On 25th February, when the Nifty slumped to a low of 6970, we should have been on Dalal Street, behaving like Dare Devils and buying stocks left, right and center. Unfortunately, we behaved like frightened rabbits and hid under our beds. Since then, the Nifty has staged a smart recovery.
The reason for our deplorable attitude is because the events of the past few weeks, coupled with the rabble rousing of doomsday prophets and the anti-NAMO rhetoric, filled our tender minds with dread about the prospects of the India growth story.
In situations like this, the best thing to do is to step back and to look at the situation from the perspective of a foreigner. Foreigners have no attachment to the Country and are not swayed by petty controversies. They are objective and always look at the big picture. Also, because foreigners invest in multiple countries, they are able to bear in mind the relative advantages and disadvantages of each Country. So, India, despite all of its problems, may be a good investment, if the other Countries are in a worse position.
Katie Koch, the Managing Director of Goldman Sachs is immensely qualified to opine on India and Indian stocks owing to her rich experience in the territory.
In her latest interview, Katie said that there are reasons to be “hugely optimistic” about India. “We are very bullish on the prospects of India”, she added and gave cogent reasons in support of her hypothesis:
(i) India is presently growing at 7.5% and has the capability of growing at 9 to 10%. There is no other Country in the World growing at such rapid pace;
(ii) Inflation is tapering down. The RBI Governor made it clear that the monetary policy can be accommodative and interest rates lowered, which is very good for equities;
(iii) India’s demographics are very attractive. 70% of the population is below the age of 30 years. Demographics are highly co-related to long-term growth prospects;
(iv) India is on the ‘precipice’ of an infrastructure boom. Already, there are 30km of roads being laid everyday. The telecom sector is also booming.
Katie emphasized that the record outflows from Indian stocks (which led to the steep crash) is the result of a “risk off” attitude amongst foreign investors and has created a unique opportunity for people “to be bold” and to add to their positions in Indian stocks.
Katie also pointed out that there was a “lot of optimism” built into the Government and that there has been some disappointment. However, there is “real progress” on the ground level and there is confidence that the Government will deliver on the promised reforms, she added.
“If you are willing to take a long-term perspective, the investment implications in India’s equity market are positive” Katie Koch said with immense confidence in her voice!
Dear moderator,
when sensex was at 22k, I was repeatedly advising to post encouraging article for small investors. But unfortunately you also joined chorus of blame Modi for everything . I was really surprised to see such posts from matured forum like this .
I thought that it will take at least few months for this post, but it took just few days . This proves again and again, when everone yells sell (including RJ forum, its blind buy) ..
Thanks,
Prashant
very true. It was difficult to understand site like this also blaming our PM for no reason. You must show maturity in this situation.
Mkt. Moves are always contrary to what retail investor thinks,
This is just a year end buying..nifty will be back to 7000 in a few weeks..global situation still weak
No one could predict the fall from 9000 to 7000. What’s the point of being fearful at 7000 now when no one at 9000 was?
Market doesn’t remain same for all 12 months, there aren’t any serious reforms to expect growth. But falling market can surely bring stocks to attractive levels.
Your posts of Feb 25 & Mar 3 ( particularly the latter) had an intense tone of frustration, which could have been tempered & moderated. This post is on the other extreme which leaves readers amused with your credibility touching a new low. One gets the impression that you wish to convey that all experts are just foolish and unreliable and stock market investment is nothing but a blind gamble.
There are no experts in stock market, everyone just tries to give probability based on market conditions. There’s only one thing that comes as guarantee with probability, it can be wrong.
Our job in stock market is not to be right all the time but make lot of money when right and avoid losses when wrong.
– Will O Neil
Which to my personal opinion is world’s greatest investor.
People who are criticizing the Moderator seems to be piqued that some criticism was directed at Modi than anything else. When Modi is projected as the star, it is only natural that he will face criticism when the market makes a nosedive.
It is always easy to say in the hindsight that the negative sentiments were unnecessary. Someone who truly trusted in the future growth of the market during the downturn in the market would have bought shares by the truckload. He/ she would now be grinning from ear to ear. It is people who got scared and didn’t buy who are now complaining.
I am still doubtful if market has turned to go up.Market was butchered by Selling and large part of that also includes short sell .At certain level short sellers and also those who had sold on delivery basis will defintly come to reverse their trade .As far as Modi is concerned all expection has already dried up and market has already factored in Modi failure. So now question is ,can Indian enterpenures can deliver in these trying times. It is no more what Modi should do,now real issue is what Modi Govt should not do .They need to control/stay away from controversies like JNU,Belgam Sadhus,non performing ministers like Smrita Irani,keeping peace and harmony among religion and castes,taxing PF (still finding ways to restart controversy). Indian enterpenures can still deliver if Govt keep quiet and don’t try to do for sake of doing and starting new controversy. Enterpenures and public are now more afraid of their doing than non doing.I am no more investing due to Modi but due to Indian enterpenures.
darth Ji,
Very well said. You are hitting the nail on head. I guess the reforms hope or “Modi premium” is well and truly over for now. It is up to fundamentals now. However I disagree that this govt. has failed. A govt. has to be judged by not the new policies it has launched but also the its day to day performance. Corporate India should realize that they can not rely on favorable policies forever. On its part the govt. have done some good work but not as much as somebody would have hoped for.
Ok, let me explain things to maybe some of you who are still infantile in the mind. Because we shout our dissapointment with Modi doesn’t mean we don’t want him to succeed. On the contrary we are the most fervount supporters, and it is becuase of our voice that he has listened and therefore real change is possible once again. Point number two. It is not the foreign investors who are to be blamed. I blame those Indians who invest in equities only to have a 5% gain before selling. Traders are the worst, and when it is Indians themselves who are causing the problem, there is no excuse. If you do t have money to keep it long term, then piss off.
So the next time you invest wishing to sell next week, don’t you dare blame an FII or a PM. you are the problem.