changes have foisted more and more women into the workplace. Make sure your communication and leadership style is a fit for today's workforce.
10. Share the big picture. If your workers don't know the company's overall goals, it can be hard for them to solve problems. That leaves you having to micromanage every problem instead of being able to delegate and offer guidance.
11. Keep your cool. The days when being a screamer worked are long gone. If workers are worried about whether you're in a good mood today or not, little gets done.
12. Think like an immigrant. When you arrive on new shores, you often see the business world with fresh eyes. Use your unique perspective to spot opportunities others are missing.
This article originally posted on Entrepreneur.com
By Carol Tice Entrepreneur – Sat 18 Feb, 2012 12:09 AM IST
So what does it take to lead a small business through this ongoing economic mess? The blogosphere is humming with ideas lately. Here's a roundup of the important traits for entrepreneurs in 2012:
1. Listen. Tune in to what workers and customers are saying, and you'll find great ideas for how to move forward.
2. Give credit. Workers love leaders who acknowledge their ideas.
3. Be yourself. In our age of sound bites and phony smiles, tell your story honestly. It's rare and refreshing, and makes workers feel like they know you -- and want to help you succeed.
4. Communicate. So much company dysfunction can be prevented with clear communication. Otherwise, workers are in the dark. And soon, they won't care.
5. Don't be trendy. Avoid the "strategy du jour" problem. Choose a course and stick to it.
6. Beat anxiety. Stop worrying and turn your negative emotions -- regret, fear, sadness -- into teachers that help shape your character.
7. Be service-oriented. Leaders can be sort of self-involved, forgetting that they are in a position of leadership. To serve customers, shareholders and workers stay focused on others.
8. Be accountable. Define the results you want, and acknowledge when a screw-up is your fault.
9. Use empathy. Demographic changes have foisted more and more women into the workplace. Make sure your communication and leadership style is a fit for today's workforce.
10. Share the big picture. If your workers don't know the company's overall goals, it can be hard for them to solve problems. That leaves you having to micromanage every problem instead of being able to delegate and offer guidance.
11. Keep your cool. The days when being a screamer worked are long gone. If workers are worried about whether you're in a good mood today or not, little gets done.
12. Think like an immigrant. When you arrive on new shores, you often see the business world with fresh eyes. Use your unique perspective to spot opportunities others are missing.
This article originally posted on Entrepreneur.com
Tuesday, February 14, 2012
TATASTEEL NEWS!!!
THOSE WHO ASKED FOR THE NEWS FLOW FROM TATASTEEL.......
I SUGGESTED PEOPLE TO WAIT FOR THE NEWS WHEN IT IS CROSSING 406-409.....MARKET KNOWS, SMELLS...AND FOLLOWS...OFCOURSE!!!!!!!!!!!!
---------------------------------
Tata Steel raises prices by Rs 1,000/tonne
Press Trust of India / New Delhi Feb 10, 2012, 17:51 IST
Tata Steel has hiked prices of the metal alloy in the domestic market by Rs 1,000 per tonne for February, a top company official said today.
"We have increased the prices by about Rs 1,000 per tonne in February," the company's Chief Financial Officer Koushik Chatterjee said in an investor conference call. He added that there is an uptrend in demand in the domestic market, particularly for the long products.
New prices are in the range of Rs 37,000 per tonne, industry sources said, adding that Tata Steel had also increased prices marginally last month for the long products.
Chatterjee, however, did not elaborate about the product categories in which the prices have been raised.
The announcement comes barely a few days after Steel Authority of India (SAIL) increased prices by about 3.9% for the current month for certain long products like TMT Bars and angles, which are used in construction sector, mainly for civil jobs.
During the first nine months of the current fiscal, the demand for steel in the country has risen by just about 5% and now the companies are pinning hope on RBI easing the monetary policy for the revival of demand.
The Tata Steel CFO also said the company has kept a capex of $2.5 billion (about Rs 12,500 crore) for the next fiscal, out of which $ 800 million (about Rs 4,000 crore) will be spent on its upcoming new steel plant of 6 million tonnes capacity at Kalinganagar, Odisha.
Besides, the company will spend $600 million on its European operations and about $400-500 million on its new 2.9 million tonne capacity at Jamshedpur, which is slated to be commissioned in March, he said.
Post commissioning, Tata Steel will have a domestic capacity of about 10 million tonnes. The company is expecting additional sales of one million tonnes in the next fiscal, after the new unit gets operational, Chatterjee said. In the October-December quarter, the company had posted a consolidated net loss of Rs 602.67 crore, its first quarterly loss in more than two years.
The loss was largely caused by Rs 741.70 crore write down on inventories of raw materials and finished goods, especially in Tata Steel Europe, Chatterjee said, adding that demand in the European market is expected to pick up in the second half of the next fiscal. The company's shares closed at Rs 475 on the BSE, up 5.3% from the previous close.
I SUGGESTED PEOPLE TO WAIT FOR THE NEWS WHEN IT IS CROSSING 406-409.....MARKET KNOWS, SMELLS...AND FOLLOWS...OFCOURSE!!!!!!!!!!!!
---------------------------------
Tata Steel raises prices by Rs 1,000/tonne
Press Trust of India / New Delhi Feb 10, 2012, 17:51 IST
Tata Steel has hiked prices of the metal alloy in the domestic market by Rs 1,000 per tonne for February, a top company official said today.
"We have increased the prices by about Rs 1,000 per tonne in February," the company's Chief Financial Officer Koushik Chatterjee said in an investor conference call. He added that there is an uptrend in demand in the domestic market, particularly for the long products.
New prices are in the range of Rs 37,000 per tonne, industry sources said, adding that Tata Steel had also increased prices marginally last month for the long products.
Chatterjee, however, did not elaborate about the product categories in which the prices have been raised.
The announcement comes barely a few days after Steel Authority of India (SAIL) increased prices by about 3.9% for the current month for certain long products like TMT Bars and angles, which are used in construction sector, mainly for civil jobs.
During the first nine months of the current fiscal, the demand for steel in the country has risen by just about 5% and now the companies are pinning hope on RBI easing the monetary policy for the revival of demand.
The Tata Steel CFO also said the company has kept a capex of $2.5 billion (about Rs 12,500 crore) for the next fiscal, out of which $ 800 million (about Rs 4,000 crore) will be spent on its upcoming new steel plant of 6 million tonnes capacity at Kalinganagar, Odisha.
Besides, the company will spend $600 million on its European operations and about $400-500 million on its new 2.9 million tonne capacity at Jamshedpur, which is slated to be commissioned in March, he said.
Post commissioning, Tata Steel will have a domestic capacity of about 10 million tonnes. The company is expecting additional sales of one million tonnes in the next fiscal, after the new unit gets operational, Chatterjee said. In the October-December quarter, the company had posted a consolidated net loss of Rs 602.67 crore, its first quarterly loss in more than two years.
The loss was largely caused by Rs 741.70 crore write down on inventories of raw materials and finished goods, especially in Tata Steel Europe, Chatterjee said, adding that demand in the European market is expected to pick up in the second half of the next fiscal. The company's shares closed at Rs 475 on the BSE, up 5.3% from the previous close.
