RISK MITIGATION!!!

High market volatility often ends up in drastically affecting the stock performance, which results in a need for risk mitigation. In Life there is no " Control Z",the same with the stock Markets, during recession or Bear markets its always " Better safe than sorry". In these market conditions there is a need for horizontal risk mitigation where in a person's portfolio comprises of more scrips and the amount to be invested in each scrip will be spread over the number of scripts.

Apart from the number of scripts, its important that the defensive stocks - Pharma stocks and FMCG Stocks hold a major share of the portfolio in order to minimise risk and optimise returns during the recessionary periods. Many Pharma stocks and FMCG stocks have fared well in comparison to the other scripts during these periods. When most of the stocks hit new low, Few of the pharmaceutical and FMCG stocks reached new highs during recessionary and bear market conditions.

If one would like to keep away from stocks then its better to opt for any bonds, Gold ETF's, Fixed Deposits and government securities.

CHINA'S Economic Growth witnessing a slowdown mode!

China's economic growth estimates tumbled to below 10% for the first time in 3 years further sending shivers down the spines about possibility of a recession creeping in, adding to its woes the Quarterly results announced by the US Firms ended up negatively, pulling down the dow by around 5.2% and nasdaq by around 4.6% which resulted in them ending up at 5 year lows! The European markets were hit by around 4.5% along with the asian markets which ended up in the red!
Economists feel that the bottom has not been hit yet, US Treasury predicts that the recovery will begun only in the late 2009. On the other hand, Nymex Crude ended up low by 7% at around $67 a barrel- 16 month low, due to the recession fears and rising inventories of the Oil Firms in the US. The Price of oil is further expected to decline drastically once the world confirms that Recession has crept in!

NEW STOCK MARKET TERMS - Post Financial Crisis.

I Came across a mail, i thought of sharing with you all! A Laugh riot!!! Humour in Crisis!
CEO --Chief Embezzlement Officer.

CFO-- Corporate Fraud Officer.

BULL MARKET -- A random market movement causing an investor to mistake himself for a financial genius.

BEAR MARKET -- A 6 to 18 month period when the kids get no allowance, the wife gets no jewelry, and the husband gets no sex.

VALUE INVESTING -- The art of buying low and selling lower.

P/E RATIO -- The percentage of investors wetting their pants as the market keeps crashing.

BROKER -- What my broker has made me.

STANDARD & POOR -- Your life in a nutshell.

STOCK ANALYST -- Idiot who just downgraded your stock.

STOCK SPLIT -- When your ex-wife and her lawyer split your assets equally between themselves.

FINANCIAL PLANNER -- A guy whose phone has been disconnected.

MARKET CORRECTION -- The day after you buy stocks.

CASH FLOW-- The movement your money makes as it disappears down the toilet.

YAHOO -- What you yell after selling it to some poor sucker for $240 per share.

WINDOWS -- What you jump out of when you're the sucker who bought Yahoo @ $240 per share.

INSTITUTIONAL INVESTOR -- Past year investor who's now locked up in a nuthouse.

PROFIT -- An archaic word no longer in use.
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PAUL KRUGMAN WINS NOBEL PRIZE.

The Royal Swedish Academy of Sciences on Monday announced that American Paul Krugman has won the Nobel economics prize "for his analysis of trade patterns and location of economic activity."
"What are the effects of free trade and globalisation? What are the driving forces behind worldwide urbanisation? Paul Krugman has formulated a new theory to answer these questions," the academy said in its citation.
The citation said Krugman's approach is based on the premise that many goods and services can be produced at less cost in long series, a concept known as economies of scale.
Krugman is an American economist, columnist, author, and intellectual. He is professor of economics and international affairs at Princeton University, and is also a columnist for The New York Times, writing a blog and a twice-weekly op-ed column for the newspaper since 2000.
Krugman was born into a Jewish family and grew up on Long Island, and majored in economics (though his initial interest was in history) as an undergraduate at Yale University. He earned a Ph.D from MIT in 1977 and taught at Yale, MIT, UC Berkeley, the London School of Economics, and Stanford University before joining the faculty of Princeton University, where he has been since 2000.
Other awards:
1991, American Economic Association, John Bates Clark Medal
2002, Editor and Publisher, Columnist of the Year
2004, Fundaci�n Pr�ncipe de Asturias (Spain), Prince of Asturias Awards in Social Sciences, the "European Pulitzer"
2004, Doctor of Humane Letters honoris causa, Haverford College

He has authored a few books with Wells including Economics: European Edition (with Robin Wells and Kathryn Graddy, Spring 2007); Macroeconomics (with Robin Wells, February 2006); Economics (with Robin Wells, December 2005); and Microeconomics (with Robin Wells, March 2004). From 1982 to 1983, he spent a year working at the Reagan White House as a staff member of the Council of Economic Advisers.

A BREATHER FOR THE MARKETS!

After the "Horror week" siphoned off millions of Investor wealth, The Markets through out the world recovered significantly owing to the provision of bail out package by the European Government. Asian Markets rallied, followed by a rally in the European Markets and the day ended up with the Wallstreet posting its highest intraday gain ever. The British Government took over the RBS(Royal Bank of Scotland) and HBOS.

Markets hit by Finami!!!!!!!!

Markets through out the world were hit by a FINAMI( Financial Tsunami) , Markets thru out the world eroded the wealth drastically owing to a huge decline in the global markets. Financial crisis hitting the European nations has added to the further woes of the investors.

