The Crash( 17.5.2006) and FII activities since then

Hi

Thw world market was in mild green. I thought FROGS will only croak. No its their masters. Nomura speaks. So world indices may not bring the relief rally.

But the question is how long will it continue. The value of paper it ultimately reflected by the real book value as on date. So go and check what is the fair value of your investment and if you determine that.It is for japanese mob to decide that. You have to believe in youself and the country and its growth prospects. If that is not there then papers you hold is nothing.This applies to both bulls and desi bears. Perhaps we will , by dint of self respect and hard work and good ploicies , rise to the strength which would allow us to dictate terms to others. No dictate is a wrong word. We may guide others as we are ancient civilisation as Amit Pointed out.

As agilent informed, Nomura feels that other FIIs also have been cheated. By whom... well Nomura himself. So there was this big news last year that japanese are willing to invest in India and FM was all over the places. May be end results are not yet seen. My guillotine info was only in that context. Understand Czar??

Let us not aniticipate the bottom and see what steps are taken to stem the fall of castle in the Air???( if there was any)

All over the world castles are built in the Air. So this is nothing new here.

We will wait for the first sign of FROGS croacking and track their activities.

Pankaj

true sir...but the vultures are not here yet..its the infantry to finish what ever dint get finished by the cavalry & archers...

Hi

These two slides of Power point presentation I found interesting. Members would like to see. The full PPT presentation was in some other context. Two more slides which I could not inclue was on performance of various markets.
Thos who would like to see here is the link

www.flaggmgmt.com/bc/presentations06/ Tabb_Larry_Alex_Key_Note.ppt

Views???
Pankaj

Hi

I just visited SEBI link as given by nkp. The cosolidated data is presented there in respect of FIIs. Here is the current scenario for FII trends

Reporting Date--- Debt/Equity--- Gross Purchases(Rs Crores)--- Gross Sales(Rs Crores)--- Net Investment (Rs Crores) ---Net Investment US($) million at month exchange rate
01-JUN-2006--- Equity 1730.90--- 2563.20--- (832.30) ---(185.20)
Debt 0.00 0.00 0.00 0.00
Total for June--- Equity 1730.90--- 2563.20--- (832.30)---- (185.20)
Debt 0.00 0.00 0.00 0.00
Total for 2006--- Equity 217643.30--- 207353.60--- 10289.80--- 2309.80
Debt--- 2306.40--- 2682.50 ---(376.10) ---(81.00)
Grand Total till June 01, 2006 ---Equity--- 1071460.30 ---885728.30--- 185732.00--- 43410.20
Debt--- 34210.80 ---32214.70 ---1996.10 ---364.20


Hope this makes some sense. I think Hedge funds are indulging in extreme speculative activities and by shooting a target of 7500 or so they are adding fuel to the fire.

Pankaj

who are these FII wallas? this question always bugged me. yes one would drop names of fidelity, actis(CDC) and other guys. but is that so simple?

India is a country where a parallel economy runs side by side which is more or less equal that of the 'white economy'.

we do hear from time to time, how our politician & business persons have their black money safely deposited in the Swiss Banks. and these are the times when these money comes into the country in the disguise of FII.

a year or two ago there was small news snippet - majority stake in Sterlite Industries has been taken over by an FII. Twinstar Holdings. but who the hell this Twinstar Holdings is? later it came into light that the said co. is nothing but another holding co. of the agarwals, the Indian promoter of Sterlite. is this a isolated incident? well............................

Hi guys,

Amidst all this FII and Hedge fund bashing let us not forget that Yes we need their money. If we did not why the bending over backwards act by our political leaders to woo them to invest here.

The one thing that no one wants to speak about is that whatever their motives, their prime motive is to safeguard their clients interest and make money for them. I wish our mutual funds would take a leaf out of their book, and manage our money as aggressively.
Regds

Yesterday European Central Bank warned the World about those socalled HEDGE FUNDS / FII investement in Emarging Markets. ECB says they pose grater risk than anticipated like Birld Flu and one should be very carefull and keep the system poolproof.

