rohitc99
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Posts posted by rohitc99
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25 minutes ago, Vish_ram said:
Anyone here investing directly in India? I finally got my demat trading account setup.
i invest directly. I am a USC but also an OCI holder so that allows me to do it. did you have any specific question ?
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7 minutes ago, thepupil said:
i find the direction of flows out of the bond market puzzling. TIPS yield 1-2% REAL across the curve. treasuries pay 4% across the curve (which is not out of line w/ long term inflation so are no longer negative real LT rates. Mortgage spreads very wide, can buy a fully government guaranteed 6% or so...which i find attractive whether its a 10 year or 20 year cash flow. IG spreads are decent.
I recognize no one wishes to fight the fed, but am still somewhat surprised at the collective cowardice of savers.
Man up and buy some bonds, you little bitches.
but rates may go up? who cares, all the more reinvestment income on which to gorge.
but inflations? if you think inflation is going to continue to roar buy tips. not like stocks are going to do well at sustained 8% inflation...but in that scenario you could lock in 10%/yr at whatever duration you want.
but regime change? yes the regime changed. unclear if it will change more.
i feel like an island on this and am probably way early per usual (and was early and knew it).
this is a long way of saying is i think we may be past the theorretical "natural" rate of interest already and am more concerned about not being able to earn these rates on safe stuff for a while than about rates going up more. but no one...and i mean almost no one...agrees with me on this.
@thepupil can you share what is the way to execute on this ? buy ETF on tips ? how does on buy mortgages ?
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2 hours ago, TwoCitiesCapital said:
As mentioned, via funds and ETFs. Most of my fixed income positions are held in 401ks, HSAs, and etc where options are limited and I can't do individual securities.
TLT/ZROZ/RGVGX are the primary Treasury funds I use to increase/decrease duration from money market/bank deposit type investments. I have a few intermediate corporate/core funds as well, but they're small relative to the Treasury position since spreads have not yet widened as has been pointed out by others.
I also switch some of my mixed exposures from things like Pimco's StocksPLUS funds to their StcoksPLUS Long Duration fund which gives me an incremental duration/yield pick-up without changing the equity exposure and leverages dollars put in the market nearly 2:1.
As far as agency bonds, there are funds/ETFs that track those as well. Or you can take a levered bet by buying agency mortgage REITs like AGNC which is what I've started adding.
thank you !
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46 minutes ago, TwoCitiesCapital said:
I've been slowly increasing duration for this is exact reason. 10-30 year treasuries are all yielding around 4%.
If the Fed cuts back to zero, it's highly probable these bonds go up 15-30% in an environment where equities are down an additional 20-30%. And all of that assumes the 10-year stops @ 2% for the bottom which may not be the case. Not a bad hedge IMO.
I've been moving a number of my short-term bonds funds to intermediate exposures and adding small positions in ZROZ/ TLT now that 10-year treasuries are back above 3.5%.
And if you don't want as much duration/credit exposure, agency mortgages at 6-7% is crazy. Especially if you think that the refinancing wave from lower rates doesn't hit due to negative equity in all of the newly issued mortgages...
can you share how you are increasing the duration ? buying the 20 yr treasury directly or via TLT
also how does one invest in the agency mortgages ?
thanks in advance
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4 minutes ago, fareastwarriors said:
Yes, the interface is clunky but it gets the job done.
$100 min, with $100 increments.
Original Issue Rate: The yield determined at auction.
See rates in recent auctionsMinimum purchase: $100 Maximum Purchase
(in a single auction):Non-competitive: $10 million
Competitive: 35% of offering amount
(See types of bidding in "Auctions in Depth")Investment Increment: Multiples of $100 Issue Method: Electronic
https://www.treasurydirect.gov/indiv/products/prod_tips_glance.htm
thanks !
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33 minutes ago, fareastwarriors said:
Why not buy tips at treasurydirect?
agree ..just that the interface is quite bad. is there is minimum threshold or can buy smaller lots
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On 7/25/2022 at 2:23 PM, RedLion said:
So I've been looking for alternatives to the I-Bond to park money for the short term to provide inflation protection but also liquidity. At this point I'm just experimenting in small orders, but at this point, my theory is to focus on short duration TIPS securities maturing around 2025 or 2026 that can be purchased for a positive yield over inflation (by about 20 basis points).
