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

Go Shopping this Diwali

191027 – We at VRIDHI wish you all a Very Happy Deepavali and a Great Future ahead. There may be ups and downs in life and markets, both are so similar, but finally those who show faith in life live happily, and those who show faith in markets make some money. We at VRIDHI are taking all possible steps to better ourselves to serve everyone. Even we tend to learn from all ups and downs.

In a previous article, some time back I had mentioned that the biggest problems in the country right now are Liquidity, Automobile Sector Sales and the Housing Sector. Further in the previous to this, I was very particular that you should take advantage of the pre-Diwali sale and invest more money even if your current portfolios may be showing negatives.

From that day to today, the market has shown lot of stability and the Mid and Small Caps are slowly showing signs of recovery. Sensex and Nifty may be at all times, but they are not showing us the real picture. Read few of the older articles on this topic.

The problem of Liquidity:

We the people always wanted a government which fights against corruption. No country in the world has zero corruption, but in India it hit an all-time high during the year 2013. The government later brought in reforms like Demonetisation, GST, RERA, IBC, etc,. Which resulted in severe squeeze in liquidity.

The squeeze got so severe that the companies with even little bit of debt on the books saw value erosion in the stock prices and finally they had to sell stakes or assets to reduce the dues. Those days of promoters enjoying at the cost of banks money and creating NPAs are gone. All NPAs seen right now are the old loans which were disbursed recklessly.

2013 was the worst year; The corruption was at its peak, the economy was at a situation were we were classified under Fragile Five, it meant India was on the verge of collapse, the Rupee was on ventilator, The Fiscal Deficit was at its highest, the then government stopped spending money. Even the then RBI governor Raghuram Rajan was not accommodative and didn’t increase the liquidity. The next governor Urjit Patel was equally stubborn.

None of the above situations holds today. The present RBI governor Shaktikanta Das has already reduced interest rates many times. He knows that if the economy has to move up then the rates need to move down. The economy is not in bad shape as projected by the Lutyens. The government right now has realised that it needs to spend, earlier their focus was on fiscal consolidation, but now they know that they need to spend and infuse liquidity.

The recent Tax Cuts are big. Not many realise the benefits which will flow in future.

There are people who get up daily in the morning and plan on what negativity they can spread that day on Social Media. Stay away from such fellows. India cannot enter into an of recession for at least the next 20 years. Our young population will take care of all situations, after 20 years situation may get grim as people get older.

I have not visited Japan, but have heard that once you cross the borders of Tokyo, finding people becomes difficult. South Korea has the 7th largest pension fund in the world; by 2030 the country will have no people left!

On Automobile:

70% of sales happen by financing. The automobile also has certain issues like BS-VI and EV’s coming up. Look at the stocks they have already entered the stability phase. We at VRIDHI have started building positions in the sector. We feel the last quarter of this fiscal will be good for the sector.

Housing Sector:

The worst is behind us in the sector. Things can only get better from here. Don’t expect any big shocks. People are Risk Averse, and hence the stocks get beaten down the moment a news is heard. True news or False news is no botheration, and the bears go for the kill.

I have recently created a WhatsApp Broadcast List for those who want to join. Save my number +919841036524 and send your name and city so that I can too save your number and add you to the list.

We have also created a Telegram Channel; you can join that in case you don’t want to join the WhatsApp Broadcast: Join the Telegram Channel:

The Current Situation:

Low Expectations, Low Valuations, Lowest Point of Growth which can only get stable from here, Improving Earnings, Improving Liquidity can bring some cheers to the market. Even the FII’s have returned.

The Crude is stable, Rupee-Dollar is stable, the government is stable and strong. Only a pessimist will avoid adding money in the market right now. If you don’t have fresh money, wait. Things will turn around. Don’t panic and exit the markets. There will be a moment when some changes will be needed in the portfolios. The moment market gives signals do that regiging work. We will advice investors on this.

Hence, this Diwali, burn off all the negativity which some people have dumped in your minds and think positive and continue investing. The amounts are not important; the discipline is.

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:

Also, When you visit 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.

Feel free to call or message us anytime.