Srini

Hi vince

What you say is right. I have also pointed both the aspects that we need their money and that they also need to answer to their clients. They are here not for charity.One assumption that is always made when inviting aam admi to the market is that it is also a safe option to get good returns, that there is no manipulation and market will grow because economy grows. Risk is there but so is the risk in driving a car and so on so forth. They get trapped and loose their money since they don't know market mechanism. You will find this story played time and again.

The question is that if and whether market reflects economic growth or prices are jacked up like three times up two times down and then last run and slam dunk. Both bears and bulls are fodder for such mechinations. Retail investors are caught like mite in the wheat.

I do not find this mechination in which almost all analysts participates , perticularly appealing or ethical. Markets should be reflecting the growth and valuations should grow in tune with developmet. Companies may fall, economies may fail. Market should reflect it. But it is too early to pronounce any judgement on all this.

Their out flow is not all that big as it is madeout to be. Swiftness , yes it is. But aren't all these anticipated. Then why we were caught off guard. GFH factor of satya. Leveraged money. not following the basic rules of investing stop losses limit profit, exit as per the period of holding.

So first we have to look into ourselves. This forum is a means to do that.


By this thread I didn't want to focus on wrongdoings of FII if any, but to see when trend reversal takes place and if it coincides with FII. Analysing their role may be only a by-product.
I still believe that long term story is fine. You can still safely invest and wait for long term horizon. Traders ... that is a different story. Follow your stretagy if you want to trade. FII or no FII they have always been there making money or losses but I have not seen them stop trading. Idea is to find your own winning strategy and stick to it. Nobody can make money all the time from all the trades( same goes for investment).

Pankaj:

Do you suggest putting Stop Losses for Long Term Holdings also?

Hope in the Long Term India will lead the world market along with China but not US or Japan which are going to be worst performaning markets untill 2009 as of now (estimates).

In the coming days people are predicting more weakness in the doller, and hight inflation as well as higher interest rates in US. And Europe will follow the US by increasing the interest rates to contain the follout of the doller weakness. I think it is an allround effect on the world markets.

Srini

Hi srini
Interesting question. I suppose all transactions will have stop losses without exception. Having said that Let us see why and how?

Short term traders in order to protect themselves from huge losses keep stop loss as determined by technical factors such as support and resistence and the trendline, your entry price(which is also determined by technical factors)

If they get into profit they try to protect the profit by keeping stoploss following the CMP. So stop loss becomes a dynamic factor and you need to monitor your trade.

Same thing will be applicable in case of Long term investment. Support and resistence will also be determined by the trendlines and technical factors. The only difference will be stoplosses will be wide and not as tight as short term trading. In day trading its a question of few paise and in long term it may be few hundreds say infosys.If cmp is around three thousand you would keep some three hundred or four hundred rupees down the line as stop loss price.Price may fluctuate but it ma not hit the stop loss. In some situation if that is triggered you simply get out. Then if you are still convinced about the fundamentals and whatever factors you might decide to enter again.

If long term trendline is broken your stop losses should protect you to some extent.

Now if you are in profit would you not like to protect your profit? When prices go up you revise again your stoplosses,keeping in mind volatality and support and resistence, volumes etc. This will protect your portfolio from getting erroded. If stop loss gets triggered on profit get out. You can always get in at lower price and you will have more of the same stocks. Your average cost will also be less.. This is also called averaging. But getting into same stock is advisable only if downturn is due to some factors not related to fundamentals. But it is better not to anticipate bottom and only to enter again when price goes decisively in uptrend.

Further if your target price is reached always book profit. It keeps ypu happy and reduces the cost of holding for remaining shares. If uptrend continues you can always invest again.

The stop losses are also related to your comfort zone ie. how much you can tolerate loss if you are convinced about your investment and time frame.

A person who had infy in 1993 would have say 1024 shares. But if he kept booking profit and reentering it he would have had many more.

Further, long term investing is not about you individual stocks but your portfolio and how much it is actually returning on capital employed. Stop losses tend to maximise return even when some investments fail.

I am not a technical person but hope I am clear.

Regards
Pankaj