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On Slack: Bain sells Hero Shares, Slack Preps for IPO, Nifty Directors earn 170x Staff Salaries, Zerodha Going zero Brokerage and more…

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The Slack Discussions

The Slack group at Capital Mind Premium has been extremely active and if you haven’t been there, pop us a note by replying to this email. (If you’re a trial member this probably sound like Greek to you; it will be available when you sign up!)

A brief summary of some of the interesting things discussed there in the last few days:

#stocks: Bain Capital selling Hero MotoCorp shares worth up to $116 million: IFR

US private equity firm Bain Capital is selling shares in Hero MotoCorp Ltd, the world’s largest seller of motorcycles and scooters, to raise as much as $116 million, IFR reported, citing a person close to the deal. (LINK)

#general: Ace Investor Pockets Rs. 375 Cr (In 1 Week) In “Mother Of All Bear Squeezes”

The story is the magnificent riches raked in by Martin Shkreli, the 32-year old Hedge Fund whiz-kid. Martin Shkreli is developing a formidable reputation as the man the Bears must run scared of. He shot into fame (notoriety?) when he bought a controlling stake in Turing Pharmaceuticals, a manufacturer of a life-saving drug for treatment of AIDS, and got it to overnight raise its prices by 5000%. The move was severely condemned by the intelligentsia, including the Presidential candidate Hillary Clinton, as “price gouging”. (LINK)

#general: The recommended Seventh Pay Commission hike will not create a boom

The Seventh Pay Commission award will boost central government wages by 23.5 per cent. So, many analysts have predicted a consumption boom, lifting corporate revenues and profits. Whoa! (LINK)

#stocks: Airline stocks around the world gain 100-300%; SpiceJet top performer

SpiceJet has become the world’s top-performing airline stock, surging more than four-fold over the past year, as the aviation industry benefitted from lower crude oil prices and a boom in passenger traffic. (LINK)

#general: PM appeals to Opposition for cooperation for passage of GST

Appealing to the Opposition for cooperation on the eve of the winter session of Parliament, Prime Minister Narendra Modi today made a strong pitch for early passage of the GST, saying it will be in the interest of the nation. (LINK)

#stocks: Sebi orders impounding of Rs10 crore in insider trading case

Capital markets watchdog Sebi has ordered impounding of unlawful gains worth over Rs10 crore from Jagran Prakashan’s company secretary Amit Jaiswal and his wife after finding them guilty in an insider trading case. (LINK)

#general: Ex-Goldman Compliance Worker Sued by SEC for Insider Trading

A Goldman Sachs Group Inc. employee hired to develop surveillance systems to detect illegal behavior was sued by the SEC for allegedly helping himself to inside information and trading on it. (LINK)

#stocks: Interesting Thought by David Einhorn

Einhorn

#general: Blue Origin Launches Bezos’s Space Dreams and Lands a Rocket

Yesterday, the Space X founder and CEO got a liiiiittle competitive with fellow billionaire, Amazon founder and CEO Jeff Bezos. Bezos also has his own space company, Blue Origin. And yesterday, Blue Origin sent a rocket to the edge of space and back with a controlled landing. BFD, since Blue Origin is hoping to eventually use the tech to send people to space and back. Yesterday, Bezos celebrated, calling the rocket landing the “rarest of beasts.” Which Musk said, ‘hi, remember me?’ He responded by pointing out that the landing wasn’t so rare – his company did the same thing three years ago. (LINK) (VIDEO)

ElonMusk

#general: Sla
ck Preps For IPO, Even If It Doesn’t Want Or Need One Soon

Stewart Butterfield, Slack’s founder and CEO, said in an interview with The Australian Business Review that the company recently kicked off an “IPO readiness” program. The idea, Butterfield said, is for Slack to have the option to go public in the future and to be prepared when the time is right. (LINK) (LINK)

#general: Construction equipment industry is seeing signs of growth: Icema report