Tuesday, February 07, 2012
China growth could halve if Europe
crisis worsens - IMF
(Reuters) - China 's
annual economic growth could be cut nearly in half this year if Europe's debt
crisis tips the world economy into a recession, putting pressure on Beijing
The Fund outlined its central
scenario for China
The China Economic Outlook published on Monday
showed that under the IMF's "downside" forecast for the global
economy, China
"In the unfortunate event such a downside
scenario becomes reality, China
Stimulative measures could include cuts in
consumption taxes, subsidies for consumers, corporate incentives to expand
investment, fiscal support for smaller firms and more spending on low-cost
housing social safety nets, the fund said.
Such fiscal stimulus, adding up to 3 percent of
GDP, would help mitigate declines in economic output, it said.
A Reuters poll in January showed China
Falling inflation will enable the People's Bank
of China to fine-tune policy to support growth through its open market
operations in the coming weeks, the IMF said. It said the central bank could
opt to cut banks' reserve requirement ratio again if capital inflows remain
subdued.
The central bank announced a cut in the amount
of cash that banks have to hold as reserves -- the first such cut in three
years -- at the end of November. More reserve ratio cuts are expected in coming
months.
(Reporting by Kevin Yao; editing by Patrick
Graham)
Monday, February 06, 2012
CORNER STONE OF VEDANTA GROUP......
6 Feb, 2012, 11.05AM IST,
Tarun Jain: The man who has been stoking Anil Agarwal's growth engine since 25 years
MUMBAI: In April 2007, Anil Agarwal, chairman of the London-listed Vedanta Resources, threw a private party in a south Mumbai hotel to celebrate the acquisition of Sesa Goa from Mitsui of Japan. Amidst a swarm of 200-odd people, a gentleman of middle age and medium height was seen taking Agarwal around and introducing him to guests, mostly pin-striped bankers. When not in Agarwal's company, the man would retreat to a corner, with a lime juice for company.
The bloke in the corner is at Agarwal's side not just at such glitzy shindigs but at virtually every step of Vedanta's growth path. That's Tarun Jain, 51, who is never in the spotlight but almost always the reason for it. Jain hates crowds and speaks very little, but don't let that fool you. He's the finance whiz who has implemented Agarwal's growth ambitions for the past 25 years. He's the bean counter-turned-game changer who has been at the forefront of executing Agarwal's vision of transforming a small cable company into a global conglomerate worth $11 billion with interests in mining, metals and energy.
Ask Jain to list out his accomplishments and he's likely to dismiss it with a shrug. "Our chairman is a visionary. We are in charge of execution," is all that he would say when this writer met him with a request for an interview, which he turned down. Agarwal too did not participate in this story. Emails sent to his office and subsequent follow-ups failed to elicit a response. Indeed, both Agarwal and Jain are private people. Another similarity: they are humble yet aggressive. But that's where the likeness ends. If Agarwal sees the large canvas, Jain is the nuts and bolts man, fitting pieces big and small into the big picture - a perfect recipe for a high-octane growth formula.
"They complement each other," says a person who has worked closely with them for a few years at Sterlite Industries, Vedanta's flagship in India. "Jain's approach to work is commonsensical," says Vallabh Bhanshali, founder-chairman of Enam, a Mumbai-based financial services company. "He identifies himself with the cause of the organisation, uses his intelligence for the cause, and works for the company and its founder."
Jain's minimalist manners and garb - he's dressed in a regular full sleeves shirt on most days in office and puts on a jacket when he goes out for a meeting - are in stark contrast to his reservoir of experience. In nearly 30 years as a finance professional, he has risen from a company secretary and chief accountant to a finance director. Till March 31, 2011, he was director (finance) at Agarwal's Indian metals and mining flagship Sterlite Industries. He's now in the chairman's office in a more strategic role that goes beyond finance matters. But finance is the arena in which Jain has earned his biggest spurs over the past 25-odd years. He's helped raise money for new projects and to finance big-bang acquisitions inside and outside India with a slew of one-of-a-kind finance instruments.
These range from an initial share sale of Sterlite at a premium in 1988 to the listing of the company's shares on the New York Stock Exchange in 2007, to a $2-billion issue of American depository receipts in the same year. He was also at hand when Agarwal had to raise some $8 billion to finance the acquisitions of Sesa Goa and Cairn India. "His creativity does not allow him to accept anything only because it's popular or it's established," says Bhanshali about "kid brother" Jain, whom he knows since the latter's early days in Sterlite.
"Tarun may not have invented everything but he definitely has implemented everything in finance," adds the Enam chairman. Yet, at times, the group's financial ingenuity hasn't found all-round approval - not from small investors, for sure. In 2002, Sterlite earned the wrath of minority investors when it appeared to be forcing them to tender their shares by mailing cheques to them; the company had to withdraw the proposal because of the ensuing protests.
Six years later, investors were once again up in arms against Vedanta's proposal to restructure businesses of Sesa Goa, Sterlite and Madras Aluminium into three commodity-focused groups. Minority shareholders in Sterlite, in which Vedanta holds a little over 60%, felt they were being short-changed because the new structure would increase their exposure to seemingly riskier assets (such as mines in Zambia) and reduce their presence in the faster-growing domestic aluminium business. The company shelved the plan.
The flip side: Investors are richer for the efforts of the Agarwal-Jain duo. A 100 investment in Sterlite's initial offering in 1988 would have burgeoned to a little under 87,000 today. You could attribute some of Jain's acumen in creating wealth to his quest for academic excellence.
He regularly topped the class in school, was a gold medallist at the under-grad level and a ranker holder in the CA and CS programmes. The small-town boy from Rajasthan's Ajmer district moved to Mumbai along with three friends when he was a second-year student of BCom. From the refuge of hostels in the city, Jain would put 18 hours daily into his studies.
His first job was with Indian Rayon, a part of the Aditya Birla Group, as a management trainee. He lasted nine months there till he was asked to shift to an upcoming cement unit in Karnataka. He then moved to real estate firm Kalpataru; and then to Sterlite in 1984 when Anil Agarwal and his brother Navin were running their cable firm out of a 2,500 sq feet office in Mumbai's commercial district of Nariman Point.
Anand Rathi, founder-chairman of the eponymous financial services firm, was a president at the Birla company when Jain left. Rathi says he was impressed with Jain's decision to leave a big group. "It showed that he was focused on what he wanted to achieve," says Rathi, who remembers him as "a man of numbers, with an eye for detail and a quiet risk-taker".
Risk-taking is also a passion for Jain when he is outside the Vedanta universe. A person close to him says Jain is an active investor in equities. Bhanshali points out that Jain's market-related activities are aimed at giving back to the society. "He once took me to the Andheri hostel where he once stayed and told me he wants to do something for the students at the hostel," Bhanshali adds.
