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Commentary

Bad News Overload and More: MV Chronicle

Read the latest MarketVision Chronicle for the juicy details on how the bad news seems to be going up, three trades we still like, and more!

(Excerpt)

The bad news, both internationally and locally, keeps coming, it seems. We take a look at things within Europe and the US and then within India in terms of how difficult it is. Then, three trades I’ve been itching to make – demonstrated with reasoning.

Too Much In The Bad News Department

In major news this week: Greece is back. The tiny little country on the periphery of Europe has overleveraged itself, and last week, was seen to be considering a request to restructure its debt. That would technically be called a default, and when you default the owners of your debt take a hit. Given the huge amount of leverage that is hidden in Europe, even a fractional default will cause impacts no one can even imagine – and worse, if Greece does manage to reduce it’s debt, the next country out there saying “yoohoo” will be Ireland, then Portugal and so on, until all the “PIIGS” are slaughtered.
Greece needed a second bailout, and other EU countries have been saying “Dudes, stop spending!”

Three Market Trades

The upcoming week or two has dangerous areas for us: the GoM is meeting to decide whether to hike diesel prices. They should. But the political winds are not for this kind of thing. Everyone expects some sort of hike, though. On June 15th is the inflation data release, and Jun 16th is when RBI might end up raising rates again. This is in all very negative for the financials.
1)      Unless you’re trading, stay off the highly leveraged players. Banks, Real Estate, Financials and even Infrastructure will hurt.
2)      Find companies with zero debt (FMCG and IT mostly) and consider buying them on strength.
A few companies that have looked very interesting:

 

A Quick Thank-You note

It has been five months since we started the Chronicle, and now over 1200 members read it every week. The response has been good and some of you have been very kind to write in. I just wanted to say my thanks to all those who continue to read and subscribe.

I’m off for a week’s holiday in Goa between the 15th and 20th and that week’s Chronicle will either be delayed or merged with the subsequent week.  Next week you’ll hear from me as usual!

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By the Good Folks at MarketVision


The Tanishq Gold Rip-Off

Reader @moneybloke (Sunil) writes in (on the Physical Gold Con Job video):
Surprise surprise, just called Tanishq and asked to buy a 50 gm gold coin. here is the lowdown
MCX price of 995 22400 per 10 gms
Tanishq price of 999 2750 per gm
making charges 4.5%

I am guessing that there may be VAT on this as well ( 2%).
Since I needed to buy physical Gold, asked my sister in law to buy it in Dubai. She paid 23400 per 10 gm for coin ( there was making charges though nominal )
Wonder what makes a brand like Tanishq so arrogant to charge this kind of prices. Is it the so called Reliability factor in a largely unregulated industry.
On Monday will do research on Banks ripping customers off in Gold. Should make for interesting reading
Cheers
Sunil
Indeed, this is such a rip-off. The cost of buying gold in Dubai was more than 20% cheaper! I’m assuming it was a 999 gold coin. Tanishq effectively charges about 2,900 rupees per gram, wherewas you get it for about 2400 per gram in Dubai.

Read the rest of this entry »

Editor’s Picks


A set of links chosen just for you (Visit our Picks section for a regular update)

Weak international revenue affects Simplex Infrastructure – livemint.com

Weak international revenue affects Simplex Infrastructure, The disappointment in its international performance explains the large difference between the forecast and actual figures. It was the local business that saved the day, Money Matters

China takes on its massive muni mess with a $463bn bailout: FT Alphaville

It seems quite a few people have. Reuters reported on Tuesday that China plans to shift RMB2,000-3,000bn, or $308-463bn, of debt off local governments, citing sources.

Videos


Past Short Takes:

(Read the full Chronicle)