Savage crash spooks novice investors
The savage crash in the stock market on the back of NAMO’s surgical strike against black money hoarders coupled with Trump’s election as President of the USA has petrified investors. Mega gains, which were carefully accumulated over the past several months, are evaporating into thin air. The question is whether this sorry state of affairs will continue in the foreseeable future as well.
Video: TRUMP, MODI WIPE OUT RS 7L CR OFF STOCKS IN 15 MINUTES
| #USElection2016 #Sensex Live: https://t.co/cmtpShEu1I pic.twitter.com/cjmkPK2Q5Z— ETMarkets (@ETMarkets) November 9, 2016
Fortunately, eminent experts have conducted a careful analysis of the situation and come to the considered opinion that the move against black money will confer several advantages upon the Country and its economy and that this will translate into mega gains for investors.
A “game changer” for the economy
Amit Rathi, a whiz-kid with Anand Rathi, has conducted a systematic analysis of the impact of the demonetization of Rs. 500 and Rs. 1000 currency notes upon the economy.
“Hockey stick” revival in growth expected
Rathi has pointed out that while the immediate impact of the demonetisation will be negative in as much as it will impact consumption, the effect of this will be short-term.
“After a slow rate of GDP growth for around six months, the subsequent two years could see sharp “hockey stick” revival in growth. Inflation could fall sharply, with a reduction in real estate prices and transaction costs involved there,” he said in a soothing voice.
Equities will be the biggest beneficiary
Amit Rathi has confidently asserted that equities will be the biggest beneficiary of the reform initiated by NAMO. He has given three cogent reasons in support of his hypothesis:
(i) There will be a gradual shift from physical assets (real estate/gold) to financial assets;
(ii) The organized sector – companies, especially the listed ones – will benefit due to fewer cash transactions;
(iii) Lower inflation and interest rates will benefit listed companies through lower borrowing costs, which will increase their profitability and valuations.
NBFCs to be big beneficiaries: Motilal Oswal
Sunesh Khanna and Alpesh Mehta of Motilal Oswal have also studied the imact of demonetization on NBFCs. The duo has expressed the view that the decision to demonetize the INR500 and INR1,000 currency notes will shift demand away from informal channels and boost the growth potential of formal segment in the medium term. It is also claimed that collection efficiency will improve due to minimizing cash transactions between builders and home buyers. It is stated that this will not only improve asset quality, but also lower operating expenses.
On the basis of this logic, Motilal Oswal has recommended a buy of Indiabulls Housing Finance with the solemn assurance that the stock has a whopping upside potential of 45%.
Expert investors also welcome move
An important indication that there is nothing to worry about comes from the sentiments expressed by expert investors.
Today will go down in history as a Red letter day for India.
— Vijay Kedia (@VijayKedia1) November 8, 2016
In my biased view worst is over.
— Vijay Kedia (@VijayKedia1) November 9, 2016
Mr. Market takes two bullets from a double barrelled gun & post that signals a long term historic bottom !#TheThougutfulInvestor
— Basant Maheshwari (@BMTheEquityDesk) November 9, 2016
PM @narendramodi_in conducted a bypass surgery on black money. The patient would run faster and harder – all he needs is a few days rest !!!
— Basant Maheshwari (@BMTheEquityDesk) November 12, 2016
Demonetization, a Game Changer!
Equal Opportunity for Every Indianhttps://t.co/mfOwNwsFYD— Porinju Veliyath (@porinju) November 13, 2016
Nifty Put:Call ratio based on near term strike prices in extreme oversold zone.
Downside in markets limited @nikunjdalmia— sandip sabharwal (@sandipsabharwal) November 11, 2016
Historic move by @PMOIndia will expedite shift in household savings frm physical to financial assets. Super for long term equities prospects
— Madhusudan Kela (@MadhusudanKela) November 9, 2016
Did we just witness a huge historic moment!! Still rubbing my eyes in amazement ?#surgicalstrike #BlackMoney
— Ravi Dharamshi (@ravidharamshi77) November 8, 2016
Donald Trump says 'money will pour into India' under Modi
— Deepak Singh (@smarket) November 13, 2016
#Investor should feel delighted if #stock prices go down; allows her to buy more. If prices increase, she can relax & enjoy the gains!
— Vikrant Yadav (@yadav_vikrant) November 13, 2016
This is what Singapore Newspaper is talking about NAM0.