Clearly, Jain is one of the increasing breed of investors who believe that greed and giving are both good and are two sides of the same coin.
http://economictimes.indiatimes.com/news/news-by-company/corporate-trends/tarun-jain-the-man-who-has-been-stoking-anil-agarwals-growth-engine-since-25-years/articleshow/11771409.cms?curpg=1
Tarun Jain: The man who has been stoking Anil Agarwal's growth engine since 25 years
MUMBAI: In April 2007, Anil Agarwal, chairman of the London-listed Vedanta Resources, threw a private party in a south Mumbai hotel to celebrate the acquisition of Sesa Goa from Mitsui of Japan. Amidst a swarm of 200-odd people, a gentleman of middle age and medium height was seen taking Agarwal around and introducing him to guests, mostly pin-striped bankers. When not in Agarwal's company, the man would retreat to a corner, with a lime juice for company.
The bloke in the corner is at Agarwal's side not just at such glitzy shindigs but at virtually every step of Vedanta's growth path. That's Tarun Jain, 51, who is never in the spotlight but almost always the reason for it. Jain hates crowds and speaks very little, but don't let that fool you. He's the finance whiz who has implemented Agarwal's growth ambitions for the past 25 years. He's the bean counter-turned-game changer who has been at the forefront of executing Agarwal's vision of transforming a small cable company into a global conglomerate worth $11 billion with interests in mining, metals and energy.
Ask Jain to list out his accomplishments and he's likely to dismiss it with a shrug. "Our chairman is a visionary. We are in charge of execution," is all that he would say when this writer met him with a request for an interview, which he turned down. Agarwal too did not participate in this story. Emails sent to his office and subsequent follow-ups failed to elicit a response. Indeed, both Agarwal and Jain are private people. Another similarity: they are humble yet aggressive. But that's where the likeness ends. If Agarwal sees the large canvas, Jain is the nuts and bolts man, fitting pieces big and small into the big picture - a perfect recipe for a high-octane growth formula.
"They complement each other," says a person who has worked closely with them for a few years at Sterlite Industries, Vedanta's flagship in India. "Jain's approach to work is commonsensical," says Vallabh Bhanshali, founder-chairman of Enam, a Mumbai-based financial services company. "He identifies himself with the cause of the organisation, uses his intelligence for the cause, and works for the company and its founder."
Jain's minimalist manners and garb - he's dressed in a regular full sleeves shirt on most days in office and puts on a jacket when he goes out for a meeting - are in stark contrast to his reservoir of experience. In nearly 30 years as a finance professional, he has risen from a company secretary and chief accountant to a finance director. Till March 31, 2011, he was director (finance) at Agarwal's Indian metals and mining flagship Sterlite Industries. He's now in the chairman's office in a more strategic role that goes beyond finance matters. But finance is the arena in which Jain has earned his biggest spurs over the past 25-odd years. He's helped raise money for new projects and to finance big-bang acquisitions inside and outside India with a slew of one-of-a-kind finance instruments.
These range from an initial share sale of Sterlite at a premium in 1988 to the listing of the company's shares on the New York Stock Exchange in 2007, to a $2-billion issue of American depository receipts in the same year. He was also at hand when Agarwal had to raise some $8 billion to finance the acquisitions of Sesa Goa and Cairn India. "His creativity does not allow him to accept anything only because it's popular or it's established," says Bhanshali about "kid brother" Jain, whom he knows since the latter's early days in Sterlite.
"Tarun may not have invented everything but he definitely has implemented everything in finance," adds the Enam chairman. Yet, at times, the group's financial ingenuity hasn't found all-round approval - not from small investors, for sure. In 2002, Sterlite earned the wrath of minority investors when it appeared to be forcing them to tender their shares by mailing cheques to them; the company had to withdraw the proposal because of the ensuing protests.
Six years later, investors were once again up in arms against Vedanta's proposal to restructure businesses of Sesa Goa, Sterlite and Madras Aluminium into three commodity-focused groups. Minority shareholders in Sterlite, in which Vedanta holds a little over 60%, felt they were being short-changed because the new structure would increase their exposure to seemingly riskier assets (such as mines in Zambia) and reduce their presence in the faster-growing domestic aluminium business. The company shelved the plan.
The flip side: Investors are richer for the efforts of the Agarwal-Jain duo. A 100 investment in Sterlite's initial offering in 1988 would have burgeoned to a little under 87,000 today. You could attribute some of Jain's acumen in creating wealth to his quest for academic excellence.
He regularly topped the class in school, was a gold medallist at the under-grad level and a ranker holder in the CA and CS programmes. The small-town boy from Rajasthan's Ajmer district moved to Mumbai along with three friends when he was a second-year student of BCom. From the refuge of hostels in the city, Jain would put 18 hours daily into his studies.
His first job was with Indian Rayon, a part of the Aditya Birla Group, as a management trainee. He lasted nine months there till he was asked to shift to an upcoming cement unit in Karnataka. He then moved to real estate firm Kalpataru; and then to Sterlite in 1984 when Anil Agarwal and his brother Navin were running their cable firm out of a 2,500 sq feet office in Mumbai's commercial district of Nariman Point.
Anand Rathi, founder-chairman of the eponymous financial services firm, was a president at the Birla company when Jain left. Rathi says he was impressed with Jain's decision to leave a big group. "It showed that he was focused on what he wanted to achieve," says Rathi, who remembers him as "a man of numbers, with an eye for detail and a quiet risk-taker".
Risk-taking is also a passion for Jain when he is outside the Vedanta universe. A person close to him says Jain is an active investor in equities. Bhanshali points out that Jain's market-related activities are aimed at giving back to the society. "He once took me to the Andheri hostel where he once stayed and told me he wants to do something for the students at the hostel," Bhanshali adds.
Clearly, Jain is one of the increasing breed of investors who believe that greed and giving are both good and are two sides of the same coin.
http://economictimes.indiatimes.com/news/news-by-company/corporate-trends/tarun-jain-the-man-who-has-been-stoking-anil-agarwals-growth-engine-since-25-years/articleshow/11771409.cms?curpg=1
BEARS PRESENCE ???????
The Nifty is well place above the 4850 technical support at the bottom and may test 5480-5440 at the top. There are some good news to be released like the STT reduction and GST. The results of HLL, SBI and auto majors may put pressure on the top but the continued positive outlook couple with RIL buy back plan may keep the Nifty float above 5080. The Nifty could bounce back to a level where it enjoyed 6 months ago. So it is very likely that the markets are not interested to become bearish for now. The Southward move that may become a correction in the rise but the sentiment is very positive. The stock specific moves will be common for next 2-3 weeks. The announced results from the big are satisfactory and midcaps earnings are good, market accepted in the current scenario.
The cool doubling of investment in Vodafone to 11.4% is apt and a wise decision from Piramals. The likely listing of Vodafone, the world’s number on in revenues, will get higher valuations in the current scenario. The markets are enjoying the FII inflow, especially to counties like India
The catastrophic blow to the telecos, especially to the foreign entrants may create some headache to the centre but can be dealt with the relief came from the then FM Chidambaram. The Cong. Has some brave face to accept the opposition challenge but the banks, especially the PSU may loose some money in the issue. The SBI is expressing 1100cr, PNB and BOB are in similar problems. The pain will be like, after operation patient will be calm for a while till the anesthesia is working. Once the reality come on to the senses, then the cry and jumpings take the centre stage despite the pain killers induced. This issue has may ripple affects on the markets. Every body is building their case, like the military preparation at Israeli.
