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One Stop Investment & Insurance & Tax Consultancy-Life Insurance....General Insurance including Health Insurance..Motor Insurance..Marin..Fire & Burglary Insurance,,overseas mediclaim Insurance..Personal Accident etc.Insurance..Mutual Fund Investment with UTI,SBI,Reliance,ICICIPru,Birla Sunlife,HDFC,Kotak Mahindra etc.. Fixed Deposits with HDFC Deposits and Revenue Matters including Income Tax,Service Tax etc Works...The Total Investment & Insurance Solutions
Saturday 29 October 2016
Choice is yours! Old Investing Methods or New! -The Total Investment & Insurance Solutions
Friday 28 October 2016
Global Markets & News -The Total Investment & Insurance Solutions
Contact Your Financial
Adviser Money Making MC
28
October 2016
OVERNIGHT MARKETS AND NEWS
Dec E-mini S&Ps (ESZ16 +0.18%)
this morning are little changed as the market awaits this morning's U.S. Q3 GDP
report, which is expected to improve to +2.5% from Q2's +1.4%. E-minis have
been able to shake off negative overnight news that includes a -4% sell-off
in Amazon on a disappointing holiday sales forecast and a -0.53% drop in European stocks. However,
Alphabet is up +1% after better than expected earnings and revenue news.
The Euro Stoxx 50 index
this morning is down -0.53% on disappointing earnings results and
carry-over concerns about Thursday's sharp rise in the 10-year T-note yield to
a new 5-month high. Anheuser-Busch InBev is down -4.5% this morning after the firm cut its
revenue guidance. Novo Nordisk is down -13% after the company cut its long-term
earnings growth target.
The Russian central bank
today left its key rate unchanged at 10.0%, which was in line with market
expectations. The Russian central bank in September pledged to leave its rates
high at least through year-end in an attempt to curb inflation. The market
consensus is for a rate cut in early 2017 if Russian inflation is contained and
the ruble is stable.
Asian stock markets
today closed mixed with downward pressure from Thursday's sell-off in U.S.
stocks: Japan +0.63%, Hong Kong -0.77%,
China Shanghai Composite -0.26%,
Taiwan +0.08%, Australia -0.22%,
Singapore -0.45%, South Korea -0.05%, India +0.09%, Turkey -0.52%.
Dec 10-year T-notes (ZNZ16 -0.08%)
this morning are down -3 ticks on carry-over weakness from
yesterday's rise in the 10-year breakeven inflation expectations rate to a
1-1/4 year high and on increased expectations for a Fed rate hike in December.
The dollar index (DXY00 -0.04%)
is slightly lower by -0.03% this morning. EUR/USD (^EURUSD)
is up +0.12% and USD/JPY (^USDJPY)
is little changed. The dollar showed strength on Thursday on positive U.S.
interest rate differentials with the 10-year T-note yield rising to a new
5-month high.
Commodity prices this
morning are mildly lower by an average of -0.17%.
Dec crude oil prices (CLZ16 -0.76%)
this morning are mildly lower by -0.15(-0.30%)
as the market awaits the outcome of today's OPEC committee meeting set to
discuss OPEC's production cut. Oil prices rallied on Thursday on Reuter's report
that Saudi Arabia and its Gulf partners are willing to cut 4% from peak
production. Metals prices are mixed this morning with Dec gold (GCZ16 -0.18%)
down -2.5 (-0.20%), Dec silver (SIZ16 -0.14%)
down -0.049 (-0.28%), and Dec copper (HGZ16 +0.39%)
up +0.011 (+0.51%). Grains are narrowly mixed this morning with Dec corn down -1.00 (-0.28%), Nov beans up +1.00 (+0.10%),
and Dec wheat down -0.25 (-0.06%). Softs this morning are mixed
with March sugar down -0.12 (-0.53%), Dec coffee up +0.05
(+0.03%), Dec cocoa down -12 (-0.44%), and Dec cotton down -0.03(-0.04%). The Total Investment & Insurance Solutions
Key U.S. news today
includes: (1) Q3 GDP (expected +2.5%, Q2 +1.4%), (2) Q3 employment cost index
(expected +0.6%, Q2 +0.6%), (3) final-Oct University of Michigan U.S. consumer
sentiment (expected +0.3 to 88.2, prelim-Oct -3.3 to 87.9), and (4) OPEC and Russian oil
officials meet in Vienna to discuss cooperation on plan to curb oil production.
Notable S&P 500
earnings reports today include: MasterCard (consensus $0.98), Exxon (0.62),
Phillips 66 (0.88), AbbVie (1.20), Chevron (0.37), Aon (1.28), Goodyear Tire
& Rubber (1.16), among others.