Hope they are proven right. pic.twitter.com/b7aftNC9Ba— Nilesh Shah (@NileshShah68) November 13, 2016
.@swapan55: Modi has taken a huge political risk by offending BJP’s trader base for a higher national purpose. https://t.co/5mLCWcSoYP
— Sadanand Dhume (@dhume) November 13, 2016
NAMO defuses tension by playing emotional card
Some knowledgeable observers noted that while the objective to demonetize the currency notes is a noble one, the implementation of the exchange has left a lot to be desired.
The long queues at the ATMs have given NAMO’s detractors much fodder to attack him.
Met traders n labour at Azadpur mandi. Cud adversely affect daily supply of fruits n veg to Del if liquidity prob not solved. M worried
— Arvind Kejriwal (@ArvindKejriwal) November 12, 2016
To neutralize this negative sentiment, NAMO cleverly played the emotional card and tugged at the heart strings of the public.
I was not born to sit on a chair of high office. Whatever I had, my family, my home…I left it for the nation: PM @narendramodi
— PMO India (@PMOIndia) November 13, 2016
I know the forces up against me, they may not let me live,they may ruin me because their loot of 70 years is in trouble, but am prepared: PM
— PMO India (@PMOIndia) November 13, 2016
#WATCH: PM Narendra Modi seeks blessings from the people to defeat the menace of corruption. pic.twitter.com/SXnpZ5mjqI
— ANI (@ANI_news) November 13, 2016
Proud to be living in a country with such a capable and motivated PM https://t.co/Ez0Ivxtang
— Naresh Katariya (@KhivrajNaresh) November 13, 2016
He also mocked Rahul Gandhi which is always a good way to get laughs and defuse the tension.
Modi takes a dig at Rahul Gandhi as he stood in line for 4000 Rs ?? pic.twitter.com/iGRMLqL0pl
— Dhaval Patel (@dhaval241086) November 13, 2016
PayTM moves swiftly to cash in on the cash crunch
At this stage, we have to compliment Vijay Shekhar, the founder of PayTM, for his brilliance in seizing the initiative to push the PayTM as an alternative to paying petty amounts in cash.
It is worth noting that Vijay Shekhar has recently been anointed a “Billionaire” for having amassed a net worth of Rs. 7300 crore.
No doubt, the brilliant tactical thinking ability coupled with the ability to seize the moment and take advantage of it has led to the spectacular riches.
Note ban: Downloads double for @Paytm ; transactions up by 250% https://t.co/NbxmkXIN97 pic.twitter.com/2QbEL5gJJi
— moneycontrol (@moneycontrolcom) November 9, 2016
Arvind Kejriwal, who had earlier claimed credit for being an ‘anti corruption crusader’, alleged that the currency note ban was premeditated to benefit PayTM and other private parties.
Paytm biggest beneficiary of PM's announcement. Next day PM appears in its ads. Whats the deal, Mr PM? https://t.co/lfP0PrQICQ
— Arvind Kejriwal (@ArvindKejriwal) November 10, 2016
However, Vijay Shekhar deftly neutralized the sting of Kejriwal’s blow by pointing out that the biggest beneficiary of a cashless regime would be the Country.
Dear Sir, The biggest beneficiary is our country. We are just a tech startup, trying to solve financial inclusion & make India proud. #?? https://t.co/3rI8r6W0EZ
— Vijay Shekhar (@vijayshekhar) November 10, 2016
Kejriwal also got rapped on the knuckles by the twitterati for trying to derail the noble move to curb black money:
This guy is an Ex-IRS. You'd expect him to dissect the new tax-policy and highlight any loopholes. But he resorts to dumb shit like this pic.twitter.com/fDhr7Nr6Lw
— Gabbbar (@GabbbarSingh) November 10, 2016
Is this guy for real? Does he always talk like this? Suna tha, aaj tajurba ho gaya https://t.co/E9lVdBBWlZ
— Rishi Kapoor (@chintskap) November 13, 2016
In ancient times, Rakshas used to throw skulls in Agni to disturb Rishi Munis from doing good work. Those Paapis have reincarnated as AAPis: pic.twitter.com/hmt8LFthzN
— गीतिका (@ggiittiikkaa) November 12, 2016
Surgical Strike On Saint Kejriwal By People Of Delhi… Must Watch.
RT & Spread The Proof. 😉#BlackMoney pic.twitter.com/qCY1XpsLGh
— Sir Ravindra Jadeja (@SirJadeja) November 13, 2016
Anna Hazare Supports #DeMonetisation, But His Fake Follower Kejriwal Doesn't.
RT If You Know What This Means. 😉#BlackMoney pic.twitter.com/o6hJuQvMRw
— Sir Ravindra Jadeja (@SirJadeja) November 13, 2016
All Moodi haters who do not support his move this is the best time to oppose. Do not exchange your 500 & 1000 notes, show ur real hatred.
