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LOOKUP
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an engineer,investing in stocks since 1987,
interested only in long term investment.
I am not a trader.
Never tried day trading and other speculative trading instruments.
interested only in long term investment.
I am not a trader.
Never tried day trading and other speculative trading instruments.
Also see LOOKUP’s rated messages
06 Oct 2008 02:26
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Already the bears nailed the coffin.The responsible personnel are sleeping or acts as sleeping, they will come in after the death of the market. And there are few sick people who celeberates the market crash.Only GOD saves the ordinary small investors and long term investors....
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06 Oct 2008 02:18
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global marketplace means that investors will link the performance of Sensex with that of the Dow. So far, the correlation is not proven
The first time I heard somebody keeping a track of Dow on a day-to-day basis was a business school senior of mine from the class of 1997. Little did I know that in matter of barely over ten years, the world will get glued to Dow daily and intraday movements.
And nothing will matter more than where the Dow was headed. We are in the age of the Dow, and Dow psychology rules. The grip is so powerful that an emerging market broker in Romania after a market update to his client starts talking about what the client is interested in most, the bailout meeting. The respective client will be missing the UEFA championship match between CFR Cluj and Chelsea to watch the bailout meeting at home.
Dow is the global pastime now. Before 2000, it was both Dow and the Nasdaq. After the tech bust, Nasdaq featured less in inter office bets and perceived connections with Indian markets.
I also remember another occasion when even a shoe shine boy understood, where we are headed tomorrow was more due to the Dow. The perceived connection was thought to be an unstated rule. On occasion when markets took a different turn locally compared to what the Dow was doing, news of a decoupling between global and local markets featured in national newspapers and TV channels. There was always a reason why a Dow connection worked or weakened at times.
As time passed and both liquidity and number of investors increased, the forecasting rules were simple, if there is certainty and up move it is generally because of local factors, but when uncertainty comes in it is the Dow.
It did not matter whether over a month and quarter what Dow returned in terms of price changes, what mattered was the daily and weekly volatility in the price performance of the benchmarks. There were not many studies I read since 1996, which actually studied correlation between Dow and the Sensex or other emerging market indices and whether such comparisons really made sense.
Even fundamental analysts historically have taken refuge in this fact suggesting an upside as a predictable certainty and downside as the Dow effect. The correlation between the Dow and the Sensex are poor. Rather correlation itself increases and decreases as markets move from greed to fear. At both extremes, the correlations have been known to be high. This is why during contagions every market seems to be correlated.
Going a bit deeper into correlations between the Dow and Sensex suggests a historical correlation of 0.69, for the last decade it has been at 0.64, the highest correlation has been since 2002 lows at 0.90 which has fallen now to 0.82 if you look at just the last year. I just ran a random check to see if the correlation could just go negative.
And here I was at the first attempt – 0.42 from May 26, 2005 to Oct 19, 2005. Correlations are an illusion that we live in, as you can actually draw a cycle of increasing and decreasing correlations between Dow and Sensex. And what use is correlation anyway. Correlation as a trading indicator works miserably with not much back testing validations.
And if we just extend the relationship to Dow and dollar, which are seen to have stronger correlation, a strong dollar and positive Dow move together. Even here the correlations between Dow and dollar can go awry cyclically, positive correlation today and negative tomorrow. It just does not work.
Once you identify that the correlation is increasing you know the assets are in sync and vice versa. It is like the classic outperformance underperformance intermarket cycles we have talked about. There will always be a period the Dow will outperform Sensex and a period when it will underperform. Just to look at one side of the cycle is extrapolation and ignoring the other side by calling it decoupling is human.
Dow is our psychological alibi that we use to explain market vagaries. There is no other way you can explain why, if the problem is in America, did China, Russia, India and the world fall more than the Dow. Of course, there will be some explanation for this too.
But then, how quantifiable is it? We at Orpheus believe that emerging markets are better indicators and lead the Dow. India formed the primary low on September 21, 2001 months before the October 8 low of Dow in 2002. Indian and Chinese indices may have lagged at the current top, topping after the October 11, 2007 high in Dow, but emerging markets like Romania had topped as early as July 24, 2007. This is why the Dow psychology remains flawed.
Even if the Dow psychology works better when inverted, understanding American markets remain important in terms of understanding when does psychology hit an extreme? Markets take more time to bottom than they take to top. This is why ‘V’ shaped patterns are seen more at the top than at the bottom. The Dow breaking at 10,000 will be globally watched and discussed.
