The rise in share valuations of one sector is not uncommon. We have seen sectoral trends dominate our markets for the past few years. Effectively, the performance of the market is often just the performance of one or two sectors. At extremes, it becomes even more finely nuanced into just…
The fear of missing out is inescapable. It usually manifests in a singular way. People get obsessed with one thing. This obsession grows so much that everybody becomes greedy exactly when they must be fearful. They end up buying something without thinking of the valuation, attractiveness or return potential. The…
The coronavirus pandemic not only affects our mental and physical health but also our financial stability. Pay cuts and job loss have become the new normal. the last few months. Most people may panic at the thought of a pay cut, but there is light at the end of the…
Economy and Stock markets – The current context The economy and the stock market paint two different pictures. Globally, the economic slowdown has been continuous and prolonged since March 2020. Financial markets, however, have recovered from their lows. No one knows what sort of volatility or value destruction to expect…
Having money and time at one’s disposal is often a bigger problem than not having both. It is during those phases that the mind tends to seek the unnecessary. It is when we invite problems into our life through hot pursuit. The growing trading culture among millennials and tech-savvy investors…
Investing tends to seek excessive peer validation. There is a strong reason behind this. We constantly worry about whether we are doing the right thing. How do we check on that? The easy option is to compare. So, we compare with friends. This explains why what others are doing interests…
“Time is the friend of the wonderful company, the enemy of the mediocre”. It is the perfect time to recall this wonderful quote by Warren Buffett. Interpreting a fine thought itself is an art. A company which did wonderfully in a growing economy may well fall into bad times when…
Investing defensively can be hugely beneficial in uncertain times like the present. This would mean changing one’s risk choices and return expectations. This is hardly going to be easy. Historically, investors always played for the highest returns at all times. In a growing economy, this strategy seemed to work for…
Raising capital under extremely adverse circumstances is truly a great accomplishment. The bigger Indian corporations have shown remarkable chutzpah in raising big monies during the COVID crisis. These monies are largely being used to deleverage their bloated debt. Clearly, India’s big businesses see leverage as a grave risk and are…
It took one virus to reshape the world’s priorities. Pay cuts, job loss, and financial stress are the new normal. Families are cutting back on non-essential spends, loan moratoriums are a relief to borrowers, and people are dipping into their emergency funds. At a time like this, why should anyone…
The US markets are now leading the global market sentiment. Indian markets seem to be fully coupled with what goes on there. Our markets are taking continuous cues from the Dow and Nasdaq. Investors are fashioning their decisions on US market moves and their index futures. As the battle against…
On 27 March 2020, the RBI announced that all Indian financial institutions under its purview would offer a moratorium on loans. This applies to all EMI falling due between March 1, 2020, and May 31, 2020. The moratorium may extend for another three months. What exactly is a moratorium? A…