The two things to worry about with buying TIPS on the secondary market, as I see it:
1) If the market "real" rate goes up, you can take a short term loss. This risk should be largely mitigated by focusing on bonds maturing in the short term, since even if real rates go up to 2% it would be the 10 and 20 year TIPS taking big losses not ones maturing in a couple years.
2) Even though the bond is guaranteed at PAR, there is an inflation factor that could conceivably go down in the even we had deflation as measured by CPI.
I just purchased one, Cusip 91282CCA7, coupon 0.125%, maturity 4/15/2026, inflation factor 1.11222. It's quoted at $99.42, but as far as I can tell, you would then multiply the quote price by the inflation factor to reach the actual market value.
If I'm understanding this correctly, I can place as much money as I want in these, they are guaranteed by US government, I get modestly better yield than I bonds, if I need money right away I can just sell them on the market. My big risk would be a spiking real yield or CPI deflation, but both of these are somewhat mitigated by the short duration. At this point I'm thinking of moving my cash allocation to a combination of these short duration TIPS and a 1 year treasury ladder (yielding about 3% right now).
Has anyone here got a lot of experience with buying/trading individual TIPS bonds? Anything I'm missing? Or do these appear to be a good place to put money if you wish you could buy more I Bonds?
for the Cusip 91282CCA7, i checked with merril lynch. the minimum orders seems to be 100K+. do you have the same limitation for Schwab ? treasuries dont seem to have that limit ...around 1000
dont know if i am looking at this right. Do Tips have a higher minimum orders in general ?
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2 hours ago, Spekulatius said:
You also have the strange thing going on that gluts and shortages for differnt items exists at the same time, which screws everything up.
Some of this has to supply chain managers yanking orders on and off like crazy. That‘s really bad for productivity (see the Fred’s productivity chart which has gone negative ).
One of my buddies working on the semiconductor equipment industry told me that they cancelled all their for supplier that are out more than 6 month because they are no concerned about demand, That’s after years of shortages and double ordering. now imaging these suppliers doing the same thing in Panik and you have another shock way running though and other value manufacturing value chain. Those things are happening now all over the place.As for @Gregmal assertion that inflation is on the retreat, i think partly it is as it pertains to volatile raw material and perhaps energy, gas etc, but it’s not true for core inflation. Core inflation is around 6% and I think it’s higher for producer prices. I know my company targets high single digits and that after years of 2% or less increases. The lousy productivity means that unit costs are higher and manufacturers try to pass those on. Those things have entrenched themselves and won’t go away easily.
I am in the process of shopping for a new car and if you want to have fun check what car manufacturers are doing as far as MSRP prices are concerned for their 2023 models. There might be something going on here that car manufacturer are miffed about dealers selling cars for thousands above MSRP and now trying to grab some extras margins raising the prices. The new Honda CRV is a case in point, even when you look past the point that the base model won’t even offered any more for the 2023 model, they raised the price for a like to like car by the high single digits for their 2023 model. Does anyone really believe that this is going to be reversed? I think that’s what entrenched inflation is looking like. and it’s just one example amongst many here.
Ironically the only countries immune from inflation seem to be China and Japan. China has seems heavy dose of inflation but they are back to 2% and change.
I work in supply chain and its quite chaotic. In the past demand was a constraint, so the focus was always to order as needed and not constrain supply. when demand spike, these orders went through, but some critical components could not be sourced such as chip. now you have a glut and excess of everything except those few critical components
now supply is being and everyone is working hard to bring down the excess. as soon as the critical components are available, we could see the shortages dissapear. a lot of demand may also be articifically inflated. people over order when there is shortage. we could see the reverse happen as supply returns to normal
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26 minutes ago, Spekulatius said:
Interesting story about Scott's Miracle gro but there are some general things you can learn from this. The COVID-19 epidemic pretty much screwed up every manufacturing value chain I am aware of. How exactly depends but in all cases it's either a huge boom or bust in demand followed by the opposite.
I have seen this in the company I work for, where demand for certain components went from hero to zero in mid 2021 all of a sudden. Be it toilet paper ,energy, lumber ,semiconductors, cars or even gasoline and crude or lawn fertilizer in this case - we are seeing ripples that originate from the epidemic and that are still moving though the economic value chains to this day.
