“The Chinese government wants to let a few businesses fail to rein in a bigger problem ... The situation is similar to a controlled detonation. For all practical purposes, a default of Evergrande has already been priced in,” says the Founder of the brokerage.
Devina Mehra is one of the sharpest minds in the Indian stock markets. An IIM-A gold medallist and Founder of institutional broking firm First Global, Mehra had led research at ...
Every single PMS fund manager keeps talking about how great their PMS investment returns are. That is great for them because that is their business. But how do you as an investor understand whether their returns are good?
Look at this example from cricket:
In 5 innings:
Batsman A: has scores of 50, 50, 50, 50, 50
Total: 250 runs
Batsman B: Scores of 0, 0, 0, 0, 250
As an investment professional, the question I face the most is some version of this: "What do you think of the market?" "Where do you think the market is headed?", "Will the market go up or down?"
And really the only answer to this is: "Which market are you talking about?" Because my reply depe...
Last week, I was watching Rajiv Bajaj's interview where he mentions going to the village where his grandfather, Jamnalal Bajaj, was born. The latter was born in a poor family and once while playing outside was seen by a wealthy Sethji and adopted (for details of how that happened, you've see the interview). On that trip, he also met an employee - a security guard at Bajaj Auto - whose home was also in the same ...
Most people approach the markets expecting a reasonable amount of certainty, but the reality is that on a probabilistic basis, at any point in time, you can have a massive upswing, a massive downswing, or a flat market!
What are the probabilities one should attach to the event of a major crash or a bear market happening, now? In my opinion, one can have a correction, but the chances of a prolonged bear market are almost non-existent.
We were recently dwelling on this very interesting dichotomy that we have witnessed in the Indian stock market in the last 15 months or so.
The conventional wisdom prevailing last year, in the first quarter, was that the GST was going to drive out the unorganized sectors and all the business would flow into the arms of the organized sectors. And then the pandemi...
His advice to investors: Follow a systematic process, buy a minimum of 20 or 25 stocks, and have a slavish devotion to risk management.
Well-known stock picker and money manager Shankar Sharma is known to deliver robust alpha to his clients. Over the years, he has spotted several multibaggers which have delivered up to 200 times return. The co-founder and ...
Suppose you want to know how to become rich or how to become a good investor or to run a successful company. How would you go about it?
A logical way to do it appears to be look at the richest people in the world or the most successful investors/companies, study the techniques that they have employed, and use them in your own life.
“Should I buy Bitcoin?”
What do you think of cryptocurrencies?”
These are now popular questions on the party circuit, even if the party is only a virtual one on Zoom.
The question is: should cryptocurrencies be included in a sensible investor’s portfolio? And here’s an attempt to answer it in a structured manner.
But before addressing this que...
An American university did an experiment where it gave a set of students a coffee mug. A few days later, the same coffee mug was offered for purchase to other students. The ones who had to buy it, valued it at around $3 on the average but the students who had the mug were not willing to sell it for less than $6-7. This is a classic example of the Endowment Effect or the Endowment Bias.
Without getting into a long preamble, we invite you to take a look at the data below, which clearly shows you the returns of the various Mutual Funds and PMS Providers, but most importantly they show you where the return...
Bitcoin has undoubtedly laid the foundation for the rapid development of Blockchain technology as we know it today.
It all started soon after the financial crisis of 2008 when on October 31, the now-famous whitepaper “Bitcoin: A Peer-to-Peer Electronic Cash System” was shared on a cryptography forum by Satoshi Nakamoto, as an answer to the shortcomin...
The style of investing that has attracted maximum derision in the last decade, it is value investing.
The aftermath of the 2008 crisis in which Central Banks flooded economies and markets with liquidity, effectively crushed the risk-free rate down to levels unseen before.
The effect it had on growth equities ...
The History of Bitcoin
On January 12, 2009, the pseudonymous Satoshi Nakamoto made the first-ever Bitcoin (BTC) transaction, sending 10 BTC to developer Hal Finney and just like that a new asset, or rather a new asset class was born!
