The Diwali 2020 just passed by with lot’s of cheer, unlike the story painted by media and the naysayers. Wishing you all a very prosperous year ahead. May the Samvat 2077 brings in a lot of health, wealth and prosperity in your lives and you see huge Vridhi in your lives. The naysayers too should survive as they are the ones who make me think and act as guiding forces at times. The difference is at the end, we end up making returns on investments, and the negativism keeps growing. Remember what you focus on grows. Hence focus on how to improve future and Samvat 2077, and we all shall automatically grow.
Investing requires positive thinking. Investing requires a lot of patience. Sometimes everything else goes up except what you are holding. To be frank, we have seen this phase too. Such phases test your mental strength. Stock markets reward only the believers and rewards then handsomely. Those who come in with a temporary affair in mind seldom make money. When the lockdowns hit the world in March, we were the ones who said to sell the extra home which you may have and invest that money in the market. That’s the belief one should have.
The market hit the panic low on 23-March-2020 as investors with negative sentiments came and dumped stocks. Investors who stayed positive made money as the market tested negative for Coronavirus in all aspects. Smart investors knew that India and the Indian Economy are the most resilient ones across the globe. Initially the mortality rate was not known and none of the governments could takes risks and hence the lockdowns were announced. As time progressed we found that Indians seem to be having the highest immunity in the world. Look at the world, lakhs have died the percentages are quite high, India has seen just around 1.50% deaths.
Most of us during our childhood would have done the same thing. When we used to play, and the ball went and fell in a sewage line, we took it out with two fingers, bounced it twice or thrice ion the road and then continued playing with the same ball. I am sure the germs present on the ball never harmed us—That’s our immunity. Hence India has tested negative for coronavirus. Yes, it did affect the economy for a brief period, but we are not alone, the whole world suffered, and people are aware of it. The results of recently held elections in Bihar proves that. Politicians who went with a full-frontal attack on the government on economy lost.
The biggest possible event in the near future, the elections in USA too are over. There is a change in the regime, initially the global markets thought that Trump will return but things have changed. The market did not react negative on Biden getting elected as the expectation of huge fiscal stimulus is doing rounds. Biden cannot hit the brakes on the liquidity infusion which is taking place and the same is driving the markets up. The most amazing part in US is that be those in the ruling or in the opposition they all talk same language when it comes to the interests of America. They don’t behave like Indian politicians who seek Pakistan’s and China’s help for their problems in the country.
The macros look positive. Hence, stay positive on the market but take care of yourself. Just because the mortality rate is low we cannot get careless. Staying negative on the virus is the best thing the country can do today.
In the short run the indexes look to have run up beyond what they should have. If you read the older posts on Vridhi’s site, it has been mentioned couple of times that market will discount what is going to come in future. It is right now discounting that may come after the negative 23% GDP rate which we saw. The naysayers are going to be surprised. They may say that the numbers are fudged but the Diwali shopping spree tells the truth.
I would come out with more on the markets in the articles in future. Stay connected. As of now the focus should be below the list of top 25% stocks in the BSE 500, I mean the top companies are looking costly but as you go down the premium seem reducing. Don’t end up buying the big names mentioned in various Diwali picks. They may spoil you 2021 too.