Thought for the day
” There is no subject so old that
something new cannot be said about it.”
-
Fyodor Dostoevsky (Russian, 1821-1881)
Word for the day
Laden (adj)
Burdened; loaded down.
(Source:
Dictionary.com)
Teaser for the day
Could the Maharashtra Sadan event have material impact on
Maharashtra state legislative elections scheduled later this year?
Low volatility - higher prices
For a bull market to occur many pre-conditions need to be
satisfied. Some of these conditions could be listed as follows:
(a) Lower
volatility; 
(b)
Greed overcoming fear;(c) Lower
expected return from alternatives like gold and bonds;
(d) Sustained
improvement in corporate fundamentals, especially earnings growth led by
pricing power (better margins not because of cost control) higher RoE (higher creditworthiness)
and RoA (better capacity unitlization), and ability to raise funds at favorable
terms;(e) Stable
macro environment(f) Stable
political environment 
(g) easy
liquidity conditions.
Lower volatility - Positive
Implied volatility as measured by India VIX has shown a strong
inverse correlation with Nifty in past 6years. The current rise in equity
prices is accompanied by substantially lower implied volatility. This suggest
that the recent rise in equity prices is sustainable and has more strength to
move further up.
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