What is more relevant is not 10,000 but the support zones near 9,700-10,000 levels. The 10,000 level is more psychological than real. The 9,700 level is the previous primary low and 9,900 is the key 0.618 Fibonacci level of the up move since October 8, 2002. After six years we are back once again to the October symmetry (the Oct low), which the Dow has been repeating since 1932.
Like we said last time, markets have not broken an October low since the great depression. So, though the term great depression is used pretty loosely now, we have yet to pass the major October confirmation.
Bank failures, bankruptcies, 30-70 per cent collapses in indices all seem to be culminating in the anticipated time window ahead. Many indices including the Dow are falling in seven wave structures. This means classic corrective zigzags. Seven waves are corrective structures not impulsive move downs.
Though we understand that seven waves could be extending into nine waves impulsive, which have a more bearish aspect linked to it, the extreme volatilities on many indices suggest otherwise. Many emerging market indices have spiked with 10-year high volatilities suggesting that panic is total and global now. Prices are also nearing the previous four wave conventional supports on some indices, Oil and gold still under supply pressures, dollar continues strength, it is too early for us to let go of the October low hypothesis.
We are in the age of Dow or simply putting the age of global psychology, which does not understand that markets have a limit till where they can collapse unlike the proverbial moon where it can go on the other side. We are in the age of too much information, this is why summaries excite us more than books, and herding is more convenient than trashing the Dow effect.
The Dow composite, just a week back, was the top performer among global indices. So, Dow might have some catching up to do till 10,000 and maybe marginally lower. But, to expect 8,000 in the next few weeks seems a low probability scenario to us.
We are looking at the Japanese Nikkei now, which should give us our first cues regarding potential multi-month global bottom formations in October and not the Dow. Let’s see.
The author is CEO, Orpheus CAPITALS, a global alternative research firm
...
The first time I heard somebody keeping a track of Dow on a day-to-day basis was a business school senior of mine from the class of 1997. Little did I know that in matter of barely over ten years, the world will get glued to Dow daily and intraday movements.
And nothing will matter more than where the Dow was headed. We are in the age of the Dow, and Dow psychology rules. The grip is so powerful that an emerging market broker in Romania after a market update to his client starts talking about what the client is interested in most, the bailout meeting. The respective client will be missing the UEFA championship match between CFR Cluj and Chelsea to watch the bailout meeting at home.
Dow is the global pastime now. Before 2000, it was both Dow and the Nasdaq. After the tech bust, Nasdaq featured less in inter office bets and perceived connections with Indian markets.
I also remember another occasion when even a shoe shine boy understood, where we are headed tomorrow was more due to the Dow. The perceived connection was thought to be an unstated rule. On occasion when markets took a different turn locally compared to what the Dow was doing, news of a decoupling between global and local markets featured in national newspapers and TV channels. There was always a reason why a Dow connection worked or weakened at times.
As time passed and both liquidity and number of investors increased, the forecasting rules were simple, if there is certainty and up move it is generally because of local factors, but when uncertainty comes in it is the Dow.
It did not matter whether over a month and quarter what Dow returned in terms of price changes, what mattered was the daily and weekly volatility in the price performance of the benchmarks. There were not many studies I read since 1996, which actually studied correlation between Dow and the Sensex or other emerging market indices and whether such comparisons really made sense.
Even fundamental analysts historically have taken refuge in this fact suggesting an upside as a predictable certainty and downside as the Dow effect. The correlation between the Dow and the Sensex are poor. Rather correlation itself increases and decreases as markets move from greed to fear. At both extremes, the correlations have been known to be high. This is why during contagions every market seems to be correlated.
Going a bit deeper into correlations between the Dow and Sensex suggests a historical correlation of 0.69, for the last decade it has been at 0.64, the highest correlation has been since 2002 lows at 0.90 which has fallen now to 0.82 if you look at just the last year. I just ran a random check to see if the correlation could just go negative.
And here I was at the first attempt – 0.42 from May 26, 2005 to Oct 19, 2005. Correlations are an illusion that we live in, as you can actually draw a cycle of increasing and decreasing correlations between Dow and Sensex. And what use is correlation anyway. Correlation as a trading indicator works miserably with not much back testing validations.
And if we just extend the relationship to Dow and dollar, which are seen to have stronger correlation, a strong dollar and positive Dow move together. Even here the correlations between Dow and dollar can go awry cyclically, positive correlation today and negative tomorrow. It just does not work.
