Nifty 2016 to 2020

Nifty moved up 154.60 points on average this year. 

This was the second highest in last 5 years with great volatility. 

Another year of great learning in the history of Stock Market.

Always Optimism and Patience wins.

Best Regards,

B G Nareshkumar

HDFC LIFE Insurance Company Limited

Insurance companies have a better growth in India in coming years. As i always compare Option Selling to an Insurance company and i work with Theta, HDFC life looks very attractive in coming years. Few details of the company as below:

HDFC Life Insurance listed its IPO by Mid of November 2017

Currently have the Market Capital of 132,170 Crores & Face Value of 10

Profit After Tax of the the company in 2016 was 816.79 Crores, for the year 2020 it was reported to be 1297.44 crores. Every year the growth of the company in terms of profit is increasing consistently as shown in the chart below

Similarly, the EPS (Earnings per share) also increases consistently for past 5 years

Shareholding pattern of the company says, the promotors have not pledged any share of the company till now and they hold 60.40% of the companies stock. FII (Foreign Investors) hold 23.54% of the share in the company and they believe strongly on the growth of the company

Best Regards,

B G Nareshkumar

Sun Pharmaceutical Industries Limited

Pharma companies , Insurance & Financial companies show stronger strength for next 2 to 3 years. Great platform to get into investment mode through SIP and watch the market moves.

I personally (not an Investing recommendation) looked at SUN PHARMA, the company financials started to grow compared to last year.

Sun Pharma is a Large Cap company which has 1.23% in Nifty as of 2020

Market Cap: 1,37,158 Crores

PAT (Profit After Tax): In June 2020 = -16522.60 Cr , In Sep 2020 = 1812.79 Cr (Which is more than September 2019 = 1064.09 Cr)

Shareholding Pattern: Promotor holds 54.69% of shares , FII - 12.56% & DII - 20.28% (as of Sep 2020)

Dividends were given every year , Last bonus on shares was given on July 20,2013 and Face Value of the stock is 1.0

Sun Pharma has shown a decent growth last year and has the tendency to grow further.

Best Regards,

B G Nareshkumar

Nifty - 2019 vs 2020

It is clear that Nifty moving in its own style (YOY) as last year but the only concern is the volatility at its best. Due to this volatility, people think that Nifty is at over bought zone and it creates fear among investors and traders to buy stocks and indices at this level.

When we compare the data between 2019 and 2020 ( till December 12th 2020 ), the movement and returns given Year-on-Year is almost same.

Nifty has moved an average of 115 points higher per month (excluding the volatility), below was the data of Nifty on monthly closing. Monthly closing is calculated below based on the expiry date ( Last Thursday of every month ).

Last 2 weeks in December, which is considered as the holiday season in most of the countries, Nifty could take a small correction downside or it could go sideways here and start fresh from January 2021, but definitely not expected for a fall like March 2020.

Best Regards,

B G Nareshkumar

Unbiased View

Definitely for an Investor, there should be growth in the company and one should not invest in a company which has negative forecast.

Unbiased view for any trader is exceptionally important to make money or to safe capital. You can notice many influencers talk about the market up / down after it has actually happened, but no one can tell what is going to happen tomorrow or in a month, because market is irrational and unpredictable.

Being Unbiased is more difficult but safer in the economic world. When we work towards success, below 6 points to be considered

1. Unbiased view

2. Discipline

3. Confidence

4. Consistency

5. Patience

6. Passion

Let's say I take a positive view ( Sell Put being an Option Seller / Hedger ) and when the market goes against me for a day or a week, I need to wait for the market to return back to its position or wait for the Theta to play its role.

In the above case, the biggest enemy is impatient and that might come out with loss, hence if I go with an unbiased view or taking an Iron Condor ( I would always sell the call option far away from the spot strike and sell the put option bit closer during the start of the month - also will take care of the Open Interests ) that will balance my profit / loss and in a long run near to the expiry, Theta will work and give the benefits both ways.

Point to note is the Margin, where the Option sellers will be benefited more for an Iron Condor, margin will be around 65% than compared to the biased view margin for any stock or indices. 

Another point for success in Unbiased positions is to select the stock / index which doesn't have high volatility and has consistent grow. Mainly the stock should not be on the news.

Need not to worry on high liquidity on the stock, I would prefer the medium liquid stocks rather than high liquid stocks. Better to consider the stock whose Bit price and Ask price of the Premium are closer. 😊

Best Regards,

B G Nareshkumar