FROM AN EXPERIENCE
Human nature often gets in the way of sound investment decision making; even among institutional investors. Do you consider yourself to be “better than average”
drivers? Most people do.
The Lake Wobegon Effect, as it’s affectionately called, was inspired by the radio series, A Prairie Home Companion by Garrison Keillor, where “all the children are above average.” Seriously though, overconfidence has the potential to make bad investments worse, by pushing obstreperous investors to hang
onto losing positions; even when evidence to the contrary is overwhelming. New car buyers love reading favorable reviews about the bright and shiny automobile they just purchased, at the same time they would be highly critical reviews that criticize their decision. As investors, we sift through a myriad of information as we assemble a mosaic. How valuable would our conclusions be if we latched onto data that only supported our views and ignored information that refuted it?
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*In a year around 40 to 50 books on trading are published, I read most of them, there are very few which have actionable trading ideas and can help you enhance your trading skills. Trade Like an O’Neil Disciple: How We Made 18,000% in the Stock Market is one of the best books I have read in recent years. I am already reading it second time and taking extensive notes.
If you are growth/ IBD/ momentum/ CANSLIM kind investor you will find practical ideas and some new ways of entering and exiting trades. You will also learn how explosive returns are possible under right circumstances using those methods.
The book also goes in to details of short selling and has couple of good short selling strategies.
The book is not for beginners and those looking for simple methods without much effort, you need to have some foundation about growth and momentum investing before appreciating and understanding it.
A must buy for growth/momentum investor who want explosive returns…..
(to be contd)
ONE OF THE WORLDS LARGEST DEBTOR NATIONS
Here is the table from the Indian Reserve bank which claims that Bharat is fifth in external debt. Most analysts know that the claim ( US $ 229.9 billion (22.0 per cent of GDP) paints a rosy picture and the real debt is more than a tirllion Dollars. The debt is also growing exponentially.
India’s External Debt as at the end of March 2009
As per the standard practice, India’s external debt statistics for the quarters ending March and June are released by the Reserve Bank of India and those for the quarters ending September and December by the Ministry of Finance, Government of India. The external debt data are released with a lag of one quarter. A detailed account of external debt as compiled in the standard format as at end-March 2009 in rupee and US dollar terms and revised data for the earlier quarters are set out in Statement 1 and 2, respectively. The developments relating to India’s external debt as at end-March 2009 are discussed in the following paragraphs.
As per the standard practice, India’s external debt statistics for the quarters ending March and June are released by the Reserve Bank of India and those for the quarters ending September and December by the Ministry of Finance, Government of India. The external debt data are released with a lag of one quarter. A detailed account of external debt as compiled in the standard format as at end-March 2009 in rupee and US dollar terms and revised data for the earlier quarters are set out in Statement 1 and 2, respectively. The developments relating to India’s external debt as at end-March 2009 are discussed in the following paragraphs.
Major Highlights of External Debt
(i) India’s external debt, as at end-March 2009, was placed at US $ 229.9 billion (22.0 per cent of GDP) recording an increase of US $ 5.3 billion or 2.4 per cent over the level of the previous year mainly due to the increase in trade credits.
(ii) As per an international comparison of external debt of the twenty most indebted countries, India was the fifth most indebted country in 2007.
(iii) By way of composition of external debt, the share of commercial borrowings was the highest at 27.3 per cent as at end-March 2009 followed by short-term debt (21.5 per cent), NRI deposits (18.1 per cent) and multilateral debt (17.2 per cent).
(iv) The debt service ratio has declined steadily over the years, and stood at 4.6 per cent as at end-March 2009.
(v) Excluding the valuation effects due to appreciation of US dollar against other major currencies and Indian rupee, the stock of external debt would have increased by US$ 18.7 billion as compared with the stock as at end-March 2008.
(vi) The share of short-term debt in total debt increased to 21.5 per cent at end-March 2009 from 20.9 per cent at end-March 2008, primarily on account of rise in short-term trade credits.
(vii) Based on residual maturity, the short-term debt accounted for 40.6 per cent of the total external debt at end-March 2009
(viii) The ratio of short-term debt to foreign exchange reserves at 19.6 per cent in March 2009 was higher compared to 15.2 per cent in March 2008.
(ix) The US dollar continues to remain the dominant currency accounting for 57.1 per cent of the total external debt stock as at end-march 2009.
(x) India’s foreign exchange reserves provided a cover of 109.6 per cent to the external debt stock at the end of March 2009 as compared with 137.9 per cent as at end-March 2008.
Here is a report from HinduBusinessline:
India’s external debt rises by 8.1% at Sept-end
Our Bureau
New Delhi, Dec. 31
The country’s total external debt stock, at the end of September, recorded an increase of 8.1 per cent from the end-March 2009 estimates.
