Shankar Sharma kept it simple and straight but also menacing:
“Emerging markets are going to be down. I am 100% sure they are going to be down from wherever they are right now. This includes India. So, absolutely no doubt in my mind that India will be sharply lower in May and of course emerging markets will be at least 10% to 20% lower from where they are right now”.
Now, if you sit down and think about it quietly, you will see that there is a good chance for a decent correction in the stock markets.
Firstly, the earnings season is almost over and there are no new triggers in place.
Secondly, the fears of a hung Parliament in the wake of the elections will sooner or later grip investors. AAP has disrupted the scenario and the feeling that the BJP and Narendra Modi will get an absolute majority does not seem so certain now.
Thirdly, the so-called QE of the FED has a bad habit of rearing its ugly head when you least expect it and of becoming a periodical nuisance.
Some other reasons are the low IIP numbers, the high inflation, the impending interest rate hikes, China’s slowing growth etc. The fact that the market has rallied so much so fast from the last correction is also a factor. In fact, the ET has compiled Five reasons why Sensex looks headed for a big fall.
Anyway, what I can say from experience is that the worst thing about a correction is not the correction itself but the fact that we are unable to take advantage of the steep fall in the stock prices.
Speaking for myself, when the markets had a steep correction in August-September 2013, I was like a deer caught in the headlights. By the time I gathered my wits and resolved to buy, it was too late because the stock prices recovered swiftly.
So, this time I am better prepared. First, I have jettisoned most of the junkyard stocks and realized whatever cash I could get. Second, I have a check-list of my favourite stocks. These are top-quality & dominant powerhouse stocks, with a proven track-record of success. Third, I will closely monitor the situation. On an ugly day, when the market crumples, I am going to systematically discharge my gunpowder and scoop up my favourite stocks. This way, when the bullish trend resumes, my armoury will be well stocked.
If you adopt this strategy, then Shankar Sharma’s prophecies no longer frighten you. Instead, you are eager that it comes true so that you can take advantage of it.
We all know what credibility this guy has: scaring the hell out of people,predicting 10 things out of which not more than 3 happen,at best.SS’s main reason for bearishness this time is the improving prospects of NDA.He is a devoted UPA fan & won’t accept any other political party(check his video after UPA was re-elected in 2009) Anyways,I feel the discussion about ‘political scenario’ is humbug.There is little doubt that BJP will come to power,the question maybe about a stable or a quasi-stable government.Some nervousness about the outcome will lead to volatility,and that happens everytime.The greater trouble is China: the growth seems to be slowing much more sharply than expected & they refuse to admit it.The acceptance can lead to some downfall,though I feel India won’t suffer as much as other markets.The idea to have some cash is always good: make a list of some stocks & buy on corrections.Generally,good stocks don’t fall much in a downturn of 5-10%,some may even rise(as did Alembic in the post Budget-2013 fall) These are phases & good stocks will continue to rule at higher prices,as long as they are good.Such moves shouldn’t deter a long-term investor: especially since you own stocks like Kajaria,Cera,ARBL,Bajaj Finance,etc.If you are a trader,then its a different matter altogether.
He is right that is only I can say!!! if maruti and tata comm can give more than 30% return in short span that can take away 20% faster than that
Has anybody compiled his recos and then seen how right he is? That wud be v interesting!
Anybody can make 10 15 calls and then just focus on the right ones and start shouting at the top of the roofs that he was right!
Well I do not know abt this guy but the fact remains that ppl usually talk only abt their success, not failures.
Janak Merchant
Thanks
I somehow dont agree to the reasoning from Mr. Sharma.
Even if the market tumbles post election due to hung assembly etc etc, there will lot of other reasons for a bull run. Even today in the interim budget, Mr. P Chidambaram has announced SOPS on excise duty for sub 4 metre cars, which helped gain auto shares by marginal points.
I dont think we need to believe the bearish sentiment that Mr.sharma has expressed.
If he is right then I would like to use his bearish trend to invest more and reap more in coming years.
Thanks,
VR
How come Mr. Sharma your prediction is so wrong? I met you in 2008 start. U predicted boom at that time! We all know what happened after that. I really wonder how come media still chases you!
Dear all,
Today is may 14 2014 and you all saying about hung parliament i gone , Now Modi will be PM , wher will this market go , Mr S.S should answer this first