Never mind that the 'value' of the asset was still ...
Over a period of time, a certain School of Investing has dominated all investment thought.
And that is the Warren Buffett School of Investing.
What exactly is that school of investing about?
That school of investing in essence comes down to this:
Buy a small group of high quality branded consumer companies which have supposed pricing power (the ability to raise prices with...
Ever heard of Dhyan Chand?
For the sake of our millennial readers, let’s do a quick bio of Dhyan Chand - the hockey equivalent of cricketing legend Sir Donald Bradman:
Dhyan Chand scored 14 goals at the 1928 Amsterdam Olympics. He was hailed as a ‘magician of hockey’ by newspapers. So ...
When you switch on your laptop or mobile, at times a disconcerting ad pops up, talking about a young girl with three siblings who cannot afford food or school fees, or maybe, a parent asking for money for a life-saving surgery for their child.
An ad like that usually makes you a bit uncomfortable or guilty, if you do not respond to it.
We had a very interesting conversation with a very accomplished industrialist. He is an existing investor into our Global funds and India PMS, and therefore very familiar with our approach to investing.
At the end of half an hour, spent discussing the entire Investment landscape, he said: "It's clear that you own some remarkable companies in your Funds,...
One of the commonest questions I get asked by hundreds of investors from across the world is: "How are we to make sense of Equity Investing? We get so much conflicting advice. Can Investing be simplified so that even lay Investors can do a decent job on their own?"
Let us admit and accept this much. Last 12 months have be...
If there is one gift you should give yourself on this Women’s Day, it is to take charge of your finances and investments.
This is true Self-care!
Too many women remain ambivalent about handling this and leave it to the male members of their household, but it is extremely key to your wel...
One of the key metrics we, at First Global, look for, when building our Portfolios, is: how correlated are our Positions. Meaning: do we have many stocks in the overall same category, eg, US NASDAQ, which then means that even if we have 25 such stocks, in effect, because of the very high correlation between them (95-99%), we actually own just one stock! And that's hugely risky, even though on paper, we own a diversified basket of 25 stocks...
Can smart Fund Managers create a permanent bull market in your portfolio?
We absolutely believe they can!
But first: Why is this question at all relevant?
Well, it is very logical for you to think that markets have gone up a lot and therefore, should you be investing right now or not?
Many big and small investors have thought exactly like this in the past...
Something interesting we thought we would draw your attention to:
Our Human + Machine caught the Dollar Debasement Trade from mid-2020, and that is paying off big!
Our Machine caught an incipient US Dollar weakening right in the middle of the year: in hindsight, it seems pretty obvious, but six months back, we had people laughing at...
'These are not necessarily books on investing or stock market or even finance. But they will sure help refine your thinking edge or tell you something new.'
By Devina Mehra
Calendar 2020 is over, and what a year it has been! One of the few pleasures that wasn't hit by this year's turmoil was reading.
Recently, someone asked me on Twitter ab...
November 9th is a day Investors won't forget in a hurry. Especially the successful ones this year. Because that's the day everything changed.
What worked beautifully in Investment Portfolios - basically growth investing - through the year 2020, suddenly stopped working.
What were disasters (investment-wise) through the year, suddenly became stars.
What was positive news for the real...
India, from the end of September, and more notably, from the 1st of October, has been a one horse race: banking stocks.
Every "performing" sector which has driven the entire rally from April,has actually been in the negative in this very period! See the list: Pharma, IT, Chemicals!
Let us try to understand whether this banking rally is logical or something else.
(This is wri...
The Indian stock market has been on an absolute roll over the past 30-40 days.
It is as if all the markets have gotten over the virus concern completely.
It may well be so but as long time students of the market, we must always dig deeper, because ultimately that is what people look to us, old folks, for: Experience coupled with level-headed Analysis.
Good news: In the one-month period endi...
The Outstanding books Devina Mehra and Shankar Sharma recommend for old investors and new
First Global started with Rs. 10,000 some 30 years ago.
Shankar Sharma and Devina Mehra,...