The bad news is continued to be kept in shelf, will find its fissures to drop down. The markets in the world as a whole took a single direction on the North side now will find skewed moves focusing on their internal assignments. The political war fares around Iran
Sunday, February 05, 2012
FII INVESTMENTS...INFLOW!!!!
THE FII- INFLOW... A WELCOME...A CONSOLIDATION.....
DATE
|
BUY
|
SELL
|
NET FII INVESTMENT
|
02-Feb-2012
|
5,124.80
|
2,989.90
|
2,134.90
 |
01-Feb-2012
|
5,227.20
|
3,134.50
|
2,092.70
|
31-Jan-2012
|
3,459.70
|
2,814.60
|
645.10
|
30-Jan-2012
|
2,577.60
|
2,657.20
|
-79.60
 |
27-Jan-2012
|
4,096.00
|
2,731.80
|
1,364.20
|
25-Jan-2012
|
3,890.50
|
2,718.30
|
1,172.20
|
24-Jan-2012
|
2,997.70
|
2,088.50
|
909.20
|
23-Jan-2012
|
1,564.80
|
1,577.60
|
-12.80
|
20-Jan-2012
|
3,547.00
|
2,549.80
|
997.20
|
19-Jan-2012
|
2,822.60
|
2,125.00
|
697.60
|
18-Jan-2012
|
3,002.40
|
2,041.10
|
961.30
|
17-Jan-2012
|
2,975.90
|
1,911.40
|
1,064.50
|
16-Jan-2012
|
1,990.50
|
1,543.20
|
447.30
|
13-Jan-2012
|
2,526.30
|
2,161.70
|
364.60
|
12-Jan-2012
|
2,526.80
|
2,001.30
|
525.50
|
11-Jan-2012
|
2,629.60
|
2,132.10
|
497.50
|
10-Jan-2012
|
2,783.10
|
2,378.00
|
405.10
|
09-Jan-2012
|
1,789.10
|
1,776.70
|
12.40
|
06-Jan-2012
|
1,851.00
|
1,825.90
|
25.10
|
05-Jan-2012
|
2,248.40
|
1,699.20
|
549.20
|
04-Jan-2012
|
1,840.30
|
1,583.10
|
257.20
|
03-Jan-2012
|
1,356.50
|
1,030.90
|
325.60
|
02-Jan-2012
|
472.30
|
511.40
|
-39.10
|
|
Wkly Tech
Analysis Nifty has broken past major hurdles
|
|
Rex Cano /
Mumbai Feb 05, 2012, 00:14 IST
|
The
markets continued to rally for yet another week, driven by liquidity. The
Foreign Institutional Investors (FIIs) so far this year have pumped in over Rs
15,000 crore. The Sensex, which, witnessed some choppiness in the first half of
the week, rallied firmly in the latter half as FIIs stepped up the buying.
The BSE benchmark index rallied
to a high of 17,630, and finally settled with a gain of over two per cent at
17,605. In the process, the Sensex has around 13.5 per cent so far in this
calendar year.
Among the
Sensex stocks this week, DLF zoomed nearly 9 per cent to Rs 230. Tata Power,
Hero MotoCorp, Hindalco, TCS, Sun Pharma, Jindal Steel, Gail India, HDFC Bank
and Bajaj Auto were up 5-8 per cent each. On the other hand, Coal India
Last week, the Sensex gave a
positive breakout on the quarterly charts, and now has crossed its first major
hurdle of 17,565 on the yearly charts. This indicates further bullishness for
the markets. Now, the overall trend for the markets is likely to remain up as
long as the Sensex trades above 16,500-16,600. The immediate support for the
index would be around 17,170.
As per the monthly Fibonacci
charts, the Sensex may now target 17,920 in the short-term, while face
resistance around 18,150-18,370 on the upside. The NSE Nifty moved in a range
of 258 points, the index from a low of 5,077 surged to a high of 5,335. The index
ended with a gain of 2.3 per cent at 5,326.
The Nifty has now cleared two
major hurdles in form of the 50-WMA and 200-DMA. The index has now settled
above the 200-day DMA (Daily Moving Average) for three successive days, which
now strengthens the up move. The index has also closed above the 50-WMA (Weekly
Moving Average) - which is at 5,255. The 200-day DMA, at 5,190, and the 50-WMA
will now act as an immediate support for the index.
The momentum oscillators
continue to remain bullish on both the daily and the weekly charts. Hence, one
should expect fresh buying on dips. The upside resistance for the Nifty could
be around 5,370-5,400. Next week, the Nifty can rally to 5,425-5,485 on the
upside, while may seek support around 5,225-5,165 on the lower side.
GOOD OBSERVATION
----------------------------------PLEASE READ ONE OF THE GOOD OBSERVATION FROM MASTER.........
Here are my observations for your last post and the markets. Markets will go lower when everyone are least expecting it not when people were talking about 4200 and 3900 possibilities. Also Markets lead the data by 2 to 3 quarters in advance. That said 4530 in the last quarter of December was reflecting the earnings data of Q1/Q2 2012 results.
Amount of money being pumped by Obama's administration will keep the markets afloat as you rightly pointed out as 40 nations across the globe are going for polls this year.
2013 and 2014 years seems to be heading to rough patch and we will be seeing huge downfalls in the market in 2014 like what we had in 2008. Temporary fixes in the markets wont help like what all the central banks in the world did back in 2008 by pumping in more liquidity. It has to stop somewhere and looks like a reset to all the developed economies is bound to happen in next 2 to 3 years which would lead to the era of chinese,brazilian and indian economies dominating the 21st century bull run.
Please share your valuable thoughts.
One simple word "Mass Psychology" is the tool all the smart investors across the globe have in their kitty. Fundamental and technical analysis are the tools they use to manipulate the markets in the direction they want.
RajeshMuppaneni
-------------------------------------------------------
Masterji,
Masterji,
Good post.
The approach is very good but economic indicators needs to be included
The approach is very good but economic indicators needs to be included
B.NageswaraRao
Saturday, February 04, 2012
THE PAST FOR FUTURE......RE-LOOK
IN MY EARLIER POST......SAID----the market as whole looks gloomy but that is not the true colour!!!!..... THERE ARE PEOPLE WHO MADE LOTS OF MONEY DURING THE UP MOVE AND MANY MORE INTELLIGENTS AND PUNDITS BURNT THEIR FINGERS-----IS ALL EXPERIENCE FOR THOSE WHO LOST AND ALSO A REINFORCEMENT TO THOSE WHO MADE MONEY....??????
Lower level buying...dated--09-10-2011
The markets are rejoiced with the bottom support at 4700 level despite of the sharp fall in the European markets in the early this weak. The regular readers might have noticed that the world markets are in bull grip except the Japan market-Nikkei. The best out performed and the recent barometer is the DAX. The Germany has given best returns to investors and it had even strong support at 5000 level. The DAX bounced from that level with vengeance and the bulls are confident of their returns over longer period of holding.
