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Have you increased your equity investments recently?

Across years, we have observed that investor’s behaviour changes as per the market sentiment. They turn risk averse when markets are going through a rough patch. On the contrary, they take more risk during the bullish phase. Exactly opposite behaviour is expected while investing in equities. We wonder how investors make same mistakes time and again. Like they say, history never repeats but it rhymes. In the recent times, Indian markets have been very generous. Corporate earnings haven’t kicked in and still equity returns are fantastic. Recent investors believe that 15-16% CAGR is the minimum returns one can expect from equities irrespective of when one invests. This myth is spread by brokers and Mutual Funds who tend to highlight such high “returns” in their pitch for selling equity products rather than explaining other inherent advantages of equities. (Inflation beating returns, tax free, compounding returns to meet goals faster) Many argue […]

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How will the economy evolve and stock markets react if Congress forms a coalition government?

How will the economy evolve and stock markets react if Congress forms a coalition government?

Over the last few weeks we have been trying to look at probable economic outcomes and stock market scenarios given different possible political outcomes after the 2014 General Election. An Investor desiring safety needs to run such thought exercises if he is investing in India. For a simple reason that the economic policy understanding that existed among the political parties of various hues in between 1991-2004 (even if it was in fits and starts) has somehow broken down over the last few years. As such political outcomes have a very strong impact on the economic scenarios that can play out. This time we would like to see what if contrary to most opinion polls Congress still ends up showing a strong performance even if say, it’s worse than 2009 but still sufficient to form the government in one form or the other. In spite of very strong headwinds against Congress […]

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How will the economy evolve and stock markets react if BJP forms a weak coalition government?

How will the economy evolve and stock markets react if BJP forms a weak coalition government?

Over the next few months the most talked about event dominating the Indian investors mind would be the 2014 General Elections. One just needs to look at the relative performance of the Sensex 30 compared to its peers Bovespa (Brazil Index) and Shanghai Composite Index (China Index) to gauge the strength displayed by the Indian indices. While most Emerging market indices have been weak over last 6 months, Sensex has been stable without any clearly visible decisive trend. We believe that the major reason for this is because most market participants are keeping their fingers crossed with respect to the outcome of General Election. In continuation of our effort to fill the gap in the analysis presented to the investors as a result of political impact, this week to look at one more scenarios that has an equally strong probability, but is underappreciated by the markets as of today. Before […]

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How will economy evolve if BJP coalition wins in 2014 General Election?

Today the most talked about topic is ‘2014 General Election’. If one were to switch on any news channel today, we can be certain of one thing, there are showing either Election debates or what was said by any of the political personality in the course of the day against other political party. In short, there is saturated coverage on election and politics. However one thing that is not covered by the most of the commentators is how the outcome of this election is likely to impact the mood of the nation. In the first of these series, we would try and fill up this gap at least as far as the economy and stock markets go. This week, we are starting by asking ourselves “What if a Centre-Right-BJP led coalition was to win this general election?” Before we start contemplating the possible effect of BJP forming a government at […]

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Interesting interview with Rakesh Jhunjhunwala

Interesting interview with Rakesh Jhunjhunwala

As a retail stock investor, I found the pessimism among my fellow retail investors quite inexplicable. So many fundamentally solid stocks are well off their intrinsic values and yet, they seem to find no buyers! After doing a bit of research into whether I was missing something, I found this interview of Rakesh Jhunjhunwala. Apparently, he too shares my confusion! But his claims that this is one of the best times to buy equities got me excited about it and I thought I should share it with our readers. The interview dispersed pearls of wisdom, which reiterates the fact that disciplined investing into good fundamental stocks reaps long term benefits for retail investors. One of the Best Times to Buy Equities: When the ‘Big Bull’ speaks, everyone pays rapt attention, and I too got absorbed listening to his keen observations about the stock market, the macros of the economy and […]

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