iCharts Discussions

[rk_a2003]

"MEMO

To: All employees
From: The chief executive
Subject: The bank in 2013


Dear team members,

Thank you for your hard work over the past year. It has been another challenging 12 months for our industry, and despite a further fall in our share price and that problem with the regulators, I am proud of how little money we have lost recently.

Make no mistake, 2013 will be tough, too. Some team members will have to find another team. We do not expect an improvement in the economy, and there is still considerable regulatory uncertainty to contend with. So we have been working on a set of simple principles that will help the bank to navigate what lies ahead. Please could you all take the time to read the following:

1. Lending is our lifeblood. We are a bank, and our job is to help the economy. As you know, we are under immense pressure from the authorities to lend more to small and medium-sized businesses in 2013. If you see a lending opportunity, take it.

2. Capital is precious. We are a bank, and our job is to avoid burdening the taxpayer. As you know, we are under immense pressure from the authorities to manage risk better. Small and medium-sized businesses are risky. If you see a lending opportunity, question it.

3. Integrity is our watchword. Someone very wise once defined culture as being how you behave when no one is watching. I couldn’t agree more. Nonetheless, from January please do not send e-mails or speak to anyone without compliance being present. This may make us a totally inefficient organisation but none of the senior team members wants to go through a public hearing like the last one.

4. Costs must be managed rigorously. We are unlikely to increase revenues greatly in 2013, so we will have to work tirelessly to reduce our expenses. Some spending cannot be cut, of course. Our compliance costs have gone through the roof, our IT systems keep breaking down, and we have to pay our people the market rate. But you can definitely forget the Christmas party.

5. Most importantly, we are responsible to our shareholders, creditors, customers, regulators and fellow-citizens. The shareholders want us to make money. Our creditors want us not to lose it. Our customers want lower rates. Our regulators want us to be prudent. I am not sure what our fellow-citizens want, but I know that they don’t like us. Please act accordingly.

I am happy to answer your questions if they have been cleared by compliance.

With all best wishes for 2013"

*Courtesy: The Economist.

[rk_a2003]

The state of the world economic affairs is best described by this cartoon.

[vinay28]

Here's something for those who have an ambition to achieve something in life.

[rk_a2003]

PLAN 'A' OR PLAN 'B' FOR THE EXPIRY

Well I have seen quite a good number of ‘unexpected’ F&O expiry moves. Today’s move is one among them. I don’t think that the dominant Institutions will have a fixed plan for any expiry in the beginning it self. On the ending day or few days before expiry they might be calling the shots which might be advantageous for them.

This Feb expiry went like this .All the world markets are near multiyear highs.US markets are at the verge of registering record highs. It was widely publicized that Indian markets are going to reach new highs by this year-end. F.M conducted road shows abroad and met Investors assuring them a conducive atmosphere for investments. In this back drop people expected that F.I.I’s must have handed over him there charter of wish list (read as commandments) and he is going to provide some sops for them like abolishing short term capital gains etc.

Now after budget it was known to everybody that except GAAR deferment no much sops. They may come in due course out of the budget whether in this government or in next new government.

In this scenario the positions for the dominant Institutes must be yielding profits for if Nifty moves down 100 odd points. They can comfortably do it as we knew that they accumulated all the A group stocks including Nifty stocks quite early. Now they booked profits by viciously dumping them from the mid of the day(just after the budget speech was over). They might have taken short positions in futures in Nifty stocks and weak stocks like ADAG group etc. No need to wonder, if these stocks make a smart recovery in the coming days….It doesn’t matter …..New month…. New game. They can as well take the index 300 points higher and may close their positions in profit in case there are some sops in the budget. It is for you and me to know what is there in the budget on the budget day, not for them.

Two birds at one shot. The game for this expiry is over with high drama. I would like to know who lost .I doesn’t believe in the theory that it is common trader or investor who provided juice for this for the reason that they don’t have those deep pockets, though some of them might have got hurt in this carnage.

That’s why wise traders square of their positions well before expiry and smart traders play with nominal risk - high reward strategies.