The US market though struggling to revive on the prospects of economy getting stimulated by the federal infusions. The banks few years back are worst scrips now quoting decent prices based on their asset quality. Now these banks even do better with the reviving of the real-estate and consumer demand. The down grade of Moody’s ratings is a caution but not necessarily an indication of crippling/sinking economy. The best barometer is the stock market. The S&P is still quoting close to 1180 still above the 1050 support level.
The Nifty is trading in the lower range of the 4700-5700 band, struggling to stay above 4930, has become a herculean task. The Nifty may touch 5280 level to trap both the short sellers at 4700 level and buyers above 5180 level is a likely scenario for NEXT 6 months. The Dollar appreciation (in my opinion a sponsored programme) helped the exporters to especially the soft ware service sector and to invite more FDI in to India, supported for the rise in the software stocks and likely to rise further. The Infy did not touch the 1900 level as anticipated when it started falling from 2700 level. Now in the changed economic environment, current move likely to touch 2700 level in future.The Banking sector which was attracted all bad news in recent time likely to under performs and will see lower levels. The downgrade of SBI will add fuel to the fire. The temporary relief in the ICICI and Axis shall be used to short at higher level. The earning season starts from Infy to focus on scrip based performance in the bourses. The focused approach will provide opportunity to gain from the results based moves. The Govt is likely to announce following the lead provided by the UK stimulus move. The FMGC sector, the outperforming sector likely to join the draggers list due to the inflation based tightening of the liquidity. The future growth in the indices can be tracked once Nifty touches and bounces from 4400-4500 level. The commodity stocks will gain the buying support as the cycle likely to see a silver-lining.
THE BOTTOMS ARE BUILDINGS!!!!! dated--07-01-2012
The Nifty is in a very narrow band. I posted the same in my earlier posts.The markets are in a sense building the bottom. The strength in the market is intact. The Nifty is getting support at 4700 level.
During my personal interaction, people are interested to buy large caps because of the liquidity. They wanted to invest 2-5 lakhs in one go. Where the tiny stocks which multiply by 5-10 time need separate patience to acquire. The SIP- Systematic Investment Plan is a model known to many market participants. The SIP term is a popular one but a coined a word like -KoI-Keep on Investing with Knowledge of Investment.
The multi-baggers are not possible with large cap and mid cap stocks. The small caps take the advantage of becoming large. The tiny stocks though look weak on fundamentals but they takeoff like fire. It is very difficult to identify such stocks but the small cap universe is quite large.
During my recent discussions, I suggested friends to buy Relcap rather than SBI, since then it gave a 30% return and it has much more potential stored in. The insurance business will give good valuation in coming months. This a sector having very bright future apart from the infra structure.
the market fall from the current levels are very good for long-term investors who can build their portfolio over a period of 12 months. The best case to start buying the value stocks from 4400 level Nifty touches.
The RIL likely to touch 620 level and it may touch 550-585 level but the market as whole looks gloomy but that is not the true colour!!!!.....
Lower level buying...dated--09-10-2011
The markets are rejoiced with the bottom support at 4700 level despite of the sharp fall in the European markets in the early this weak. The regular readers might have noticed that the world markets are in bull grip except the Japan market-Nikkei. The best out performed and the recent barometer is the DAX. The Germany has given best returns to investors and it had even strong support at 5000 level. The DAX bounced from that level with vengeance and the bulls are confident of their returns over longer period of holding.
The US market though struggling to revive on the prospects of economy getting stimulated by the federal infusions. The banks few years back are worst scrips now quoting decent prices based on their asset quality. Now these banks even do better with the reviving of the real-estate and consumer demand. The down grade of Moody’s ratings is a caution but not necessarily an indication of crippling/sinking economy. The best barometer is the stock market. The S&P is still quoting close to 1180 still above the 1050 support level.
The Nifty is trading in the lower range of the 4700-5700 band, struggling to stay above 4930, has become a herculean task. The Nifty may touch 5280 level to trap both the short sellers at 4700 level and buyers above 5180 level is a likely scenario for NEXT 6 months. The Dollar appreciation (in my opinion a sponsored programme) helped the exporters to especially the soft ware service sector and to invite more FDI in to India, supported for the rise in the software stocks and likely to rise further. The Infy did not touch the 1900 level as anticipated when it started falling from 2700 level. Now in the changed economic environment, current move likely to touch 2700 level in future.The Banking sector which was attracted all bad news in recent time likely to under performs and will see lower levels. The downgrade of SBI will add fuel to the fire. The temporary relief in the ICICI and Axis shall be used to short at higher level. The earning season starts from Infy to focus on scrip based performance in the bourses. The focused approach will provide opportunity to gain from the results based moves. The Govt is likely to announce following the lead provided by the UK stimulus move. The FMGC sector, the outperforming sector likely to join the draggers list due to the inflation based tightening of the liquidity. The future growth in the indices can be tracked once Nifty touches and bounces from 4400-4500 level. The commodity stocks will gain the buying support as the cycle likely to see a silver-lining.
THE BOTTOMS ARE BUILDINGS!!!!! dated--07-01-2012
The Nifty is in a very narrow band. I posted the same in my earlier posts.The markets are in a sense building the bottom. The strength in the market is intact. The Nifty is getting support at 4700 level.
During my personal interaction, people are interested to buy large caps because of the liquidity. They wanted to invest 2-5 lakhs in one go. Where the tiny stocks which multiply by 5-10 time need separate patience to acquire. The SIP- Systematic Investment Plan is a model known to many market participants. The SIP term is a popular one but a coined a word like -KoI-Keep on Investing with Knowledge of Investment.
The multi-baggers are not possible with large cap and mid cap stocks. The small caps take the advantage of becoming large. The tiny stocks though look weak on fundamentals but they takeoff like fire. It is very difficult to identify such stocks but the small cap universe is quite large.
During my recent discussions, I suggested friends to buy Relcap rather than SBI, since then it gave a 30% return and it has much more potential stored in. The insurance business will give good valuation in coming months. This a sector having very bright future apart from the infra structure.
the market fall from the current levels are very good for long-term investors who can build their portfolio over a period of 12 months. The best case to start buying the value stocks from 4400 level Nifty touches.
The RIL likely to touch 620 level and it may touch 550-585 level but the market as whole looks gloomy but that is not the true colour!!!!.....
Friday, February 03, 2012
Investors worry--CRISIS not OVER
Investors worry where to put cash as banks wobble
By Chris Vellacott
LONDON
Fri Feb 3, 2012 5:59pm IST
LONDON (Reuters) - Investors are holding more cash than at any time since the Lehman Brothers collapse to protect themselves against volatile financial markets, presenting them with a dilemma - where to hold that money when banks are looking shaky.
When the European Central Bank stepped up efforts to provide liquidity to banks in late 2011, financial markets settled down and the chances of a catastrophe scenario, in which banks fail and depositors lose their money, became more remote.
