Give Me Money: Print it or Release the Repo Floodgates

This is what I’ve been telling some people around me these days…

Now that we all know that the latest quarterly GDP growth number is 6.1%, I guess my thoughts on inflation & interest rates (here) will turn true and the RBI will start easing down policy rates. I guess if that happens then I will finally be able to redeeem the Axis Banks and the HDFC Banks that I have on my books.

What’s a good bond fund to go long on now? Need to find out. I resolve everytime not to practise the ‘trapper’ style of investing, but always fall prey to it.

A ‘trapper’ style of investing is a personal term I’ve created to remind me on the numerous opportunity losses I have incurred investing on a hunch and waiting for that event to play out, snaring my capital in the process – not to mention some real losses as well. I guess. An example is the big hue and cry around the possibility of IFCI being converted into a bank. I had given in to the temptation and put in a modest amount, laid the ‘trap’ and waited, waited, waited for the poor animals that make our financial jungle to fall into it. I guess the only trap that played out here was that my capital got trapped. 🙂 I can recollect so many other examples from my personal trading journal – the government is about to come out with a favourable policy on cement and lift the restriction on cement prices: so lets pick a clinker crusher or two and wait by the trap! Ditto with sugar stocks some time back. Even before there was that shine which many had taken to PSUs under the hope that they’ll be monetized by the Government’s disinvestment program. Cut to today – have you noticed all those articles and pop-ups, emails, even sms’ and tweets advising “stocks to buy ahead of the budget”, “hot sectors during budget 2012” etc etc. Avoid this noise please. If you remember conditional probabilities and Baye’s Theorem from your maths classes, your chances of making money are highly conditional – probability of (BEL going up) given that budget makes provision/announcement regarding defence etc etc.