Of P-Notes and Bird Hits - Views on News from Equitymaster

Helping You Build Wealth With Honest Research
Since 1996. Try Now

  • MyStocks


Login Failure
(Please do not use this option on a public machine)
  Sign Up | Forgot Password?  

Of P-Notes and Bird Hits

Oct 16, 2007

While all the media is playing up the hype of the recent surge in the BSE-Sensex from 18k to 19k, a step back indicates that:

  1. Every 1,000 point is now a LOWER percentage number, so should be easier to achieve. An Index moving from 1,000 to 2,000 is a 1,000 point move but, more importantly, is a 100% move! While a move from 18,000 to 19,000 is also a 1,000 point move, it depicts an increase of 4.3 % (see the Table below).

    BSE-30 Index Date Days Points % Gain per day, points Gain per day %
    13,989 21-Aug - - - - -
    15,121 30-Aug 7 1,132 8.1% 162 1.2%
    16,322 19-Sep 14 1,201 7.9% 86 0.6%
    17,150 27-Sep 6 828 5.1% 138 0.8%
    18,280 9-Oct 7 1,130 6.6% 161 0.9%
    19,058 15-Oct 4 778 4.3% 195 1.1%

  2. The pace of this 1,000 point move to the 19k levels in 4 days sounds impressive (indeed it is the second strongest!) but, on further analysis the move from 14,000 to 15,000 was not only more in terms of the percentage gain ( 8.1 %) but was also a stronger move. See the column on the extreme right that indicates the average % change per day.

Index levels, needless to say, are representative of a basket of stocks and your portfolio may or may not have moved with the same intensity. The Index is a number, don't break your head over it. But do analyse the underlying valuations of the companies that comprise the Index - and of the companies outside the Index. (click here for our Research Reports).

So, while the Finance Minister and Securities and Exchange Board of India (SEBI) are now worried about the monster they have helped create due to their willingness to allow short-term flows via P-Notes, sit back and enjoy the ride.

Of course, you may need to fasten your seat belts.

Really tight.

If the entire Australian cricket team and the remnants of a ramshackle Indian team was brought down to Nagpur airport by a bird-hit, imagine what could happen if those P-Note owners took a break and stopped buying India for one day.


Equitymaster requests your view! Post a comment on "Of P-Notes and Bird Hits". Click here!


More Views on News

BSE Sensex Surges 600 Points; BAJAJ AUTO Among Top Gainers (Market Updates)

Oct 1, 2020 | Updated on Oct 1, 2020

The BSE Sensex Surged 600 Points; BAJAJ AUTO Among Top Gainers. Find the latest update, special reports and news on all time high gainers of BSE Sensex at equitymaster.com.

You Should Be looking for Small-cap Stocks that Will Rebound Strongly (Profit Hunter)

Oct 1, 2020

This single trait in excellent small cap businesses differentiates them from the rest.

This Number Will Give You an Edge Over Other Traders in the Market (Fast Profits Daily)

Sep 30, 2020

In this video, I'll share with you, a crucial number that I track everyday which gives me trading edge.

Is Mirae Asset Ultra Short Duration Fund a Right Solution for Your Short Term Needs? (Outside View)

Sep 30, 2020

PFN explains about the Mirae Asset Ultra Short Duration Fund.

India's Drone Revolution is a 4x Profit Opportunity (Profit Hunter)

Sep 30, 2020

My research on India's leading defence companies brought me to one major player in drone manufacturing.

More Views on News

Most Popular

My Top Stock to Buy in this Market Selloff (Profit Hunter)

Sep 22, 2020

The recent correction offers a great opportunity to buy this high conviction smallcap stock.

Can the Nifty Fall to 10,200? (Fast Profits Daily)

Sep 24, 2020

The Nifty has reached an important support level today. If it breaks then we could see further downside.

What Do the Charts Say About Buying Smallcaps Now? (Fast Profits Daily)

Sep 18, 2020

Everyone seems to be excited about buying smallcaps now...but is it the right thing to do? What do the charts tell us? Find out in this video...

I Believe These Stocks Will Deliver the Most Outsized Returns in 2021 and Beyond (Profit Hunter)

Sep 23, 2020

Rules of the racetrack can help you bag the biggest gainers of the coming decade.


Covid-19 Proof
Multibagger Stocks

Covid19 Proof Multibaggers
Get this special report, authored by Equitymaster's top analysts now!
We will never sell or rent your email id.
Please read our Terms


Oct 1, 2020 12:29 PM