U.S. IPO's scheduled to
price today: none.
Equity conferences today
include: none. The Total Investment
& Insurance Solutions
·
Amazon.com (AMZN -0.51%) is down -4% in overnight trading after forecasting
weak holiday sales that may produce an earnings miss.
·
Alphabet (GOOG -0.47%) rallied +1.2% in after-hours trading after
reporting a 20.2% rise in revenue and announcing a $7 billion buyback of its
Class C stock.
·
GE (GE -0.83%) is in talks to buy Baker Hughes (BHI), according
to a Dow Jones report, which boosted BHI 17% in post-market trading. GE was
down -1.3% after the report. However, GE
officials later denied that it is discussing an outright purchase of BHI.
·
Apple (AAPL -0.96%) raised the price of its Macs in the UK by 20% due
to Brexit-induced sterling weakness.
·
Expedia (EXPE +0.70%) rallied 1% in after-hours trading on positive
revenue and bookings news.
·
TripAdvisor (TRIP +0.16%) bookings to Cuba were cleared by the U.S.
Treasury Department.
·
Tesla (TSLR) and Solar City (SCTY +3.25%) will unveil their solar roof on Friday, according
to Tesla CEO Elon Musk.
·
VeriSign (VRSN +1.94%) rallied 4% in after-hours trading and beating
revenue and earnings estimates.
·
Decker Outdoor Corp (DECK -1.72%) rallied +0.8% in after-hours trading on an
earnings beat.
·
Cirrus Logic (CRUS -1.63%) rallied 6% in after-hours trading on positive
earnings news.
·
Hanesbrands (HBI -0.38%) rallied 4% in after-hours trading on positive
earnings news. The Total Investment
& Insurance Solutions
Dec E-mini S&Ps this
morning are little changed and have shaken off this morning's -0.53% sell-off in European stocks.
Thursday's closes: S&P 500 -0.30%,
Dow Jones -0.16%, Nasdaq -0.65%. The S&P 500 on Thursday
closed lower on the sharp rise in the 10-year T-note yield to a 5-month high
and on the weaker-than-expected durable goods report. Stocks found underlying
support on generally positive earnings news and some strength in energy
producers after Dec crude oil prices recovered by +1.10%.
Dec 10-year T-notes this
morning are down -3 ticks on carry-over weakness from
Thursday's session. Thursday's closes: TYZ6 -13.50,
FVZ6 -6.25. Dec 10-year T-notes on Thursday fell
to a new 5-month low and closed lower on the rise in the 10-year breakeven
inflation expectations rate to a new 1-1/4 year high of 1.75%. T-notes were
also undercut by the recent strengthening of expectations for a December rate
hike by the FOMC.
The dollar index is
slightly lower by -0.03% this morning. EUR/USD this morning is
up +0.12% and USD/JPY is little changed. Thursday's closes: Dollar index +0.259
(+0.26%), EUR/USD -0.0011 (-0.10%), USD/JPY +0.82 (+0.78%). The
dollar index on Thursday closed higher on improved U.S. interest rate
differentials as the 10-year T-note yield rose to a new 5-month high and as
expectations grow for a rate hike by the FOMC in December.
Dec crude oil prices
this morning are mildly lower by -0.15 (-0.30%) as the market awaits the
outcome of today's OPEC committee meeting set to discuss OPEC's production cut.
