The Market Vision Chronicle
This has been a week of data and more data, and then some data. Our newsletter gives you a quick summary, further reading and more interestingly, a chart of onion prices since 1994.
The markets have crashed more than 8% in two weeks. And there are a significant number of reasons why.
International cues: Other than China, Europe has shown signs of strain, with Portugal and Spain bond issuances and market problems. But this is only a great heading when you have nothing else – someone on twitter said that when nothing sticks, you can always blame global cues.
Reasons abound, and there will always be more reasons. Budgets, RBI, Scams, Political problems and who knows what. The only thing we can control is our reaction to these events. On my part, I have been reducing net exposure (by adding short positions), and looking for opportunities to invest.
Like I wrote last week, we have yet to even reach our 200 day moving average, which for the Nifty is still around 5,600 (and the Nifty’s at 5657). Is this the turning point? I wouldn’t know, but one way to play this is to buy call options on the Nifty. As always, I suggest you keep a stop loss for every stock, and respect it. And quite importantly, it’s result season, and there will always be some stocks that look attractive – from strong results, and strong relative strength. Time to filter wheat from chaff.
Onion PricesEveryone’s been going nuts about how much onion prices have moved in the last ten years.
Technical note: The index changed bases from 94-95 to 04-05, in August 2010. Data after August has been readjusted to the old index to demonstrate continuity.
Look meanwhile at other commodity prices – in the area of food we tend to use often.
The upward pressure isn’t quite as much for other vegetables or rise, and there are obvious elements of seasonality. So is this a one-off rise, or something much more serious? Time will tell.
Onion prices aren’t a big deal, it seems, when you look at weights. Onions have a weight of 0.18%, and that is less than Chicken, Mutton, Rice, Wheat and Milk. But we are fond of our pyaaz, at least for newspaper headlines.
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ResultsThree stock results were noteworthy this week. HDFC Grew EPS 30.46% with a strong quarter. Sintex showed a 55% increase in EPS, and Infosys disappointed with a 6%EPS increase. I look at EPS growth rather than net profit because:
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We had a Short Take about how Recovering from a Steep Loss is tougher compared to when the losses are smaller. Everything in the market is relative!
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More short takes are on the way, and we’re working to bring you more financial results in the best way possible. Keep watching for a separate piece on the budget, including education on why it’s important. It’s an education for us too – we still don’t know why it matters so much nowadays.
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Worriedly about Onion Prices,