The Corona Virus outbreak in China brings the heavily underestimated power of disruption to the global economy into sharp focus. The effect of a virus in a globalised world is far more than in closed economies. Interconnections kick in immediately. Instantaneous news spurs people to suddenly stop buying goods from…
A week is a long time in the markets. With the smart turnaround in microcaps, small caps and midcaps, there is a palpable sense of urgency that is quietly replacing the negativity which pervaded market opinion. Investors who were disinterested in buying anything outside the performing dozen among equity shares…
With a few weeks to go for the Union budget, we are slowly building up expectations. IIP Data released on Friday added to the hope quotient. Budget trades usually start a month ahead of the actual budget day. On D-Day, the trade usually ends as the expectations square up with…
It is natural for investors to always want to be on the winning side. So, in the stock market, we crave to own the stock winners and market leading sectoral themes all the time. Achieving that should effectively translate into higher investment returns. But, for that to happen, an investor…
Flows decide sentiment. There are two components to flows – domestic and foreign. FIIs are always usually leaders in determining the direction of flows. They lead and domestic investors follow. So, the market takes cues from FII flow patterns. When foreigners decide to invest more money into a market, they impact…
The UK election results are out, proclaiming Boris Johnson’s conservative party as the victor. This victory indicates a strong pro-Brexit sentiment amongst voters. But Britain’s divorce from the EU is riddled with complexities. For instance, Scotland may seek an independence referendum again. Theresa May’s efforts earlier this year are a…
Interest rates have been falling through this year. As the RBI’s monetary policy committee met last week, consensus was trying to decide on how much the interest rates would be cut. It arrived at a cut of 25 bps. The RBI decided not to reduce interest rates. Instead, it chose…
When bad news is expected, its arrival is likely to be a non-event. The news of poor GDP numbers for Q2 falls squarely in that category. But markets will always move ahead and start anticipating the next bit of news. This move significantly impacts sentiment. The market trend would reflect…
What should I say now about 2020? This question is on top of everyone’s mind. The minuscule minority who got their investment calls right in 2019 are certain that their investment style is the only way going forward. Those who haven’t got it right saw some green shoots last week.…
A friend was in a state of gloom. He was feeling bad that he hadn’t bought those five big winners of 2019. “If I had bought those, I could have returned big.” Hindsight retained its teaching honours. But, there still is a future beyond those five names. So the next…
Contrarian investing is never easy. Especially when you are early. Being early makes you see your investments temporarily lose value. At times, it can be as steep as 15%-20%. Those times will be testing. You hesitate to invest more. You wonder if you are wrong. The temptation to get away…
Regardless of whether markets rose or fell, one set of stocks simply kept rising. And, another set of stocks, which encompassed the broader market simply kept falling. This trend finally seems set to break. When we have extreme overvaluation in one part of the market and significant undervaluation in the…