Dec gasoline prices this morning are down -0.0021 (-0.14%). Thursday's closes: Dec crude
+0.54 (+1.10%), Dec gasoline +0.0065 (+0.44%). Dec crude oil and gasoline on
Thursday closed moderately higher on a Reuters report that Saudi Arabia and its
Gulf partners are willing to cut 4% from their peak oil output. Crude oil
prices also found continued support from Wednesday's bullish weekly EIA report,
which showed that U.S. crude oil inventories fell by -553,00 bbl to a 9-month low and that
Cushing crude oil inventories fell by -1.337 million bbl to an 11-month low.The Total Investment & Insurance
Solutions
Securities Appellate Tribunal warns Pancard Clubs against delaying tactics in repaying investors -The Total Investment & Insurance Solutions
Contact Your Financial Adviser Money Making MC
28
October 2016
The Securities Appellate Tribunal (SAT),
while hearing unpaid Investors of Pancard Clubs Limited (PCL) who have filed an
intervention making serious allegations of fraud on Pancard Clubs Limited
(PCL), which has failed to repay investors, expressed annoyance at
delaying tactics adopted by PCL to prolong the hearings. Justice J P Devadhar,
Presiding Officer of SAT warned PCL that if PCL does not file their replies to
the Miscellaneous Applications filed by SEBI and the unpaid Investors, SAT will
vacate the Interim Stay granted in March 2016 to PCL. The Total Investment & Insurance Solutions
SAT was hearing Appeals by PCL and its
Directors challenging SEBI’s Order of 29 February 2016, holding PCL to be a
Collective Investment Scheme and directing PCL to return Rs7,035 crore to about
2.5 million investors all India. The
Total Investment & Insurance Solutions
Advocates Rabindra Hazari and Niket
Mehta, who appeared for several unpaid Investors, argued that PCL, has a paid
up capital of only Rs50 lakh but has debts of more than Rs7,000 crore. Hence,
to ensure recovery of Investors’ monies it is vital that SAT and SEBI take
action against more than 54 Companies which are admittedly part of the
Panoramic Group of Companies which have siphoned funds from PCL and thereby own
31 running hotels all over India and 13 overseas hotels plus another 9 hotels
which are under development. The Total
Investment & Insurance Solutions
Rabindra Hazari and Niket Mehta
therefore prayed that all the entities and Directors of the Panoramic Group
must be separately identified along with the assets held by each person, Court
Receiver must be appointed over all these properties and in the interim period
they must be specifically restrained from disposing of any of their assets
without prior written consent of SAT or SEBI.
Moreover, as the transfers of assets and
funds from PCL to its huge number of related enterprises is very murky,
forensic auditors must be appointed over all the Panoramic Group entities,
especially Panoramic Universal Limited, the sole listed Company which is
managing more than 50 hotels, and all these documents and reports must be
posted on public websites or otherwise published in the public domain.
Justice Mr. J.P. Devadhar directed that
the latest Miscellaneous Application filed by the Interveners be heard together
with PCL’s Appeal on 15 November 2016.The
Total Investment & Insurance Solutions
Odd-even car restrictions did not improve Delhi air-The Total Investment & Insurance Solutions
Contact Your Financial Adviser Money Making MC
28
October 2016
As Delhis air quality begins to
deteriorate with Diwali, new government data indicates that the Aam Aadmi Party
(AAP) governments restrictions on cars based on odd-even number plates-between
January 1-15, 2016, and April 15-30, 2016-did not improve the air quality in
the worlds 11th most polluted city. The Total Investment & Insurance
Solutions
The main reason the odd-even system
cannot check air pollution is because no more than 25 per cent of fine, toxic
particles are emitted by cars and trucks in winter, according to a 2016 Indian
Institute of Technology-Kanpur (IIT-K) study, which was commissioned by the
Delhi government.
The Total Investment & Insurance Solutions
The failure of the odd-even system
and the data were cited by the National Green Tribunal (NGT) last week,
validating similar findings in January 2016 by IndiaSpend‘s network of
#Breathe air-quality sensors, which were disputed by the AAP government.
Three sources of Delhi air-quality
data now confirm that the odd-even system did not lower pollution levels: The
union government's Central Pollution Control Board (CPCB); the Delhi's
government's Delhi Pollution Control Committee (DPCC); and IndiaSpend's #Breathe
network.
Particulate matter, or PM, is the
term for particles found in the air, including dust, dirt, soot, smoke, and
liquid droplets, classified according to diameter. Particles less than 2.5 µm
(micrometres) are called PM2.5, roughly 1/30th the average width of a human
hair. Particles between 2.5 to 10 µm in diameter are called PM10.
While pollution from vehicles
comprises a quarter of the air pollution in winter, as we said, it is less than
a tenth in summer -- pointing at sources other than private vehicles, according
to the IIT-K study. The Total Investment & Insurance Solutions
The implied consensus from
government-owned air quality devices, independent monitoring networks and IIT-K
data is that it is necessary to regulate other sources of pollution-not just in
but also around Delhi -- instead of just barring odd-numbered vehicles on
alternate days.
40 per cent of toxic particles from
road dust, 10 per cent from power plants
Vehicles rank second in PM 2.5
emissions and fourth in PM 10 emissions.
Aside from vehicles, smoke from
power plants burning coal and dispersing fly ash, dust from roads and fields
surrounding the city, smoke from non-LPG cooking and tandoors in Delhi
restaurants contribute to Delhi's worsening air quality, the IIT-K study found.
Air pollution from nitrogen oxides
-- mainly emitted by power plants, refineries and vehicles -- also worsened
over the odd-even periods, data from devices maintained by the CPCB and the
DPCC show.
The Total Investment & Insurance Solutions
Road dust is the chief contributor
to PM 10 and PM 2.5 pollution, 56 per cent and 38 per cent, respectively. Power
plants contribute to 90 per cent of Delhi's SOx pollution and half the NOx
pollution.
