Modi 2.0

190526 – Before we start, we would like to congratulate Mr. #NarendraModi for getting the second term as the PM and that too with thumping majority. We also wish the people of India for having decided the next government with clarity.

Any government with dependence on regional parties would have been unstable. India is in a time where a majority government can take decisions much faster and there would be no vested interests to pull the government down.

It is first time probably in the history of India that a government has been voted back to power with larger vote share and seat share. It’s a world record, this is the first government which has been voted back to power after implementing GST. All other governments in the world which brought in GST were thrown out.

With 303 seats under its kitty, the new government will kick start on day one of taking the oath. In 2014 Modi was new to Delhi and it took him almost 6 months just to understand the 11 am a culture of Delhi. Also, the bureaucracy was more loyal to the earlier establishment.

The above problems are not present this time and the work would start from day one. The same will be taken very positively by the markets. Though we saw some movements, we did not see upper or lower circuits since the outcome was somewhat factored in already.

The year 2018 has been very bad for the markets particularly for the Mid and Small Cap segments. Due to various factors, the stock prices had corrected 50-70% and most Large Caps too corrected up to 30% resulting in losses across the board in both equity portfolios and mutual fund portfolios.

A lot of newcomers entered the markets in 2017 and 2018 and now are assuming that they made a mistake. They also feel that while the Sensex and Nifty are at all-time highs, why are their investments not moving up?

Fact is this: Firstly, literally only five heavyweight companies in Sensex and Nifty have moved up, other stocks have either moved down or remained flat. Hence, the index may be at high and the portfolios down, but that doesn’t mean you should call it quits. After the election results, there are all possibilities that Index may remain flat and the stocks move. Secondly, Please don’t judge the investments on 3-5 years basis. Equities can give you five-year returns in a single year and make you lose patience in the first four years. You need to invest for absolute long term.

The best thing is to do your Financial Planning and start investing. This can keep you disciplined during the ups and downs. Keep in mind, no one in this world has become rich by investing in Fixed Deposits alone. Even Real Estate will remain subdued for the next five years.

We believe that the markets will be buoyant now. Single-party majority government will take actions faster.

I expect these things in the first half of the term:

1. A 100 days plan will be announced.

2. The full budget may be presented with Bigger Tax breaks for people.

3. Draft of Direct Tax Code will be ready by July.

4. IBC will be strengthened.

5. More spending on Social Reforms.

6. Spending on Infrastructure may increase.

7. Govt and RBI will now push liquidity into the system.

8. Big projects like River Linking may be announced.

Also, since the clarity has now emerged, the corporates will start their investments in India. Many of the companies were just waiting for the results. For example, around 200 companies from China alone were waiting for results to shift base to India.

We at VRIDHI will start the process of making the changes required to suit the portfolios for the New India. We also have been under pressure in the last one year due to bad markets and are now hopeful and delighted that better days for India are in sight. Will now be working for best results. India’s time has come.

Global problems will continue to cloud the markets, but the local opportunities overweigh them. India’s relationship with global leaders is extremely favourable currently which will also help our country.

We will continue updating over the next few weeks as the structure of the new government gets clear. Stay connected with us and work for better tomorrow.

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 phone then scroll to the bottom for the ‘follow’ button. Do stay connected with us. Click Here for all modes.

Happy Investing

Vivek Karwa

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Roller Coaster Ride Continues

190217 – Firstly, We pray for all 44 souls of our Indian Army martyred in the Pulwama terror strike. May all the souls attain Shanti. Om Shanti.

Such a cowardice act on part of Pakistan backed terrorists. They feel they will get back Kashmir by doing all these. Fact is it’s getting tougher for them by the day.

Sensex went to highs of 37172 on 7-2-2018, the movement on the upside was as expected since I was sounding bullish on the Index in the previous two to three posts continuously. Post the highs, the market has corrected a bit more than expected and has closed at 35809 as on 15-2-2018, that’s almost 4% fall within a few days.

Sensex even at these levels looks quite decent. Sensex is actually giving a wrong picture to everyone. Fact is though Sensex is at its highs, most portfolios are in red. I should say 100% of the portfolios in the last one year has turned negative, including the Mutual Fund portfolios. Including ours, which we recommend. That’s the truth. The only difference between our portfolios and that of a naive investor will be seen during the recovery of Mid and Small cap companies.

Our portfolios will recover much faster than others. Even our MarketFastFood subscribers will see a faster recovery. In fact, we have added just one company in MFF past one month.

