Economists predict the Indian Economy taking a “V” shape in the coming year. What about the Market?

 

24^th March 2021

Economists predict the Indian Economy taking a “V” shape in the coming year. What about the Market?

Dear Fellow Travellers,

Namaste! Check all prediction on the economy and you will see there is a positive undertone in the market about the economy taking a V shape in the coming year. While I am not an economist – but thanks to my system – I had given a bold call for “V” shape recovery way back in December 2019

Are we heading for a MAJOR TEJI in the Market? If ... https://bestofhiteshparikh.blogspot.com/2019/12/are-we-heading-for-major-teji-in-market.html?spref=tw…

7:04 AM · Dec 17, 2019

You must read this master prediction about the market. We have gone 100% right as usual. This was said categorically in that post.

The main benefit of this movement will be – everything will hit the ground. All excess will be gone and new business cycles will start. New investments will also start. This will lead to NEW TEJI.(Read this along with number 4 results given in our last post). Every time chart has formed a V shape during this period. It means it had gone down and reversed. You can confirm yourself by studying the chart.

We had also said that many of you will feel – “I should have listened to you”. Those who did not follow our FREE advice – missed the bus.

Did you see everything hit the GROUND and moved up? BSE Sensex has crossed 50000 and Nifty 15000 since our call. In fact, the Market has already made a “V” shape recovery as per our call. Sensex was about 25000 and Nifty was about 7500 in March last year. So, from December high to low of march 2020 and recovery to new levels now in march 2021.

This is the accuracy of our system.

What about the Economy taking a “V” shape and Further market movement?

Many economists and IMF are predicting Economy recovery and I agree with their understanding as my system has already predicted the same way back in 2019. This thinking is adding more fuel to the market. Many analysts are talking about further hikes in the market from current levels due to improvement in the economy.

What is my personal understanding?

Market always runs ahead of the economy in practice. That’s why we have a saying in the market – buy on rumours and sell on confirmations. I am skeptical about the market moving up further – if the economy takes a “V” shape recovery from here.

In practice we have observed that the market takes a downward trend if the economy moves up as per the expectations. It moves down if the performance is below expectations. It moves up further only and only if the economic recovery is substantially above the expectations.

So, the market will move up further only and only if the economic recovery is substantially higher than the expectations. Keep this in mind.

What are the apparent risks to the economic recovery?

1.   New COVID spread and selective lockdown in some areas will affect the economic activities.

2.   Rain season will start in June and the Indian economy is still a major dependent on Rain. Climatic changes will affect the economy.

3.   State election in various parts and political changes will affect the recovery in many parts of India. Normally, with the change in government, some section gets new benefits and some get affected locally.

4.   Relationship with Neighbouring countries – China and Pakistan will also affect our economy. If war-like situations happen – our resources will be diverted towards them.

5.   We are witnessing a lot of natural calamities. Some major calamities can add to the fiscal deficit in a major way. As such we have a huge deficit in the last budget.

6.   An increase in  US Bond yield can affect the FIIs flow in the Indian market.  

What about Liquidity driven market Move?

There is a perception in the market that if at all fundamentals are not proper – the market can move up and up thanks to liquidity. This is a 1000% wrong belief.

Do you think that persons who are managing 1000 crores are fools? Just because they have money – they will go on buying some or the other assets? They are super smart investors. They can’t be fooled easily by the market.

They buy with a lot of calculation for the coming time and if they feel that economy is going to improve going forward – they invest when the market is down. They did the same thing between March to May 2020. They bought it because they knew that economy will catch up in the future. The same thing has happened with respect to the economy. It moved up and they made great money.

This is the reason Warren Buffett said – buy when others sell and sell when others buy.

What NEXT?

There is no free lunch in the market and life. If something looks too obvious to happen – it generally never happens.

Have a Happy Investing.

Follow me on Twitter @hiteshmparikh and join me on WhatsApp on +91 986 942 5399.

 

Live With Passion…. Invest With Passion.

 

 

Hitesh Parikh