Vivek Karwa

Pre-Diwali Sale

190915 – In my previous three posts, I have been mentioning that the so-called slowdown currently is due to the cleansing process by the government and how every defaulter is being taken to task. You should read them again so that we are on the same page of thinking. I am clear in my theory and firmly believe in it.

The opposition and media are making too much noise as if the world is going to come to an end. The rant by the opposition is understandable; they have no other choice. An old video was doing rounds on social media of a former finance minister saying the same words which the current finance minister is saying that the slowdown is temporary and will pick up.

No doubts there is a slowdown, no denying on it, no doubt the finance minister behaved amateurishly in the beginning, no doubt the government was also in denial on the slowdown, but then the realisation happened. The government is working with front foot forward in announcing various measures.

In the previous article, I also said: ‘The three pain points are Liquidity Crisis, Automobile, and Housing Sector.’ Now check the steps announced, including those of yesterday everything revolves around these three pain points.

These are issues as said earlier, also due to the cleaning process and will slowly subside. The Macroeconomic parameters are strong. Except for one or two factors, India is quite strong compared to the world. Hence the economy and the Indian Stock Markets both will bounce substantially going forward.

Media is making noise since Bad News Sells! How many times do you find headlines of a newspaper to be positive? As a person who does so many television shows on markets and economy, I know the mentality in and out.

The sad part is that people forward negative news and videos on WhatsApp without thinking even once. In the last 15 days video of an official spokesperson of an opposition party has been circulating on WhatsApp and Internet. His political lineation is clear once you visit his profile. In the video, he presents himself as an economist and then gives absurd logic and ideas.

People should question his biased logic once the predictions fail, which will surely fail. Listen to the words as though coming from a politician which they are. Scaring people is not appreciated.

While all these are happening, let’s check these few things:

BSE Auto Index at 16541, BSE Bankex 31681, BSE Consumer Durables 23587, BSE Capital Goods 17422, FMCG 8368, Metals 9093, BSE 500 14351

All the above Indexes on Friday have closed at a 1 to 2-month highs! Even the BSE PSU Index at 6658 is at a recent high!

Sends you a message? Some more:

RBI has been cutting rates

Govt has been announcing positive steps.

ECS has cut rates

Statement by Apollo Tyres: Automotive industry reaching the end of the downward cycle, demand uptick ahead.

Recent IIP numbers are good, and the inflation remains under control.

And the biggest news is that the FII’s and FPI’s have started buying. Buying may not be huge, but the unabated selling has stopped! Read here:

We have been cruising through bad times, almost for two years. All the previous good things were also wiped off during this phase. But the things looks like having settled right now. We are at valuations which cannot get much cheaper from here. One of the articles recently I had mentioned that we are at the lower end of the U curve and I maintain so.

Will keep you all updated on the happenings. Until then you can figure out how you want to use this pre Diwali sale.

I am initiating a new thing: I am creating Two WhatsApp group for VRIDHI which you can join by clicking any of the below links:

VRIDHI WA Group-1:

VRIDHI WA Group-2:

*Not sure if the idea will work or not, but no harm in attempting. Will close the groups if the attempt fails.

*The idea is to keep you updated, and don’t worry, no junk or blind forwards.

*Join any one group only since the postings and updates will be same in both.

*Financial Advisors, Brokers, Agents etc, please don’t join, I will have to remove you.

*Those thinking ‘Privacy’ take a call, since there is nothing called privacy now-a-days.

*You are free to join or exit the group, I don’t feel bad for silly things.

Also: 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:

Also, When you visit 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

Reality Strikes Finally

190825 – First and foremost, our tributes to the former FM #ArunJaitley. Most of us who have heard him debate in the parliament have ended up learning something or the other. He will be remembered forever surely for these things: GST, IBC, NCLT and Benami Properties Bill. Om Shanti.

I in the previous posts have been writing that one major reason for the correction in Indian market apart from the global slowdown is the cleanup process which is going on the debt side of companies. As I post this writeup today, an FIR has been filed against NDTV’s founders, and raids have been conducted on the JET Airways founders. Both the companies are suspected of swindling crores of investors monies.

Before moving further, 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:

Also, When you visit 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.

Coming back, are the raids justified? Of course yes, is the govt aggressive in the clean up process? Of course yes and that’s hurting the economy too, is there any alternative? No is the answer. So there is no other option but to grind through the pain for better corporate governance and transparent balance sheets.