After four years of decline, the construction equipment industry is seeing some signs of growth in 2015-16, said a report released on Wednesday by the Indian Construction Equipment Manufacturers’ Association (Icema). (LINK)

#general: Nifty firm directors earn 170 times their staff

The top brass of Nifty companies, on an average, earned 170 times what an average staff member earned in these companies in FY15. Of the 95 directors belonging to 34 private sector firms in the Nifty, 11 had remuneration in excess of 400 times the median average staff pay. (LINK)

#macronomics: Why Congress Would Want GST to be Implemented by BJP only after 2017

Let’s start with some facts. No government across the world has been re-elected after they implemented goods and service tax (GST). Not just that, the benefits of the GST were always reaped by the succeeding government. (LINK)

#macronomics: Sharekhan’s Report on the GST and What it Could Bring to the Nation’s Economy

GST–Simplified indirect tax regime: The Goods and Services Tax (GST) aims to simplify the current indirect tax regime by bringing all central and state levies (like excise duty, sales tax, octroi, VAT and other countervailing duties) under one single head having uniform tax rate across goods and services (with some exclusions like electricity, alcohol and petroleum products). (LINK)

#general: Deepak Parekh’s son Siddharth Parekh Launches $200 mn PE Fund

Siddharth Parekh, the younger son of Deepak Parekh, chairman of India’s largest mortgage lender Housing Development Finance Corp. Ltd (HDFC), has made an entry into the country’s private equity sector with a $200 million fund. (LINK)

#general: Rear view by Inder Malhotra: Preamble to a 2015 Debate

Not long ago, there was a fierce tussle between judges and politicians over who should make appointments to the higher judiciary. Last week, a potentially more hurtful fight began over secularism that is unlikely to end any time soon. Ironically, this happened on Constitution Day, coinciding with the 125th birth anniversary of Babasaheb Ambedkar, who headed the drafting committee of the Constituent Assembly and is the greatest icon of the Dalits today. Every political party is trying to usurp his legacy. (LINK)

#stocks: Gulf airlines eyeing stake, says SpiceJet

Budget carrier SpiceJet, which has surged 280 per cent this year, has said Gulf airlines have shown interest in buying a stake in the airline. (LINK)

#general: CAG Blows the Lid on Rs 100,000 Crore Rice Milling Scam

Taking advantage of the skewed pricing policy of successive governments both at the Centre and at the state level, rice mill owners across India have been literally milling thousands of crores of rupees for themselves through the sale of paddy by-products left over from the rice they process for the public distribution system (PDS). (LINK)

#general: Inside Job: The woman who was sacrificed to nab Raj Rajaratnam

Anil Kumar, a senior partner at the global consultancy firm McKinsey & Company, sent a two-word email to Raj Rajaratnam, the CEO of the Galleon Group, a multi-billion-dollar hedge fund based in New York. The email said, simply
, “Manju Das.” (LINK)

#stocks: Import Data Confirms Reliance Jio 4G Services Launch on Track

Having pushed the deadline by a month, Reliance has promised to deliver ultra-cheap 4G services in India starting December. December is almost here and according to a tipster, Reliance will be announcing Reliance Jio soon across the country, delivering as per the promised timelines. After all, the country has been looking forward to the launch of 4G services since the beginning of the year and what is more fulfilling than cheap and super-fast internet. (LINK)

#stocks: Ajay Singh: Forty companies, a dispute and some defaults

Former SpiceJet promoter Ajay Singh is pulling out all stops to raise the hundreds of crores of rupees needed to take control of and keep the wobbling airline afloat. But a few small developments from his past could now come under closer scrutiny. (LINK)