The broader market has been on a slide. Sensex and Nifty are up based on just a few stocks. They are today commonly called the HRITHIK stocks! No, not that Hrithik Roshan the actor owns them, just that a new word has been coined in the market. HRITHIK means:

HDFC, Reliance, Infosys, TCS, HUL, IndusInd Bank, Kotak Bank.

An investor can now ask why shouldn’t I buy only the Hrithik stocks and beat the market? Logically it’s a yes, you can, but will you take risk of investing only in 7 companies of which 3 are from one sector alone? If these stocks falter then life can become miserable. Hence, an advisor like me would never risk putting money in such stocks and few of them are steeply valued today!

The broader market is actually quite cheap now. Your portfolio may be in minus, still, this is the time to add more. Those who fear now will later regret missing the chance. This is not the first cycle in the market. It has happened many times in the past. Not that India is doing bad, not that Indian companies are going to close down tomorrow, not that we have bad government.

Yes, in the short term there will be heightened volatility due to elections coming up. Until then keep adding slowly. Don’t fear, this phase shall too pass.

We may get even better chances in the next few weeks/months. Pakistan has this time crossed its limits. The Indian government cannot simply let this pass. Action has already started. I don’t think there will be a full-fledged war, but things like surgical strikes, or strikes in the PoK area cannot be ruled out. Any panic situation should be used. Pakistan is bankrupt. They cannot face India. India has had huge diplomatic success in the last few years which has cornered Pakistan on all fronts.

India has already taken few steps over the weekend. These will make India emerge stronger. No country would dare to openly support Pakistan over India.

In case you need our support feel free to WhatsApp us on our office number. My desk number is 93810-24365. We at VRIDHI are always happy to hear from you. Feel free to get in touch with us.

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 phone then scroll to the bottom for the ‘follow’ button. Do stay connected with us. Click Here for all modes.

Happy Investing

Vivek Karwa

Roller Coaster Ride Ahead

190127 – Volatility has set in as expected. Again, like before, the same is invisible in the indexes, but when you dig deep into the market you find that enough damage has been done in the past 10 days. There was some recovery which tried coming in, and some of that has again been taken off. Justified! The market climbing by the stairs would be better, an investor should not expect an escalator type of recovery, that’s always dangerous.

We at VRIDHI have been trying to stay connected with you all on various platforms, would like to mention a few of them before proceeding, would request you to join them all.

1. You can follow this website by subscribing for email alerts. Scroll down to the bottom if you are reading it on phone. If you open the website on a system then you would find the subscribe option on the left-hand side.

2. Subscribe to the YouTube page: https://www.youtube.com/c/VivekKarwaIndia/

3. Facebook: https://www.facebook.com/teamVRIDHI

4. Twitter: https://twitter.com/vivekkarwa (being personal twitter, you will find non-finance posts too)

Now coming back to the markets:

I, still feel we would do better in 2019 than 2018. Leave the minor blips, I guess, in the previous post I had mentioned that my gut feeling says we may hit a new high before the Lok Sabha elections. Some people sent me counters, people don’t understand! I am in competition with none, and nor do I predict this short term. It’s just a gut feeling which may turn out to be real or may fail. If it fails, so be it.

Some people have been sending me WhatsApp messages and Facebook messages that America may crash and take India along with it. The scenario is totally different. Dow Jones on 3/12/2018 hit a high of 25980, it saw a steep correction and hit a low of 21712 on 26/12/2018, that’s 16% correction in a short span of time. The latest high on Dow is 24750 achieved on 18/1/2019 which again is a massive recovery in short span of time.

We did not move with Dow! India is adjusting to her own scenario.

What’s the lesson? We have to move very selectively for the next few months. The fact of the matter is that the valuations are cheaper now, and yet I am not able to freeze on the investment ideas easily. Meaning, a normal investors life would be much more difficult. We at VRIDHI will keep doing the hard work on behalf of you. Just stay connected with us. In the previous post, I had recommended three ideas, and all of them are stable even today. Read them by Clicking Here.

Also in the previous post to the previous, I had mentioned that we had recommended MGL to MarketFastFood clients and you know what? The stock is still stable. Don’t take this as a Buy recommendation since we may exit without any info. The exit ideas for the other three stocks will be posted on any of the above-mentioned platforms, hence stay connected.

