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2950
Digital_Saint Says
How would the bigger banks suffer with deregulation in interest rates? Could you elaborate, please.


Digital_Saint, its like this. Savings accounts are the cheapest source of funds for any bank. Usually bigger banks get higher percentage of their funds from savings account due to their reach.
With the deregulation, the smaller banks will compete on the rate of interest. The bigger banks will have to increase too to compete. This will make the cheapest source of funds a little costlier. So their margins will decrease and that's how they will suffer.


I tried to understand what you are saying. However, seems like I am too stupid to understand it completely.

You're saying that Yes Bank can afford to raise the interest rates as the outgo is small. And, you are probably correct on this, because Yes Bank raised interest rates by 2% after this announcement. But, the outgo is small because the saving deposits are smaller as compared to those of SBI. But the base over which they need to make the extra outgo is also small as compared to SBI which has a much larger base in terms of deposits to begin with.

Extra outgo of Rs. 2 on deposits of Rs. 200 (Yes Bank) or Rs. 10 on deposits of Rs. 1000(SBI). That's the same thing, no?

Or, may be you're comparing the saving deposits in terms of percentage of total deposits with the respective banks? Is that the case?

What other means of deposits other than CASA do banks have? Or, may be Yes Bank has very high percentage of current accounts (which are interest free) out of total CASA?

Too many questions. ::


Other source of funds are fixed deposits, recurring deposits, bonds, debentures, promoter's capital, loan from RBI etc. For a more detailed understanding I suggest you visit my blog. PM me for any clarification 😃
2951
Digital_Saint, its like this. Savings accounts are the cheapest source of funds for any bank. Usually bigger banks get higher percentage of their funds from savings account due to their reach.
With the deregulation, the smaller banks will compete on the rate of interest. The bigger banks will have to increase too to compete. This will make the cheapest source of funds a little costlier. So their margins will decrease and that's how they will suffer.




Other source of funds are fixed deposits, recurring deposits, bonds, debentures, promoter's capital, loan from RBI etc. For a more detailed understanding I suggest you visit my blog. PM me for any clarification :)



Very well explained. Thanks a lot, instinctivefist.

I read your blog too and particularly liked the post on Theory X and Theory Y. :thumbsup:
2952

Hello Puyz,


How are you all doing?



Well, Id like to share something with all of you. As this thread is really for those who are really interested in Equity Markets, those who are willing to know more about it and many of us possess good knowledge and use that for investment purposes.



So I am thinking that why not we form a group or something like that? It will serve lot of purposes. We can set up a blog and post relative updates there too. Those who live in the same city can even arrange a meet and discuss a lot of things. That will be really great knowledge sharing and we can make some friends too. It is quite possible that we encounter like-minded people.



Moreover, this will be also beneficial to MBA aspirants and B-School students who want to pursue Finance as their specialization.


I want to do MBA-Fin and I think it would be very great to have such a group, to know from industry people themselves and to connect with such aspirants. Well, PG itself can serve this purpose but I am thinking much specific interest & purpose here.



What do you all say? I'd like to have your opinions.

2953

So I am thinking that why not we form a group or something like that? It will serve lot of purposes. We can set up a blog and post relative updates there too. Those who live in the same city can even arrange a meet and discuss a lot of things. That will be really great knowledge sharing and we can make some friends too. It is quite possible that we encounter like-minded people.

.


good to hear from you .. i dunno how practical it is to meet and discuss .. one thing which is very much possible is to increase the activity in this thread .. keep this thread active with some good posts rather than a blog .. i agree that blog helps to share the knowledge but then it would be nice if u post your views here only ..
2954

Could someone give me an insight on how to trade in F&O...As; in what all goes into F&O; trading.

2955
UtsavGambhir Says
Could someone give me an insight on how to trade in F&O...As; in what all goes into F&O; trading.


Futures and Options :)

There are three types of derivative instruments used

Forwards : Long term contracts , let say you want to buy SBI shares , but right now you dont have the funds , so you think you will buy it at end of the month , but the risk is that SBI Share price might appreciate in the meantime , so what you do is try fix an contract with a seller that you will buy

" 100 shares of SBI at Price of 1700 on 30th Nov 2011" , so what you have done is you have hedged the market risk out of your trade , no matter what the price of SBI is at the end of the month you can buy at 1700

There are downsides to this as well , what if the SBI shares would have depreciated to 1600 , you would still have to buy at 1700 , so you may be at loss of rs 100 per share

Futures : Forwards and Future contracts are similar in context , differences are that Futures are exchange traded , where as Forwards are OTCs , Futures don't generally result in actually delivery of the stocks but trade can be settled on cash to cash basis

Options : Options are like this , You want to buy SBI shares in future so u get into a contract that is
" Buy 100 shares of SBI at Price of 1700 on 30th Nov 2011"

but what if SBI share price is 1600 on 30th Nov , now you would like to buy it from the market isnt it 😃 , Option allows you that choice , to cancel the contract and buy from the market . But offcourse any choice comes with a price , there is upfront fee in options ,which you have to pay to the seller , so in case you dont wish to honor the contract , the seller is compensated for some loss :)


I have explained a very small part of what F&O; is , taking example of only buying/selling of stocks , but we can do trades on currency , oil , metal , foodgrain , Stock Index itself 😃 , in US people even trade on weather 😃
2956

Hi,

Is anyone, on this thread, an equity / stock broker?