The Total Investment & Insurance Solutions
Vehicles occupy the main polluter
slot only as regards carbon monoxide in Delhi's air.
The intensity of polluting sources
varies according to season.
Secondary particles, such as oxides
of nitrogen and sulphur pollute the winter ambient air the most. Vehicles also
contribute to ambient air pollution in winter, lesser in summer.
Vehicles contribute only 6-9 per
cent of ambient air pollution from particulate matter in summer. Coal ash, fly
ash from power plants, soil and road dust-including the dust from construction
activities-affect the summer air the most. The Total Investment & Insurance
Solutions
During the monsoon -- which lasts
for roughly three months every year in Delhi -- the ambient air quality
improves because of high wind speeds and moisture, which gathers particles and
wipes the air clean.
When the monsoon recedes and the
October heat makes way for winter, ambient air is affected the most by SOx and
NOx (mostly from power plants and refineries), followed by vehicular
pollutants.
The Total Investment & Insurance Solutions
Biomass burning -- which pertains to
post-monsoon burning of the crop residue -- takes place mostly in Punjab and
Haryana, but affects Delhi as the third most ambient air-polluting element, as
Indiaspend reported in January 2016. The Total Investment & Insurance
Solutions
As winter passes and summer sets in,
ash from burning of coal in power plants, dust from roads and construction
activity remain in the air for a longer time and become the worst air
pollutants.
Air pollution levels in Delhi rose
23 per cent during the second phase of the odd-even registration rule, from
April 15 to April 29, over the previous 14 days (April 1 to April 14),
IndiaSpend had reported on April 30, 2016.
Eight of the11 CPCB sensors showed
deterioration in PM concentration (air quality) during the odd-even period. The Total Investment
& Insurance Solutions
"On a fair analysis of the
report submitted by the DPCC, it is clear that the odd-even scheme have not led
to any substantial improvement in the ambient air quality of NCT, Delhi,"
the NGT order said.The Total Investment & Insurance Solutions
Misbehaving (The Total Investment & Insurance Solutions)The Rational Approach to Make Sense of Our Irrationality -The Total Investment & Insurance Solutions
Contact Your Financial Adviser Money Making MC
28 October
2016
 |
Misbehaving (The Total Investment & Insurance
Solutions)
Richard Thaler is the world’s foremost
theorist on behavioural finance, a field that was developed by Daniel Kahneman
(Nobel Prize-winner in 2002) and Amos Tversky from the 1970s. Most of them, and
another top researcher, Cass Sunstein, have worked together at some stage or
another to generate fabulous insights into how irrational out behaviour is.
Behavioural economics, and its subset behavioural finance, of course, is
designed to show that human beings are not rational while making decisions. The Total Investment & Insurance
Solutions
His recent book Misbehaving:
The Making of Behavioural Economics is a fascinating history of how this
new discipline developed into such a major force over the past four decades and
has come to dominate the mainstream economic thinking. The Total Investment & Insurance Solutions
After all, Thaler is now the president
of the American Economic Association, a position held by luminaries from
conventional economic stream, such as Milton Friedman, JK Galbraith and Amartya
Sen. The Total Investment &
Insurance Solutions
The book starts with a fascinating
example of how irrational we are. For a mid-term exam, Thaler had set up a test
that was designed to distinguish between three broad groups of students: those
who really mastered the concepts taught; those who grasped the basic concepts;
and those who just did not understand. For this, the exam had to have some
questions that only the top students would get right, which meant that the test
was tougher than usual. Thaler writes that “the exam succeeded in my goal—there
was a wide dispersion of scores—but when the students got their results, they
was an uproar among them. Their principal complaint was that the average score
was only 72 points out of a possible 100.” As happens, this reaction was
irrational. The average numerical score had absolutely no effect on the grades
since the average grade was a B or B+, and only a few got grades below C. The Total Investment & Insurance
Solutions
Thaler writes that “I had anticipated
the possibility that a low average numerical score might cause some confusion
on this front, so I had reported how the numerical scores would be translated
into actual grades in the class. Anything over 80 would get an A or A-, scores
above 65 would get some kind of B, and only scores below 50 were in danger of
getting a grade below C. The resulting distribution of grades was not different
from normal, but this announcement had no apparent effect on the students’
mood. They still hated my exam, and they were none too happy with me either. As
a young professor worried about keeping my job, I was determined to do
something about his, but I did not want to make my exams any easier. What to
do?” The Total Investment &
Insurance Solutions
For the next exam, Thaler, the
behavioural expert, made the total number of points available 137 instead of
100! This exam was harder than the first, with students getting only 70% of the
answers right (as opposed to 72% in the first); but the average numerical score
was a cheery 96 points.