India is adjusting to her own scenario. The market is factoring in all the possible outcomes of the elections. Don’t go with the doomsday sayers. Ignore them. Most of them have stopped getting their easy money and are predicting hell. Take my word, India is the best investment case in the world today. With China slowing down and US-China stress, India will fear in short term but gain in medium to long term.

So, be selective, take advice from your advisor, use strategies wherever possible and keep adding fresh money in these volatile times.

If you are a member in any WhatsApp group and would like me to contribute, feel free to add 93810-24365. No one to one messages, please.

At your service

Vivek Karwa

Better 2019

190101 – Wishing you all a Very Happy Calendar New Year 2019 and may all the days till next year are exciting, profitable and memorable. I, in my video recently had promised to mention few investment ideas in the article and will do so today. To stay connected with us on all social media platforms Click Here.

I know most of you must be busy on this day and hence will not make this post very long. I promise you will be able to read the whole write-up in under 11 minutes. Not all are sitting in office today like me. 😦

In the video, I had mentioned a line that ‘My gut feeling says we may hit a new high before Lok Sabha elections’ Not necessary the gut feeling is high but most probably 2019 will be better than 2018.

Look at the Index performances in 2018:

Index 29-12-17 31-12-18 Change %tage

Sensex

34057 36038 +2011 5.90%

BSE MidCap

7781 6696 -1085 (13.94%)

BSE SmallCap

19231 14707 -4524 (23.52%)

The Sensex delivered marginal 6% returns. Still, not all investors made it, why? Because the movement was based on just 5 companies. The silver lining is that world markets did much worse. India was among top performers with this bad return. The movement was very shallow. MidCap Index delivered pretty bad and SmallCap Index was a disaster! When Index itself is down this much, no wonder most investors are seeing their portfolios in deep red.

This builds the base for a better the year 2019, in spite of elections around the corner. You can read the previous two posts to read the views on elections.

Volatility will still be seen and hence I would publicly mention ideas which may not see huge volatility. MarketFastFood clients get updates instantly but the public at large who are acting upon reading this post should go safer. Any further update would be posted in the comments box by me in future.

Things are improving constantly, as per RBI’s Stress Test of the banks, the PSU banks are getting stronger. Buy SBI at CMP of around 295 and hold it till I update again.

The loans which were written off from the balance sheet are now finding their way in again with NPA resolution mechanism. Some people got misguided when politicians said loans are being waived off of the rich, there is a big difference between waived off and written off.

The GST has almost settled fully. With the liquidity situation improving in the system and elections around the corner, the rural economy may do well. Elections see a lot of spends and hence the economy benefits. GST will be a game changer and stocks like ITC in the FMCG sector can possibly do well. You can Buy it at this CMP of around 281 and just hold on for some time. Compared to other peer group companies the stock looks cheap as well.

The third stock I would like to choose at this juncture is Cipla at CMP of around 521. You can aim for a price of 600+ and then ask me again what to do.

In the recent Fb Live video, I had said that don’t get misguided by what news you see on social media. It’s a platform right now used by vested interests to spread fake news about the economy. What has been said in MFF articles till now have gone the right majority of the times.

We at VRIDHI will continue to help investors who are ready to listen to the facts with an open mind. Only this can make you money and not believing in the fake news.

Take it from us, the overall quality of the economy has improved and markets will also follow suit and hence look at India with a positive mindset.

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 phone then scroll to the bottom for the ‘follow’ button. Do stay connected with us. Click Here for all modes.

Happy 2019

Vivek Karwa

Not Much to Fear

181223 – Those who had read the previous MarketFastFood article dated 9-12-18 would have found things post that very interesting. If you did not read Click Here, read it first and then continue reading this article.

First, I had said, don’t fear the state election results too much, they are going to be insignificant in the current scenario. I had posted two charts showing how markets have behaved in the past.

What happened finally? Though all the three states were lost by the ruling party, the markets gave thumbs up to the results. The Sensex and Nifty closed in the green on the same day. Why? It’s all due to the vote share pattern! If you look at the vote share, as an investor you will be least bothered on the results outcome.

Second, Though I had mentioned market looks good, the volatility will remain. Check the data, on the article day 9-12-18, Sensex was 35673, it hit high of 36554 on 19-12-18 and as I write today’s MFF, we are at 35742, hardly any movement!

Third, It was mentioned that RBI will not increase the rates and it went as expected. No rate hike and no impact of Urjit Patel’s resignation.