I am seeking some assistance (and connection) in order to land a job at a Brokerage House. I'd be very glad if anyone can help me out.

2957
Hello Puyz,


How are you all doing?
Well, I'd like to share something with all of you. As this thread is really for those who are really interested in Equity Markets, those who are willing to know more about it and many of us possess good knowledge and use that for investment purposes.
So I am thinking that why not we form a group or something like that? It will serve lot of purposes. We can set up a blog and post relative updates there too. Those who live in the same city can even arrange a meet and discuss a lot of things. That will be really great knowledge sharing and we can make some friends too. It is quite possible that we encounter like-minded people.



Very good idea. I would love to join for sure. I am from Mumbai. Please PM me if anything works out
2958

Very good idea. I would love to join for sure. I am from Mumbai. Please PM me if anything works out


Will definitely do.

I think Mumbaikars will definitely have an edge if this thing works out. I am looking forward to come over there, provided that I get a job at a Brokerage House.! I am trying for that. If you have any idea about the same, please do guide me, so we can make this thing happen sooner 😃
2959

Guyz,

Any suggestions / recommendations which companies are good to invest in, for long term(indefinitely.!) & short term as well?

Though the markets are performing well compared to few months before, there must be some companies of which stocks should be trading at attractive valuations.

What do you guyz think?

2960
Guyz,

Any suggestions / recommendations which companies are good to invest in, for long term(indefinitely.!) & short term as well?

Though the markets are performing well compared to few months before, there must be some companies of which stocks should be trading at attractive valuations.

What do you guyz think?


stocks like jsw steel and patni very good for short term
2961
abhimukh19 Says
stocks like jsw steel and patni very good for short term


No idea about Patni, but regarding JSW steel, before some days I read in ET that JSW Steel is having some problems and a big Debt and Sajjan Jindal had involvement in this.

Basically, JSW steel has no mines (not a single), the article said. It imports all of the steel - mostly from China, and now prices have increased, also Government has made some law or policy regarding importing steel. So all this links up.

Tata steel can be preferred over JSW, I guess.
2962
No idea about Patni, but regarding JSW steel, before some days I read in ET that JSW Steel is having some problems and a big Debt and Sajjan Jindal had involvement in this.

Basically, JSW steel has no mines (not a single), the article said. It imports all of the steel - mostly from China, and now prices have increased, also Government has made some law or policy regarding importing steel. So all this links up.

Tata steel can be preferred over JSW, I guess.


+1. I remember last year when everybody was gung ho about JSW Steel when it had beaten TATA Steel and SAIL to become India's largest steel producer and the stock shot up like a rocket.

Now they are on a freefall. Backward integration is quite important in industries like these as one cannot remain perennially dependent on others for raw material. This is where Tata Steel scores. They have iron ore mines and they are into power sector too.

Even though I have not done detailed analysis, steel industry is cyclical in nature. So, invest when everybody is running for cover and sell when you think you have earned a lot. And, I mean A LOT and not 10-20%.
2965

By the way, how much duration is short term?


Well thats a question to be asked to the puy who had originally asked for short term investment opportunities

PS: i just gave my opinion , short term could be intraday to 6 months :), again depends on investment horizon of the investor and also risk appetite :)

PPS: my original views given were for short term 😃 and i endorse your views regarding incremental costs effecting their profit margin and may end up causing problems as dependence on import will increase 😃
2967

This discussion about publicly available information had me bring up some old posts where I kept telling people to pull the trigger and buy.

I had bought Tata Steel at around Rs. 170 a piece back then (Oct-Nov 2008 ) and then sold it gradually in 2009-2010 at average of about 600-625.

I had also bought DLF at 165 when people were dumping real estate stocks, doubled it in a few months and came out unscathed. :)

Digital_Saint Says
Thx a ton! But do you generally think Tata steel is a good buy, even if I buy in the month of Jan? I am just a beginner. So not got much of an idea. What others would you suggest for 10000 bucks.(Remember it's my hard savings:))



It is quoting almost 75-80% lower than its peak price. I think most of the bad things that 'can' happen have already been factored in the prices of the stocks since it is human tendency to make a picture gloomier than what it actually is.

At this time, most of the people would not suggest investing in infrastructure, commodity stocks. However, I feel the people who are investing in these now are going to reap in high profits when the turnaround happens as these stocks are available at dirt-cheap prices now and the world is not going to end. So, all these good companies will make the best comeback whenever these clouds passby.


