The markets have run up too fast in July. Investors are wondering if this run-up is sustainable. That’s a question for which there are no easy answers. Markets can run up very quickly on the back of liquidity. When liquidity increases rapidly, the run-up can gain more velocity than we…
The week saw the return of FIIs as buyers in the equity market. This was completely unexpected. The resulting outcome saw a revival in the quality trade. Stocks which were already trading at reasonably high valuations were favoured, given the lower expectations set by analysts. By setting lower expectations, the…
We anticipated that there would be a need to reset expectations. This result season clearly seems to be confirming our fears. Several marquee IT companies, Reliance, and top private banks like HDFC and Kotak are all falling short of earnings expectations. Clearly, markets were expecting more than they should have.…
Result season has begun on a note of disappointment. The reasons are more related to the market’s expectations. In a volatile economic context, the market should usually tone down expectations as business volatility spikes up. Contrary to that approach, the markets have been very slack in resetting their expectations. Analysts…
Turning market volatility into a friend requires conviction. When markets lose confidence, it translates into selling stocks without bothering about intrinsic value. The selling becomes so indiscriminate that it turns into volatility. During such times, investors must be completely focused on intrinsic value. Focusing on the intrinsic value of falling…
The twin deficit problem is not new to India. Whenever we had adverse forex flows, very high crude prices, falling exports or strong imports of non-essentials, our trade deficit would widen. When growth slowed, revenues fell, Government expenditure went out of control, tax buoyancy tax collections weakened, subsidies soared, and…
Are our markets now completely in sync with global markets? Or are we seeing FII selling even though global markets are showing strength? The answers are fairly obvious. FII selling in Indian markets is unabated. On days when the markets open higher, we see sharp selling that quickly erases the…
The markets fell without much relief throughout the week. The selling was persistent, ending the week on a very difficult note. Sales of Indian equities by FIIs exceeded a billion dollars on Friday alone. The selling is now fast spreading into the more popular parts of the market like midcap…
Preparation for rapid change in macroeconomic conditions is an intrinsic part of investing. Every investor must always stay reasonably prepared for big macroeconomic changes. When we talk about big change, inflation is clearly a macro factor which affects equity investing far more than other indicators. When inflation falls continuously and…
The years 2020-22 were indeed most remarkable for asset classes. We had gold prices staying in a strong band, bonds appreciating as rates fell, equity markets soaring under the swell of liquidity, and real estate melting up on the back of low-interest rates coupled with easy credit. There was a…
The past month lived up to the wild card prediction “Sell in May and go away” for market traders. But, investing needs a very different mindset. It requires us to do things very different from what traders do. The time to build new positions, scale up existing positions at more…
Every market bounce is getting sold. Investors are making a quick rush for the exit door every time the markets go up. Markets rise in the morning only to lose gains by the evening. Equity fatigue is probably only going to get worse with time. Investors, who got in during…
