Monkey 2 gets its chance, but Nifty continues to lead
Monkey 2 had a brief respite from its losses last week. The NIfty continues to be the best performer.
Guess who gained in a volatile week when stock indices and the rupee hit new lows? Monkey portfolio 2, ahem!
At the end of a week in which the Sensex plunged below 16,000, the Nifty sank below 4,800, and the rupee hit a fresh all-time low of 54.85, Monkey portfolio 2, comprising 10 randomly picked stocks from the BSE 500, managed to eke out a 1.3 percent gain. Finally, a small win!
In comparison, the Sensex and Nifty, while recovering from their lows of the week, ended 0.7-0.9 percent lower.
The brokers' portfolio, consisting of 10 stocks picked by 10 stock gurus, landed in third position with a fall of 1 percent, while Monkey portfolio 1, consisting of 10 randomly picked stocks from the BSE 100, slipped 2 percent.
For the period since inception (19 August, 2011), however, the benchmark indices were in the lead, but only just. The Sensex is up a minor 0.07 percent for the 10-month period, while the Nifty gained 0.95 percent. Monkey portfolio 1 came next, declining 1 percent (see table). Its biggest gainer was Tata Global, up 20 percent, while its biggest loser was Adani Enterprises, down 56 percent.
The brokers' portfolio, in comparison, shrank 2 percent (see table). Star performer MRF, which at one time was up a heady 80 percent, pared its gains to 65 percent.
Monkey portfolio 2, sadly, languished at the bottom, plunging 16 percent (see table). Manappuram Finance remains the biggest loser, shedding 56 percent. ( A recent report by Ambit Capital, however, predicts the stock could jump 100 percent soon, so maybe Monkey 2's portfolio could soon be in for better times. Fingers crossed!).
At least Monkey 2 is unbowed by his portfolio's losses and was spotted this morning going for his usual weekend boxing workout carrying the latest issue of Intelligent Life, the 'intelligent lifestyle' magazine from The Economist.
Why is that such a big deal, you ask? Well, because it has a story about how 'unthinking' can actually be good for you. It suggests that sometimes bad decisions can be made by thinking too much. To quote a line from the story, " To make good decisions in a complex world... you have to be skilled at ignoring information."
Even more interesting, the story quotes a study by a psychologist that found a portfolio of stocks picked by ordinary people did better than those chosen by experts. "The pedestrians were using the "recognition heuristic": they picked companies they'd heard of, which was a better guide to future success than any analysis of price-earning (P/E) ratios," it said.
Clearly, a defiant Monkey 2 is trying to prove a point to the P/E-obsessed brokers. As if any more points had to be made after the ruckus at the Big Nasty last week. As Firstpost had mentioned earlier, both the Monkeys and brokers landed up at the 'club with an industrial feel' on the same evening to unwind and drink away their sorrows.
As it turned out, the only thing that came unwound was everyone's common sense. It seems a belligerent Monkey 2, after guzzling rather hefty quantities of vodka, shimmied his way over to the broker's dancing corner and started flirting with a rather buxom date of one of stock whizkids.
Drunk men. Drunk monkey. Both vying for the attention of females. It's the perfect recipe for a bar fight. Suffice to say that some brawling males got a few scratches on their arms (mostly brokers), some got their hair (and toupees) pulled viciously, while one decided to break a beer bottle with his head (Monkey 2).
Good thing Monkey 1, the only teetotaller of the pack, was around. He managed to whisk away Monkey 2 before the police arrived. The bar, we have learnt, has now got a restraining order against both Monkey 2 and the whole gang of brokers. Looks like both sides will have to cope with their increasing portfolio losses another way.
Until next time!
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While the Sensex dropped 3 percent between 19 August and 26 August, our Monkey portfolio 1, comprising 10 randomly-picked BSE 100 stocks, slipped a marginal 0.1 percent. Our Monkey portfolio 2, consisting of 10 randomly selected BSE 500 stocks, shed 2 percent.
2011 has been a rough year for the markets. One of our Monkeys weathered it quite well, but not the other one.
Our randomly-picked Monkey portfolios are struggling to hold their own against the two main indices. But Monkey 1 had a decent run last week.