#stocks: RobinHood Brings Commission-free Stock Trading to more Apps

Robinhood grabbed our attention for years while it was still on the drawing board. The company succeeded in rocking the financial boat when it launched in Dec 2014 as the first mobile-first, fee-free brokerage, allowing users to trade stocks without commissions or account fees right from your smartphone. Today, the company is announcing partnerships that will let users of financial services StockTwits ( one of Fast Company’s Most Innovative Companies in Finance in 2012), Openfolio, and Quantopian trade directly using Robinhood’s platform. (Educational finance company Rubicoin will also integrate Robinhood services when it launches in December.) (LINK)

#general: AirAsia India Reports a Net Loss of INR 65.2 cr. in Q2’16, Stellar Cost Improvement but Disappointing Revenue Performance

Summary:

  1. Net loss INR 65.2 crore.
  2. Excellent work in reducing unit costs in Q2’16, exceeded expectations.
  3. Disappointing revenue performance.
  4. Excellent ancillary revenues.
  5. Accumulated losses around 200 crore, losses since start of operations around INR 150 crore.
  6. Financial & certain performance data reported by AirAsia India is inconsistent, inaccurate, and unreliable.

Data Discrepancy

Before we begin the analysis of AirAsia India’s performance, it must be noted that the quarter reports of AirAsia are unreliable, on at least four counts, as observed (LINK):

#stocks: Piramal offer floating rate bonds, but will investors gain?

Piramal Enterprises, a healthcare and financial services company, is raising Rs 750 crore in floating rate bonds (or floaters), an instrument that’s finding favour with corporate entities trying to take advantage of falling interest rates. Non-convertible debentures issued by Piramal are linked to State Bank of India’s base rate, two people in the investment banking circle said. The coupon is 9.40 per cent a year, 10 basis points above SBI’s base rate. (LINK)

#stocks: The Truth about Volatility – A Fantastic Piece of Analysis by Jim Berg

Typically, volatility indicators are used to determine the direction, strength, and momentum of a security. The Average True Range (ATR), one of the more popular volatility indicators, measures volatility by looking at the average price ranges over the past x number of periods, taking gaps into account. (LINK)

#general: Dayanidhi Maran to be questioned by CBI on November 30 in illegal telephone exchange scam

The Supreme Court today said that Dayanidhi Maran should appear before the CBI for questioning, but also added that there shall be no custodial interrogation. The court said that the CBI could question the former telecom minister between 11 AM and 5 PM on November 30. (LINK)

#stocks: Allahabad Bank May Exit From Insurance JV

Allahabad Bank on Monday said it may partially or completely divest its stake in insurance joint venture Universal Sompo General Insurance (USGI). (LINK)

#stocks: Gas worth upwards of Rs 11,000 crore explored by RIL from ONGC’s side of KG field: Report 

US-based consultant D&M has submitted it
s final report on the gas dispute between ONGCBSE 0.47 % and Reliance Industries, establishing that natural gas worth over Rs 11,000 crore has migrated from idling KG fields of the state-owned firm to the adjoining KG-D6 block. (LINK)

#general: Zerodha Going Zero Brokerage

Traders & Investors,

Yes, you read it right! All investments at Zerodha will now be absolutely brokerage free starting 1st Dec 2015. No upfront fees, no minimum volume, no special terms and conditions, no clauses, no strings attached. (LINK)

#general: Myntra decides to return to web presence

Online fashion retailer Myntra is shedding its app-only presence and plans to revive its website for shoppers by January, to tap more users. Myntra had taken a lead in going app-only earlier this year, following which many others were shifting their focus as well. (LINK)

#stocks: Jubilant Life gets USFDA nod for generic anti-depressant; shares up over 8%

Jubilant Life Sciences Ltd has received final approval from the US health regulator for its generic version of anti-depressant Paxil tablets. (LINK)

#general: UP keeps state advised price for sugar cane unchanged

Forced to take note of the plight of the sugar industry, which has frozen capacities amid mounting losses, the Uttar Pradesh government on Wednesday decided to keep the state advised price (SAP) for sugarcane unchanged at R280/quintal for the marketing year that started in October. (LINK)

#macronomics: IMF gives China’s currency prized reserve asset status

The International Monetary Fund admitted China’s yuan into its benchmark currency basket on Monday, in a victory for Beijing’s campaign for recognition as a global economic power. (LINK)

#general: ​Are ERP ‘dinosaurs’ on the road to extinction?