— Zaid Hamid (@SirZaidHamid) November 11, 2016
@ Mamta Banerji you screeching loud mouth — more ppl had heart attacks bcos of Sharda Scam.Very poor ppl had invested there. Shut ur mouth
— pad balaram (@padbalaram) November 12, 2016
Change of mood by NAMO’s detractors?
Prima facie, it appears that NAMO’s detractors may have realized that they have gone too far in their criticism of the demonetization move and that this may appear as if they are supporting the black money hoarders and alienate the public.
They appear to be doing damage control:
We appeal to all Congress workers to help all those who are standing in long lines outside banks in whatever capacity possible pic.twitter.com/3Xlhg6aVsn
— INC India (@INCIndia) November 12, 2016
Your support is appreciated
First time you behaved like a responsible leader of opposition @INCIndia https://t.co/BAJE2lLP76— Rishi Bagree (@rishibagree) November 12, 2016
I appeal to AAP volunteers all over the country to help people standing in long queues at banks in filling forms, offering water etc
— Arvind Kejriwal (@ArvindKejriwal) November 11, 2016
Good point. Everyone shud follow this. https://t.co/vo0wWgio09
— Arvind Kejriwal (@ArvindKejriwal) November 12, 2016
Conclusion
The consensus of opinion of the expert investors is very soothing and should calm our nerves. It is sending the clear message that not only do we not have to worry about the demonetization but instead we have to take advantage of the temporary weakness in the stock market to aggressively load up on top-quality stocks. This way, we will also be able to pocket hefty gains when the dust settles down and the markets limp back to normalcy!
It is a Big Political Drama ,with lot of Over Acting as usual.This is all being done to improve saging stock of BJP in UP election,as old tricks like Surgical strikes and OROP falling flat .Inexperienced politician has eaten more than what he can chew, with out any preparedness.Seeds of a prolong recession has been laid,Economy has gone for a toss .I can understand ,many people had no choice but to support Govt action with obvious reasons.Indian Currency has been permanently damaged by Foolish Act and Gold may be preferred default Currency of Indian household for storage of value for a long time to come.Common people who initially welcome the move ,may also start irritating due to ill preparedness with contionus long lines in front of Banks and unorganised job market and trade being Worst hit.No doubt black money holders may be affected (definitely and righly they should)but to a very small extent,as most of black money is in Swiss banks or foreign country ,Gold,real estate and business.Common man and Indian Economy are the real casualty of this Political Drama with Black Money holders least affected.As Govt is doing nothing to stop black money generation,so it will be piled up again,sooner than later.So we don’t have any choice but to suffer in this unending Political Stunt / Drama .If BJP did not do well in UP election inspite of this big gamble,then weakened Govt may also become a problem for Economy.
Some how I agree your view. I know it is required to tackle with the black money with adequate planing. It is may be a good idea to remove 500 and 1000 rupees note but govt. need to smoth traction but now it seems it is not. I don’t have any black money but for every 100 rupees I m straggling. Let’s hope for the best as everyone saying good days are coming in next 6 month after the black money issue resolved. Economy will boom.
If your words come true in 6 months, Indians will have a thing or two to celebrate. But seriously, if you see the economy has not been doing well, inflation is hitting common man under the belt, job opportunities were the lowest in years, etc. People who have stashed crores in Swiss are free, Panama folks are free, Ambanis & other friends of our dear PM are taking advantage (just today I read in paper about a politician’s daughter’s wedding of 500Cr). All these news are not sending a good signal but then comes the currency ban just before UP & Punjab elections to curb black money. The new currency has no feature that will help stop black money, although what’s in hand of the corrupt may become waste.
Anyway, the sentiments are both supportive and opposing. The ones who support our PM is called a Bhakt and the ones who oppose is called Anti-national. Politics have divided this nation into groups and I sincerely believe that we move out of this selective opinion is when we will see good days.
Hi Jack,
can you please elaborate Ambanis and other friends of PM are enjoying ?
Probably you have not red the news of 1.55 Billion $ fine slapped by goverement on reliance ..
If you have any proof of enjoying friends plesae provide it, else you are free Join Kejariwal club with baseless talks .
Black money is not curbed by currency features . Its curbed by making money accountable (I am amazed to see some one who do not have basic knowledge is talking about black money) .
Thanks
Prashant, I shall let it pass because I hate to get personal. Have a great day with your great thoughts and knowledge.
You got personal too soon, that’s makes it very much clear you are self proclaimed genius. Demonetization might be a very good move but done at very wrong possible time, unemployment is overall running high, disrupting cash flow only gonna make it worse.
