by Vivek Karwa, CPFA., CFPCM
140618 – Not even a month has passed since the oath taking ceremony of the, all new government. Even before taking oath the country’s new establishment has sent the right message to all the neighbouring countries, commonly called as SAARC nations. They had no other option but to come to Delhi since they were hinted clearly that the new government means Business!
After taking oath, the corridors of power in Delhi showed a sign of confusion and disbelief for few days on what is happening. Most people there were used to time schedules of 10am+ to start the day (I think even certain courts start their day post 11am), these people got a shock when they saw that the new PM reaches office by 8.30am and is on job by 9am!
You have no other option to fall in line with your boss. When the head of an organization or even a country for that matter is serious, about work the lower lines will automatically fall in place. Even one minister in an interview went to the extent of saying that the PM calls on his office landline to ensure that the ministers are on job! All these send waves of confidence to the citizens of the country.
The government has already started working on war footing. We just hope that this momentum continues and they walk the talk by clearing all the bottle necks in the system. Every Bottle has its Neck on the Top, and that’s the reason the boss who is at the top has to be strong and decisive.
The PM has asked the ministers and the bureaucracy to start performing and the cabinet has taken stock of various economic agendas in the country. There are talks that most projects stuck in the ego vaults of different ministries in the previous government need to be cleared soon. We may hear news on this in coming weeks and that will again augur well for the markets.
We in our previous article had mentioned that… If things improve and GDP shows signs of going up we may see Sensex testing 28630 – 30006 within next 18 months! And further mentioned that… we should surely look at Banking, PSUs, Capital Goods, Infrastructure at this point of time.
All the above mentioned sectors did phenomenally well over the past one month. But we feel that the run has been pretty steep and too fast too soon. It was mentioned that the above targets may be achieved in next 18 months but the market seems to be determined to hit them earlier. Hence we need to be cautious at this point of time.
By cautious, we don’t mean sell everything and sit on cash. But it is time to liquidate the companies where the run has been more than their fundamentals and invest in companies which will remain stable. We are in bull market and the corrections in bull market are always steep and by the time we think of entering fresh they recover. Hence by selling junk and keeping cash ready will help you make most out of the frenzy movements which may occur, and they will occur for sure!
Disclosure:- It is safe to assume that the author may have interest in the sectors recommended in this news letter. Seeking personal advice from your Financial Advisor is recommended before acting on any of the substance given herein. The numbers, figures, etc., presented may have been taken from various sources.
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