The thread as promised

It all started on Apr 17 (T-2), when @DrTamilisai4BJP's husband visited our apartment and one of her team members remarked that they need to find a "booth agent" for our booth that had voters from my apartment and few other apartments.

(1/n) @DrTamilisai4BJP One of the fellow residents (was formerly a District level functionary of BJP from Kongu region) asked If I am game and I accepted with no idea of what it entails.

Think of a trade before analysis!

(2/n)

#SVB a short thread

Banking is a business of borrowing in the short end and lending at the longer end with some element of credit risk thrown in for higher spread.

So it should not come as a surprise that a bank has A-L mismatch. Its part and parcel of banking!

(1/n) To what extent such mismatches are allowed is governed by the regulations in a country.

Considering we have what we call as Fractional Reserve banking, the Banks only retain a fraction of the deposits and on-lend/ invest the rest

(2/n)

#Adani

#Active vs #Passive

NIFTY50 has both Adani Ports and Adani Enterprises in it.

Adani Enterprises is in essence a holding company that draws its value from the value of its subsidiaries, with no substantive business.

1/ While an Index is expected to be representative of the economy it represents, does it make sense to have holding companies in Indices.

Should there not be a rule for reducing the impact of double counting such instances.

2/n

#adani #HindenburgReport with the USD bonds falling by the heap, looks like the short seller has hurt the US investors notionally more than anything else.

Looks like bonds fell between 7% to 15% YTD, with one unsecured bond falling 30% or so!

1/ The head line "bonds trade at 60c" while right, it misses the data that they were at 68-70c at the beginning of the year.

Most of the damage had already been caused by the US rates moving up in 2021-22!

2/

#adani #HindenburgReport

The operative part of the report

“short positions in Adani Group Companies through U.S.-traded bonds and non-Indian-traded derivatives, along with other non-Indian-traded reference securities”

(1/n) What does this mean

(a) They may be Short Bonds issued by Adani in US
(b) Short non-Indian-traded derivatives
(c) short other non-Indian-traded "reference securities"

(2/n)

#ShortSelling is not natural investing and is beset with #risks that are also not usual. One needs to go beyond the usual fundamentals that we look in #investing.

So a short seller is usually very careful and has to time it right for it to be successful!

#adani

(1/n) You start with looking for vulnerable businesses.

Vulnerability can come from - Excessive valuations, leverage, systemic liquidity, specific liquidity, regulatory change, political regime change, governance issues, loan against shares or margin and the list is long.

(2/n)

@CFASocietyIndia had a very interesting session at Chennai on Sep 2, 2022 on "Art of Investing" by @safalniveshak with @arun_kumar_r interacting with him with a great set of questions.

(1/n) He started sharing a slide on how a portfolio of stocks (mostly consumer) picked by his teenage daughter o/p broader markets.

For a moment, I thought I should do a wapsi of my CFA charter and the other degrees!

(2/n)

#PreIPO

The final round before an IPO is in essence signalling with a hope to get higher IPO valuations!

If the financing is marginal, it makes sense to ignore that!

(1/n) If you are a small investor, investing in pre-IPO shares is not a great idea - Information asymmetry is almost highest at this point!

(2/n)

#Markets vs #Economy

This is an Investor letter written by John Templeton in 1954 that was shared in 1958 again! This time is not different!