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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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Investors…Beware of these behavioural biases! – 1

Investors…Beware of these behavioural biases! – 1

It is a common perception that investing is all about having the right knowledge about the dynamics of the market, the sectors and ultimately the investible companies. However, knowledge is not the only thing that matters. Even the most knowledgeable investors may not be successful investors, if they are not able to control their emotions. Investing is not just about finding the right stocks, buying and selling them to make a profit. Finding the right stock is a very important step, but in addition to this, what ensures sustained success in investing, is control over behaviour and emotions. In his book on Behavioural Investing, author James Montier touches upon such non-financial aspects in the field of investing. He highlights some of the most destructive behavioural biases and common mental mistakes often made by investors leading to investment losses. Appropriately, the book is titled ‘The Little Book of Behavioural Investing: How […]

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