But investors are still mindful that the unthinkable, while highly unlikely, is not impossible, giving pause for thought to institutions and wealthy individuals with sums too large to be covered by existing compensation schemes.
A monthly survey of British investment managers showed in December cash holdings were at their highest for more than two years, prompted by worries over the euro crisis.
The panic about bank solvency has not yet reached the levels seen in the wake of the collapse of Lehman Brothers four years ago, investors said. One senior private banker said at the height of the post Lehman turmoil in 2009, a "particularly eccentric" rich client had enquired about putting large amounts of their wealth in gold and then burying it on their land.
But closer scrutiny of counterparty risks by investors is currently leading to more use of alternatives to bank deposits like short-dated debt issued by AAA-rated governments or cash-like instruments such as money market funds.
"It's a small chance it'll happen but it's big enough that we think there's no point in looking for a few extra basis points (of investment performance) for taking the risk," said William Drake, co-founder of London-based investment manager Lord North Street.
Drake said the firm favours putting more money in short- dated UK government bonds as an alternative to deposits in a bank, while the crisis continues.
"We think you should be absolutely sure you are going to get 100 pence back out of every pound you put in." he said.
Britain's Financial Services Compensation Scheme guarantees recovery of up to 85,000 pounds per person if a bank fails, protecting the savings of most people but falling short of the amounts deposited by rich investors or institutions.
David Scott, chief executive of London-based upmarket investment manager Vestra Wealth, favours parking clients' cash in UK banks that were bailed out by the government during the earlier crisis of 2008 to 2009.
Royal Bank of Scotland (RBS.L) is 83 percent owned by the British government following a state bailout during the 2008 credit crisis, while Lloyds Banking Group (LLOY.L) is 40 percent state owned.
Having stopped people losing their savings once, the British government is likely to do it again should the need arise, Scott argues."There's no way the UK government will let a high street bank go," he said.
Xenfin Capital, a London-based hedge fund trades using a small amount of the capital it holds for its clients, mostly very rich private investors, placing the rest on deposit at cooperatively-owned Dutch lender Rabobank RABO.UL.
Unlike its main Dutch rivals ABN AMRO ABNNV.UL and ING Group (ING.AS), Rabobank did not need state aid during the 2008 credit crisis.
"We use Rabobank as a counterparty due to their high credit standing, and due to the fact that the London FX Prime Broking desk only deals in spot FX, and has no exposure to more exotic instruments," said Nick Hocart, head of business development at Xenfin.
Many of the investors contacted by Reuters said they are less nervous now about the chances of financial catastrophe than they were during 2008-2009.
Efforts by monetary authorities late in 2011 to provide liquidity to struggling European banks are widely seen as evidence of firm political will to avert collapse, said Rob Burgeman, a divisional director at investment manager Brewin Dolphin (BRW.L), who sits on the asset allocation committee.
"You have to do your due diligence but at the same time if you are with a basket of blue chip banks it is inconceivable that the world will watch this go to hell in a handcart," he said.
But four years of financial crisis and extreme events like Lehman Brothers have undermined assumptions about banks and led to long term shifts in attitudes about how to manage cash, said Frances Hudson, global strategist at Standard Life Investments.
"Lehmans started counterparty risk awareness and that'll be a lesson that will stay with us for some time," she said.
"One would hope things would ease at some point but there's still a credibility deficit from governments and from the banking system."
By Chris Vellacott
LONDON
Fri Feb 3, 2012 5:59pm IST
LONDON (Reuters) - Investors are holding more cash than at any time since the Lehman Brothers collapse to protect themselves against volatile financial markets, presenting them with a dilemma - where to hold that money when banks are looking shaky.
When the European Central Bank stepped up efforts to provide liquidity to banks in late 2011, financial markets settled down and the chances of a catastrophe scenario, in which banks fail and depositors lose their money, became more remote.
But investors are still mindful that the unthinkable, while highly unlikely, is not impossible, giving pause for thought to institutions and wealthy individuals with sums too large to be covered by existing compensation schemes.
A monthly survey of British investment managers showed in December cash holdings were at their highest for more than two years, prompted by worries over the euro crisis.
The panic about bank solvency has not yet reached the levels seen in the wake of the collapse of Lehman Brothers four years ago, investors said. One senior private banker said at the height of the post Lehman turmoil in 2009, a "particularly eccentric" rich client had enquired about putting large amounts of their wealth in gold and then burying it on their land.
But closer scrutiny of counterparty risks by investors is currently leading to more use of alternatives to bank deposits like short-dated debt issued by AAA-rated governments or cash-like instruments such as money market funds.
"It's a small chance it'll happen but it's big enough that we think there's no point in looking for a few extra basis points (of investment performance) for taking the risk," said William Drake, co-founder of London-based investment manager Lord North Street.
Drake said the firm favours putting more money in short- dated UK government bonds as an alternative to deposits in a bank, while the crisis continues.
"We think you should be absolutely sure you are going to get 100 pence back out of every pound you put in." he said.
Britain's Financial Services Compensation Scheme guarantees recovery of up to 85,000 pounds per person if a bank fails, protecting the savings of most people but falling short of the amounts deposited by rich investors or institutions.
David Scott, chief executive of London-based upmarket investment manager Vestra Wealth, favours parking clients' cash in UK banks that were bailed out by the government during the earlier crisis of 2008 to 2009.
Royal Bank of Scotland (RBS.L) is 83 percent owned by the British government following a state bailout during the 2008 credit crisis, while Lloyds Banking Group (LLOY.L) is 40 percent state owned.
Having stopped people losing their savings once, the British government is likely to do it again should the need arise, Scott argues."There's no way the UK government will let a high street bank go," he said.
Xenfin Capital, a London-based hedge fund trades using a small amount of the capital it holds for its clients, mostly very rich private investors, placing the rest on deposit at cooperatively-owned Dutch lender Rabobank RABO.UL.
Unlike its main Dutch rivals ABN AMRO ABNNV.UL and ING Group (ING.AS), Rabobank did not need state aid during the 2008 credit crisis.
"We use Rabobank as a counterparty due to their high credit standing, and due to the fact that the London FX Prime Broking desk only deals in spot FX, and has no exposure to more exotic instruments," said Nick Hocart, head of business development at Xenfin.
Many of the investors contacted by Reuters said they are less nervous now about the chances of financial catastrophe than they were during 2008-2009.
Efforts by monetary authorities late in 2011 to provide liquidity to struggling European banks are widely seen as evidence of firm political will to avert collapse, said Rob Burgeman, a divisional director at investment manager Brewin Dolphin (BRW.L), who sits on the asset allocation committee.
"You have to do your due diligence but at the same time if you are with a basket of blue chip banks it is inconceivable that the world will watch this go to hell in a handcart," he said.
But four years of financial crisis and extreme events like Lehman Brothers have undermined assumptions about banks and led to long term shifts in attitudes about how to manage cash, said Frances Hudson, global strategist at Standard Life Investments.
"Lehmans started counterparty risk awareness and that'll be a lesson that will stay with us for some time," she said.
