More from @AnandableAnand

Conservative Trader

@AnandableAnand

22 Sep

Managing long term portfolio

With very little efforts you can beat any mutual fund while being buy only long term investors,

First, why many mutual funds underperform the index on a long term average

1. they have to keep cash for redemptions, which gives little returns

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2. They have to pay overheads like salaries, office expenses, sales and marketing expenses which is around 5-6% of the AUM they handle

smaller the MF, higher will be such % but bigger MFs have different problem

3. When market falls rapidly, like march 2020, they see huge redemptions as everyone wants to be out before others

So literally they are forced to sell their long term holdings because of short term market shake outs

Read 22 tweets

Conservative Trader

@AnandableAnand

20 Sep

China’s credit market: as crisis unfolds #Evergrande

From 2008 onwards, to match projected GDP numbers of 10%,

china made 300 cities which are loosely called ghost cities of china

Video of Al Jazeera Is from 2009,

This growth of GDP was fuelled buy Chinese PSUs and state govts taking loans to complete these projects

These loans were short tenor loans with frequent refinancing. This was done to keep a tight control over their finances and operations without letting the credit risk spread

Later majority of these corporations floated bonds which also had implicit (important word) guarantee by the CCP (party)

Most such investments in a command economy are not productive, but who cares till GDP numbers look good and outside investors are in awe.

Read 20 tweets

Conservative Trader

@AnandableAnand

10 Sep

Everyone wants them to be your number one priority

But they keep you on standby, sometimes last priority

Why so? are people so mean and selfish?

No, they are not

this behaviour is part of our evolution process,

little before industrial revolution and if u go to stone age then all the more clear,

human beings were struggling for resources, food shelter etc,

plus only goal of the species is to maintain best gene pool,

that requires us to constantly look for best possible mate, and dominate the situation at all times

This is hard wired in our brain, just the way hunger for food is hard wired

Read 9 tweets

Conservative Trader

@AnandableAnand

7 Sep

People dont change

No matter how much we pray and expect them to change, in a short span of time, people don't change

As we are sum of our habits,

these habits are hard wired in our brain,

to change these wiring, requires either painful integration of new habits

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Or sudden change in their life situation, especially sudden loss of job or loved ones etc

If a person is lazy, very unlikely that motivational books will help him

If a person is always late to meetings, expecting him to be on time is inviting lot of heart burn

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Similarly if someone is compulsive eater or prone to substance abuse, not able to focus on steady job

rather than praying for him/her to change, one should prepare for the eventuality, what ever it might entail

Read 5 tweets

Conservative Trader

@AnandableAnand

31 Aug

The speed with which big Banks adapt to change in environment is commendable

Smaller banks and NBFCs either cant do that (because of regulation or lack of strategy)

#HDFCBank had a retail heavy book for last 20 yrs, now corporate book is bigger and expanding fast (53% now)

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as HDFC Bank sees that, fintech riding on ponzi scheme of valuation and VC money, will eat away CASA, will eat away fee income related to retail

but regulation will not allow fintech to even look at corporate loans, so not only hedged, but double down with AT1 of USD 1 billion

#AXISBank has closed all foreign subsidiaries except UK, these subsidiaries are not easy, as in china you have to have 5 yrs of Rep office then only you can apply for a licence and once surrendered, you cant re-apply , so big shift in strategy

Read 6 tweets