Investing in equities with fundamental and tukka view
- Thread starter praveen taneja
- Start date
DATA FOR THE DAY ><><
11:30am EUR German Trade Balance 16.9B 15.7B
12:15pm EUR French Gov Budget Balance -25.7B
1:30pm EUR Italian Industrial Production m/m 0.2% -0.5% commotrendz
7:30pm USD JOLTS Job Openings 4.21M 4.17M POSITIVE FOR BASE METAL WEAK FOR GOLD
7:30pm USD Wholesale Inventories m/m 0.5% 0.5%
11:30am EUR German Trade Balance 16.9B 15.7B
12:15pm EUR French Gov Budget Balance -25.7B
1:30pm EUR Italian Industrial Production m/m 0.2% -0.5% commotrendz
7:30pm USD JOLTS Job Openings 4.21M 4.17M POSITIVE FOR BASE METAL WEAK FOR GOLD
7:30pm USD Wholesale Inventories m/m 0.5% 0.5%
Now let’s see what Could happen in the three scenarios mentioned above!
1. BJP/Modi led NDA loosing: Markets would tank! If it’s a scrambled egg type of verdict then we may go down more that 10% in a blink of time. Great support for the #Sensex lies in the range of 18000 – 19500. If say, its not a fractured mandate and even if #Congress wins market will still go down and then gradually move up if the govt. is stable. You may look at stocks from the IT and the Pharma sector in this scenario.
2. NDA having an average win and forming govt. with support from others: Criteria here is Modi becoming the PM. We may see a volatile market with a bias upwards. Modi heading the govt. with weak BJP/NDA will not immediately fuel any rally, its already factored in. Hence their may be a pause with positive bias after seeing how well Modi can implement his vision without any dragging of issues by the smaller parties.
3. A Strong NDA and Modi becoming the PM: We have markets on the counting day and hence would not be surprised if we see an upper ceiling, sending us home early since trades may be stopped for the day! We may see a target of 24350 – 24950 on Sensex on same day! We would recommend being very cautious at those levels. A strong mandate for Modi would mean him doing what he wants! Going by his current speeches we may see levels of 28630 – 30006 on Sensex by end of 2015, IF he walks his talk!
The third scenario will bring all round buying and frenzy into the market led by a recovering economy. Looks like FII’s know who the next PM would be, even before the counting has begun! Most of Indian retail investors are getting out of the markets right now, this is a bad sign!
Whatever is the result, this event will also pass on like any other! Hence though the impact would be there, market will start focusing on the fundamentals soon.
1. BJP/Modi led NDA loosing: Markets would tank! If it’s a scrambled egg type of verdict then we may go down more that 10% in a blink of time. Great support for the #Sensex lies in the range of 18000 – 19500. If say, its not a fractured mandate and even if #Congress wins market will still go down and then gradually move up if the govt. is stable. You may look at stocks from the IT and the Pharma sector in this scenario.
2. NDA having an average win and forming govt. with support from others: Criteria here is Modi becoming the PM. We may see a volatile market with a bias upwards. Modi heading the govt. with weak BJP/NDA will not immediately fuel any rally, its already factored in. Hence their may be a pause with positive bias after seeing how well Modi can implement his vision without any dragging of issues by the smaller parties.
3. A Strong NDA and Modi becoming the PM: We have markets on the counting day and hence would not be surprised if we see an upper ceiling, sending us home early since trades may be stopped for the day! We may see a target of 24350 – 24950 on Sensex on same day! We would recommend being very cautious at those levels. A strong mandate for Modi would mean him doing what he wants! Going by his current speeches we may see levels of 28630 – 30006 on Sensex by end of 2015, IF he walks his talk!
The third scenario will bring all round buying and frenzy into the market led by a recovering economy. Looks like FII’s know who the next PM would be, even before the counting has begun! Most of Indian retail investors are getting out of the markets right now, this is a bad sign!
Whatever is the result, this event will also pass on like any other! Hence though the impact would be there, market will start focusing on the fundamentals soon.
Praveenji,
Third scenario is interesting. Modi will become PM that pretty much assured, after the Exit Poll numbers got leaked causing the massive rally on Friday. Modi is a dynamic minister, and he will change the country for good. There is little doubt in that too.
But, time and again, we have seen that projection of good fundamentals in the future, do not assure that the stock prices will rise. Stock prices have a mind of their own.
Allow me to quote Mr. Parag Parikh from his book, Value Investing and Behavioural Science.
"..... However, from 1994 to 1996 the fundamental return started going up but the sepculative returns were highly negative, signifying irrational investor behaviour".
More interesting:
"..... From 1994 to 2003, we had a prolonged bear market where in spite of a rise in fundamental returns, the lack of investor interest and pessimism is evident with high negative speculative returns barring a stray couple of years".
Final word, investors often behave irrationally. What you see and expect is almost definitely is NOT what you get. It is my firm belief that, ONLY those investor earn money consistently who have courage and money, both, in falling markets. It only those who have the mindset to go against the crowd make good wealth.
Third scenario is interesting. Modi will become PM that pretty much assured, after the Exit Poll numbers got leaked causing the massive rally on Friday. Modi is a dynamic minister, and he will change the country for good. There is little doubt in that too.
But, time and again, we have seen that projection of good fundamentals in the future, do not assure that the stock prices will rise. Stock prices have a mind of their own.
Allow me to quote Mr. Parag Parikh from his book, Value Investing and Behavioural Science.
"..... However, from 1994 to 1996 the fundamental return started going up but the sepculative returns were highly negative, signifying irrational investor behaviour".
More interesting:
"..... From 1994 to 2003, we had a prolonged bear market where in spite of a rise in fundamental returns, the lack of investor interest and pessimism is evident with high negative speculative returns barring a stray couple of years".
Final word, investors often behave irrationally. What you see and expect is almost definitely is NOT what you get. It is my firm belief that, ONLY those investor earn money consistently who have courage and money, both, in falling markets. It only those who have the mindset to go against the crowd make good wealth.
Bro all I am waiting for a good dip sitting on 100% cash niether I am in heaven nor in Dessert of Sudoku Bro enjoying the mood of traders and politicians praying for growth of our country, with that chosing stocks for next dip which would comewith surprise even if Modi form Govt as profit is only that is encashed
eye on power and infra sector as both would benifit most in case of Modi came
Any stock give goods to jails as Many Congress SP BSP TMC and tatpunjia leaders going there soon hehehehe
eye on power and infra sector as both would benifit most in case of Modi came
Any stock give goods to jails as Many Congress SP BSP TMC and tatpunjia leaders going there soon hehehehe
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