"One would hope things would ease at some point but there's still a credibility deficit from governments and from the banking system."
Wednesday, February 01, 2012
Per capita income crosses Rs 50,000 for first time in
2010-11
PTI, 31 Jan 2012 | 06:22 PM
"The per capita income at current prices is estimated at Rs
53,331 in 2010-11, as against Rs 46,117 for the previous year, depicting a
growth of 15.6 per cent," said the Quick Estimates of National Income
released by the Central Statistical Office (CSO).
Reflecting growing
prosperity, India
"The per capita
income at current prices is estimated at Rs 53,331 in 2010-11, as against Rs
46,117 for the previous year, depicting a growth of 15.6 per cent," said
the Quick Estimates of National Income released by the Central Statistical
Office (CSO).
The growth in per
capita income comes on the back of 8.4 per cent expansion of the Indian economy
during the last fiscal.
Per capita income is
the earnings of each Indian if the national income is evenly divided among the
country's population of around 120 crore. It is an important indicator of
overall prosperity in the country.
However, the increase
in per capita income at constant (2004-05) prices, after discounting for
inflation, was about 6.4 per cent in 2010-11. It was Rs 35,993 in 2010-11, as
against Rs 33,843 in the previous year.
According to the
figures, the size of the economy at current prices rose to Rs 71,57,412 crore
last fiscal, up 17.5 per cent from Rs 60,91,485 crore in 2009-10.
Based on 2004-05 prices,
the Indian economy expanded by 8.4 per cent during the fiscal ended March,
2011.
The GDP at constant
(2004-05) prices in 2010-11 has been estimated at Rs 48,85,954 crore, as
against Rs 45,07,637 crore in 2009-10, as per the Quick Estimates.
The rate of growth in
the 2009-10 fiscal stood at 8.4 per cent, as per provisional estimates which
were also released today.
Saturday, January 28, 2012
PLAN YOUR BET ON STOCKMARKETS....
Wednesday November 23, 2011
Political parties and stock returns by Sy Harding, editor Street Smart Report
The lead-up to next year’s election will bring a lot of claims from both parties. So we looked at the record over 50 and 100 years to see which political party in the White House is historically better for stocks.
I thought I’d check the historical record to make sure I don’t fall into the ‘lazy trap’ of repeating popular beliefs as fact when they might not be. I was more than mildly surprised by my research. It’s common knowledge, popular belief, historical fact, that the Republican Party is better for business, corporate profits, and the stock market – isn’t it?
Democrats are more interested in pushing socialistic programs at the expense of business – aren’t they? But wait a minute! Here's a look at the Dow’s gains and losses under Republican and Democratic Presidents over the last 50 years.
•Kennedy/Johnson (Dem) administration (1961-1965) - up 41.9%
•Johnson (Dem) administration (1965-1969) - up 8.1%
•Nixon (Rep) administration (1969 to 1973) - up 7.9%
•Nixon/Ford (Rep) administration (1973-1977) - down 0.1%
•Carter (Dem) administration (1977-1981) - down 4.1%
•Reagan (Rep) administration (1981-1985) - up 25.6%
•Reagan (Rep) administration (1985-1989) - up 79.0%
•Bush Sr. (Rep) administration (1989-1993 - up 52.3%
•Clinton (Dem) administration (1993-1997) - up 95.3%
•Clinton (Dem) administration (1997-2001) - up 67.3%
•Bush Jr. (Rep) administration (2001-2005) - unchanged
•Bush Jr. (Rep) administration (2005-2009) down 18.6%
•Obama (Dem) administration (2009 through Oct. 30, 2011) - up 36.3%
Over six Democratic terms the Dow gained 247.9%, or an average of 41.3% per term. Over seven Republican terms the Dow gained 147.1%, or an average of 21.0% per term.
Could it be? Over the last 50 years, investors have made almost double the returns under Democratic Presidents as under Republican Presidents?
I then went back 110 years to 1900. The same pattern emerged, although the difference was not as striking as it has been for the last 50 years.
From 1901 to 1961 the Dow increased an average of 36.7% per term when the president was a Democrat, and 32.1% when a Republican was in the White House.
The influence of one party or the other on the strength of the economy, business prosperity, and the stock market has clearly not been as popular wisdom suggests.
Political parties and stock returns by Sy Harding, editor Street Smart Report
The lead-up to next year’s election will bring a lot of claims from both parties. So we looked at the record over 50 and 100 years to see which political party in the White House is historically better for stocks.
I thought I’d check the historical record to make sure I don’t fall into the ‘lazy trap’ of repeating popular beliefs as fact when they might not be. I was more than mildly surprised by my research. It’s common knowledge, popular belief, historical fact, that the Republican Party is better for business, corporate profits, and the stock market – isn’t it?
Democrats are more interested in pushing socialistic programs at the expense of business – aren’t they? But wait a minute! Here's a look at the Dow’s gains and losses under Republican and Democratic Presidents over the last 50 years.
•Kennedy/Johnson (Dem) administration (1961-1965) - up 41.9%
•Johnson (Dem) administration (1965-1969) - up 8.1%
•Nixon (Rep) administration (1969 to 1973) - up 7.9%
•Nixon/Ford (Rep) administration (1973-1977) - down 0.1%
•Carter (Dem) administration (1977-1981) - down 4.1%
•Reagan (Rep) administration (1981-1985) - up 25.6%
•Reagan (Rep) administration (1985-1989) - up 79.0%
•Bush Sr. (Rep) administration (1989-1993 - up 52.3%
•Clinton (Dem) administration (1993-1997) - up 95.3%
•Clinton (Dem) administration (1997-2001) - up 67.3%
•Bush Jr. (Rep) administration (2001-2005) - unchanged
•Bush Jr. (Rep) administration (2005-2009) down 18.6%
•Obama (Dem) administration (2009 through Oct. 30, 2011) - up 36.3%
Over six Democratic terms the Dow gained 247.9%, or an average of 41.3% per term. Over seven Republican terms the Dow gained 147.1%, or an average of 21.0% per term.
Could it be? Over the last 50 years, investors have made almost double the returns under Democratic Presidents as under Republican Presidents?
I then went back 110 years to 1900. The same pattern emerged, although the difference was not as striking as it has been for the last 50 years.
From 1901 to 1961 the Dow increased an average of 36.7% per term when the president was a Democrat, and 32.1% when a Republican was in the White House.
The influence of one party or the other on the strength of the economy, business prosperity, and the stock market has clearly not been as popular wisdom suggests.
ANALOGY- US-ELECTIONS AND PERFORMANCE...
Presidential election cycle: Stocks and profits?
A market historian reviews the long-term pattern of stock prices and the Presidential election cycle.
By TheStockAdvisors on Fri, Jan 27, 2012 1:38 PM
By Jim Stack, Investech Market Analyst
What lies ahead in 2012? That’s the big question, and the fact that we’re approaching a Presidential Election likely improves the chances that this will be a good year for the stock market.
Historically, there has been a clear visible link between the Presidential election cycle and Wall Street. Below, we look at the correlation between cycles in the stock market and the 4-year election cycle.
