We have started hedging our cash portfolio by buying some puts in F & O segment. It goes without saying these are troublesome times and you need some protection against the wild swings of the market.
In layman's language by buying puts your portfolio gains when market falls. When market falls obviously the value of your cash portfolio reduces and to protect it from free fall you need the comfort of some instrument through which you can gain when market falls.
As if now we have bought the Nifty 3700 PE July series Put. Considering the present scenario we feel it is a must since in the present circumstances we are not looking at the relative returns compared to sensex. We are already outperforming the sensex by a margin of 20%, but we strongly believe it makes no sense to say our returns are -5% since sensex has gone down by 25%. It is time to look for absolute returns and we are going to ride puts unless the market condition stabilizes.
Today again inflation figures were bad and has increased to 11.89% and we think RBI would be further increasing the key policy rates soon. We are in a election year and government would want the inflation to reduce at any cost even of GDP growth. In high interest rate scenario there is only a point up till which companies can pass on the cost increase to the customers after which there is a elasticity of the demand comes in and it contracts. This affects the margins of the companies.
It seems there bad news just keeps pouring in. Industrial production growth has slipped to 3.8% -its lowest levels in last 6 years. It makes the job of policymakers even more difficult with high inflation at one hand and slowing growth on the other hand.
Earnings season has started and Infosys came out with a good set of numbers for Q1 FY-09 along with revised guidance of 99.34-101.06 for the full FY-09. Biggest contributing factor to the revised guidance is the rupee depreciation. There are concerns on the deals coming from the BFSI vertical which is the main reason Infosys tanked despite good set of numbers and revised guidance. But we believe there is some scope of rerating in the stock and in the next 3-4 months it should outperform the sensex and nifty. We are definitely looking at buying into the IT stocks.
Oil continues to boil and has crossed its previous high of USD 145.85 per barrel on July 3. Supply side concerns from strike in Brazil, violence in Nigeria and geopolitical tension in Iran continue to provide fuel to the oil price rally. We can't comment how is the present price is due to speculation or genuine supply side concerns but we believe the world has entered into a phase where it is continuously going to see higher prices.
In layman's language by buying puts your portfolio gains when market falls. When market falls obviously the value of your cash portfolio reduces and to protect it from free fall you need the comfort of some instrument through which you can gain when market falls.
As if now we have bought the Nifty 3700 PE July series Put. Considering the present scenario we feel it is a must since in the present circumstances we are not looking at the relative returns compared to sensex. We are already outperforming the sensex by a margin of 20%, but we strongly believe it makes no sense to say our returns are -5% since sensex has gone down by 25%. It is time to look for absolute returns and we are going to ride puts unless the market condition stabilizes.
Today again inflation figures were bad and has increased to 11.89% and we think RBI would be further increasing the key policy rates soon. We are in a election year and government would want the inflation to reduce at any cost even of GDP growth. In high interest rate scenario there is only a point up till which companies can pass on the cost increase to the customers after which there is a elasticity of the demand comes in and it contracts. This affects the margins of the companies.
It seems there bad news just keeps pouring in. Industrial production growth has slipped to 3.8% -its lowest levels in last 6 years. It makes the job of policymakers even more difficult with high inflation at one hand and slowing growth on the other hand.
Earnings season has started and Infosys came out with a good set of numbers for Q1 FY-09 along with revised guidance of 99.34-101.06 for the full FY-09. Biggest contributing factor to the revised guidance is the rupee depreciation. There are concerns on the deals coming from the BFSI vertical which is the main reason Infosys tanked despite good set of numbers and revised guidance. But we believe there is some scope of rerating in the stock and in the next 3-4 months it should outperform the sensex and nifty. We are definitely looking at buying into the IT stocks.
Oil continues to boil and has crossed its previous high of USD 145.85 per barrel on July 3. Supply side concerns from strike in Brazil, violence in Nigeria and geopolitical tension in Iran continue to provide fuel to the oil price rally. We can't comment how is the present price is due to speculation or genuine supply side concerns but we believe the world has entered into a phase where it is continuously going to see higher prices.
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