Varun Khandelwal's blog

Sir...I have mailed you few questions...PLease rep...

2010-03-29T23:55:03.989+05:30

Sir...I have mailed you few questions...PLease reply whenever you find time..It would help me a lot..
Thanks

you need to trade rupee neutral.. hdfc/hdfcbank is...

2010-03-28T15:14:29.136+05:30

you need to trade rupee neutral.. hdfc/hdfcbank is balanced so simply go long and short one lot each !

Long HDFC Short HDFC Bank Long ONGC Short Cairn H...

2010-03-27T23:10:01.681+05:30

Long HDFC Short HDFC Bank
Long ONGC Short Cairn
How do you trade them, if you dont mind?

nice one...finding some cool stuff in this blog......

2010-01-26T23:06:54.956+05:30

nice one...finding some cool stuff in this blog...

Hello Sir, I am a regular reader of your blog.I ha...

2009-12-26T01:00:54.271+05:30

Hello Sir,
I am a regular reader of your blog.I had few questions ,tried to mail you on varun.khandewal@gmail.com ..but didnt go through,..Could you please update your contact ID in your profile.
Thanks
Saif
saif.shakeel@gmail.com

Now I can see the application of pair trading work...

2009-01-22T21:29:00.000+05:30

Now I can see the application of pair trading work :)

Manoj

Good post, and interesting speech. I recently lear...

2008-11-29T18:27:00.000+05:30

Good post, and interesting speech. I recently learnt what he meant by inflationary bias. If you work out the algebra of the monetary policy reaction function of an inflation targeting central bank, you will see an inherent inflationary bias in it - will demonstrate the algebra to you sometime - it's very interesting!

thanks for the advice guruji ;).. great going.

2008-11-29T01:33:00.000+05:30

thanks for the advice guruji ;).. great going.

Hello Janardhan,The LLP structure will benefit hed...

2008-11-11T12:25:00.000+05:30

Hello Janardhan,

The LLP structure will benefit hedge funds (as opposed to mutual funds or portfolio managers registered with SEBI). Currently, under SEBI guidelines, there is no way for an asset manager to run a short-bias fund, leveraged fund etc..
For example, if an investor believed in Jan 2008 that the markets will collapse the only professional advise he had access to were brokerage research analysts. There is a conflict of interest there since brokerages earn revenues from higher client trading volumes rather than the client making money. An asset management firm, on the other hand, prospers only if the clients prosper. There are several other strategies which cannot be made available in India under the current regulatory structure (however India focussed funds based outside of India can offer these).

With the LLP structure, fund managers can float a LLP for each strategy and the clients can become partners and the fund manager can be paid his fees directly by the LLP depending on the scheme's performance. The limitation here is that this structure will probably not be feasible for a large number of clients (and for small investors).

Hi Varun,Was a little confused on how LLP would be...

2008-11-11T11:48:00.000+05:30

Hi Varun,

Was a little confused on how LLP would benefit funds - could you elaborate on this??

The article on Bear Sterns collapse in Bloomberg was interesting.

Regards,
Janardhan
bjan.rao@gmail.com (johnbelpu@blogspot.com)

Superb way to describe the bubble!! Thanks for pos...

2008-11-11T09:44:00.000+05:30

Superb way to describe the bubble!! Thanks for posting it.

-RK

Shruthi, you might want to read http://www.house.g...

2008-10-31T19:09:00.000+05:30

Shruthi, you might want to read http://www.house.gov/jec/Research%20Reports/2008/rr110-21.pdf or http://www.livemint.com/2008/09/19220553/The-global-bear-hunt-begins.html to give you some sort of an overview.

To answer your questions:
1) Yes, the equity stake would on the RBIs balance sheet via a SPV

2) RBI doesn't decide on what stocks to buy. They hire asset managers such as State Bank, PNB, ICICI, HDFC, Reliance or even some of the foreign banks for the purpose of managing the money. The idea situation would be to have a consortium of asset managers. As a matter of fact, the Fed is taking a similar approach to buying CDOs under the TARP.

3) The RBI should ideally hold the stocks for a period of 3-5 years (or until such time when market conditions are attractive). The Hong Kong Monetary Authority sold their investments at a tidy profit several years after investing..

Varun, correct me if I understand this wrong. SSF'...

2008-10-31T14:32:00.000+05:30

Varun, correct me if I understand this wrong. SSF's imply that governments use forex reserves to buy stocks, infusing liquidity into the equity markets and restoring confidence. Is this right? If so, I have the following concerns.
1. While it is true that all RBI assets are ultimately technically owned by the GoI, reserves are on RBI's balance sheet. Is this an action that you think the RBI should take, or the GoI? Because they are two distinct legal entities. So the equity would be in the RBI's balance sheet at the end of the day.
2. How does the RBI decide what stocks to buy? The RBI is the regulator of banks. So I assume it doesn't buy a stake in any bank equity. Does it merely participate in an index fund type of activity?
3. How long does the RBI hold these stocks? Does it wait until stock prices "redeem" themselves?
I'm guessing all my questions point towards a need for greater understanding of the concept of SSF's. Could you point me towards some literature?
Thanks, and look forward to reading your other posts!
Shruthi