Off-election years are often preceded by bear markets or stagnant growth and typically provide some of the best buying opportunities for stocks.
However, one rarely sees the market swooning in the 12 to 18 months leading up to a Presidential Election – 1960 and 2008 are the notable exceptions.
If you think about it, this relationship makes sense. Any politician worth his salt knows that you should try to get bad news and bear markets out of the way as quickly as possible after taking office. That way, the economy and the stock market can get back on track and be ticking along smoothly when it’s time to run for re-election. You rarely see Washington passing controversial tax hikes or legislation once the Presidential campaigns get rolling in earnest, and even the Federal Reserve, which is not supposed to be politically influenced, is reluctant to rock the boat.
Historically (since 1941), the first two years after a Presidential Election have the lowest performance, with average annual gains less than 5.5%.Year 3, as politicians start gearing up for re-election, is usually the best on Wall Street by a wide margin. With an average gain of 17.3%, it more than doubles the return of the other three years.
Presidential Election years tend to be more moderate, but historically are still the second most profitable in the cycle. Before the financial crisis, the average annual gain for election years was 8.9%; however, the 38% drop in the S&P 500 in 2008 reduced the long-term average to 6.2%.
The current 2009-2012 Presidential Election cycle is anything but “average.” After the 2008 debacle, the bull market recovery came early.
Years 1 and 2 were far stronger than usual, which likely stole performance from Year 3. Consequently, 2011 fell far short of expectations, ending with 0% gain in the S&P 500 after it suffered a sharp bearish contraction mid-year. Although the progression up to now has been atypical, what are the odds that this election year will be closer to the norm? In seeking the answer we looked back at prior cycles, where historical precedent has not always prevailed.
Election years can be volatile (what years can’t), but they rarely end with big losses for investors.
We looked at every Presidential Election year since 1900 along with the gain or loss in the DJIA (excluding dividends). Note that:
•The average gain for these 28 election years is 7.3%, which is equivalent to the average annual market gain taking all 112 years into consideration. However, if we exclude 2008, which was the worst Presidential Election year in over a century, the election year average jumps to 8.8%.
•Two-thirds of the periods were positive for the market, while years with major losses were rare.
•Election years that showed double-digit gains outnumber those with double-digit losses by nearly 3:1 – and only one of those double-digit losses occurred after 1940. That was in 2008 when the economy was deep in recession at election time (which was also the case in 1960), and it cost the incumbent party dearly at the polls. Our study also revealed another secret in Presidential Election years… the market often rallies in the second half of the year.
• In all but six election years, the DJIA either hit a new yearly high, or came within 5% of the year’s high, in the 4th quarter.
•There have been only five elections where the market dropped to a new yearly low in the 4th quarter, and three occurred during major recessions – 1920, 1932 and 2008.
•In 2004, the 4th quarter saw both extremes. The low was hit in October, and the DJIA rallied to its high for the year in December.Looking at 2012, the year has started off with good news on the economic front – leading data is improving along with confidence and recession fears are receding. Also, the technical picture is more encouraging, with stronger market breadth and the disappearance of bearish distribution.
In our opinion, this evidence, along with the Presidential Election Cycle, reduces the chance that this will be a down year for the market.
In our Model Portfolios, we are currently 77% invested, but we’ll likely step up from this level if fundamental and technical models continue to improve.
A market historian reviews the long-term pattern of stock prices and the Presidential election cycle.
By TheStockAdvisors on Fri, Jan 27, 2012 1:38 PM
By Jim Stack, Investech Market Analyst
What lies ahead in 2012? That’s the big question, and the fact that we’re approaching a Presidential Election likely improves the chances that this will be a good year for the stock market.
Historically, there has been a clear visible link between the Presidential election cycle and Wall Street. Below, we look at the correlation between cycles in the stock market and the 4-year election cycle.
Off-election years are often preceded by bear markets or stagnant growth and typically provide some of the best buying opportunities for stocks.
However, one rarely sees the market swooning in the 12 to 18 months leading up to a Presidential Election – 1960 and 2008 are the notable exceptions.
If you think about it, this relationship makes sense. Any politician worth his salt knows that you should try to get bad news and bear markets out of the way as quickly as possible after taking office. That way, the economy and the stock market can get back on track and be ticking along smoothly when it’s time to run for re-election. You rarely see Washington passing controversial tax hikes or legislation once the Presidential campaigns get rolling in earnest, and even the Federal Reserve, which is not supposed to be politically influenced, is reluctant to rock the boat.
Historically (since 1941), the first two years after a Presidential Election have the lowest performance, with average annual gains less than 5.5%.Year 3, as politicians start gearing up for re-election, is usually the best on Wall Street by a wide margin. With an average gain of 17.3%, it more than doubles the return of the other three years.
Presidential Election years tend to be more moderate, but historically are still the second most profitable in the cycle. Before the financial crisis, the average annual gain for election years was 8.9%; however, the 38% drop in the S&P 500 in 2008 reduced the long-term average to 6.2%.
The current 2009-2012 Presidential Election cycle is anything but “average.” After the 2008 debacle, the bull market recovery came early.
Years 1 and 2 were far stronger than usual, which likely stole performance from Year 3. Consequently, 2011 fell far short of expectations, ending with 0% gain in the S&P 500 after it suffered a sharp bearish contraction mid-year. Although the progression up to now has been atypical, what are the odds that this election year will be closer to the norm? In seeking the answer we looked back at prior cycles, where historical precedent has not always prevailed.
Election years can be volatile (what years can’t), but they rarely end with big losses for investors.
We looked at every Presidential Election year since 1900 along with the gain or loss in the DJIA (excluding dividends). Note that:
•The average gain for these 28 election years is 7.3%, which is equivalent to the average annual market gain taking all 112 years into consideration. However, if we exclude 2008, which was the worst Presidential Election year in over a century, the election year average jumps to 8.8%.
•Two-thirds of the periods were positive for the market, while years with major losses were rare.
•Election years that showed double-digit gains outnumber those with double-digit losses by nearly 3:1 – and only one of those double-digit losses occurred after 1940. That was in 2008 when the economy was deep in recession at election time (which was also the case in 1960), and it cost the incumbent party dearly at the polls. Our study also revealed another secret in Presidential Election years… the market often rallies in the second half of the year.
• In all but six election years, the DJIA either hit a new yearly high, or came within 5% of the year’s high, in the 4th quarter.
•There have been only five elections where the market dropped to a new yearly low in the 4th quarter, and three occurred during major recessions – 1920, 1932 and 2008.
•In 2004, the 4th quarter saw both extremes. The low was hit in October, and the DJIA rallied to its high for the year in December.Looking at 2012, the year has started off with good news on the economic front – leading data is improving along with confidence and recession fears are receding. Also, the technical picture is more encouraging, with stronger market breadth and the disappearance of bearish distribution.
In our opinion, this evidence, along with the Presidential Election Cycle, reduces the chance that this will be a down year for the market.
In our Model Portfolios, we are currently 77% invested, but we’ll likely step up from this level if fundamental and technical models continue to improve.
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