Author Archives: Vivek Karwa | VRIDHI

About Vivek Karwa | VRIDHI

Certified Financial Planner™, Stock Market & Mutual Funds Advisor, Life & Health Insurance Advisor, Actor, Trainer, Investor, Travel Enthusiast, Polymath, Outlier, Iconoclast

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20 Lakh Crore Push

There was recently news that Indian govt to borrow 12+ Lakh Crores this year. Intellectuals with half knowledge went berserk without knowing that the govt anyway borrows around 8 Lakh Crores yearly and this was additional 4 Lakh Crores or a 50% additional borrowing.

The government may garner another 1 Lakh Crore by way of fuel taxes which were hiked recently. The lower crude prices are a boon to India and those intellects who keep cribbing that the benefit should be passed to the consumers don’t understand that such moves will negate all benefits which lower prices bring on the table. You should also read this old article of mine on fuel prices: https://vridhi.co.in/2016/01/06/few-words-on-market-33/

Even after read, that old article is a person doesn’t get convinced then so be it. I would always support not passing huge benefits on crude, which ever government is at the centre, I would be with govt on this. Only condition: There should not be scams, and the money looted. That’s a fair condition, I believe.

The #EconomicPackage announced by #PMModi #NarendraModi should relieve many economists. The country was eagerly awaiting an economic package.

#CoronaVirus has put on back foot the global economy. No country has been spared. Most countries are announcing packages, and the central governments are also announcing stimulus packages so that the economy does not collapse and the businesses, people can be helped.

Today’s package at least sounds excellent. Cannot talk on details since the same will be made public tomorrow probably by the finance minister herself. Still, it looks great since it accounts for almost 10% of the GDP.

Few things we need to be clear on:

Don’t expect that monies will hit your bank account directly. Like the 15 Lakh lie, many people will try spreading such news.

My suggestion to the govt will be to support businesses and farmers only.

Stock Market will take this as a piece of great news, SGX Nifty is trading 5% higher as I write this article.

Pessimists will talk about #FiscalDeficit going up. Thankfully, the govt has been maintaining 3% to 3.5% fiscal deficit ratio, and this gives them the room to help people in this hour of need.

The package should help businesses so that they don’t go shutter down.

The package should help reallocate money in various sectors so that jobs can be created.

Fiscal Deficit will not be a problem if the package can bring back growth on track; hence all support should go where it’s needed.

I am bullish on India, I feel India will recover first in the world when this pandemic goes into history. More in the next post.

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Vivek Karwa

Corona Se Darona

200426 – The previous article ‘Sell that house you own and invest in shares’ invited varied feedback from investors. Since it’s quite simple to get in touch with us, people feel free to send us an opinion. Ya, sorry if I don’t respond to all of them since it’s humanly impossible for me to reply to all. I make sure all clients get replies from me as a preference.

Let’s come back to the topic. I sincerely feel you should once again read the above article before proceeding with this one. It was posted on 14-March-2020 when the panic was setting in, the crux of the post was that continue your investments, add on dips if possible, and surely don’t stop your SIP’s since once the panic lows are made we may also see similar sharp recoveries.

Ten days later, on 24-March-2020 the #Sensex saw a low of 25639 and the #SmallCap Index hit a low of 8622. Today, as I post this article, Sensex is at 31327 and Small Cap Index at 10633. You can calculate the quantum of recovery yourself.

The market is still reeling under #CoronaImpact, which has to be felt by the whole world. Three airlines have already filed for bankruptcy till now. Read the names here: https://www.facebook.com/MostWantedIndian/posts/10216111884102706

Expect many companies to wind off once the economy opens up. Keep in mind one companies pain will be other companies gain. Small companies in India will also feel the pain, but I think the impact on the Indian economy will be the least among all economies in the world. Thanks to our population.

Don’t go by what Raghu Ram Rajan or other similar disgruntled people write and say. Also, don’t pay heed to the people and politicians who are saying India is not fighting well the #Covid19. They will give you useless explanations that India is not doing enough tests, etc. All these are crap. Corona takes 14 days to show up, 28 days to kill if not checked. We are under lockdown for more than 40 days. If India was not doing well, we would by now be seeing 50000 death daily.

Hence, I expect the govt to open up places from 4-May-2020. The decisions will be left to the state govt’s since states like Maharashtra, Tamil Nadu and Rajasthan, Gujarat may not open up soon. Places like religious places, bars, restaurants, schools, colleges, malls, theatres may remain under lockdown for some more time.

So the bottom line is that markets will remain volatile. Though we recovered a lot, we will continue seeing up’s and downs. Ride the trends with regular purchases. Don’t stop your SIP’s and monthly investments.

Mr Chirag Patel of ICICI AMC gave an interesting example in a conversation recently. Markets are cheaper compared to the economy, and the markets have to follow the economy finally.

Assume a man is walking his pet and going to someplace. The strap to which the pet is tied up maybe a metre long. So what happens while walking? You will find that many times the pet is walking ahead of the man, and many times the pet is behind the man. But in the end, both the pet and the man reach the destination.

Here the pet is the market, and the man is the economy. In the short term, the market may move ahead or behind the economy but finally will do what the economy does.

Indian economy had started doing well in Dec-Jan-Feb and will continue recovering again once the Corona Impact is behind us, and the market will follow, it has to follow.

Remain invested. The ride will be a roller coaster one.

I request you all to go to the below link and click subscribe on my YouTube channel. It sometimes becomes easy to record a video and post instead of writing the whole thing. There are all type of people, some like reading and some listening. Click Subscribe: https://www.youtube.com/c/VivekKarwaIndia/

Also, When you visit www.vridhi.co.in on a laptop or desktop, you can subscribe for email alerts on future articles. If you are browsing on the phone, while scrolling up and down, you will find the ‘follow’ button. Do stay connected with us. Click Here for all over social media details.

