Posted at 11:58 AM , on August 11, 2015
A senior banker asked me an interesting question, “If the Indian economy is growing at 7.5%, then why have corporate results been disappointing for the last 3 quarters”? It surely needs to be examined as to why the GDP growth is not being translated into corporate profitability. The answer probably lies across 5 major arguments. Let me explain! Continue reading
Posted at 7:52 PM , on August 10, 2015
A slowing China has important consequences for the world
Our recent blog on a slowing China, written on LinkedIn, drew irritated responses from many Chinese. Nothing has changed in China and we will be up and running; was the standard response. Nothing could be farther from the truth! A 35% crash in markets that wipes out $4 trillion cannot be dismissed as insignificant. And the impact cannot be negligible when there are 90 million Chinese investors with unfettered access to cheap leverage. Continue reading
Posted at 4:10 PM , on June 12, 2015
What does a trading rule book mean?
It is a set of rules and discipline points you will not transgress at any cost. You will not deplete more than 20% of your initial capital. As a 50-year old person you will not have more than 40% of your money in equities. You will make it a point to book profits if returns on a stock cross 30% in a quarter. And you will be out of equities at a market p/e of over 25. So on. Continue reading
Posted at 5:36 PM , on May 5, 2015
Not at all! In fact it is still attractive by global standards…
A sharp 10% correction leaves a lot of optimistic investors in the lurch. Most investors like to believe that bull markets will last forever. The key questions are whether the 10% correction is a precursor to a larger correction? Is the correction indicative of a larger underlying problem? Is it just a temporary break in the rally, which offers an attractive entry point? Continue reading
Posted at 5:18 PM , on March 30, 2015
But, do investors need to panic, not necessarily!
The nifty is down close to 10% from its peak. Over the last 1 week there has been evident panic in the markets. The question is whether this is a normal correction or an indicator of something bigger? And what should investors do? Be opportunistic and buy on declines; or panic and rush for the exits?
India story is still intact…
You just can’t miss the irony behind the market correction. The Indian GDP is still likely to grow at 8% plus. Current account deficit and fiscal deficit will be under control. Forex reserves at $340 billion are at an all time high and so is FPI investment. Quarterly results may be below expectations but Indian companies are still growing in a deflationary world. Capital cycle is not reviving, but that was a good 3 years away. Nothing seems to have changed. Continue reading