I think every boom will be followed by an equally severe bust and vice versa. Fun times.
Yes, seeing the same in our company too ..electronic/networking equipment. Inventory piling up though also due to chip shortage which continues for now
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3 hours ago, treasurehunt said:
I took a look at how the rupee has depreciated versus the dollar over the last 20 years and compared this to the relative inflation rates in the two countries.
From the beginning of 2002 till the end of 2021, the cumulative inflation rate in India was about 241%. The cumulative inflation rate in the US was about 53%. So a 2002 rupee was worth about Rs 3.41 at the end of 2021; a 2002 dollar was worth about $1.53.
One USD was worth Rs 48 or so back in January 2002. It was worth about Rs 76 in December 2021. But based on the relative inflation rates, you would expect one dollar to be worth 48 * 3.41 / 1.53 = 107 rupees at the end of 2021.
There is a significant difference between 76 and 107, so just looking at relative inflation rates misses other important factors. Maybe relative economic performance is another factor to consider?
Also keep in mind, that rupee is not a full convertible currency. Its managed to a certain extent by the central bank. ofcourse i have no idea if its undervalued or overvalued ...just pointing out one more factor to consider
and the Indian central bank and govt prefers to weaken the rupee against the dollar to boost exports. they buy and sell the currency so that this depreciation is orderly
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On 8/27/2022 at 11:25 AM, Spekulatius said:
My framework for foreign currency devaluation relative to the USD is to look at the inflation differential over time which means country X (in this case India inflation rate) - US inflation rate over longer timeframes (couple of years).
Generally, Countries with high inflation rates have more currency depreciation.
The underlying thinking is that buying power relative to each other remains the same.
Right now, inflation seems to be lower India than the US (~7% in India vs 8.5% in the US) which suggest a short term dis location based on Fed tightening and flight to safety perhaps. the USD has been extremely strong recently despite high inflation causing buying power erosion.
So from that perspective, it might be a good contrarian bet to invest in in Rupee based assets right now.
The inflation in India for the last 20+ years has usually been 3-5% higher than the US. Now that reverse in the future, but India has usually had high inflation due to supply side issues and govt interventions. If that changes, then you are right
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12 hours ago, Dinar said:
See your Sergei Brin and raise with tens of thousands of Russian immigrants on Brighton Beach collecting welfare/supplemental security income + food stamps + receiving Medicaid + receiving Section 8 housing. Don't forget the massive home attendant fraud - nothing wrong with your 68 year old mother/father, but you get a sympathetic doctor to write a note that she/he needs 40 hours a week of home care, and voila - Medicaid pays you for forty hours of "work" + health insurance. Indian immigrants like Satya Nadela & Sundar Pichai (and the list goes on) obviously add a great deal, however in many cases Indians in IT (just like Russians & Chinese immigrants) only hire their own, care to put a value on that? We need a well thought out immigration policy - get people with the right skills, deal with negative externalities, exclude people with few skills, end chain migration, and limit it. If we let 100MM Russians or Chinese or Indians or Africans or pick your favorite nationality/ethnic group in, we will turn the US into the same unpleasant place that these immigrants are fleeing from. Small numbers of immigrants will assimilate, large numbers will change the country.
averaging 1 Mn per year or less than 0.3% per annum and dropping for last 5 years. i dont think we risk getting run over by any ethnic group any time soon
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45 minutes ago, Dinar said:
Then why doesn't Canada or US hold a nationwide referendum and see if the masses agree with you? Also what exactly are the positives of a Russian computer scientist depressing wages or Haitian construction worker destroying job prospects of African Americans?
and the son of one of those russian computer scientist started google , created 1.5 Tn of wealth and 100K+ high paying jobs
Anyway US is getting some of what you are wishing for. Look at the venture space outside of the US ...a lot of the brightest are starting companies in their home countries. I know a lot of such folks in India who have no desire to immigrate to the US considering the number of hoops they have to jump through. They have started companies in india and the ecosystem is now moving to places like bangalore
We just have to keep doing what we are doing in the US (make legal immigrants wait for 50+ years in the queue) and we will achieve what you think the masses want
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2 hours ago, Crip1 said:
Full disclosure that international currencies is not in my circle of competence.