Vivek Karwa, +919841036524

Sell that house you own and Invest in Shares

200314 – This post comes at a time when most investors are in panic mode over markets behaviour over the last three weeks, and the kind of bear rampage witnessed over the previous three trading days.

Hence I understand that I have taken up the tough job of writing this post since many emotions must already be high and most investors under confusion on what to do? I will try to write down what can happen and what we should expect and also will try to prompt a few questions which many of you must be having in the minds. You can decide your next step after reading the whole article.

I many times ask investors if they have experienced markets in the year 2008 during the sub-prime crisis. Of course, those who came into the markets in 2009 and beyond have not witnessed those movements. But I can surely say the panic is almost a repeat of 2008; hence 2020 and 2008 can be equalled.

If we consider the market movement since Jan’2018 when it started correcting, then safely assume that the 2018-2020 period has been worse than in 2008. Having seen 2008, I can say this firmly.

2008 was a sudden crash and a swift recovery, 2018 till date has been a slow grind, and that’s the reason it has been more painful. As already mentioned in the previous articles, Sensex and the Nifty were showing up, but the portfolios are down as rally has been quite narrow. The American market was also up and trading at hefty premiums.

Markets need a reason to correct. This time it was #CoronaVirus. Corona would turn out to be such a significant contagion, no one saw it coming, and it crippled the market so suddenly!

Equity markets always factor in the worst. When the market starts correcting, more than the usual, the weakest hearted jump in the first stage to sell their holdings, fearing more slide. The traders who were holding on bring in more margins to stay, but when more selling starts happening on bad news, the margins trigger, and the markets go into free-fall mode.

Exactly what happened on Friday too, the market hit the lower circuit at around -3500 points. Me, having seen four lower-circuits in my Investment career, believe me, a lower circuit signals that most panic has been factored in. More circuits can only occur in situations like a repeat of Italy in India or America.

A small post of mine in Facebook and other social media yesterday did wonders… it read as: We are not going to be asked to vacate the Earth and shift to Moon or Mars. Don’t panic” After this post, many investors called up and added money to their portfolios. And as we all know, the market recovered almost 5000 points from the day’s lows of -3500 to close at +1300.

We have seen such corrections during Y2K crisis, Sub-prime crisis, Asian financial crisis, European crisis, Brexit, WTC bombings. During all these crisis investors sold as if there won’t be any tomorrow, but then as it’s said, corrections are temporary, and the growth is permanent. A few months later we will forget this Chinese Virus too.

Most sensible people would invest in such situations. The valuations right now are juicy. One has to be aggressive at these levels and add more stocks or average the existing holdings.

I very well remember, in one of the interviews in the year 2008, in response to a caller I said: Boss you have two houses, sell one which is on rent and invest this money in the market right now. A few years later, you will be able to buy back the same house and still have loads of cash left in your hands.

To my surprise, an investor a few years later tweeted to me: Sir, I followed your advice, today I am very happy.

After 12 years I can confidently repeat the same. The panic is so much in the market right now that if you own two houses, one being extra fetching just rent,  sell it and invest the money in markets. Of course, do it with the help of an advisor. Can we see another 10% or 20% lower from here? We may or may not, but this 20% should not make you miss the possible 60%

Let me prompt few questions in your mind and answer them.

1. My existing portfolio is already down 50%; even my five-year-old portfolio has gone down, how can I invest?

For sure, it will be down when there is panic, but then as Warren Buffet says, Be Greedy when everyone else is Fearful. Average out the stocks. The recovery also can be swift this time. If your goal is 7+ years away, invest aggressively.

Looking at the existing portfolio while it’s down will only deter you from buying cheap.

2. I don’t have money, shall I sell now and buy lower?

That would be the most unwise decision. Except for God, no one knows which is the bottom. How sure are you to buy at the right price? And what if the Fridays rally continues?

3. I don’t have confidence, can’t add more.

At least wait. Sometimes the market can test our patience so much that it will make us sell and then only move up. At least add the extra amount you have in Hybrid funds to reduce the volatility and still give you some upside returns than that of an FD.

Friends, in 19 years of career in markets, I have gone through all the above emotions in my own life. I know how it feels, and hence my experience says go aggressive now not bothering about another 10 or 20% which may come or may never come at all.

A quick note on #YesBank:

This is a unique way of rescuing a bank which the government and the RBI have arrived at. It makes no point selling here. The bank was going down since no ‘Big’ investor was taking a stake in it.

But now you have SBI, HDFC, ICICI, AXIS, RJ, and other BIG names who have come to rescue. YES has great retain customer base and excellent technology. All it needed was money an which now has come in. At these rates, once should continue holding if not buying fresh. Hold on even if RBI brings in any kind of lock-in for the existing shareholders.

Hope you all go aggressive Monday onwards! Call your Investment Advisor today itself and buy more. Corona too shall pass.

I request you all to go to the below link and click subscribe on my YouTube channel. It sometimes becomes easy to record a video and post instead of writing the whole thing. There are all type of people, some like reading and some listening. Click Subscribe: https://www.youtube.com/c/VivekKarwaIndia/

Also, When you visit www.vridhi.co.in on a laptop or desktop, you can subscribe for email alerts on future articles. If you are browsing on the phone, while scrolling up and down, you will find the ‘follow’ button. Do stay connected with us. Click Here for all over social media details.

Happy Investing

Vivek Karwa


IAP at Karaikal and Pondy

Mr #VivekKarwa will be speaking at Karaikal and Puducherry on 24th and 25th Jan-2020. Please find the invites below and attend the program. Thanks -team #VRIDHI