FIIs had not FORGIVEN MR.OBAMA, Will they FORGIVE MR.NARENDRA MODI for NOTE BAN?
December 3, 16
FIIs had not FORGIVEN MR.OBAMA, Will
they FORGIVE MR.NARENDRA MODI for NOTE BAN?
Greetings from Hitesh!
People have appreciated the other side of the story which we shared with you in
our post titled - Reliance JIO V/s. PAYTM V/s. CREDIT or
DEBIT CARD V/s. Other Online
/ Offline Payment Methods. If
you have not read – I suggest you must read in the weekend. Basically, I am
seeing the things from all the perspective. Today I am taking FIIs perspective.
Who are FIIs and what
are their STRENGTHS?
The
world we live in is dominated by 5-10 financial super powers (FIIs for Indian
Guys). They are running the show of the world. You must have observed that when
one market falls – all other markets also falls and vice versa. Many times
clients ask me what we have to do with JAPAN or CHINA or USA market fall? The
secret is the players in each of the market are the same. It hurts your ego –
when you read this. You may not want to believe me. I can’t help you. This is
the FACT. NAKED FACT.
All
countries have Presidents / Prime Ministers or Kings as Financial Super Powers don’t
want to come into the picture. They are silent operators. This lobby is the
most powerful lobby and they dictate the terms in the countries they invest.
You are not supposed to go against them.
This
lobby is more powerful than USA president also. Just to share you an example of
MR.OBAMA. When he became the PRESIDENT he gave following statement on 4th
February, 2009 - President Obama announces that companies receiving large
amounts of federal bailout money through the Troubled Assets Relief
Program (TARP) must cap top executive pay at US$500,000.
What do you think FIIs did?
This was not acceptable to them.
Who is US PRESIDENT to decide about their salaries? They reacted negatively.
The brought down DOW
index from 8270 on 9th February 2009 to 6547 on 9th March
2009!! A fall of 1723 points or 21% fall
in just 20 days!!
Mr.Obama had to make a PEACE with
them before the NEXT teji started in USA.
How do they OPERATE?
The way we invest in a Company or
the way RAKESH takes a controlling stake in a company – these guys take control
of the COUNTRY they invest. All the policy measures should be favorable to them
before they agree to invest in a country. They don’t mind – if your PRIME
MINSTER takes the CREDIT for opening up of the economy or for developing the
country. They are not at all interested in NAME and FAME. They are purely
interested in MONEY.
Look at CHINA. It progressed
because it agreed to their terms in the first 15 years and now CHINA is in a
position to dictate terms with them, but not too much.
How NOTE BAN affects FIIs?
Now, you may ask they have all
transactions through BANKING CHANNEL and how they are affected due to this.
They do not deal with cash at all. How come they are affected? Let me deal with
this.
The measure to BAN the NOTE is a
SURPRISE measure to all of us and for them also. As we said on our December 1,
16 post - Is India HEADED for MORE
TAXES and HYPER INFLATION? – They feared the economy is killed and the
businesses will suffer demand side set back. When businesses suffered, their
profitability is affected and ultimately the SHARE PRICES will come down. With
the prices coming down – they will have huge losses in their books. All because
of NOTE BAN.
Now, they have invested BILLIONS
and with the sudden announcement they are STUCK in the MARKET. They can’t sell
big quantity of shares and get out of India, as there is no DEPTH in the Indian
market. They feel cheated.
What are they doing and How they can
take India for a ride Now?
As per MONEYCONTROL.COM data they
have sold shares worth Rs.19982 Crs in the month of NOVEMBER 2016, highest
selling in a month in the last 3 years.
They invested this money in CRUDE
and the CRUDE prices moved up from USD 45.50 to USD 51 in just 3 days. Now, if
they take the price to USD 80 per barrel, what do you think will happen to
INDIA’s Balance of Payment?
USD was Rs.66.74 in NSE currency
derivative on 10th November and it made a high of Rs.69 on 24th
November. Now, if they jack up the DOLLAR to Rs.75 – Rs.80, what will happen to
Indian economy?
With CRUDE and USD moving up – Indian
Economy will go for a TOSS from outside forces also. As such we are suffering
from note ban.
Indian Government will be forced
to increase the TAXES. INFLATION will shoot up like anything. We have already
told you the coming scenario. I received many comments on my last post of
December 1, 16 - Is India HEADED for MORE TAXES and HYPER INFLATION? Many readers were upset emotionally, by reading our predications.
They are not ready to accept that Mr.Modi can also make mistakes!! For them he
is a GOD.
Jesse Livermore, the greatest trader, had said “The game
of speculation is the most uniformly fascinating game in the world. But it is
not a game for the stupid, the mentally lazy, the person of inferior emotional balance, or the get-rich-quick adventurer. They will die
poor.”
So, if you think emotionally
– you should stay out of the MARKETS.
Now, you may ask – Why
then we are saying MARKET will make NEW HIGH in coming 4 months?
Logical question. I have three
solid reasons.
1. FIIs STRATEGY:-
FIIs are STUCK. They can’t sell in
one go. If they sell market will hit lower circuit and it will make their job
difficult for further selling. They will play 2 steps up and 1 steps down
strategy. Slowly and gradually, they will take the market up and they will sell
in one go. They will have to repeat these steps. In the process – Market will
have to make NEW HIGH. (When Market makes NEW high – Mr.Modi can take CREDIT
that due to NOTE BAN – FIIs have taken the market up!!)
What they have done till now? - Just
see from 22nd November NIFTY FUTURE moved up from 7923 to 8273 on 1st
December and on 2nd December they sold it and NIFTY future made low
of 8092, a fall of close to 180 points in just one day.
2. Mutual Funds and Domestic Institutions:-
Another reason is our mutual funds
are flush with CASH and they will buy all the sold stocks at throwaway prices.
In NOVEMEBR – they bought stocks worth of Rs.18277 Crs. So, their buying will
offset the selling of FIIs.
Recently LIC closed JEEVAN AKSHAY scheme,
which was giving 7.5% interest per annum. Early estimates show that LIC
collected approx Rs.1500 Crs on the day of closing i.e. 30th
November.,2016. During the last month it would have collected close to Rs.5000
crs in single scheme only. LIC has to return this money only on the case of
DEATH of the policyholder. So, LIC will be the buyer at lower levels in market
as always.
3. NEW INVESTORS:-
Most guys have deposited their
CASH in the BANK. Now, they will have no BUSINESS due to economic conditions
and note ban for coming 6 months. With the money in the BANK and their lively
hood at the stake – they will come to play in the share market. They will
create new demand of shares. So, share prices will move up.
What NEXT?
For a real investor – he will get
a good long-term bargain deals in the market. And for an intelligent trader –
he will make tons of money every day.
If you really want to make good
money – you need proper education. On 1st December we gave
perspective from – NORMAL Guys point of View. On 2nd December we
gave perspective from Mr.Modi’s Point of View. Today we are giving FIIs
perspective.
If you like our holistic thinking
from all the angles – you can learn from us. Do contact us.
Wish you HAPPY Investing.
Follow me on Twitter @hiteshmparikh / WhatsApp - +91-9869425399
/ www.hiteshmparikh.com
Live With
Passion…Invest With Passion.
Hitesh Parikh.
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