Fourth, I had mentioned that we had recommended MGL to MFF clients and the stock still remains in our portfolio’s. It hit a high of 907 recently.

Hence, my stance on the market continues to be neutral right now, Buy on dips, but be very selective on what you are buying. Volatility will persist till Lok Sabha Elections and hence no blind buying until then. Seek an Investment Adviser’s help.

Till the general elections are over, my views can drastically change as the events unfold, hence stay tuned to www.VRIDHI.co.in and follow this page. Read the last paragraph of this article.

One can ask why am I neutral and not negative on the market in spite of America’s partial shut down.

As of now, I am least bothered about what is happening in America. Not that they don’t affect us, just that I don’t fear America movements like before currently.

Good things are happening in India.

Inflation is so much under control that RBI won’t think of rate hike even in the next meeting. Remember the inflation in 2012-13? It hit above 12% and we are today under 3% little more down and we can reach deflationary situations! That would be negative but will not happen.

Banks are collecting the earlier written off NPA’s back. Government is funding the Public Sector Banks heavily. Look at the stock movements of strong PSU banks. They are so stable. (Not a buy recommendation)

The GST rates have been cut yesterday. Now hardly around 22 goods are remaining under the 28% category. The market will celebrate this for sure. I have in a number of TV interviews and articles said that in 2-3 yrs post-GST the overall tax paid by the common public will come down. A recent report already states that a common man is saving Rs.320 already, mainly due to FMCG products.

We as a country are heading into interesting times. Don’t go by what news you read. With elections hardly 4 months far, you need to read every news with two teaspoons of salt. Better to stay connected to VRIDHI.

I promise to mention few Investment Ideas before the New Year article. Keep following us. Read the below para.

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 phone then scroll to the bottom for the ‘follow’ button. Do stay connected with us. Click Here for all modes.

Happy Investing

Vivek Karwa

Election Mania or Maniac?

181209 – Sensex, in absolute terms has moved up 600 points since the last MarketFastFood post, the high was even more. We during this period bought a stock called UPL and also exited with quick returns before it fell again. The idea was not to indulge into trading, as said in the previous MFF post, the market had been volatile and after the recent rally we just thought to exit before it comes down, and it did come down. We recently recommended the stock MGL in the portfolios. Will exit the same when the situation warrants.

Vivek Karwa’s Quote:

While investing keep in mind, there is nothing called Short Term, Medium Term or Long Term, there is only Profit Term..!

The next point of view in the previous article was that RBI will not increase the rates and they followed MFF J

We also feel that the chances of FED increasing the rates this month have come down to 50:50, earlier the chances were much higher. Also, the election results won’t impact much, the impact may be seen for maximum Three days. Read the previous article by scrolling down. Also, see the pictures below sent to us from IDFC Mutual Fund. These pictures give us so much sense.

Another analysis below:

Exit polls surveys have been declared predicting not a good picture for BJP while giving an advantage to Congress. Rajasthan would go to Congress, tough fight in MP and Chhattisgarh, TRS will take Telangana. Manipur doesn’t matter!

Let’s first discuss why I don’t give any importance to these exit polls and then let’s divide the results into scenarios.

Why these exit polls don’t matter?

First, Exit polls in the last few occasions have failed. Gujarat is an example.

Second, Rajasthan has always voted government’s alternately between both the major parties. Hence, technically it’s congresses turn now. The market won’t see Congress coming back to power as a negative.

Third, After 15 years of anti-incumbency, a defeat cannot be termed as bad. It’s actually embarrassment even that after decades of one-party rule, the exit polls don’t give a clear victory to the opposition there.

Fourth, Market will be more bothered about the 2019 Lok Sabha polls, these state results have no implications on them. Voters have become smart. They have selectively started voting differently for state and central elections even while held at the same time.

The market will see this negatively only in one aspect: The number game in Rajya Sabha changes!

Scenarios:

Rajasthan: Congress, MP and CH: BJP

The positive impact, as per general expectations hence the market will take this as no surprise.

Rajasthan, MP: Congress, CH: BJP

Anything more than Rajasthan to Congress is a negative news, but just for three days.

All three states BJP: Super news for the market! Would be a dreadful defeat for the opposition. Already Telangana seems to slip out of the Con-TDP combine.

Hence when the finals are just around the corner, don’t bother much about the so-called semi-finals. Choosing a CM face and a PM face are two different things now.