"I handed over my cheque in March, but they never invested for 3-4 weeks.”
The Investing Journey of a Senior Fortune 500 Executive: A Fascinating Read
We got this recently from a client of ours, who is a senior executive in a Fortune 500 company and is based in Stuttgart, Germany.
His investment journey may appear familiar to you.
(Do read till the end, because...
Bond investment decisions are supposed to be made on a Investment-grade versus Non-investment/ High yield bond binary. Right?
We explain why.
As we delved deeper into this and did more granular analysis, we discovered that all rating categories within High Yield bonds are not created equal.
This is what we found: Higher-quality high-yield bonds are likely better bets for long-term investors than those t...
We were having a chat with a Family Office Head the other day, who has large sums invested with us, in India and across the world.
At the end of half an hour, spent discussing the entire Investment landscape, he said: "It's clear that you own some amazing companies in your portfolios: Alkyl Amines, Navin Fluorine, Reliance, Muthoot, Thermo Fisher, Shopify, Logitech, LSE, JD, etcetera. How come I have not heard you sp...
What you hear most often, from Fund Managers, is: "We look for great companies that deliver multi-bagger returns".
Sounds Very glam.
But just a slight problem: It is not borne out by data. Most fund managers are lucky even to perform as well as the market - let alone better.
So why has the "Human only" Investing Model stopped working?...
Investing at its heart and soul is avoidance of the big loss.
We, at First Global, look at risk management as a central tenet of our investing process.
While there are quantitative ways to manage risk, this blog post, we want to talk about how to qualitatively manage risk in your portfolio.
Therefore, qualitatively speaking, these are the major risks that you should avoid in your inv...
I made a presentation at the Morningstar conference in 2019 which created quite a ripple amongst investors.
The theme of my presentation was that Indian equities had been an extremely disappointing asset class over the last 10 5, 3 and 1 year time frames.
Starting from 2010, the Dollar index (Dollex) has given negative Returns 6% till date.
And the data for 2019 has been eye-popping. <...
Calendar 2020 has, so far, made almost all Indian investors, big or small, look like really sick patients. Nearly all strategies have been decimated in a market that resembled a ferocious killer dog let loose on a flock of chickens.
So what are the learnings that you should take away from this bear market?
2020 लगभग सभी भारतीय निवेशकों के लिए बहुत ही कष्टकारी रहा।
निवेश की लगभग सभी रणनीतियाँ विफल हुई और अधिकतर निवेशकों को भारी नुकसान ...
There is no easy way to say this.
The Portfolio Management Services Industry is in a shambles.
No. It's broken.
It's a tale of "naam badey, aur darshan chhotey".
The Industry was born on the promise of superior performance. Superior to Mutual Funds, that is.
But what does the data say?
The industry per...
घरेलू बाजार के खराब रिटर्न के बाद आप अंतरराष्ट्रीय मार्केट में निवेश कर सकते हैं लेकिन इसका सही तरीका क्या है?
हमने 2019 में&nb...
Go through the nine things we did to navigate the Market.
We avoided most of the downfall in markets in the month of Fe...
Living with ambiguity is the first lesson we teach our Analysts at #FirstGlobal. A lesson that is particularly hard for the engineers to grasp 😊
The Difference between education & real life is this:
In Maths and Science, the problems have a known set of variables with definite values (speed, direction etc)
Whereas decisions in r...
Over the past several years, I have heard the usual tag attached to me: "The Big Bear".
Of course, like in most things in this world, this monicker is neither accurate nor particularly sensible.
It represents an under-analysed and oversimplified perspective, based largely on two seminal events of the past 20 years.
First: The massive meltdown in Year 2000, of tech stoc...
Valentine's Week is over but let us still give you some love advice for free.
It is great to love a guy, gal, your family, dog, cat, country etc.
But you must NEVER EVER fall in love any stock or investment.
An investment has one purpose and one purpose only: to multiply your wealth.
Look elsewhere for your emotional satisfaction & you will end up wealt...