It’s understood how the INR’s devaluation has impacted FFHI, but how would the investor know whether that devaluation is temporary or more permanent?
-Crip
India has a history of weakening the rupee over time. you may want to model 3-4% annual depreciation against the dollar.
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On 6/27/2022 at 4:25 PM, Crip1 said:
The caveat to the commentary below is that geopolitical politics is not in my circle of competence, so take it for what it’s worth.
I’m not stating that India should support Ukraine, but I think it’s important to not explicitly or implicitly condone invading a sovereign state if for no other reason that it’s trend-setting (and don’t underestimate that). Much of the citizenry in North America is bellyaching about energy pricing, some of which can be attributed to the invasion of Ukraine, and that definitely has a negative impact on all of us in terms of inflation. That, however, is not nearly as concerning as:- The loss of life and liberties for thousands, if not tens of thousands, of innocent people. Everyone should be outraged over this.
- The impact on hundreds of millions of people who depend on food and fertilizer from Ukraine and from Russia. The crisis that may be caused by this is, honestly, unconscionable.
The west can only do so much in terms of dissuading Russia from their actions. Sanctions may be putting pressure on the Kremlin, but the entities who are best able to dissuade Russia are China and India since both are chief trading partners for Russia. It’s more to do with humanitarian concerns and world economics than “supporting” Ukraine/Europe/The West.
-Crip
You make fair points and i don't disagree. However the viewpoint in India, is that Europe has not really cared about their 'humanitarian' concerns all these years and have focused on their own narrow interests. Now expecting other countries to do otherwise is hypocrisy
if you are interested, you can watch some of the video/speeches by the India foreign minister on this topic
I think outside of the media chatter, India is definitely trying to balance its equation with the both the sides in its own self interest
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12 hours ago, Viking said:
I have been trying to better understand India’s posture on the war in Ukraine. The speaker in the video below succinctly explains one of the key factors driving India’s response: security. Go to the 35:40 mark of video (discussion of India starts at 32:30 mark). China is India’s primary external threat. India’s security/military is built around managing the Chinese threat. And pretty much all of India’s military equipment is supplied by Russia - including munitions and spare parts. (Vietnam is in the exact same situation). And it would be massively expensive for India to pivot away from Russia (the speaker said it would not be like a consumer pivoting from Apple to Android when deciding to switch smartphone platforms
which got a good laugh from the audience).
—————Viking’s additional comments: There are also significant economic benefits to India of supporting Russia: cheap oil, cheap fertilizer and first in line for grain shipments. All important for a country looking to raise much of its population out of poverty. And also wanting to avoid an all too possible political crisis (driven by high energy prices and lack of food).
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This may not be a popular view in the west, the question to ask - why should india support ukraine/europe ?
Ukraine has voted against india in most international forums. Europe/US have not been any better in the last 70+ years. Now that they need support from India for whatever reason, they talk of moral reasons etc.
India is acting in its own interests as have US and Europe in the past. Russia has supported India when US was supporting Pakistan. So there is reason India should not leverage the situation to its own benefit
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1 minute ago, Gregmal said:
May be happening....
spot on !! you are good at this
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23 minutes ago, Viking said:
I watched the Fairfax India AGM. Here are some thoughts:
- overall, i was impressed. It was the first time i saw management in the flesh.
- Chandran Ratnaswami (CEO) appears to be a very smart dude.
- unlike Africa, Fairfax’s skill set and track record in India is stellar; lots of tailwinds; future looks bright.
- whoever it was asking management all the hard questions… thank you!
- they have assembled a very good collection of assets in India. Maxop and Jaynix investments in 2021 are seeding the next generation of multibaggers.
- Fairfax India had bought back 1.9 million shares to March 4, 2022. (Same seller who sold Fairfax 5.4 million shares in Feb).
- Sanmar’s IPO/deleveraging in 2021 was a very big deal. If market conditions help (PVC pricing stays elevated) there could be significant value to be unlocked in the Egypt sub.- mildly disappointing to learn the Airport’s revenue request for 3rd control period (2021-2026) was cut by $125 million (and pushed into next control period).
- here is a good example of the value management at Fairfax India is driving for shareholders: sold 14% of Fairchem in Nov 2021 for $46 million; recouping more than its ENTIRE investment (of $30 million). Still own 53% of company values at $155 million at Dec 31, 2021. Wow!