Finally the reality has stricken the Finance Minister and the government on the economy side. The biggest positive is that finally, the government has agreed that there is a slowdown. Acceptance is the first step to a solution. Until you accept a problem, a solution can never arrive.

There are major three pain points in the economy right now, and solutions to all three were attempted too. The three pain points are Liquidity Crisis, Automobile, and Housing Sector. And one major confidence booster has been the removal of additional tax on the FPI’s. Remember FPI’s were continuously selling since the budget taking a severe toll on the markets. The clarification that we are back to pre budget rules will sooth them a lot.

You all would have already read through the proposals and hence would not like to dwell in all of them, but few of the most important ones are these:

– Clarification that Petrol and Diesel cars will not be banned.

– You can still without worry buy the BS-IV vehicles.

– Additional depreciation on the cars bought now.

– Lifting of ban on government departments on buying vehicles.

– Additional infusion of money into PSU Banks for easing liquidity.

– Additional allocation towards NBFC’s.

– Making EMI’s cheaper.

There are many more announcements made, and these will surely lift the sentiments in the coming week. The best part is that the FM has announced that she would be coming with Part-2 and Part-3 of the proposals also.

A stimulus package is announced by the governments when the economy of a country is slogging. Such packages have been announced by the governments in history too and is a common phenomenon across the world. Let’s now wait for two more announcements which may happen soon. These small steps can lift the sentiments considerably.

On the valuations, my stand remains the same. We are now cheap. As mentioned in the previous articles the pain has been overstretched this time. This is not the first time the market is seeing such movements and nor is the last. If you cannot invest more at this point at least wait. Selling at the bottoms should be avoided. Remember we are at the bottom region of the U. Warren Buffet says: Be Greedy when Everyone is Fearful. With my conversations I can humbly submit that investors are severely scared right now.

Feel free to ping us anytime. Do share this writeup with other investors.

Expecting Sentiments to Turn

Vivek Karwa

It’s Darkest Before the Dawn

190816 – The previous article Don’t Press the Panic Button got me many responses from investors across (if you haven’t read that article, please do so before reading this one). Existing investors with spare money in hand, fully invested investors, and first-time investors. I’m going to try addressing most of the concerns which came across to me

The market today is in panic mode; no investor is ready to peddle into the market currently. Stocks are getting punished ruthlessly even though they are quoting below their actual worth. The valuations are far cheaper than even 2008 crash. I remember in Jan’2008 Sensex was quoting at around 21200, and the same crashed to 7500 by Oct’2008 which was the steepest cut which most of us present then, ever saw in our careers.

With all the earnest I can say that we have already seen a 2008 kind of correction in the market today. The difference then and today is that 2008 was fast and furious, and the current correction which started in Jan’2018 is continuing even today. It has been a slow and steady grind.

People relating the correction to bringing back of LTCG, Increase in Income Tax levels for the super-rich, Taxing the FPI’s, etc. are not fully correct. 100% I agree that these did the initial job of spoiling the sentiments, but the whole correction cannot be on this. Who in the world will stop earning just because he has to pay tax?

The real reason for the steep cut in the last few weeks and the pertinent slowdown we are witnessing in certain sectors, particularly automobile can be directly related to the NPA and Debt cleansing which government has seriously undertaken. I had explained this in the previous article.

This cleansing process is going to be good; as a result, we will have better balance sheets, better auditors too. Had the world economy been strong this process would have passed by without hurting us and our economy, but sadly, the whole world is under stress right now, and hence we are feeling so much pain.

The recent proof for my thought process is the stake sale by Reliance Industries to a Saudi Arabian company. Even the imagination of Reliance failing brings pains in the minds! RIL too has huge debts in the books, and there was a report which was also circulating on the WhatsApp warning the same. The stock too had fallen almost to 1200 levels.

The market is punishing any company which has debt, Mukesh Ambani knew this before the market could react in an ugly manner, the deal got struck, and he has promised to go debt-free in next 18-24 months! We should applaud him for his business acumen.

