I have no money to invest
“I do not have any money at the moment so I cannot buy stocks“.
This statement by Rakesh Jhunjhunwala brought a big smile to the faces of novice investors of Dalal Street.
The novices are poverty stricken and living a hand-to-mouth existence and also have no money to invest.
Of course, the context in which the Badshah made the statement is different.
“I am fully invested as always. Not only my money, even people’s money,” he said.
“I do not have 100%, I have 105% of my wealth in equity,” he added.
The Badshah warmed on the theme.
“I have one fixed deposit of Rs 50000 in Andhra Bank to get my wife a locker and I have some money in the public provident fund. Otherwise, it is all debt. My liquidity is the overdraft accounts that the banks give me,” he revealed for the first time with a big smile on his face.
Markets are at highs but why investors are not happy?
It is no secret that though the Nifty and Bank Nifty are surging to new heights, most investors have not experienced any prosperity because mid-cap and small-cap stocks are still languishing at the depths.
Surabhi Upadhyay produced tangible data to prove the point.
She revealed that nearly 40% of the Nifty stocks are down 5-20% since start of 2019.
The Midcap Index is down 6.5% while the Smallcap Index is down 7.3%.
#Nifty at 11000 again, but…
40% of #Nifty50 stocks down 5-20% since start of 2019
SO FAR THIS YEAR
Bank Nifty: 0.8%
Nifty Junior: -5.9%
Midcap Index: -6.5%
Smallcap Index: -7.3%
MEANWHILE#Dow: 8.9%#Nasdaq: 11.5%
MSCI EM: 9%
Brazil: UP 29% !!#stocks #stockmarket
— Surabhi Upadhyay (@SurabhiUpadhyay) February 6, 2019
Vijay Kedia, the accomplished investor who turned a petty sum of Rs. 30,000 into a gigantic fortune of Rs. 300+ crore, corroborated this fact.
“This new high of index is meaningless when majority of retail investors are not bursting firecrackers,” he thundered.
But this new high of index is meaningless when majority of retail investors are not bursting firecrackers. https://t.co/AAiYwl1ANe
— Vijay Kedia (@VijayKedia1) April 3, 2019
He also tweeted the image of a crying child to highlight that his portfolio is also in a sorry state despite the bullishness in the market.
My portfolio after seeing index at all time high. ? pic.twitter.com/wymqJ36WQw
— Vijay Kedia (@VijayKedia1) April 3, 2019
Rakesh Jhunjhunwala took cognizance of the fact.
“Today is a new high in the market, but all the bars are empty!,” he exclaimed, implying that no one is celebrating the highs.
The Badshah explained that this situation has arisen because of two reasons.
The first is that only a few stocks in the Index are contributing to the highs.
The second is that most citizens have not participated in the prosperity of the stock market and have chosen other avenues for investment.
“We have a dilemma there,” the Badshah said, acknowledging that there is a serious problem which requires redressal.
NAMO has not committed any crime with GST and demonetization
A few days ago, I reported that a distinguished fund manager with Oppenheimer had expressed unhappiness with NAMO’s reforms.
“NAMO Should Learn His Lesson & Not Commit Further Disasters“, the fund manager had stated.
Rakesh Jhunjhunwala made it clear that he is not happy with such criticism of NAMO’s policies.
“The kind of negativism we have had that Mr Modi did demonetisation, he got GST, as if in getting GST, he committed some crime,” he fumed.
The Badshah pointed out that in other countries, mega reforms like GST take five to seven years to stabilise.
However, we have stabilized it in a year and this is a tribute to NAMO’s administrative skills, he said.
The Badshah also took umbrage at the fact that people are obsessed about the worst effects of GST.
“What about the good effects?” he demanded to know.
“I cannot complain of fair taxes just because I was evading it and now I am not allowed to evade it. What kind of logic is this?” he thundered.
[READ] The negative effects of GST and demonetisation are over, time to reap dividens – Rakesh Jhunjhunwala. https://t.co/j2MChHTaVK
— Yahoo India (@YahooIndia) April 19, 2019
The Badshah also pointed out that although the economy has slowed in the current quarter, India is going to have one of the fastest rates of growth and there is under exposure to equity funds here. So more money will come into the market.
This statement of Rakesh Jhunjhunwala is corroborated by the statements of Goldman Sachs and HSBC, both of whom have declared that the surge in earnings makes India the best option amongst emerging markets.