Yes, whatever the results are there would be short and quick volatility, those fully invested can just ignore it and ride through it, and those with cash in hand can look at entry points if they arise.

The overall valuations in certain pockets are cheap now, keep in mind that market will turn around. It sometimes takes little longer time and with so many events happening the flat trend of over markets can continue till Lok Sabha polls. If all three states are won by the sitting government then the flat may start trending up slowly.

So let’s have some fun over the next two days. EVM’s are damn scared that they should not be finally blamed on 11th J

Don’t forget to like our Facebook page to remain updated Click Here. Also when you visit www.vridhi.co.in on a laptop or desktop, you can subscribe for email alerts on future articles. Do stay connected with us. Click Here for all modes.

Thanks

Vivek Karwa

Elections! Should I Invest?

181125 – Not much ‘absolute’ movement in Sensex and Nifty since the last post of MarketFastFood, this is the advantage of not looking at the markets daily, you just witness the destination and don’t have to experience the volatile ride, what am I trying to say here? It’s this: If you look at the absolute movement since the last post the difference is almost negligible, but if you check the daily movements you would get shocked. We saw wild movements during the past fortnight. Hence if you need to have a peaceful mind then take help of money managers like VRIDHI and we take care of your financial planning while you concentrate on your work in the office.

Generally, one advice I give to people is: concentrate on your business or job, try to earn as much as possible there and invest that money with help of an investment advisor, who in turn would make your money work most for you. Most people who come to my office seeking advice have one thing in common, most of them would have few market mobile apps like moneycontrol installed in their smartphones and they frequently check them during the office hours. Keep in mind that in this competitive world you got to be indispensable, else… you know what I mean, thus focussing on your job becomes the most important thing.

There are few queries which are coming to me regularly from investors past few days. Let’s see them.

1. My investments both in equities and mutual funds are in negative past one year. Should I sell and come out and invest in fixed deposits?

Withdrawing your investments since the market has not performed in past is the most stupid thing a person can do. As a financial advisor, I always say that don’t come to market with lesser than 5 years as time horizon. Keep in mind that you are indirectly investing in businesses and no business can give you returns quickly. The fastest way to double your money is possible only at a casino and the chance still remains just 50:50

Stay invested, keep adding more on every dip. Buy when the market is giving you a discount.

2. State election results are around the corner and Lok Sabha will go to polls early next year. Should I wait?

These are just reasons to procrastinate! Sensex was started in 1978 with 100 points, more than 40 years up and we are around at 35000 today. Now go back and calculate:

How many elections have taken place in 40 years?

How many PM’s we have seen in the past 40 years?

How many scams we have seen in 40 years?

How many natural calamities have occurred in 40 years?

The list goes on…

Still, the Sensex has moved from 100 to 35000..! Great Job. Yes, I agree there would be volatility!

3. Since you yourself said there would be volatility, what should an investor do?

Volatility will surely be there, but that does not mean you should sell and sit in cash, volatility does not mean only downwards, it could mean upwards too! Hence selling and sitting in cash cannot be the solution.

Existing investors can reduce volatility by being more defensive. There are many ways to do it and you should call your portfolio manager on this.

If you are having fresh money you can split the investment over the next 9 months. It’s easier said than done, discipline becomes very important here. Can be done with help of mutual funds, a mutual funds adviser will again be of great help here.

You can also ask why 9 months? It could be 6 as well, or 12 as well. My calculation says 9 would be the best.

The answers to the above three queries should reduce a lot of confusion. Keep in mind, a Fixed Deposit has never made anyone rich! You need to invest in markets. The more time you wait in the market, the more you can earn!

Some advisors may tell you: Don’t bother about anything, invest and wait for 20 years and you will automatically make money! Sad Advice! I agree you will make money, but you will lose on many opportunities! With time the investment methods also change. Warren Buffet style cannot be blindly followed in 2018. Those Buy and Hold advisors preach this to reduce there own workload. I find no other reasons for such advice.

Indian Stock Markets would do well, it seems almost clear that RBI would not increase interest rates at least in next two meetings. Crude has come down steeply. Inflation is under control. Future of markets at least in India seems great. Be part of it or lose yourself in deposits! The choice is yours.

Don’t forget to like our Facebook page to remain updated Click Here. Also when you visit www.vridhi.co.in on a laptop or desktop, you can subscribe for email alerts on future articles. Do stay connected with us. Click Here for all modes.

Happy Investing

Vivek Karwa