Do you think Tata steel will come down to as low as 130/ share? I missed it last month when it came and the share took a 'U' turn and has now come upto 220/share as of 2day. Can I wait for 130-140 range again? How long will it take?Your predictions for the same:)




That is how the stock markets work. If anyone knew where it was going to go, that person would have been a billionaire already. This stock was beaten badly earlier and no one wanted to buy metal stocks. It closed over 245 today. Just imagine the people who bought it at 150-160 or even lower, they would have realised (or unrealised) profits of more than 60% within a month or so!

One needs to realise 2 things - there is risk involved and stock markets are unpredictable to a large extent. Those who tell you that they buy shares at 'lowest price' or claim to know bottom of the stock market are either lying or are Gods. So, do not expect that you will buy it at the 'lowest price'. Lowest price was the 'past price', now see the future potential of the stock and buy. If you are going to wait till it comes down to '130' again, then you may never buy it, and who knows if you see it at 1000 within a year, however unlikely it may be.

IMO, if you have to buy, just follow it for few days as I think there would be punters booking profit now since it has been going up since quite some time now, but it is highly unlikely that you would get it for the price you want it for anytime soon again.

If the money is yours (not borrowed), there is no one whom you should depend on for investing. And, even these so called 'anal-ysts' on TV are a joke or rather the people who follow them and help them realise their dreams. Follow your own mind. No one will EVER help you more than what you yourselves can.
2968

Abhimukh, in fact to think of it again, even though I have not been following JSW Steel or much of the stock market on the whole, if JSW has been beaten badly recently, it might be a good investment for a period of a few months because it is human tendency to sell under knee jerk reactions, or one can say under over-pessimistic thoughts.

One more old post where the the stock that I was talking about when I said 'stock on my mind' was Tata Steel, so yes I had bought it somewhere in November 2008.


er_gaurav211085 Says
And it would be better if you can wait till the market stabilizes till march'09. Or atleast keep a part of you money till that time.
Giving all the due respect to your investment strategy, I would beg to differ. In stock markets, it is never wise to wait for any kind of stability if one is a buyer. One has to be ruthless and make quick decisions. I wont go too far. I have a stock on my mind which I had 'almost bought' last Monday. Thanks to my laziness teamed with the festive mood, I thought I would buy it after Diwali. Now, that stock has already shot up by more than 30% within the last 3 trading sessions as the market sentiment has improved!

And, like you talked about averaging, how do you manage doing that, because I invest everything at one go when I see the price to be decent enough. I dont subscribe to this concept because one just would'nt know where the markets would go. We may predict a day or two but when we cant even predict one week, then it is useless keeping money to 'average' and realise later that the market has gone up instead of coming down. So when the probability in favour is just about 50%, it makes no sense to me.

The only point I keep in mind is to stay liquid enough so that I dont have to sell the stock anytime soon.
2969

Do anybody have any idea about ICSA INDIA and INDIABULLS FINANCE on a 5 year horizon...
Both the companies looks great in terms of fundamentals....
Am a bit confused whether to hold these for another 5 years or sell....
By the way i have incur a huge loss if i have to sell ICSA...
Anybody, any puy with reasoned answer?

2970
Abhimukh, in fact to think of it again, even though I have not been following JSW Steel or much of the stock market on the whole, if JSW has been beaten badly recently, it might be a good investment for a period of a few months because it is human tendency to sell under knee jerk reactions, or one can say under over-pessimistic thoughts.

One more old post where the the stock that I was talking about when I said 'stock on my mind' was Tata Steel, so yes I had bought it somewhere in November 2008.


+1, mate :)

Speaking personally, before a couple of months I was vacillating whether to invest in TISCO or JSW, as both seemed good option. I chose TISCO. After reading the article that I mentioned, I was thinking: Man, it is good that I haven't put my money in JSW.

But from now on, thanks to abhimukh, I will think of JSW for short term as it is also a better company to invest in 😃 and make profit
2971
Do anybody have any idea about ICSA INDIA and INDIABULLS FINANCE on a 5 year horizon...
Both the companies looks great in terms of fundamentals....
Am a bit confused whether to hold these for another 5 years or sell....
By the way i have incur a huge loss if i have to sell ICSA...
Anybody, any puy with reasoned answer?


regarding ibulls fin i would like to say that its in the hunt for banking license , if it really finds its prey(license) then it could b could trigger point for enhanced liquidity on this counter ... i suppose it would be an agressive player if it gets into banking space akin to Yes bank

meanwhile Crisil -- the rating agency is a gud bet in fin sector ... i would be willing to enter it near 750-800 levels... stock is at an exciting stage post the split n its expanding biz with more verticals make it a gud candidate to have in one's portfolio both for medium to long term
2972

indiabulls finance is just a punter play with no sure shot win
but Crisil i must say the valuations are a bit high But the business is rock solid im holding the stock from 3000 levels Pre split thats like 300 rs on the current stock one of my favorite long term plays because the corporate debt market in india is still in its infancy and as the credit market grows Crisil shal boom it is the growth story of the next 10-15 years! the clout that Crisil has over the indian Financial sector is Unprecedented Unchallenged & Irreplaceable, in other words a near Monopoly something which defines every multibagger.
another example of such a business is Google:D