Once you identify that the correlation is increasing you know the assets are in sync and vice versa. It is like the classic outperformance underperformance intermarket cycles we have talked about. There will always be a period the Dow will outperform Sensex and a period when it will underperform. Just to look at one side of the cycle is extrapolation and ignoring the other side by calling it decoupling is human.
Dow is our psychological alibi that we use to explain market vagaries. There is no other way you can explain why, if the problem is in America, did China, Russia, India and the world fall more than the Dow. Of course, there will be some explanation for this too.
But then, how quantifiable is it? We at Orpheus believe that emerging markets are better indicators and lead the Dow. India formed the primary low on September 21, 2001 months before the October 8 low of Dow in 2002. Indian and Chinese indices may have lagged at the current top, topping after the October 11, 2007 high in Dow, but emerging markets like Romania had topped as early as July 24, 2007. This is why the Dow psychology remains flawed.
Even if the Dow psychology works better when inverted, understanding American markets remain important in terms of understanding when does psychology hit an extreme? Markets take more time to bottom than they take to top. This is why ‘V’ shaped patterns are seen more at the top than at the bottom. The Dow breaking at 10,000 will be globally watched and discussed.
What is more relevant is not 10,000 but the support zones near 9,700-10,000 levels. The 10,000 level is more psychological than real. The 9,700 level is the previous primary low and 9,900 is the key 0.618 Fibonacci level of the up move since October 8, 2002. After six years we are back once again to the October symmetry (the Oct low), which the Dow has been repeating since 1932.
Like we said last time, markets have not broken an October low since the great depression. So, though the term great depression is used pretty loosely now, we have yet to pass the major October confirmation.
Bank failures, bankruptcies, 30-70 per cent collapses in indices all seem to be culminating in the anticipated time window ahead. Many indices including the Dow are falling in seven wave structures. This means classic corrective zigzags. Seven waves are corrective structures not impulsive move downs.
Though we understand that seven waves could be extending into nine waves impulsive, which have a more bearish aspect linked to it, the extreme volatilities on many indices suggest otherwise. Many emerging market indices have spiked with 10-year high volatilities suggesting that panic is total and global now. Prices are also nearing the previous four wave conventional supports on some indices, Oil and gold still under supply pressures, dollar continues strength, it is too early for us to let go of the October low hypothesis.
We are in the age of Dow or simply putting the age of global psychology, which does not understand that markets have a limit till where they can collapse unlike the proverbial moon where it can go on the other side. We are in the age of too much information, this is why summaries excite us more than books, and herding is more convenient than trashing the Dow effect.
The Dow composite, just a week back, was the top performer among global indices. So, Dow might have some catching up to do till 10,000 and maybe marginally lower. But, to expect 8,000 in the next few weeks seems a low probability scenario to us.
We are looking at the Japanese Nikkei now, which should give us our first cues regarding potential multi-month global bottom formations in October and not the Dow. Let’s see.
The author is CEO, Orpheus CAPITALS, a global alternative research firm
...
30 Sep 2008 13:07
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21 Sep 2008 23:50
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Real estate stocks are the favourite of Bear Operators.
So be carefull and patient.Sobha has good leadership.Its major holdings are in bangalore.Their Sobha city project in Kerala is a good project.valuations are going cheap, but will be verey volatile
in the coming months as elections are approaching soon.
HDIL is attractive too.Bombay slum rehabilitation project offers a lot. but their kerala venture is in legal mess.
it is better to buy large real estate companies, based on liqudity reasons.but can buy under valued shares during deep cuts.
Good luck ...
So be carefull and patient.Sobha has good leadership.Its major holdings are in bangalore.Their Sobha city project in Kerala is a good project.valuations are going cheap, but will be verey volatile
in the coming months as elections are approaching soon.
HDIL is attractive too.Bombay slum rehabilitation project offers a lot. but their kerala venture is in legal mess.
it is better to buy large real estate companies, based on liqudity reasons.but can buy under valued shares during deep cuts.
Good luck ...
21 Sep 2008 23:39
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It will remain high.Dear, India is growing and its people too.
Income levels are high compared to old levels.
New generation have great ambitions and they are determined to achieve it.So there is demand for all kind of properties.
land prices will not drop significantly, only there will be a stagnation,with few trades.Fundings may not come easy, but NAV WILL BE SAME.Hold it for few years ,and you will reap the riches....
Income levels are high compared to old levels.
New generation have great ambitions and they are determined to achieve it.So there is demand for all kind of properties.
land prices will not drop significantly, only there will be a stagnation,with few trades.Fundings may not come easy, but NAV WILL BE SAME.Hold it for few years ,and you will reap the riches....