Indian stock markets which i thought were substantially better when compared to the other Asian, Europoean and American counterparts was itself hit by around 1028 Points in the intraday, 11000 was considered to be the support levels but the level was breached yesterday itself, later Sensex recovered to around 10528 levels, rising doubts of a further fall is the fact that the european markets ended up lower by around 5% even yesterday. Outcome of G-7 Visit might end up helping the markets!

Indian stock markets were hit by a couple of badnews namely- IIP Rate was at 1.1 % compared to 10.6% last year, Inflation at 11.8% , Good news being RBI Cutting down the CRR by 150 basis points thus infusing around 60,000 crores into the market, aiming to easen the credit squeeze. by ending the day at 10528 sensex is trading at half the levels of all time high(21607) which was touched in January- 08.

Bears rule the roost!

The Indian stock markets nose dived by around 6%, amidst global fears and fears of the financial crisis which hit the European nations as well. The European stock markets were down by around 5 % on saturday and 7.5% yesterday indicating that the markets might be facing a downturn even today. The major stock exchanges through out the world were down by around 5 % Yesterday. The era of globalisation has resulted in the interdependence of stock exchanges through out the world resulting in further volatility i.e( Ex- A crash in US markets will have an impact on the Indian Markets as well).

The Indian stock market(BSE) ended up breaching the most crucial support levels of 12000 and ended up at 11800 Points. This was mainly triggered by offloading by the FII's and panic selling among the investors amidst global financial and Stock market turmoil. All these will only result in aggravating the sentiments of the market by leading people to believe that recession has crept in.Even SEBI's( Securities and Exchange board of India) favourable moves on allowing the Participatory notes could not stop the Indian Stock markets from the blushes of downtrend.

After SEBI's move on P-Notes, RBI had cut down the CRR( Cash reserve Ratio) by 50 basis points on Monday, But the European Stock Indices were down by 7% and the US Markets down by 3.5%, So lets see whether the move of RBI will offset the negative sentiments of the Indian Stock Markets.

On the other hand, Long term investors can start accumulating attractive buys.

Signing off for now- will be back after 2 days.

Warren Buffettaaya Namaha!!!!!!!!!

Dollars flash across the mind the moment his name is uttered, Also regarded as the " Oracle of Omaha"-That's his persona, charm, Wisdom Investing, Value investing - Yes Its Warren Buffett, regarded as one of the greatest investors ever. He plays bridge game with Bill Gates and Allen Paul for 12 Hours a week! He made an official announcement regarding giving away his 83% of his fortune to the Bill & Melinda Gates Foundation. This a classic proof of his Philantropism.

When the whole world tries to make money out of a booming market, he tries to make money by investing in the crashing markets.

Buffett warned in 2003 that mortgage-backed derivatives named as the C.D.O.'s ( Collateral debt obligations) were “financial weapons of mass destruction” and that, while the Federal Reserve system was created in part to prevent financial contagion, “there is no central bank assigned to the job of preventing the dominoes toppling in insurance or derivatives,” Buffett's views. The fed paid no heed to it and you know who is right!

I happened to come across an article suggesting the youngsters to stop investing on their creditcards and to start investing in themselves, which impressed me a lot, I even came across a mail dealing with his childhood info that he got a share at the age of 7( if i m not mistaken), having read this i instantly became one of his millions of admirers.

A week back he was in news for his decision on investing $5 Billion in Goldman Sachs, Now he is back in the limelight once again for investing $3 Billion in GE.The whole world eagerly awaits his next moves.

He is Known for his principal of " Entering the markets at a time when people think there cant be anything worse than the markets" . His sense & Simplicity has won many a hearts worldwide. His Investments in the Chinese Markets ended up the scrip higher by around 30 %, that's the Buffett impact.

At a time when the Fed and the Treasury were waiting for Private persons to pour in Money, Buffett entered like a heaven sent angel, much to the relief of the Fed. With the Fed infusing $700 Billion bailout, he (Buffett) expects GE and Goldman Sachs to comegood amidst the global turmoil, which buffett feels will start to stabilise once the bailout is done.

People worldwide can atleast follow the footsteps of Warren Buffett and start investing in the downtrodden times in order to pep up the market conditions before it is too late.

Remember- " There is never a wrong time for doing the right step".

INVESTOPHOBIA- Buzz Word of the Buzz Town

Investophobia- Fear of investments might have hit the investors worldwide badly. With the financial crisis which hit US hard, seems to spread its fang to the European markets as well. The global markets have already witnessed a meltdown in the last few months sparing no market. The Markets globally have shaved off around 30-35% of the Market Cap owing to the Crisis.All indicators of the global economies heading towards a recession. The US Markets- considered to be the Big Daddy of all the Markets is itself hit by credit crunch , adding to its woes is the credit freeze , though the bail out plan was passed by the congress, the Post-Bailout outplan sent the market reeling down by 3.5 % indicating that bailout plan is just not enough to end the myriad sufferings of the investors.

The Jobless Claims in the US hit a 7 Year low, the aftermath of the financial crisis is further likely to take the Jobless claims to a new low. Fed's Rate cutting rampage will nowhere result in reviving the crashed markets.

An alternative for improving the employment rate needs to be targeted first. All that matters now is the time the Economy would take to reinstate itself in a stable condition and sustain the momentum for a marginal recovery.