- Wealth PMS (50L+)
My, my. What a day. Sensex reached 19K and the Nifty crossed 5700, a hefty 4% move on the latter. The TV channels went on and on about how this is the fastest Sensex 1000 point move, but that is so silly – after all, everything in the markets is a percentage move, and a move from 10,000 to 11,000 is far more significant than a move from 18-19K. Anyhow.
What’s the situation at the front? Well, macro stuff first. FII’s are buying – they bought another 781 crores today. And Indian institutions are selling – a whopping 2,300 crores net sales this month, meaning that they have not participated much in this phenomenal bull run! (Either that, or they are doing some crazy thing I do not understand)
Trading updates: Going strong. Bought Axisbank in the morning as it was 3% up – bought the future at 765 – and its stellar earnings release moved the stock up to 810+. Earnings are up 62% – a phenomenal record under the tight interest rate regime! I had sold at 810, intending to cover such a large move – note that the lot size is 450 – but then changed my mind and bought back at 817 for a longer term on the future.
I also added HDFC Bank Future – a stock I’ve been wanting to buy and the momentum and the great recent results prompted me to pick it up. It’s at 1,500, a record high of sorts, but I think we should be buying companies at record highs.
I was net short on the Nifty, through a lot of puts. I sold out most of that position at a loss, and churned into a long position by buying at the money calls. The move gave me a fast 60% on my premium, and then I shifted to an out-of-the-money call – Nifty 5750 – at Rs. 65. Who knew that was exactly the right thing to do? I could buy more calls since the premium was lower and the call ended at 110, a fairly good profit. I lost some money on a Reliance future position I was too stupid to hold – I have learnt I am not an intraday trader, and still I took a ridiculously small intraday loss for no reason – but it was small money.
Stock stories are similar – Reliance is hugely up, Jai Corp is still hitting upper circuits (a 2000 cr. bulk sale might have it reversing though), Sintex crosses 400, Suzlon moved back up, and IGate continues its saga. Praj is moderately up. Kamat Hotels is nearing its stop loss.
I’m now up 28%, higher than the index move (finally!). Plus, I still retain about 25% cash for buying more tomorrow should the need arise. Bartronics has resumed momentum, and so has United Spirits, plus Bata is showing lots of promise. Reliance Capital and Energy are also interesting to work with.
Where are we going? I don’t know. I’m not in the business of predicting markets – and although some of the things I’ve said have come true, I don’t like to say “I told you so”. This is not a market for fundamentals, or “value”, whatever that means.
This is an irrational market. We are in the middle of irrational exuberance. I say “middle” because no one will know the end until after it happens. Yet, there needs to be massive retail participation before it all falls down, like Ring-a-ring-a-roses.
Stay invested, and please update your stop losses.