He says, “The students were delighted!
No one’s actual grade was affected by this change but everyone was happy. From
that point on, whenever I was teaching this course, I always gave exams a point
total of 137, a number I chose for two reasons. First, it produced an average
score well into the 90s, with some students even getting scores above 100,
generating a reaction approaching ecstasy. Second, because dividing one’s score
by 137 was not easy to do in one’s head, most students did not seem to bother to
convert their scores into percentages. Lest you think I was somehow deceiving
the students, in subsequent years, I included this statement, printed in bold
type, in my course of syllabus: ‘Exams will have a total of 137 points rather
than the usual 100. This scoring system has no effect on the grade you get in
the course, but it seems to make you happier.’ And indeed, after I made that
change, I never got a complaint that my exams were too hard.” This book is full
of stories like these. The Total
Investment & Insurance Solutions
Behaviourial
Finance Meets Quants
One of the more interesting applications
of behaviourial finance is, surprisingly, in clarifying a knotty investment
conundrum which is the domain of quants. For instance, academics have intensely
debated an anomaly called the ‘equity premium puzzle’, first announced by Raj
Mehra and Edward Prescott in a 1985 paper. The Total Investment & Insurance Solutions
 |
Misbehaving 2(The Total Investment & Insurance
Solutions)
Now ‘equity risk premium’ is the
difference in returns between equities (stocks) and some risk-free assets such
as government bonds. The premise is that investors demand a premium for buying
equities over risk-free securities because equities are risky. The question is:
How big is this premium? We can look at history but the answer depends on the
period used and various definitions. Mehra and Prescott studied the period
1889-1978 and concluded that the equity premium was about 6% per year. The Total Investment & Insurance
Solutions
“In many economics articles, the
analysis would stop at that point,” writes Thaler. “The theory predicts that
one asset will earn higher returns than another because it is riskier, the
authors find evidence confirming this prediction, and the result is scored as
another win for economic theory. What makes the analysis by Mehra and Prescott
special is that they went beyond asking whether economic theory can explain the
existence of an equity premium, and asked if economic theory can explain how
large the premium actually is.” The
Total Investment & Insurance Solutions
Mehra and Prescott went ahead and
developed a model to predict equity risk premium. The largest value they could
predict from their model was 0.35%, far lower than the actual historical figure
of 6%! This made no sense. Stocks are highly risky. Why would investors take
the risk of buying stocks when all they get is 0.35% over risk-free returns? The Total Investment & Insurance
Solutions
The model and its conclusions were
controversial. Mehra and Prescott took six years to get the paper published.
Once it was published, many economists came forward to offer their
explanations. Thaler and his associate Shlomo Benartzi offered theirs: people
behave differently over short term and long term. While Mehta and Prescott
arrived at a 6% figure reward figure for the risk one took to buy stocks, it is
worth asking why don’t more people go for that reward? Why do investors hold
more bonds than stocks? The answer: they were taking too short-term a view of
their investments. Humans are not rational.
To test this, Thaler and Shlomo ran an
experiment using employees at the University of Southern California which had a
defined contribution retirement plan. Under the plan, employees have to decide
how to invest their retirement funds. They told each employee to imagine that
there were only two investment options in this retirement plan, a riskier one
with higher expected returns and a safer one with lower expected returns.
They were shown charts showing the
distribution of 68-year returns. They were not told of the asset classes, to
avoid any preconceptions they might have about stocks and bonds. The trick was
in what the charts revealed. In one version, the subjects were shown the
distribution of annual rates of return; in another, they were shown the
distribution of simulated average annual rates of return for a 30-year horizon. The Total Investment & Insurance
Solutions
“The first version captures the returns
people see if they look at their retirement statements once a year, while the
other represents the experience they might expect from a thirty-year
invest-and-forget-it strategy. Employees who were shown the annual rates of
return chose to put 40% of their hypothetical portfolio in stocks, while those
who looked at the long-term averages elected to put 90% of their money into
stocks,” writes Thaler.
The more often people look at their
portfolios, the less willing they will be to take on risk, because if you look
more often, you will see more losses. Thaler later explored this idea in a
paper with Kahneman and Tversky, the only paper that these three stalwarts
published together and that too after Taversky passed away. This is a book full
of interesting stories from the world of behavioural finance that will keep you
engrossed if you are interested in this discipline, as every investor should
be. The casual reader, too, will find these fascinating.The Total Investment & Insurance Solutions
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