Gaming like Cleo

My cat Cleo loves to play. She is a big communicator when it comes to gaming. She is a gamer. The more I see her playing, the more I see a behavior similarity with humans. The idea of play is equally important if not less in investments. Or maybe it becomes important in time. She knows where the ball is but she will look the other way, walk a bit ahead and then turn and crouch, getting ready to attack.

A reader on mail asked, “I am genuinely worried about the rising Sensex but I don’t know why I am worried about rising prices. I don’t want to have my savings wiped out when foreign investors start pulling out their money. I don’t understand why domestic FIIs are selling and foreign FIIs are buying. so are the foreign fund inflows likely to stop/ stabilize soon?

Just like Cleo, many of market participants are playing, like Crystal Moore admitted, her job was to sign not to read. The people who made her sign were gaming too. There is a wide section of us, who gamble and play. How can we assume that domestic and foreign FII’s have no play element. Ultimately what does majority understand by speculation? It’s a game for them.

Of course its fun to play the game, but that could be a lot of risk. How about adding a system to the game, a risk reducing system? If you are an investor wondering the game of FII’s, let’s help you lay down the ground rules for a system based play. 1: We cover 120 assets which includes CNX100 components and sector indices. 2: We rank them on multiple holding periods. 3: The worst rankers are best holds and buys and best rankers are best sells and reduce, simple.

The attached pair gird from 120 Indian assets suggests that for the intermediate period the best holds are: Punj Lloyd, Suzlon, Housing Development and Infrastructure, Tech Mahindra, GMR Infrastructure, Sesa Goa and Sterlite and the Best reduce are Federal Bank, Bank of Baroda, Canara Bank, Cummins, Corporation Bank and Bajaj Auto.

The current outlook of the market may need effort to understand what the FII’s are doing, but don’t forget the threes.
3 negative for the markets. 1: Volatility is coming out of historical lows and should rise. This could mean fast down activity. 2: A similar structure suggests Rupee multi week weakness (negative for equity) 3: Markets generally correct an 18-20 month upsides in both time and price. We have carried anticipated and happened cases.

3 Positives. 1: There are more than a few sectors (stocks) that can hedge (falling less or not falling at all). 2: Quantity of fall may not be more than 30% from current levels. 3: Hedging Put options owing to current low volatility are still cheap.
3 Strategies. 1: A simple ranking process can isolate the potential outperformers. 2: This ranking is linked to a certain holding period (say a quarter).3: The ranking process also isolates the potential underperformers that should be closed or reduced in a portfolio. And the best part we can do it for you. We will rank your portfolio and tell you which of your assets are mismatched with your holding periods (quarterly, monthly, weekly etc.). We will tell you which of your assets are going to underperform and which are going to outperform. We can also tell you which of your assets are going to be more volatile. So if you are uncomfortable with the current market situation, we could help you reduce your portfolio risk. Maybe watching the game would be relaxing and not stressing then.

Alpha is a daily strategy signal product that gives long only, short only, pair trading signals. Alpha is a numeric Ranking product based on TIME fractals. The signals are carried over minor (10-30 days) and intermediate (above 30 days) time frame. The signals are illustrated through tracker and running portfolios. Alpha can be used by fund managers for relative allocations, traders for leverage bets and high net worth clients for selective trades. This is a part of the time triads analytics developed by Orpheus Research.

Naked and/or pair strategies are not riskless strategies. Time arbitrage portfolio legs should be risk weighted before any implementation. Please mail us for a detailed working or consult a local financial risk manager to execute these pairs. For more details please subscribe to the Orpheus Research products.

Performance cycles (Rieki) is a term coined by Orpheus Capitals. This is another name for time triads, time arbitrage, time fractals but expressed in terms of relative performance. Time arbitrage, Time Triads, Time fractals are terms coined by Orpheus Research. Rieki is a bounded oscillator that moves in a range say from 1 to 30. 1 is top relative performance and 30 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.

Time is a social construct and we see time through the life and nature around us. Understanding time can not only give a unifying theory to research of a few thousand years, but also help us understand the world we live in. Time evolves, oscillates and continues. Time comes before everything, but we don’t see it. We just feel it. We believe what we see and this is why understanding what we don’t see is a challenge. Understanding time could bring more than a conventional thought down, it’s a revolution, which could rock the very foundation of economic thought or the geometric structures Euclid laid down in 300 BC. We are at the start of the journey, but if time is indeed the real mathematics, we could see high accuracy in time forecasts.

Stop loss and exits are activated at 4%

Coverage India: 100 top traded stocks and Indian Indices.

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Orpheus Research at Reuters - United Kingdom

Orpheus Research at Reuters - United States

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