21 Sep 2008 12:17
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21 Sep 2008 12:09
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some of the high lights from the realty report of Emkay Stock Broking is as follows,
Our NAV for Unitech stands at Rs.296 per share. Land bank in Kolkata accounts of 10%
of the NAV, with signifcant contribution from the residential segment.
Unitech was amongst the first national developers to have a presence in Kolkata. The
company currently, has two residential projects and IT SEZ under development. The
residential project, Uniworld City, is spread over 100 acres with ~3,600 units of
appartments on offer. The company launched the project in Novermber 2006 and has
sold ~2,800 units till date. While the launch price was at Rs.1,700 per sqft, current price
is at Rs.3,200 per sqft. The company is also developing a residental project named
“Kolkata West International Project” , Spread over 390 acres, the company has 40%
stake in the project. Phase 1 of the project (comprising of 912 units of row houses) has
been launched and the company has pre-sold 713 units till date.
In the commercial segment, the company is developing 4.3mn sqft of IT SEZ, which will
be delieverd in a phased manner. Phase 1 of IT SEZ (0.8mn sqft) is operational . The
company is expected to deliever additional 2.5mn sqft in the next two and half years.
Amongst the stocks under our coverage, DLF Limited and Unitech Limited have
land bank of 2573 acres and 3170 acres respectively in Kolkata. We estimate 6%
NAV for DLF (including Dankuni) and 10 % of NAV for Unitech accruing from these
markets.
Property prices in the last one year have increased by 20-25% across various
segments. However, during the last four months there has been no price increase
undertaken by the developers. In the commercial segment, rentals in the suburbs
are in the range of Rs.40-45 per sqft. Driven by demand from IT/ITES companies,
lack of quality supply and attractive rentals as compared to other Tier-1 cities we
expect the rentals to remain stable in the medium term. Our interaction with
property consultants suggests that Kolkata residential market is an end user
market with smaller proportion of investors. Residential prices in areas like Salt
Lake and New Town range between Rs.2,800-3,500 per sqft, an increase of 25% in
the last one year.
Recommendation
Reco CMP TP
DLF BUY 409 672
Unitech BUY 128 237
HDIL BUY 214 542
Puravankara
Projects
BUY 158 227
Sobha
Developers
BUY 226 554...
Our NAV for Unitech stands at Rs.296 per share. Land bank in Kolkata accounts of 10%
of the NAV, with signifcant contribution from the residential segment.
Unitech was amongst the first national developers to have a presence in Kolkata. The
company currently, has two residential projects and IT SEZ under development. The
residential project, Uniworld City, is spread over 100 acres with ~3,600 units of
appartments on offer. The company launched the project in Novermber 2006 and has
sold ~2,800 units till date. While the launch price was at Rs.1,700 per sqft, current price
is at Rs.3,200 per sqft. The company is also developing a residental project named
“Kolkata West International Project” , Spread over 390 acres, the company has 40%
stake in the project. Phase 1 of the project (comprising of 912 units of row houses) has
been launched and the company has pre-sold 713 units till date.
In the commercial segment, the company is developing 4.3mn sqft of IT SEZ, which will
be delieverd in a phased manner. Phase 1 of IT SEZ (0.8mn sqft) is operational . The
company is expected to deliever additional 2.5mn sqft in the next two and half years.
Amongst the stocks under our coverage, DLF Limited and Unitech Limited have
land bank of 2573 acres and 3170 acres respectively in Kolkata. We estimate 6%
NAV for DLF (including Dankuni) and 10 % of NAV for Unitech accruing from these
markets.
Property prices in the last one year have increased by 20-25% across various
segments. However, during the last four months there has been no price increase
undertaken by the developers. In the commercial segment, rentals in the suburbs
are in the range of Rs.40-45 per sqft. Driven by demand from IT/ITES companies,
lack of quality supply and attractive rentals as compared to other Tier-1 cities we
expect the rentals to remain stable in the medium term. Our interaction with
property consultants suggests that Kolkata residential market is an end user
market with smaller proportion of investors. Residential prices in areas like Salt
Lake and New Town range between Rs.2,800-3,500 per sqft, an increase of 25% in
the last one year.
Recommendation
Reco CMP TP
DLF BUY 409 672
Unitech BUY 128 237
HDIL BUY 214 542
Puravankara
Projects
BUY 158 227
Sobha
Developers
BUY 226 554...
more
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