- i think there is a good chance Fairfax India does another Dutch auction at some point in 2022. They had cash and government bonds of $230 million at Dec 31. Another $70 million in liquid public equities. Jaynix cost $33 million. When it closes proceeds from IIFL Wealth will be $191 million (they are keeping 3.8% stake). Looks to me like Fairfax India has (or will have) the cash to do another Dutch Auction.
- i shifted a little more of my Fairfax into Fairfax India (tax free accounts).my concern is BIAL which accounts for a large portion of the value. What the government is doing is par for course - Keep changing the terms such that in the long run the investor earns sub par returns. losses are borne by the investor and when the asset turns, then cap the upside by calling the profits as excess
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9 minutes ago, Gregmal said:
GOOG and MSFT are diversified behemoths. Basically high quality tech ETF. The one dimensional one trick ponies are getting walloped.
isnt GOOG the same ? most of their earnings are from search. youtube is there too but unlike MSFT not as diversified ?
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1 hour ago, Xerxes said:
United States immensely benefitted from its geographical location (surrounded by two large oceans)*, its natural endowment & resources, and that it became that natural candidate to take the mantle of global leadership from the United Kingdoms and Europe.
While United States proper (continental US) remains unscathed throughout the war and turmoil in Europe, I think the geopolitical changes were so immense that it is wrong for Jeremy Grantham to sit there and casually observe that how bad the market return it was, as if most people stayed in the market and were watching Jim Cramer on CNBC etc. There were so many hurdles in life that individuals had to go through (relatively better if they lived in the U.S. and relatively worse if they lived in Europe) that point was not need to be made. I realize that Buffett also made the same point in 2020 AGM.
A better comparison is 2000, because while you had 9/11 etc., one could make the statement that all else being equal (since there were no major geopolitical event) this is what happened when the economy rolled over. So really isolating what we want to focus in.
*people complain all the time about Middle East and its politics, but they forget that the region does not have a natural barrier protecting it from the outsiders. It is often easy for people from U.S. and Canada to look down at the rest of the world and wonder why there are so many wars and conflict and look how great we are. Another case in point, Japan and United Kingdoms. Both islands at the far extremes of the Eurasian continent.
which kind of comes to the point that if the country we live in gets into a war and gets destroyed, the stock markets and its returns will be the last of our priority. Ukraine comes to mind here in the present.
Actually the experience of the US and some of the european countries for the last 200 yrs is the exception. most other place have seen huge destruction of life, property and wealth
I would invest hoping the country survives and does well, but if doesnt then i have other and bigger problems to worry about
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On 12/23/2021 at 9:26 AM, Gregmal said:
Who doesnt love these headlines?
https://seekingalpha.com/news/3783048-new-home-sales-miss-consensus-in-november-rising-124
Just like the Hedgeye chumps pushing their "sunbelt peak" thesis. Sorry folks. Gonna have to settle for 12% increases in sales and $10k increase in average price of a new home. Darnit. Time to buy some puts LOL.
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But the world has a long way to go. In May 2021 researchers at Freddie Mac, a “government-sponsored enterprise” which subsidises much of American mortgage finance, estimated that the world’s largest economy faced a shortage of nearly 3.8m homes, up from 2.5m in 2018. Other estimates put the shortfall closer to 5.5m. In England an estimated 345,000 new homes per year are needed to meet demand, but builders are further away from the target than they have ever been. Unless something profound changes, pricey property may be around for a while yet
https://www.economist.com/finance-and-economics/how-long-can-the-global-housing-boom-last/21807002
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1 hour ago, ERICOPOLY said:
I think that is a requirement if the individual is actively involved. Otherwise it will look like they're avoiding employment taxes (FICA).
Yes, these are people working as Tech consultants
India
in General Discussion
Posted
Most seem to be NSE 50 stocks. why not buy the index
Personally i would avoid the adani group. consumer good companies are an avoid for me too ...growing low single digits and selling at 60 times PE or more. Pharma companies have a good domestic business, but their generics segment is a challenge.
ITC is a good candidate for research if you have no issues with cigarrette companies. ICICI bank is doing well too. Same for HDFC. These three could do 20% CAGR for the next few years in terms of growth