Goldman sachs upgrades India to overweight
Nifty target of 12500 in 12 months
this is a catch up pre-election rally driven by FII flows
sharp underperformance, better Q3 earnings,pick up in FII flows leads to upgrade
expect earnings to grow 16% this yr, highest in the region
— Sonia Shenoy (@_soniashenoy) March 19, 2019
HSBC Asia Strategist says.. Its Time for India
Turn OW from Neutral, Dec 19 Sensex target 40300
+ve based on relative vals, high earnings growth & low FII exposure
Key risks – surprise election outcome & higher oil prices@_anujsinghal @_soniashenoy @CNBCTV18News @latha_venkatesh pic.twitter.com/GdJx5el5tM
— Nimesh Shah (@nimeshscnbc) March 15, 2019
“We are going to see recovery in banking, capital expenditure, foreign investment and we are growing on a higher base. We have reached a situation where discretionary expenditure is going to go through the roof,” the Badshah said.
“The Indian economy and maturity is picking up pace. I see a big growth in capital expenditure,” he added.
— ET NOW (@ETNOWlive) April 18, 2019
Samajhne wale samajh gaye, jo na samjhe wo anadi hai
Rakesh Jhunjhunwala opined that people who are incessantly criticizing NAMO and are unable to see the positive side of the reforms are “Anadis” (amateurs).
“Samajhne wale samajh gaye, jo na samjhe wo anadi hai,” he said in a somewhat contemptuous tone.
The Badshah explained that people who have followed the law fairly or practically are the people who are prospering. Integrity is coming to the fore, governance is coming to the fore in this country.
“We do not understand the implication of that,” he said.
“There is some change in society which is coming about. And this change is permanent, there is going to be no reversal,” he added.
Prima facie, there is merit in Rakesh Jhunjhunwala’s theory as we can see from the case of Vijay Mallya, the absconding former Billionaire, who is now pleading with Banks that he will return the moneys that he allegedly siphoned off.
Every time I say that I am willing to pay 100 percent back to the PSU Banks, media say I am spooked, terrified etc of extradition from the U.K. to India. I am willing to pay either way whether I am in London or in an Indian Jail. Why don’t Banks take the money I offered first ?
— Vijay Mallya (@TheVijayMallya) April 16, 2019
Mr Mallaya, now it is not the question of 100% payback to PSU banks, which would be recovered anyway. GOI and Bank want to see you in an Indian jail. Your biggest mistake was to think that GOI could not do anything if you run away and settle in the UK.
— Radhe Shyam (@Shyam_Hy) April 19, 2019
NAMO may not get a majority – markets may crash
Rakesh Jhunjhunwala made the chilling prediction that though NDA will form the government at the center after election, the BJP may not win a majority on its own.
Obviously, this will be a disappointing state of affairs because NAMO’s wings will then be clipped and he will be dependent on other unscrupulous politicians for implementing new reforms.
Naturally, the stock markets may then crash like a ton of bricks.
“I personally feel this may not be the time to be very aggressive in the markets … The markets may go down by 5%, 10% when something unexpected happens,” the Badshah said, implying that it is advisable that we stay light.
A similar warning has been issued by Jimeet Mody of Samco.
“Markets may be heading into a major speedbreaker in mid-May,” he has warned in a grim tone.
The warning is based on a careful study of fundamental and technical factors and it is better we heed it rather than be caught unawares.
I have never felt so bullish for India ever in my life!
Rakesh Jhunjhunwala is rightly described as the “Big Bull” because his unending bullishness about the Indian economy has led him to amass a massive fortune of $2 Billion (Rs. 13,000 crore).
“I have never felt so bullish for India ever in my life!,” he stated with a big smile on his face.
“I am saying from a five-seven year horizon …. Any dip is an opportunity to buy,” he added.
The Badshah explained that the situation now is like what it used to be in the golden days of 2002-2003.
Old timers will recollect that there was a structural and secular bull market in 2002-2003 and investors made tons of money.
“In the next 10 years, India is going to outpace all the growth it has done in the last five years because the NPA problem is behind us, capital investment will revive and we are now going to have growth on a much higher pace,” the Badshah confidently opined.
— ET NOW (@ETNOWlive) April 18, 2019
It goes without saying that we have to attentively listen to Rakesh Jhunjhunwala’s sayings and obediently follow his directions. If there is a dip in the markets after the elections, that will be our cue to rush in and grab stocks!