You cannot get a bank loan easily today, and that is hurting the automobile industry in particular. And when this sector slows down many others slow with it. For example, Maruti uses 70 litres of paint every minute, so if Maruti cuts production… you got the point already!

The slowdown in the Automobile is due to various other factors too like BS VI, EV and non-availability of finance. Other sectors too are facing the brunt. As per my info CTS alone has cut around 6000 jobs in last few weeks.

The saying goes It’s Darkest Before the Dawn! Don’t forget that the Indian Micros may be going through a rough patch right now but our Macros continue to be strong. The government has already taken note of the situation and expect some measures to boost confidence among investors.

What I sense now is that we are in the bottom part of a U. Check out the results; they are down not that companies across the board have started incurring losses. One thing which has made an investors life hell is the WhatsApp forwards.

Remember we are in the darkest phase of the downtrend right now and are bound to see the dawn.

Will write more later. Feel free to reach us on the below contact details in case of any non specific stock or investment queries.

When you visit 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.

Be Greedy!

Vivek Karwa

Don’t Press the Panic Button

190728 – As mentioned in the previous writeups, the Sensex and the Nifty have been moving up and holding the levels based on 6-7 stocks popularly called as Hrithik stocks. It is next to impossible to find anyone, be it individuals or fund managers who would have bought only these stocks.

The market has been performing badly since Jan’2018 and till date, there are no signs of recovery. There was some expectation which was built up before the budget’2019. The budget has been a total damp squib from the market’s point of view. Not that the overall budget was bad, it was prepared keeping the only long term in mind and hence nothing materialised for the short term for the market.

Two things which market did not like were, firstly, Higher Taxation of HNI’s and FPI’s and secondly, with this brute majority, the market was expecting the government to go capitalistic but they seem to be adopting the socialist approach to which even I am opposed to.

With clear thumbs down from the market, I feel there would be course correction in the next budget, this being not a whole year budget.

There are other reasons also due to which the Indian market is going down. Budget is a smaller excuse. One reason being the slowdown which India is facing right now. The most common thing being talked about is slowing sales of the automobile sector. The sector was going thru a rapid growth and with so many factors changing and expectations of the changes are slowing it down. I am not ready to link it directly with the slowdown.

The biggest reason due to which the businesses are talking about slowdown is Cash Crunch in the system. Majority of the companies today don’t have access to cash by way of loans, overdrafts, etc, Only a few companies with no debt on the books are in a happy situation today. Let me explain the earlier situation and what changed now in detail below:

Earlier, assume company X goes to a bank and takes a loan of Rs.1000/- Crs, also assume the management has no intention of paying the amount immediately. Cannot be termed as a fraud, but had the intention to use the money for a long time, maybe called as overzealous.

When the due date arrives to repay this 1000 Crs, the company goes to another bank and asks for a loan. Gets the loan and repays the first bank. The first bank actually ends up rating the company in high regards since they paid on time. Factually the amount still remains with the company.

When the date arrives to pay the second back, the company goes to the first bank again and the bank this time is happy to lend them double the amount since it was repaid on time earlier. Such loans kept on building up during the period 2004-2014 under the economist PM, these loans today are popularly called as NPA’s.

Then the government brought the IBC Law. Where in the government has made it clear to all those having debt that, it’s there problem and can’t depend on the banks and taxpayers money anymore? It’s their problem, they took the loans and now pay them back or they may lose the control over the company and in certain cases if found that the money was being diverted may end up in jail.

The result: Most companies are repaying or reducing debt.

Few examples: Emami recently sold a stake to reduce debt, Apollo Hospitals sold their Health Insurance business to HDFC to reduce debt, Anil Ambani is selling everything he owns under the sun to repay debt, there are many such examples.

Even the Chartered Accountants are feeling the heat.

Above all the IL&FS and DHFL issues have aggravated the problems.

Hence the slowdown! But go to any hotel, any resort, any airport, any mall and you may end up asking what slowdown! Even a few car models are overbooked right now.

This too shall pass, don’t let the bad times pass by simply, use the opportunity. We are seeing a severe cleaning process right now. In the end, we will have cleaner companies and balance sheet. You get the point right? Call up your advisor and ask which segment and which sectors to invest in right now. Invest more now, you won’t regret few years down the line.

When you visit 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