A very eventful investing year will soon be behind us. 2020 has taught us many things. Once again, the benefits of being a contrarian equity investor were emphasized big-time. More importantly, the need to be more diligent in debt investments is critical. While defensive investing in FMCG, pharma, etc. has…
At the beginning of 2020, popular perception leaned towards defensive FMCG and away from pharma, tech, and commodities. As the year slowly draws towards a close, things have turned out quite differently. While liquidity has helped FMCG do reasonably well, the other three “out of favour” sectors clearly outperformed to…
The rally in the Nifty was initially concentrated in defensives. Subsequently, the rally spread to cyclicals, with private banks leading a sharp surge. We also saw frontline midcaps rally towards the last week of the month. Metals also saw a comeback. The significant FII inflows are the principal reason for…
Within a few weeks, Indian markets have seen nearly five billion dollars of equity flows. FIIs have been flooding our markets with liquidity. This money is going into select large cap index names. The velocity of investment is abnormally high in growth-delivering businesses. This explains why only a select club…
Rising markets tend to give out euphoric highs. Everybody wants to be in so that they don’t miss any of the fun and froth in every trade. Trends guide investment behaviour. Going against the trend looks increasingly difficult. Slowly, even the naysayers give up and join the party. The euphoria…
The much anticipated American polls are now behind us. We still don’t have a clear winner. But, given the fractured nature of the mandate and divided polity left behind by this election, America has more to mend now than before the polls. Given the new realities, we need to reassess…
The American voting is already at an advanced stage with significantly more voters preferring to use the postal ballot. By November 3rd, we will see the highest voter turnout in recent history. This election will be influenced more by those who decide not to vote than by those who vote.…
We have a week left before America makes up her mind on the next President. Unlike previous elections, this one seems to be going to the wire. And we don’t quite know the ground realities. A polarised polity and media have made judging the public mood almost impossible. Under the…
Secular behavior isn’t driving the sustained momentum in our markets. Just about 100 stocks are keeping this market up. The bulk of scrips trading in our market is way below their pre-COVID-19 highs. Clearly, the market indices don’t tell the real story. Narrow momentum drives this. This momentum is concentrated…
The week saw a sustained rally in defensives. While pharma held steady, tech stocks showed tremendous strength. Towards the weekend, financials joined he party lending stability to the indices at higher level. The regular rotation of sectors, gradually rising valuation trend, and rising retail participation in the markets made for…
The drama of the American Presidential polls promises to keep stock markets volatile for the next few months. Like politics, markets are acutely polarised. A large part of the polarity is political. Business houses which are favourably inclined to the incumbent party have seen their valuations skyrocket. Corporate actions at…
The speed at which stocks rerate excites us on the way up. But, they can also rattle us on the way down. Derating is happening at the same time as rerating. The concurrent course of events is not new to our markets. When euphoria sets into one part of the…