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Is Investor is a loser with SEBI’s “Research Analysts” regulation 2014

I guess this is the first time I am writing a blog on regulation matter

To protect Investor’s interest SEBI has come out with “Research Analysts” regulation. Research Analyst will get regulated. From interpretation for words / writing of “Research Analysts” regulation I feel Investor is a loser

SEBI has come out with below regulations

Year 2013: “SEBI (INVESTMENT ADVISERS) REGULATIONS”

Year 2014: “SEBI (RESEARCH ANALYSTS) REGULATIONS”

Concerns about “Research Analysts” regulation have been written to SEBI on 12 Dec 2014. By the time of writing this blog, I am still awaiting reply from SEBI

Introducing myself

I am passionate about stock market since 1993/ 1994. It’s 20+years now

I started investment advisory service in 2011, so it’s 3+ year old

I applied for Investment Advisor registration to SEBI in 2013 (got certificate in 2014)

About interpretation of regulation

I)          Investment Advisor may need to comply “Research Analysts” Regulation in addition to existing compliance under “Investment Advisors” Regulation

“Research Analyst” regulation says  “Provided further that an investment adviser, credit rating agency, asset management company or fund manager, who issues research report or circulates/distributes research report to public or its director or employee who makes public appearance, shall not be required to seek registration under regulation 3, subject to compliance of Chapter III of these regulations. ““

“(w) “research report” means any written or electronic communication that

includes research analysis or research recommendation or an opinion

concerning securities or public offer…..”

II)       Let’s discuss further about “Research Analysts”  Regulation with real time example

“Research Analysts” regulation says

“(2) Independent research analysts, individuals employed as research analyst by

research entity  or their associates shall not deal or trade in securities that the research analyst recommends or follows within thirty days before and five days after the publication of a research report.”

“Investment Advisors” regulation says

 (4) An investment adviser shall disclose to the client its holding or position, if any, in the financial products or securities which are subject matter of advice. 

Let’s take example of Shreyas shipping which declared impressive result on 11-Nov-2014. I guess within 10 minutes of declaration of result, it got upper circuit.

Let us assume

Situation a) if I (Investment Advisor) had bought on 11-Nov at Rs 95, I can recommend it to my client on 11-dec at Rs 179. i.e. client is buying / paying 88% higher price.

Situation b)

i) Technically: if I recommend Shreyas to my client on 11-Nov at Rs 95, I can buy Shreyas on  17-Nov @ 115. (I am assuming 5 days as calendar days and not stock market trading days).

ii)  Practically, it is likely that I may be getting new clients registered with me every week. May be two /three weeks I may continue to recommend Shreyas. In that case I will buy Shreyas at very high price

Compliance under “Investment Advisors” regulation is a win-win situation. I along with clients /reader of blog can buy the same stock in same period.

I felt ultimately Investor (May be myself) or Investor (may be Clients / viewer / reader of blogs) may be a loser with SEBI’s “Research Analysts” regulation

This blog is only an expression of views about regulation. This is not stock recommendation.  Example of Shreyas has been taken to explain implication of regulation by an example. This is not stock recommendation

You can share your views by way of reply or write me email at CommunicateAtul@Gmail.com

Thanks you

Investment Update: Escorts Ltd

Escorts ltd was recommended in Aug-2013 at Rs 89/-  ( Link http://atulgandhicom.blogspot.in/2013/08/escorts-ltd.html )

Last closing price is Rs 166.75

Jun-14 quarter Escort's financial numbers were weak. Subsequent in Sep-14 quarter results, we see operating margin is under pressure.

Advice to exit the stock

Disclaimer:

Any purchase/sale of a stock involves a high degree of investment risk. Caution all investors that they may lose some or all of their investment if they decide to purchase any stock listed here.