In a past life I was an IT consultant. During this time, I always found it rather interesting that the vast majority of organisations would invest millions of dollars into enterprise software marketed by the big three – Peoplesoft, SAP, and Oracle (before it bought PeopleSoft). (LINK)

#general: VW Group to recall over 3,20,000 cars in India

Volkswagen India is bracing itself to initiate a recall of over 3,20,000 of its cars affected by the diesel emissions scandal. The affected cars include all cars powered by the EA189 diesel engine family and this is around 2,10,000 VWs, around 80,000 Skodas and over 30,000 Audis. (LINK)

Great Reads:

1) We, the Nation: the Lost Decades – by Nani A. Palkhivala

A book for all persons and all seasons indeed. Each topic is illuminated with sensitivity and sunlight-clear exposition. Public memories are irresponsibly short and selective, and this book, spanning as it does the panorama of the last ten tumultuous years, becomes essential reading – the history that must be read so that we are not condemned to repeating it.

2) We, the People – by Nani A. Palkhivala

Nani A. Palkhivala’s name is a byword in India’s legal world. A man of many and varied parts, he has crossed with ease the law’s narrow confines and has gone beyond into numerous other fields. Palkhivala discusses many subjects – education and democracy; economic growth and social justice; socialism and taxation; crucial constitutional issues and memorable judgements;

3) The Billionaire’s Apprentice: The Rise of the Indian-American Elite and the Fall of the Galleon Hedge Fund

Chronicling how a dogged team of SEC officials, federal prosecutors and FBI agents discovers and prosecutes the biggest trading case of the generation, The Billionaire’s Apprentice: The Rise of The Indian-American Elite And The Fall of The Galleon Hedge Fund is a compelling read.

4) A Wealth of Common Sense: Why Simplicity Trumps Complexity in Any Investment Plan – by Ben Carlson

A Wealth of Common Sense sheds a refreshing light on investing, and shows you how a simplicity-based framework can lead to better investment decisions. The financial market is a complex system, but that doesn’t mean it requires a complex strategy; in fact, this false premise is the driving force behind many investors’ market “mistakes.”

5) Gurus of Chaos: Modern India’s Money Masters – by Saurab
h Mukherjea

What does it take to be a stock market guru? What are the traits needed to be a successful investor? Can one master the stock market or is it a gift one is born with? How does one build a portfolio and protect it? Learn from the masters. The Indian stock market is many things to many people. Some are drawn to its thrill and promise but, more often than not, they fail to recognize the risk that accompanies the reward of a great ride.

#backtobasics:

Max Painhttp://www.investopedia.com/terms/m/maxpain.asp andhttps://www.capitalmind.in/2013/12/premium-the-concept-of-max-pain-in-options/

Frog in the Pan: Identifying the Highest Quality Momentum Stocks – http://blog.alphaarchitect.com/2015/11/23/frog-in-the-pan-identifying-the-highest-quality-momentum-stocks/?curator=alphaideas&utm_source=alphaideas

Hans Rosling: Global population growth, box by box – https://www.youtube.com/watch?v=fTznEIZRkLg

Not Rich Enough to Sell Calls?https://www.tastytrade.com/tt/shows/market-measures/episodes/not-rich-enough-to-sell-calls-11-20-2015?locale=en-US

If you’re trading FX, don’t make it complicatedhttp://education.forexlive.com/!/if-youre-trading-fx-dont-make-it-complicated-20151117

A 5-minute history of Syria’s war and the rise of ISIS – http://www.vox.com/2015/11/14/9735102/syria-isis-history-video

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