Posts Tagged ‘cash’

Bear and Bull Part 2

Hello Friends,

Just an extension of our previous blog ” Bear and Bull Part 1″.

Both bull and bear markets are inevitable

Both bull and bear markets are inevitable

In this Blog we would touch upon if bull and bear markets are inevitable and what are the basics investors should keep in mind while trading in bear and bull market 🙂

Both bull and bear markets are inevitable!

Smart investors try to anticipate both events to profit from their eventuality.

Bear markets are generally shorter in duration than bull markets.

To avoid being hurt by bear markets you must recognize the signs early and move part of your assets into cash equivalent investments.

It is recommendable that one should invest for the long term. Don’t let the bears get you down!

The same thing is true of bears – don’t panic and sell low.

Let the bear market run its course, which history tells us is likely to be short.

On the other hand, a bull market can leave many investors feeling pretty good about their ability to prosper.

Their confidence bolstered by the good times.

Some even find themselves swept up in “Bull Market Myopia” and forget the basic tenets of smart investing, like asset allocation and portfolio diversification.

Holding good stocks through bull and bear markets is a prudent strategy.


However, many investors feel that they do not want to be in the market during a bear market. It is difficult to predict when to move in and out of the market.

When a bear market ends, a strong upward move can occur in a short time.

If you are not in the market you will miss the move. The probability that your timing will be wrong is very high.

Unlike slow-starting bull markets, bear markets may start with a mini-crash – a major drop within a few days when investors least expect it.

Many investors are afraid to get out of a bull market for fear of missing “big profits” at the top of the market.

This is a recipe for disaster!

It is also known as greed!

As a bull market continues to increase, investors should start to decrease their stock holdings and move them into cash or money markets accounts.

Now, besides bulls and bears there are two other animals in our zoo to keep watch for!


Are investors who stick to their old strategies, oblivious to changes in the world around them.

And then there are the Hogs.

Bulls can make money. Bears can make money.

But Hogs are investors who are too greedy and usually get slaughtered!


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Trading Hours of Bourses Extended by SEBI :)

Trading Hours of Bourses Extended by SEBI

Trading Hours of Bourses Extended by SEBI

Market regulator SEBI on Friday extended the trading hours of bourses by up to two-and-a-half hours from 9 am to 5 pm, a move that may help in bringing back the trade that was seen shifting to Singapore Stock Exchange.


It has been decided to permit the stock exchanges to set their trading hours (in the cash and derivatives segments) subject to the condition that the trading hours are between 9 am and 5 pm,” SEBI said in a statement.

The new trading hours would now help integrate the Indian bourses with Singapore and other Asian markets in the morning hours, and the European market in the evening hours, said SMC Capitals Equity Head Jagannadham Thunuguntla.

“Some trade that had shifted to SGX Nifty (Indian Nifty traded in Singapore Stock Exchange) can now be brought back to the country,” he said.

The current market hours stand from 9.55 am to 3.30 pm.

In Singapore, trading sessions are held between 9 am to 12.30 pm and 2 pm to 5 pm (local time).

In addition, there is pre-open routine from 8.30 am to 9 am and pre-close routine from 5 pm to 5.06 pm.

Singapore is around two and a half hours ahead of India.

This would provide an opportunity to NSE to try and align their timings to that of a few Asian markets like the SGX since this exchange permits trading in Nifty.

With market regulator SEBI now allowing longer trading hours, it is now up to the bourses to decide on the duration and when to reset their trade timings.


Thunuguntla said, “All stock exchanges are likely to go for the maximum possible trading hours as they have been demanding it to be extended to 9 am to 9 pm.”

He said there is a serious competition ongoing between Bombay Stock Exchange and National Stock Exchange, and then there is the new competitor MCX-SX.

“I will be surprised if any bourse not utilises the full timing,” he added.


Greed and Fear : Factors that Drive the Stock Market !

fear and greed are the two key factors that drive the stock market :)

Everyone knows that fear and greed are the two key factors that drive the stock market.


If you talk to any seasoned investors in the market, they would tell you of the stories of how people got carried away by greed and lost all their money in the process.

Stories about people spooked by ‘fear factor’ also do the rounds of Dalal Street at regular intervals.

According to a study by SMC Capitals, “the elements of fear and greed are clearly apparent in the trends of allocation of assets by the investors in terms of cash and stocks.’’

The trend, says the study, can be seen at the levels of market cap and bank deposits in the economy.


When there is fear among the investing community, the bank deposits go up.

And, when there is widespread optimism, the market cap levels go up.


“If you look at investor behavior in the last three years,
the pattern is very clear:

the first year was of over-optimism,

the second was of over-pessimism and

now it’s the recovery period.

This trend is clearly visible if you look at the market cap and bank deposits (or the real wealth),’’ says Jagannadham Thunuguntla, equity head of New Delhi-based SMC Capitals.


In the study, SMC has compared the BSE market cap from the period starting January 2007, with the aggregate bank deposits in the bank deposits.

The relative measure of the entire market capitalisation of BSE as a percentage of aggregate bank deposits in the entire banking system demonstrates the mindset of the investor community.


Read the Full Story on The Economic Times

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Bank strike hits individuals, corporates alike :(

Bank Strike

A strike by over a million employees of 25 state-run banks hit both individual and corporate customers Friday, the second day of the two-day strike over wages and pensions.


While bank managements tried to keep automated teller machines (ATMs) across the country supplied with cash, cheques were not being cleared, delaying payments all around.


Eighty-five percent of the bank branches have reported closed.
It’s difficult to quantify how much business has been affected, but there was hardship in store for the people.


People were inconvenienced across the country with hundreds of ATMs getting closed.

A handful that were open, such as in Kolkata, did not have cash.


In Bangalore, banking operations, especially transactions have virtually halted, with majority of ATMs running out of cash since Thursday evening.


The trading volume at Indian equities and bond markets is also expected to be slim Friday as a lot of payments are routed through state-run banks.

‘In bond markets, banks are big players and hence volumes will be down. As settlements and clearance process are hampered, equity trading may also get affected,’ said Jagannadham Thunuguntla, equity head at SMC Capitals.

It is estimated that an average 3.52 million cheques (valued around Rs. 26,767 crore) were cleared every day during May 2009.

Private sector banks are open, but operations which involve transactions with public sector banks are expected to be affected.


While bank managements tried to keep automated teller machines (ATMs) across the country supplied with cash, cheques were not being cleared, delaying payments all around.

‘Eighty-five percent of the bank branches have reported closed. It’s difficult to quantify how much business has been affected, but there will be hardship for the people