Archive for May 9th, 2012

The Argumentative Indian

 

I just arrived 3 days back to Delhi. It started well with the Airport shuttle to the centre of the city. But then the dry and hot Delhi is prompt, “welcome to the extreme climate city”. Distance keeps my love alive for India.

Talking about love, listening or reading news about India from Europe is different than coming here and tuning in. I have never felt such an anti-state wave before. There was hardly an objective comment about the state. The state is bad, the leaders are corrupt, the laws are poor and “India kabhi change nahin ho sakta”.

Then there are open forum debates, be it between Air India vs. its pilots, the state vs. telecom majors, finance minister vs. Mauritius, the debate about productive investment in gold or about Kingfisher or Reliance. The regulators recommendations are criticised and labelled as arbitrary, regressive and inconsistent. Thought leaders have started using words like destroyed and collapse. There are of course counter opinions, “seven reasons why India will not collapse”. It seems like an ever ending debate fitting the description Amartya Sen gave us as ‘argumentative Indians’

I don’t have a pro state stand neither I am against the state. Maybe I am judging the state relatively and not absolutely. For me messing up a pensioner’s life, losing his pension in risky investments is a bigger sin than trying to restrain a kind of laissez-faire. We are in tough fiscal times and controls has helped India on prior occasions, but maybe it’s poor timing and lack of diplomacy (India has lesser diplomats than New Zealand). And after a secular fall from Nov 2010 the negative market sentiment only fuels up the debate further.

As an investor, trade or money manager I have a choice whether I want to indulge in the blame game or think of a solution for risk management. What if these negative sentiments exacerbate and take us 20% lower from here. What then? Nifty is already down 20% since Nov 2010 another 20% may lead to further pain. Owing to geographical bias or portfolio allocation rules, going cash or cutting out losses is simply not an option. Is there a way of superior stock selection? Is there a way to identify 10% of the market which can outperform and sustain despite any broad market drop and continued negativity.

This article was written for Business Standard

Our Jiseki Time cycles are seasonal patterns of strength or weakness in assets. They are derived from percentile rankings from 1 to 100. The higher the percentile more the chance for an asset to weaken and worst the ranking, better the chance for the respective asset to outperform. 100 is top relative performance and 1 is worst performance. The idea is that performance is cyclical. A top performer will underperform in future and vice versa. A top relative performer is also the worst value pick and the top relative underperformer is the best value pick. Jiseki is another name for Performance cycles, time triads and time fractals. The signals are illustrated as a running portfolio and as Jiseki Indices. These signals can be used by fund managers for relative allocations, traders for leverage bets and high net worth clients for selective trades.

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Mukul Pal, is a Chartered Market Technician, MBA Finance and a member of the reputed Market Technicians Association (MTA). He has more than a decade of Capital Market experience dealing with derivatives and global assets. He has worked for Bombay Stock  Exchange, multinational Banks and brokerage houses in leading research positions before starting on his own in 2005. He is the President of the MTA Central and Eastern European Chapter.