The external debt at the end of September stood $242.8 billion, an increase of $18.2 billion over end-March.
While the long-term debt showed an increase of $19.2 billion (10.6 per cent) and went up to $200.4 billion, the short-term debt came down by $985 million (-2.3 per cent) to $42.4 billion. The increase in external debt over the previous quarter stood at 5.7 per cent or $13 billion.
Valuation effect on account of depreciation of the dollar against international currencies accounted for $8.3 billion (45.6 per cent) of the total increase in the external debt. The increase in total external debt also reflected the impact of inclusion of cumulative SDR allocations to India by International Monetary Fund as a long-term debt liability in external debt statistics.
The debt-service ratio, i.e. the ratio of total debt service payments to current receipts worked out to 4.9 per cent during April-September 2009 as against 3.7 per cent for April-September 2008. The ratio of short-term external debt to foreign exchange reserves, which was 17.2 per cent at end-March 2009, came down 15.1 per cent at end-September 2009. The ratio of Government external debt to GDP has remained around 5.0 per cent in the last three years.
ARE U CLOSE TO PERFECTION?
Becoming the perfect trader is no easy task, and I daresay that nobody has been able to achieve this great feat. The perfect trader buys at the absolute low of the day and sells at the absolute high. And depending on whether the high happens first or the low happens first determines if he is long or short for the day. It’s really easy to calculate this metric. It is simply the absolute value of the daily range or the high minus the low.
To get an accurate handle on the concept, we first ask what time frame we will be using. For end-of-day traders or swing traders, the daily bar is your competition. If you day-trade off the five-minute bar, well then use the five-minute bar to gauge your performance.
This concept is used in system trading and because vast amounts of data are typically used, we system traders need to resort to our super-duper calculators, also referred to as our programming language. This is an example of what code looks like for our daily perfect trader. The language is TradersStudio’s version of Visual Basic, but you can get the idea and use it with any program you wish. It’s the basic loop function.
For i = FirstBar to LastBar step 1
Next
PerfectProfit = PerfectProfit + Range [i]
You’ll need to dimension your PerfectProfit variable as an array if you want it to tally up daily ranges.
But you don’t need to be a systems trader to get some use from the concept. You can simply take a sheet of paper and tally the sum of all the bar ranges for your time frame. Take your net profit and divide it by perfect profit for a sobering assessment of how far from perfect you really are.
If you are 20% of perfect, then you have an impressive system. Don’t be discouraged to find out you’re more in the 2% range. What they say about flyfishing applies. First you try to catch a fish (profitable trade), then you try to catch a lot of fish (consistently profitable), then you try to catch big fish (participating in large moves) and then you seek the fish that has never yet been caught.
NFUTURES TODAY’S
DAY TRADING STRATEGY – SEPT 1
DAY TRADING STRATEGY – SEPT 1
Strong Intraday resistance @ 7 DEMA - 5446
Today if trades above 5400 for 15-30 minutes,
Jerk upto 5419-29-45 is possible
If failed to sustain,
Slide upto 5382-70 and more is for sure
BANK NIFTY
Supports @ 10711 & 10683
Buy btwn 10761-78
T1- 10805-19
T2- 10831-48
Sell btwn 10706-690
T1- 10663-49
T2- 10637-20
Nifty, Bank Nifty levels and intraday news updated here gives astonishing success rate (more than 97%) that is more than enough for the readers to attain a decent profit daily.
To mint much more money pls subscribe our service and
enjoy daily market with our guidance.
Thank you.
SHARE TIPS TODAY (SEPT 1)
INTRADAY
Sell SBM @ 1074
T1 – 1064
T2 – 1055
WORLD'S WORST TEACHER
The market often rewards bad behavior. You exit a stock because your stop is hit. You are okay with this because you followed your plan. The market then immediately reverses. You begin to think, “If only I stayed with the position.” The next time the market goes against you, you decide you are not going to get tricked again. This time though, the market does not reverse and what started out as a small manageable loss is now huge.
The market will give you loss after loss forcing you to abandon a methodology right before it takes off without you. On the flip side, the market will lull you into a false sense of confidence. You trade larger and larger, taking on excessive risk. You print money until your risks become so excessive that one or two bad trades wipe you out.
Learn from the market, but realize that sometimes it can be a lousy instructor.
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-Mahindeesh (a) Sathish
Cuddalore-2
Tamil Nadu
TODAY’S QUOTE
Wives are young men's mistresses, companions for middle age, and old men's nurses.
-FRANCIS BACON
RELAX CORNER
JUST SMS TO YOUR PAL
Sardarji to others:
Did anyone lose money wrapped in a rubber band?
One said, Yes I did
Sardar: Well, it’s your lucky day,
Be Careful hereafter..
Here’s your rubberband!
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