"A market is the combined behavior of thousands of people responding to information, misinformation, and whim." - Kenneth Chang Economic activities are back to pre-covid era. Profits are rising, reflected in lowering P/E multiple. Tax collection, power consumption etc. are rising. And above all market is flush with liquidity, thanks to lower interest rates and money thrown into market by many central banks. So, markets have all the reasons to rise high but why should I be cautious. It’s not that only economic matters affect the markets. Socio-politico matters also have deep impact on markets in short to medium term. Because unstable politico-socio situation in the economy dissuades economic actors to work freely. At the moment following socio-politico and economical events ask us to be cautious on stock markets: Afghan Developments & China-Pak Nexus   Third Wave of Corona   Union Budget LIC’s IPO Corporate Results Central Bank’s Monetary Policy Let’s analyse t...

“There are only two things you can invest – Time & Money. Of the two – Time is more important.” – Robert Kiyosaki  Beautiful story of an airbus & a fighter plane I came across today that immediately struck my mind, how similar is this to two traits of investing. Let me tell you the story first: Airbus & the Fighter Plane : An Airbus 380 was on it's way across to its destination. It was flying consistently at 800 km/hr at 30,000 feet, when suddenly a Eurofighter with Tempo Mach 2 appeared. The pilot of the fighter jet slowed down, flying alongside the Airbus and greeted the pilot of the passenger plane by radio: "Airbus, boring flight isn’t it? Now have a look here! He rolls his jet on its back, accelerates, breaks through the sound barrier, rises rapidly to a dizzying height and then swoops down almost to sea level in a breathtaking dive. He loops back next to the Airbus and asked, "Well, how was that?" The Airbus pilot answered: "Very impr...

Few years back, we have talked about Indian’s ability to adapt to any situation. Same is reflected the way Indian government & corporates have managed the situation from first lock down to second phase of lock down. Despite the health bedlams during second wave of corona and unprecedented number of fatalities that forced the second lock down, Indian economy kept moving. Increase in tax collection, power consumption, capacity utilization, consumer spending, employment numbers etc. confirms the uptrend and revival in the economy. Stock markets anticipates the future and its trends reflect the same most of the time. With improved sentiments and well supported by ample liquidity it has seen an unprecedented rally over last year. And this rally has spread well across all market segments. Though market valuations are high at this point of time when compared to long term averages but with earnings fast catching up, these valuations are coming back to normal. For those who have to inve...

  "You only have to do a very few things right in your life so long as you don't do too many things wrong" - Warren Buffett When markets are trading at all-time highs with most people waiting for correction to happen, investors are baffled by rush of new fund offers (NFOs) by the mutual fund companies. Even when they find some NFO worth considering, they are confused whether they should invest in them at such high levels of market or not. There are two questions – 1) whether one should invest in an NFO? And 2) Should one invest at the current markets levels? Let’s evaluate the situation and check if this is the right time to take a plunge into NFO or not. Whether one should invest in an NFO - Traditionally we have been of the view that when there are already established schemes available with the same objectives and had been doing well, we should avoid a new fund whose performance is yet to be seen. Over a period we have experienced, as the size of AUM grows of the exis...

  "The market does not trade upon what everybody knows, but upon what those with the best information can foresee" – William Hamilton   For most of the investors there seems no breakthrough happening in the economy but markets are continuously scaling new highs. Second wave of corona caused havoc in people’s lives. We lost many precious lives, many times than the people we lost during its first wave. It forced lock down all across the country though degree varied. But stock markets this time, don’t seems to be worried at all for corona messes.   From economy side also, most of the news aren’t encouraging. All major agencies have downgraded forecasts of GDP growth for current financial year from their earlier estimates. But stock markets are still riding higher and higher.   Equity Market & Economy - Stock markets are deemed to be the barometer of an economy. But they do not necessarily present the true picture of the current state of economy. They ei...

 Need: One of our investor retired from a plum post from a private organisation with decent retirement corpus of over 1 crore but didn’t have a regular pension. He wanted to invest this corpus in a way that he gets a regular post-tax income of Rs.60,000/- per month. Another investor wanted to invest in lumpsum to provide regular money to his daughter to take care of her education and living expenses who was going to pursue a degree course in engineering in Europe.  Someone would like to provide a regular income to her special child to take care of expenses over lifetime of the child. Another person may wish to provide a regular income to her parents. Common among them all is that they have lumpsum money to invest to get regular cash flow from it with capital remaining safe or appreciating. Options: Retirees look towards senior citizen saving schemes (SCSS) and Pradhan Mantri Vaya Vandan Yojna (PMVYY) both offering 7.4% interest p.a. with an option to get interest monthly or ...

  " A market is the combined behavior of thousands of people responding to information, misinformation, and whim. " - Kenneth Chang Second wave of corona is creating jittery in the society and the stock markets as well. Numbers being reported daily are frightening. And second phase of lock downs seems inevitable to many.   Data throws many option and thus multiple interpretations. India has seen highest spike in number of cases over last couple of weeks. In last one week alone India added over 13 lakh cases of corona, 62% hike over cases reported a week prior to that. Closest allies in number of cases are USA, Brazil & Turkey who reported 5 lakhs, 4.6 lakhs and 4 lakhs cases respectively during last week, where Brazil has shown negative growth with US & Turkey showing 4% & 17% growth in cases over week prior to that.   Another interesting fact is number of cases per million (ten lakhs) population of the country. India has 948, US 1502, Brazil 2147 ...

“I am a better investor because I am a businessman and a better businessman because I am no investor.” – Warren Buffet   By now you must have been bombarded with lot of budget analysis by TV channels, news-papers and from whatsapp & YouTube University. We don’t want to bore you further on nuances of budget. Should you have any specific query on budget, you may write to us and we would be very happy to answer your queries.   Market have welcomed budget with full josh and has started rallying again. It seems like the beginning of the Big Bull Run that we have been talking about for couple of years now.   Many of you might feel left out. Some of you will still remain hopeful of some correction to let you in. We at InvestmentMitra believe that his budget has laid a good foundation of sustainable growth over long term than going in for any short term quick fix options. Stock markets reaction is testimony to that.   In our communication last Thursday we had...

  "The best time to plant a tree was 20 years ago. The second best time is now." -  Chinese proverb   Till about a week back, we were discussing that markets have gone very high and in last one week broader markets have come down by 6 to 8% from their peaks. Noticeable thing is that majorly large stocks had risen in prices in past year and price movement in small caps had started to pick up recently from last about 2 months.   And if we notice the fall in the recent week, it is majorly in large companies stocks. It was due to FPIs had bought more into these stocks after covid fall in March and now are redeeming the same investment.   In our New Year message at InvestmentMitra From 2020 Moving Into 2021 – Evaluate and Plan , looking at the valuations, we had advised you to rebalance your portfolio and stagger your equity investments over 3-5 months period expecting some corrections to happen in this period.   Now with markets down by over 6-8...

  We started 2020 on a buoyant mood with all good things picking up for the economy by the end of 2019, well elaborated in our article, ”The last day is special, it ends significant confusion.”  published on 31 st December 2019. Indian government brought in an expansionary budget which was well supported by RBI’s policy rate cuts. Not only various engines of growth of the economy started showings signs of revival, stock market rally also spread to wider range of stocks including from midcap and small cap segments, from just being a concentrated rally limited to 12-15 stocks. It was also the time when corona had engulfed the key industrial town of China and its spread started dreading the world. Remember our communication of 16 th February in which we feared it to be a Black Swan event. And in our communication Adversity offers Opportunity on 24 th February we had advised you to keenly look for investment opportunities that this pandemic could offer. Opportunities st...