Whatte week it has been. Till Tuesday 8-11-2016 everyone was discussing the US elections. This is probably the first time Indians have taken so much interest in American elections. Literally everybody was busy guessing the election results. Thanks to President Elect Mr. Donald Trump for having made the elections so interesting! The scenario is so much similar to India, politics was never so interesting here until Mr. Narendra Modi was declared the Prime Ministerial candidate in 2014 Lok Sabha elections. Even those who never knew ‘P’ of politics today Appreciate, Advice, Criticize him regularly. The latest trend is: If you are a Flop person in life, just criticize Modi to grab the headlines!

The two events which we need to discuss today are the American elections and the government’s drive against the Black Money by demonetizing Rs.500/- and Rs.1000/- currency notes, their outcomes and how would they impact our stock markets and our other investments and money!

Let’s first discuss the victory of Donald Trump:

First Trump because his win has become a smaller event the moment Modi appeared on TV and announced the clamp down on black money. Hence we would discuss that in detail and American election in brief!

Those who follow me on Facebook and other social media would appreciate that from the day American elections were announced, I was hoping and wishing Trump wins.

You can check the facebook posts here: https://www.facebook.com/vkarwa you can alternately search for Vivek Karwa on fb.

Unlike other analysts and advisors, I don’t believe in faking and trying to project self as diplomatic and try balancing all views so as to not look as if I’am siding with someone.

Kindly don’t even for a moment feel I’am trying to boast about myself here. I’am only making clear that I will vociferously support the Right Things, and oppose the Wrong Things with same vigour. Also accept and change if someone can correct my point of view in the right direction in case they are not in sync with reality.

People across the board were creating a narrative so that Trump loses the elections. They also scared the investing community that the world would come to an end if he wins. If you have been regularly reading MarketFastFood articles we were saying markets won’t get affected much. In fact Trump would be good for India, going with what he has hinted till now. If he changes later it would be different issue, but he still would be better than Hillary.

So what happened the day he won? There was some effect of demonetisation also, but I would attribute 99% of the moment to the American elections.

The Sensex opened at 26251, hit a low of 25902 and then recovered and closed at 27252. The next day it rallied! Now read the previous MFF post where we said: 27300 is a good support and in worst case scenario we may test 26300 +/- 200 points (meaning a range of 26100 – 26500).

We opened at 26251 which was very near to 26300, hit a panic low and closed at 27252 which was very near to 27300. Whoa!

The event has now passed and won’t affect markets too much. Post January when Trump assumes office the policies may affect/benefit certain sectors and stocks based on the policies he adopts. Hence let’s wait and watch.

Now let’s talk on the clamp down on Black Money:

We have all sort of dirty things in India, Pro-Pakistani people, Corrupt Politicians, Fake Currencies supplied by ISI from Pakistanis.

India was once called as the ‘Golden Bird’ and then came the invaders and post independence the rulers have been even Worse!

I will not blame the people, bureaucracy or anyone else for starting the corrupt practices. The initial blame goes only on the politicians who ruled us post independence. It was their duty to curb corruption with proper policies, but most of them were themselves busy making money as long as till 2014.

There are reports which say that the parallel economy in India is almost the size of the official one. People were fed up with the corruption. Then came Mr. Modi who grabbed power saying ‘Na Khaoonga, Na Khaane Doonga’ meaning ‘Will not ‘eat’ nor will allow anyone too’ Eat = Corruption

Due to these corrupt politicians the whole country got corrupted. Creating illegal money became rule of life.

Common Man has always been at the receiving end of black money! Even getting a School or College admission was not possible since someone else with lots of cash Bought the seat!

Finally some action has been taken, the action is a bold one indeed. This move is revolutionary and will show us big impact within a year!

The opposition as usual by talking against the action is supporting the crime. Be it Surgical Strikes or be it Black Money, they have no issues left, hence oppose anything and everything in the name of common man, not realising that Common Man is actually happy that finally someone is fighting the demon in the system.

‘We as common man should be ready to accept few days of trouble since the benefits of it will be immensely huge’

So what could be the possible benefits of this demonetisation?

– It is estimated that around Rs.10 Lac Crs may be deposited in the banks and would enter the official economy! As I write this article, Rs. 3.25 Lakh Crores have already been deposited.

– Rs. 5+ Lac Crs may never come back. We are already seeing the notes being burnt or thrown into dustbins. Those holding huge cash will have no option but to destroy them.

This means the Debt of the government which was created in last 10 yrs comes down. If debt come down the interest rates come down, inflation comes down, this money will be spent on the Common Man by the government. Hence Common Man is with the govt.

– The elections to be held in next few months will be a bit Fair! There won’t be Illegal Cash with the parties to be distributed. Those saying this move was eyed on elections are wrong. In India every year some or the other elections happen! Even if it’s political we will support it since the benefits for the Common Man are high.

– Those doing Vote Bank Politics will be badly affected. You can check for yourself that the Kashmir valley has been silent in the last few days, the terrorists there now don’t have money to fund the stone pelters. The terroirts funding groups operate with around Rs. 3000/- Crs of illegal money which has been trashed in one stroke by the govt.

– Pakistan’s ISI earns around Rs. 500 Crs annually by printing fake money. Their business has been shut overnight. This money was used to fund the terrorists. Now we can expect some peace.

– The import of Chinese goods will reduce. This will help Indian manufacturers.

Modi today has said that there are many more projects which are running in his mind to curb the corruption and black money. Hence expect few more actions. Enough time was given under the IDS to come clean now is the time to pay up for your illegal activities.

Read this article in a Pakistani news paper: http://www.dawn.com/news/1295150

Two worthwhile comments to be noted:

SIDNOV 09, 2016 01:13AM

WOW.. this is crazy. Step by step this man is changing India to be a GLOBAL POWER. For the good of the poor and law abiding Indian’s everywhere..

ALI RAZA RIZVINOV 09, 2016 03:39AM

You would be surprised that there are political leaders like Mamata Bannerjee, Kejriwal, and Digvijay Singh who are doing their traditional politics even on such an issue that will be such a huge benefit to India. Democracy does have its disadvantages.

India can be a super power if corruption is ended and all black money is brought in to the formal system. Taxes can easily reduce if that happens.

So what happens to businesses and the markets?

There would certainly be short term effect on the sales of companies, particularly luxury goods and things which are generally bough in cash. You can make the list yourself.

With GST coming in within next 12 months, coupled with curbs on Black Money, Indian Businesses and People are going to have Bright Future. We at VRIDHI have become even more bullish on India than ever before.

Hence investors buying the right sectors and stocks will make above average returns. Expect markets to recover. Anything below 26300 should be bought into – just be stock specific or you can call us for help.

There are many more points, will keep discussing them on social media. As said you can search for Vivek Karwa and VRIDHI on facebook. Also sign up for email alerts from VRIDHI. Visit www.VRIDHI.co.in on your computer.

So let’s resolve to take Short Term Pain for our own Long Term Benefits. And as voting public we need to give enough pain to those Supporting Black Money!

Jai Hind

Vivek Karwa

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