FROM AN EXPERIENCE
“One common adage on this subject that is completely
wrongheaded is: you can’t go broke taking profits.
That’s precisely how many traders do go broke.
While amateurs go broke by taking large losses,
professionals go broke by taking small profits.
The problem in a nutshell is that human nature does
not operate to maximize gain but rather to maximize
the chance of gain. The desire to maximize the
number of winning trades (or minimize the number
of losing trades) works against the trader. The success
rate of trades is the least important performance
statistic and may even be inversely related to performance.”
“The people who survive avoid snowball scenarios in
which bad trades cause them to become emotionally
destabilized and make more bad trades.
They are also able to feel the pain of losing. If you don’t
feel the pain of a loss, then you’re in the same
position as those unfortunate people who have no
pain sensors. If they leave their hand on a hot stove,
it will burn off. There is no way to survive in the
world without pain. Similarly, in the markets, if the
losses don’t hurt, your financial survival is tenuous.”
(to be contd)
OF NIFTY FUTURES – MARCH 21
If trades above 5395 for 15-20 minutes
see a hike upto 5425-33
If that breaks more hike upto
5455-65 is possible
Otherwise,
if trades below 5394 and cuts 5375
a sure fall upto
5352 and then upto 5335-20 is seen on charts
BANK NIFTY
Buy btwn 10805-820
T1 – 10866-89
T2 – 10904-12
T3 – 10942
Sell btwn 10682-68
T1 – 10623-598
T2 – 10584-75
T3 – 10546
SHARE TIPS TODAY (MARCH 21)
1) Sell M&M @ 630.30
T – 625.75
HIGHER CRUDE IMPACTS INDIA'S FINANCES
Will Oil Cripple India’s Finances? What Do Higher Oil Prices
Mean for India India’s Energy Profile: India’s current
energy requirements are estimated at ~400mtoe.
In order to sustain growth at current levels, studies
indicate that India would need to increase its
primary energy supply to 1,651mtoe in the next two
decades. Currently, coal meets more than half of
India’s energy needs, oil accounts for close to 30%, while
natural gas, lignite and hydro power make up the balance.
While coal resources are abundant, oil is not. As the
fourth largest consumer of oil in the world most of
India’s oil energy needs are met through imports,
making it is the world’s 5th largest oil- importing nation.
Impact on the BoP: India imports 80% of its crude oil
requirements, with oil comprising over 30% of its
import bill. Taking into account petro product exports,
a US$1/bbl increase in oil prices would increase the
trade deficit by US$800m. Our FY12 estimates
incorporate the Indian basket averaging US$105/bbl,
resulting in a current a/c deficit (CAD) of
US$59.5bn (3% of GDP). With the budget easing
funding availability on the capital account, we expect
flows to be sufficient to finance the CAD and maintain
our view of the currency trading in the Rs45-46 range.
Impact on the Fiscal Position: Absence of
deregulation in diesel and cooking fuels has resulted
in rising losses for oil marketing companies.
A US$1/bbl increase in oil prices results in gross
under recoveries rising by US$700m. With oil at
US$105/bbl and assuming no deregulation, estimate
under-recoveries are likely to rise to Rs1.4trn.
Further, assuming the continuation of the subsidy
sharing framework (i.e the govt’s share is 50%
of total losses), the subsidy burden could rise to Rs 688 bn.
Impact on Inflation: The impact is a bit difficult
to quantify though prices of petrol and industrial fuels
are market determined, the price adjustment at times
takes place with a lag, while the government regulates
prices of cooking fuels as well as diesel. However,
statistically, the impact on inflation could range from
0.68% to 3.4% depending on how it is transmitted.
Key to look out for is de-regulation of diesel,
but given upcoming state elections this could be delayed.
The budget arithmetic is based on nominal GDP
growth of 14%, gross tax revenues rising 18.5%,
and expenditure rising 3.4%. While the revenue and
growth assumptions appear realistic, the expenditure
numbers appear optimistic. Overall expenditures
are expected to rise by just 3.4%.
On the back of continued political upheaval in the
MENA region and assuming that output disruption
continues through 2Q11, our global Oil and Gas
team recently revised Brent Crude forecasts for 2011
and 2012 to US$105/bbl and US$100/bbl respectively,
from US$90/bbl estimated earlier.
What Does This Mean for Our Forecasts?
What Does This Mean for Our Forecasts?
Incorporating higher oil prices as well as recent trade data,
we have made several revisions to our BOP forecasts:
Given the current run-rate in exports ( Apr-Feb FY11
average at 30.5%) we are raising our FY11 export
estimate to US$229.6bn or 26%YoY from 15%YoY
earlier. Factoring in FY12 growth at 19%, exports in
absolute terms would rise to US$273bn from US$252bn
earlier.
On the import front, we are nudging our FY12
forecasts to US$435bn or 22.5%YoY, from
US$422bn earlier (+19%). This incorporates
(a) Oil imports rising by 35% vs. 15% earlier
(b) Non-oil imports rising by 18% (20% earlier).
Factoring in invisibles at US$102bn (slightly lower
than our previous forecast due to a moderation
in remittances), we expect the CAD to come in at
US$59.5bn from US$65bn earlier, or 3% of GDP.
Gas Gains Lower than Earlier Envisaged
With higher oil prices weighing on the trade deficit,
a key factor to look at is the gas discoveries that could
impact the net oil import bill. On this front, while
our oil analysts initially expected gas production to
be higher due to Reliance¡¦s KG Gas Basin
discoveries coming on stream (64mmscmd in FY12
and 80mmscmd in FY13), they recently revised
forecasts down to 55mmscmd and 64mmscmd
respectively.
Although the RIL BP deal could potentially advance
KG gas ramp-up timelines, lack of clarity and
production levels remaining stagnant in the foreseeable
future are a key reason behind the revision.
U.S. Disappointed over Pranab
(Refer to ‘OUR POLICIES’ in blog archives
if you have any queries)
For further details,
Contact Admin (Analyst) @
(0)9788563656
MESSAGE TODAY
One thorn of experience is worth a whole
wilderness of warning.
- JAMES RUSSELL LOWELL
RELAX CORNER
A GOLF JOKE
He left home about 8:30 a.m. to play golf with his friends.
On the way out the door he answered his wife’s
“what time will you be home?” question with “probably
about 1:30. I’ll have lunch at the club.”
1:30 came &a went, 3:00 passed, 6:15, still not home,
1:30 came &a went, 3:00 passed, 6:15, still not home,
finally at about 7:00pm he rolls in the driveway,
leaves his clubs in the garage, and presents his wife
with a pizza, and begins the apologetic story:
“We finished our game about 11:30, had lunch,
and I started home, when alongside the road I saw this
attractive girl with a flat tire on her car. I stopped to help,
got the tire changed, and looked around for a place to
wash my hands.
She offered money, but I refused, so she suggested
that I at least allow her to buy me a beer. She said
there’s a tavern just up the road, and they have a
restroom, you can clean up a bit. I agreed to stop,
we had a beer, then another beer, then a couple more,
and I realized that this girl was not only pretty,
she was very friendly, and a good companion to
spend time with. Before I knew it, we were in the
motel next door having sex. And that is why I am so
late getting home.”
His wife looked him in the eye and said
His wife looked him in the eye and said
“Don’t shit me; you played 36 holes, didn’t you?”
JUST SMS TO YOUR PAL
to fold it in half and put it back in your pocket.
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