Trading is like an MMA fight. A constant battling with your emotions.
Many traders, even experienced ones, often exit their trades before the optimum time. And then there is nothing but regret!
Always understand that most things happen in the subconscious mind. And, our actions are an outcome of the same emotional fight.
But don’t get upset if you have just realized the psycho...
Did you Know these Trading Strategies with Ichimoku Clouds?
Technical indicators are excellent price action indicators.
In the 1960s, a Japanese journalist named “Ichimoku Sanjin” brought a special technical analysis tool to this trading world.
It is termed as “Ichimoku Clouds”, meaning “One look, glance” in Japanese.
You just have to pe...
The word Asset Allocation is bandied around rather casually these days. Hence it is important to understand what Asset Allocation is not.
We see the word asset allocation used quite widely and we should say, somewhat lightly these days with many financial advisors and fund managers claiming to do asset allocation strategies.
Only when one goes somewhat deeper into this one realises that the Asset Alloc...
We did quite ok in January, 2020.
India Investment Products
The India Super 50 (IS50) did +8.9% in the month of January, '20 with a Sharpe Ratio of 2.8.
The India Multi Asset Allocation Portfolio (IMAAP), delivered +4.75% in January,'20 with a Sharpe of 3.7.
The NIFTY was ...
“Remember XYZ stock I told you about 3 months ago? It is up 80% since then”, “ABC ekdum solid hai. Just jump in”, “PQR kya lagta hai?” Sounds like familiar party conversation…or something that you watch financial channels for?
If your end game is to have fun discussions at parties, this is fine. But if your purpose is to protect and multiply your wealth, or to optimise your ...
The Top 3 Trading Lessons from 2019
Ok folks, thankfully 2019 is over!
Or, maybe not "thankfully"; the risks that existed in 2019 continued its existence in 2020, and given that parts of the world are about one bomb away from annihilation, there is little room for escape.
So, did we learn anything from our trading results in 2019?
Well, yes. Buy low-sell high.
This crude price chart shows clear signs of optimism in the near term. Look at the recent breakout from a stubborn resistance mark. It seems the bulls have enough strength to display more upward moves in the coming days.
So, let’s jump to the point and try to find out what’s driving the crude bulls right now, one by one.
Let’s get started:
The US-Iran Conflict...
Economists Think Dollar's Fall May Explain the Recent ‘Rally’ by Steve Liesman
Einstein taught us about relativity in nature. Now come Devina Mehra and Shankar Sharma of First Global to teach us about relativity in financial markets -- and raise some serious questions about just what is driving stock prices.
First Global reports are quite credible and, on occasion, more than that.
What prompts this mention is Intel's earnings report and the fact that First Global has had a pretty good bead on the company and its stock.
AMD up again following First Global upgrade to ‘buy’ (AMD) By Tomi Kilgore
Analyst Kuldeep Koul at First Global upgraded Advanced Micro Devices (AMD) to "buy" from "outperform," given the "exceptional traction" that the chipmaker's Opteron line of processors has been able to get.
Baidu Climbs on First Global’s ‘Outperform’ Outlook
Baidu Inc., the operator of China’s most-used Internet search engine, rose to the highest price in two weeks after First Global rated the shares “outperform? in new coverage.
Personality counts: Walmart's frugal, but Target charms
"It's better to take a slight hit on [profit] margins and keep on moving and inventing," says First Global Securities. And at least for now, Target is inventing in a way that appeals to consumers with money to spend.
At 11 times trailing earnings, Energizer is cheaper; Gillette's multiple is 25. But cheaper doesn't mean better, says First Global.
Bipinchandra Dugam @bipinchandra90
invested in both GFF-GTS and Super I50. Thank you very much for such wonderful investing experience with completely new approach. In my 15years of investing first product I felt which close to what customer want.
Shishir Kapadia @shishirkapadia1
by far you are the best, I have not come across transparency, acumen, global expertise, exposure, protection of capital, delivering return from any fund/ fund managers. Invested very small size in 3 products will keep on increasing it over the period
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