[vinay28]

interesting

[rk_a2003]

Some of you might have read it.For others who missed it;Here comes 'Dog eat dog world' chunk of this market.

"Shares of state-owned NHPC crashed 24 percent on Friday on suspected bear hammering, as the sell-off in second line shares is spreading beyond companies where promoters have pledged their shares.

Brokers say bear operators are specifically targeting stocks where their rivals have sizeable long positions (in some cases created on margin funding) and are facing a liquidity crunch.

In the case of NHPC, talk in the market is that a big trader was holding sizeable positions through a combination of margin funding, loan against shares and stock futures. This trader had been told by one of his many brokers that he would have to shift a chunk of his positions elsewhere, as the broker was unable to finance it. The trader had been in the market for the last couple of days, scouting for financiers to fund the position. He is said to have sought the help of a former BSE President who is renowned for his bearish calls on the market.

And while this bear operator declined to fund the position, he is learnt to teamed up with another old hand in the market, also renowned for his bearish calls. The duo is said to have short sold NHPC futures heavily last week. Open interest in NHPC stock futures shot up from under two crore shares (the equivalent of) to over 20 crore shares in a week. On Friday, NHPC March futures were trading at a 5 paise discount to the spot price, indicating massive short selling.

Open interest in NHPC futures declined around 40 percent to 14.55 crore shares on Monday, indicating that bears may have used the steep decline in price to cover up a good part of their short positions.

The crash in NHPC’s stock price comes at an inopportune time for the state-owned utility major as the government has to lower its stake from the current 86.36 percent to 75 percent by June. The company came out with a public issue in September 2009 at Rs 36 a share, but has traded above that price for just a few days in the last four years."

[pkholla]

Here's a bear story with a twist in the tail!
5 years after Dhiru's BHAROSA Co IPO in 1977, that is circa 1982, he was targeted by the then KING BEAR aka MANEK. Manek used to approach promoters, pay me greenmail or else I will hammer your stock. What he didnt know was that DA had emergency cash reserve around Rs 5 cr! DA said go to hell. Manek started shorting RIL naked, DA went on buying up the contracts. When his brokers asked Manek to square up, he couldnt and faced ruin. He was asked to approach DA, he went. DA asked him to do namaskar and ask for forgiveness! DA then gave his blessings, said go back to muluk and dont do wrong things again. The KING RAT went back to pavilion, retired hurt, without a squeak!
Moral: No matter how big a fish you are, there is a bigger shark waiting out there. So be careful how you display your ego! Prakash Holla
(Modified due to objection raised by Vinay28)

[vinay28]

prakash, the story is partly true but not about namaskar or touching shoes. I have seen Manu Manek in action from close. Later, my neighbour's son married his daughter too.

[pkholla]

Vinay: You heard what u heard. I heard what I heard.
You are not disputing the facts about Manek shorting RIL and getting short circuited??? BTW, what has your neighbor's son and his daughter got to do with his shaanpana? Prakash Holla

[vinay28]

"....BTW, what has your neighbor's son and his daughter got to do with his shaanpana?"

Manu Manek was considered a God by those in the market till he was finished. My neighbour thought his son was "marrying into a family" and will become an "in-law" and not an outlaw, as per Parkinson's law.

By the way, Harshad Mehta was also the cause of Manu's end.

[pkholla]

[rk_a2003]

Well, this Manu Manek episode can be described like this--- A relatively small fish tried to swallow a big fish underestimating its size. It only realized the reality only after predator turned in to prey.

Once the real size of the presumed small fish is known, no other predators dared to touch it. Now that big-big Fish empire is grown in to status of taking the whole country to ransom.

Bottom-line "You only can swallow smaller fish".

[vinay28]

that's because the small fish was from market while big fish was from corporate world. There are a few examples when this has been highly successful in the corpoarte world e.g. Emerson gobbling up Westinghouse, 20 times its size, with a violent counter bid.

[rk_a2003]

[vinay28]

some of you may find this interesting!

http://www.investopedia.com/articles/trading/06/retracements.asp?utm_source=chartadvisor-free&utm_medium=Email&utm_campaign=COTW-03%2F10%2F2013#axzz2N9OAQWwm