More and more people gonna lose jobs due to this decision thus worsening working conditions for already employed and further lead to compound rate increase in unemployment.
Businesses surely gonna show profits but those profits will come on cost of unemployment and employee exploitation.
Dear Kharbji,
its unfortunate that you still think black money is in swiss banks .
The real black money is right here around us in real estate and gold .
Anyone who has done any land or flat transaction anytime in his life will tell you the biggest black money is created around us only .
Lakhs of crore rupees flowing in jan dhan accounts suddenly shows how hard it has hit the black money hoarders . Its simple, peopels who are burning, throwing, depositing through others is all black money became usefull in a single night . No other politician has such guts to take head on . This move will create a long term impact and create fear among black money holders that this government is not in compromising position at all .
Even if I have inconvenience for few weeks am happy to see terrified black money holders . Lets us not encourage the parallel cash black money economy.
Thanks,
Dear Prashant,
Only the foolish will keep all his ill gotten wealth in cash and not all will be kept in India. Large chunks remain offshore and the best of legal brains worldwide are slaves to the ultra rich to help launder and spin webs to veil the illgotten wealth. They will loose some of their wealth due to this but will not be beaten down.
But yes, this does give a body blow to the cash hoarded in India and there are millions and millions Indians who are scrambling to see what can be salvaged. Their dishonest nature doesnt take a beating though. It never will and the spurt in Jan Dhan accounts just shows the lengths to which these dishonest people will go to legitimise their wealth.
For me people with black money are like termites and treating termites requires regular doses of pesticides. I am hoping and looking forwrd to more measures from Namo.
The one good outcome of this certainly will be an end of my spouses nagging about how our friends boast of 2 foreign holidays each year when I (being a top professional with an MNC) can afford one in two years (with difficulty) and high value jewelery gifts by husbands when from me its usually ……….
which “terrified” builder or black money hoarder ,bureaucrat, politician-have we seen on the road?
should we all clap?
Get real -only person on the road is the poor man, salaried man, farmer,
any stockbroker u have seen?May have done insider trading thousand times- correct?
just because u change 2 old notes for 1 new one -it will change the way people think?
What a silly joke!
Free country with abused democracy. anybody and everybody is not just entitled to a view but has liberty to express it any which way he/she desires – now if tht be clapping or dancing or displaying stupidity or any other, each to himself.
Life is tough buddy and being rich (even honestly) comes with privileges. Be a Imperia Client with HDFC or Yes First with Yes Bank or other privelege programmes of other banks and you wont have to stand on the streets to get banking done – even in these times when the not so fortunate fellow Indian struggle.
But does that mean that those with black money arent shitting bricks just because you dont see them on the streets, well you are welcome to any such opinion. Maybe the awareness of how the rich and mighty operate isnt widespread.
Mindset change – well one needs to check with the hoarders if there has been a change. amongst those I know, there certainly has been post this move.
It is strange to find a long term investor like Mr Kharb is getting unduly worried on short term volatility,
Lot of strange things happen around us and including in here dear Shaktiji
As always you are first off the block in your Modi bashin Kharbjiiiiii
Inexperienced politician —–> “”yours most be the lone voice in the whole country””
eaten more than what he can chew, with out any preparedness ——> “”shows his utter disregard to his political consequences he will face in his belief of doing good for the country””
Seeds of a prolong recession has been laid,Economy has gone for a toss —–> “”only a temporary situation. the economy will sustain this blow and chug along””
I can understand ,many people had no choice but to support Govt action with obvious reasons. ——> “”which are these people you referrring too? if you mean the many ordinary honest citizens then Modi has played out a master stroke. Non of the corrupt political parties like RJD, TMC are supporting and your ULTRA CORRUPT CONGRESS is being a cry baby and must I add for OBVIOUS REASONS??””
Indian Currency has been permanently damaged by Foolish Act and Gold may be preferred default Currency of Indian household for storage of value for a long time to come. ——> “”Is the currency damaged? Do you mean damaged because of all the high denomination notes you have had to burn?””
