Sunday, August 30, 2020

What may spoil the market party ?

Fact - Market is in a party mood

Reasons
  1. Hopes for a V shaped Recovery 
  2. Heavy Retail participation (what to do when WFH)
  3. Song of India overtaking China playing too frequently and too hard

Disruptions
  1. More or less clear that Recovery will not be V shaped as some sectors such as Tourism, Travel, Hospitality may be silent for long and some sector will have deep tech disruptions
  2. Retail participants will get bored and move to other excitements and fun stuff. 
  3. Even a slight correction may have a catastrophic effect on retail participation

I march I wrote this article

and I still hold my strong belief that this is once in a century kind of event and will wipe out may be 25% of the NIFTY companies and may be around 50% will have deep pain at least for more than 3 quarters.


Regarding Indian Dominance song, there is an excellent article by Prof. Rama here 


Actually WSJ just wrote an article on the faltering consumer story of Indian Middle Class here
https://www.wsj.com/articles/covid-19-hits-indias-already-faltering-consumers-hardest-11597921200?mod=wsjtwittertest19 



Regarding Valuations, I think it makes sense to identify companies in public market from Private Equity point of view, in the current scenario as expressed in this article



there are some interesting companies such as ITC, which always amuse me and there is an excellent article on the same 


This article tear down the business and try to highlight the dichotomy of value based investing











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