Market Update: Book Profit, Reshuffle Portfolio

In previous blog

i) 04-Nov-2013 (Silver lining (Optimism) continues…Beginning of new era) I had mentioned

“….we believe currently market is at major junction which can mark / make foundation for new era -new beginning”

ii) 17-May-2014 (Market update: Beginning of new era…A Multi Year Bull Market) I had mentioned “…I believe its beginning of multiyear bull market….”

Long term trend continues to be up & we are seeing a bull market now & will see it in years to come.

From last Aug-13 to current month i.e. May-14, we have seen a strong & vibrant rise in market. Unlike 2011 & early 2013 market reaching high (19000+ level), which saw rise mostly in large cap, current rally saw participation of “B” Group stocks as well. We have seen sharp rise in stock prices.

Broadly in coming days, I see opportunity to

1) Book profit especially where valuation has risen too fast than the fundamentals of stock.

2) Reshuffle portfolio, where we are getting good valuation from current holding, but we feel some other stock will outperform market by large margin.

Happy Investing

Disclaimer:

Any purchase/sale of a stock involves a high degree of investment risk. Caution all investors that they may lose some or all of their investment if they decide to purchase any stock listed here.

Market Update: Beginning Of New Era…A Multi Year Bull Market

In the previous blog 04-Nov-2013 (Silver lining (Optimism) continues…Beginning of new era), I had mentioned

1) “….may be the upcoming rally will give opportunity to reshuffle portfolio...”

We saw mid & small cap rally along with large cap in past few months.

2) “Beginning / foundation for new era

In 1990-1998 we saw Sensex making top around 4000+ level & falling thereafter…. Post 1995 /1996 to 2000 we saw a major rally in software stocks….from 2003 to early 2008 we saw bull market….

…. In Apr-2009 we mentioned on blog about uptrend (Mousam Badal Raha hai….Marekt is changing itsDirection) in market (Sensex 10803) …..followed by blog in Jan-2011 (Sensex 18860) we updated change in direction to down (Mousam badal raha hai …. Reorientationrepositioning ….unfolding mystery)…..we believe currently market is at major junction which can mark / make foundation for new era -new beginning…..”

On Friday, 16-May we saw Sensex touching intraday high of 25375 (closing 24121)

Long term trend

As mentioned in past blog, I believe its beginning of multi-year bull market….Let us see how many times Index multiplies from breakout point of past high.

Medium term trend

From mid feb-14, we have seen market has been rising. On Friday, 16-May we also saw intraday market correction /selling of 1254 points (falling from high of 25375 to close 24121) Things will be clear in coming days whether we are looking for some consolidation phase / correction or it will continue to rise.

Invest for healthily returns

Be aspirant

Be part of glorious future

Invest, Relax & Keep Smiling

Happy Investing

Disclaimer:

Any purchase/sale of a stock involves a high degree of investment risk. Caution all investors that they may lose some or all of their investment if they decide to purchase any stock listed here.

India Aspires For Glorious Golden Future :) Cheers !!

BJP led NDA party has got unprecedented victory in Lok Sabha Election 2014.

Some facts about election

• High voter turnout during election
• People rise above caste politics
• People rise above freebies politics
• People vote for development
• Everyone wishes to rise & be successful

Here are some of quotes from Mr Narendra Modi’s speech post election result.

"Irrespective of who is in the opposition, I want to take everyone along. To run the government and country we want to take everyone along"

"It is the government's job to think for the people. People of this nation have given a verdict. The verdict says that we have to take India forward."

"This is the power of people, which will shape the future of India. You trust me and I trust the people of India. It is the citizens of the country who will lead it into the future."

"Sabka saath, sabka vikas (with everybody, development for all) is our motto,"

“देश चल पड़ा है, युवा चल पड़े हैं, हमें कदम से कदम मिलाना है, भव्य, दिव्य और समृद्ध भारत बनाना है “

Disclaimer:

Any purchase/sale of a stock involves a high degree of investment risk. Caution all investors that they may lose some or all of their investment if they decide to purchase any stock listed here.