Common people who initially welcome the move ,may also start irritating due to ill preparedness with contionus long lines in front of Banks —–> “”all good deeds come at a cost. It would indeed be a dark day for this great country of ours if the common people start harbouring hate towards Namo for this but I dont put it beyond the gullible Indian masses to behave this way. And what this then means is that they would have to stop complaining for ever about the state of affairs of this country and continue to live their rotten lives as just another common honest Indian””
and unorganised job market and trade being Worst hit. ——> “”well its these traders who deserve this pain for its they who hoard and leech off us honest citizens””
No doubt black money holders may be affected (definitely and righly they should)but to a very small extent,as most of black money is in Swiss banks or foreign country ,Gold,real estate and business.Common man and Indian Economy are the real casualty of this Political Drama with Black Money holders least affected. ——> “”well the coming times and his future measures against this war against black money will tell the true story. to early to conclude basis just the first step””
As Govt is doing nothing to stop black money generation,so it will be piled up again,sooner than later. ——-> “”if the PM can take this first bold step of purging out the existing black money in cash form, he surely knows what steps need to be taken to stop the root causes of its generation. Picture abhi baki hai mere bhai””
So we don’t have any choice but to suffer in this unending Political Stunt / Drama. —–> “”speaking for myself (and probably millions of others like me) feel just a little pinch not having lower denomination cash. defininately not suffering””
Rational thinking elaborated.Impressed !
Good to see you commenting in here atleast. You simply disappeared from the stock talk section – probably for some obvious reasons.
Thanks for poating your personal views.people in society have far different opinions from yours one
It’s a free country with an abused democracy. All are not just entitled to “their” views but express them as well at will
can you please tell how much of 14Lakh Cr is with in Bank chest itself?
Demonetization exercise aims to curb black money (kaala dhan) in a big way. Our Hon. Prime Minister Mr.Narendra Modiji has taken right steps against black money and every Indian is suppose to back him for clean up process of Indian economy. Let us come together to abolish black money and clean up Indian economy. This will require great patience and awareness. For the first time, we have got such a dynamic Prime Minister for our country. Our job is to support him and make his and our dream come true. In the near future, we will enjoy the fruits of the above exercise. Victory is ours. Long live Mr.Modiji and Bharat. Jai Hind.
Reality will soon come to haunt you, Sanjayji
These so called experts are trying to fool retail investors. Many of them might have skeletons in their cupboard. I have seen one of them, PV, praising MMS for his 33% CAGR, 3 years back on Malayalam channels. Now he is competing with Goneswamy for the title CHAMCHA NO.1. What a turnaround story .
Of late his focus has shifted from PMSing to sycophancy. That is why I cancelled my business with him. Don’t fall in to the trap of these “experts”
well said biju
But I am in all praise for the courage and intentions shown by PM.Seemingly insurmountable problem to many, is being attempted to be solved.Let us give him a chance by cooperting.
Rs 500 and Rs 1000 Demonetized is a good step against “Surgical Strike on Black Money”. But for new launch of Rs 2000!!!!!!!!! is this step decrease the corruption & Black Money in the society?
ultimately the Corruption and the black money, never ever stop in the society! until the society became paperless currency!!!!!!
The sudden step of demonetization,affected to all kind of people of this society………..
What happened the black money in Swiss Bank of Big business man,politician,Actors,Actress, etc etc etc……………. Is he brought it?
A step in the right direction by Modi. This was needed. Let’s hope this move will be followed with a series of new measures to curb black money. Let’s support Modi in his earnest endeavors to weed out the menace of corruption and black money.
Modi has destroyed the economy just to win UP election. This will start a huge recession now and long bear phase in market. All who are celebrating now will repent when nifty will fall below 6000 and stay below that for few years
If you are investor you need the thanks modi. If nifty come 6000 I will buy more as a investor but I m clerifing i m not big fan of modi or any political party. I say what I feel right always. I don’t know how many people understand the black money. If you pay Rs 10 rupee to purchase any think and shop kipper not give you a valid receipt that is black money.shop keeper is not going to show the money to govt. like every where.it is deep rooted. I don’t know what the Govt. doing to stop such think.
Everyone knows in real state has blank money and flowing crazily what they are doing to stop. I m not questing any one these answer I think this govt. going to take step very soon if not then you need to understand it is same like other govt.
In a society like ours where it is 80% cash economy and majority of indians r not tech savvy or paperless transactions, wiping out black money is a mirage. Like a pheonix bird , it will bounce back again n again. Demonitisation had been tried earlier n failed to arrest black money. But this thunderbolt action has created lot of hardship for commeners who r living on day-to day earnings.
I am here to support Modi ji. He has done a tremendous job by this decision. What a step he has taken. Opposition or Kejri or anybody who are speaking against Modi’s decision, they all are crooks. BLA BLA BLA……
But as a citizen who is into full time job, and likewise crores of people, we do not have a any choice. We have to say “SUPPORT MODI” by hook or by crook. No choice. It is we people who are facing salary cuts for getting in a queue outside the bank. No Choice.