What will happen to 21000-22000 Nifty Target for 2022 given by Leading Brokerages?

 7^th March 2022

What will happen to 21000-22000 Nifty Target for 2022 given by Leading Brokerages?

Dear Fellow Investors,

Namaste! Nifty made 15800 today. Nifty has fallen by approx. 14% from the top. Today you ask anybody about the market and he will not talk about the 21000-22000 Nifty levels. He may talk about 15000/14000/12000 something. Some superheroes would talk about the 3^rd world war and the dire situations which may come in the coming time. Let us see how a normal person thinks?

How the mind of a NORMAL person works?

They think in a LINEAR pattern. The linear pattern is the easiest pattern to follow. They understand 2+2 = 4 so they follow that formula in all situations. In the last 30 years – I have got privileged to work with some of the most successful people in their own areas. But when they come to the stock market – they fail miserably. The reason is simple they think in a linear pattern.

1.   Look at the top executive or daily bread earner – both know that they are getting their salary or wages as soon as the month is over or the day is over.

2.   Look at the BANK FD investors. They know that they are getting their interest periodically.

3.   Thanks to corona – many people who have gone to the hospital have not come back in the last 2 years. So, today when somebody listens to the name of CORONA – they start praying to GOD for their return.

4.   Many people regularly die due to CANCER / KIDNEY and HEART ATTACK – so when they know that they have problems in those areas -they mentally decided that they will not survive.

5.   Somebody has cheated them in the past – so they may think that the total community is a cheater. When next time they need their services – they will be highly skeptical about those service providers.  

6.   When the market is moving up – they talk about 21000-22000 and when it starts going down – they start talking about lower targets.

All the above are examples of the LINEAR thought process. In management parlance – they call it VERTICAL thinking.

Vertical thinking is a natural way of thinking given by NATURE to help us survive. This kind of thinking is good only for SURVIVAL and not for GROWTH.

The majority of the people have failed to understand the difference between Survival and Growth. This is reflected in the Wealth Distribution Worldwide. 90% of the population has 10% of the Wealth and 10% of the population has 90% of the Wealth.

What happens when these kinds of people come to the Market?

They want everything Predictable / Sure-shot / Logical and Regular. They spend a lot of time listening to media and reading on GOOGLE and WhatsApp kind of stuff. They feel that they KNOW ALL. In reality, what they feel they know is nothing but a mixture of various Expert conclusions. They spend so much time in Media that they have no time to READ qualitative inputs and REFLECT on the same. They are nothing but OPINION MACHINE.

With the BORROWED KNOWLEDGE they are bound to fail in the market and live a mediocre life. They become the PREY for the SMART people who take them for a ride with Guaranteed Return Schemes or sub-standard return schemes.

What is the sub-standard return?

I was checking the database of STAR TRACK Mutual fund ratings. Most LARGE CAP FUNDS generated 11% -12% return in the LAST 5 years. LARGE and MIDCAP funds generated returns in the range of 11%-13%. The same is the RANGE of FLEXICAP and MULTICAPS.

Nifty was 8000 in January 2017. It moved to 18477 in October 2021. It generated approx. 18% return year over the last 5 years.

Now this LINEAR mindset people will feel happy with their 10-13% return. I am not calculating the FEES they paid to get this return.

Those who are following the above MODEL – will surely SURVIVE but they will not grow Exponentially for sure. It is also okay if you are not a very ambitious kind of person.

Do you really want to GROW Exponentially?

You need to think beyond the obvious. Let us deal with some of the examples from the above.

Say a top executive is paid Rs.1 Cr per annum salary along with other perks. Say he is working for Reliance. If he is a LINEAR  guy, he will feel happy with the SALARY and spend his life working with reliance.

Now, if he sees what MUKESH BHAI is doing he would realize that – Mukesh Bhai invested heavily, took loans, and waited for 7 years before he can earn even a single rupee from JIO. Now Mukesh Bhai is planning for 2030 – GREEN POWER. He will have to invest billions and will take loans and pay interest also for the next 7-8 years. He is okay if he is not earning for the next  7-10 years as long as he knows that he will earn 100 times or 1000 times of his investments in the project life cycle.

The point is – Mukesh Bhai is thinking beyond what is obvious and he is making tons of money due to that. He is paying the PALTRY salary of Rs.1 Cr to our top executive and making Rs.100 Crs from his skill sets.

Your attitude towards the above example will decide your destiny.

What about MARKET?

Whichever way you think – the market will surprise you for sure. So, Buffett doesn’t focus on the market. He focuses on the Businesses and he knows that he can predict the business with reasonable accuracy throughout life.

I am a follower of BUFFETT in words and deeds. With the grace of God, my selected businesses are doing well in this market. I am not much worried about the market.

All I know from my experiences is that Market will do something that will prove all NEGATIVE GUYS wrong.

What NEXT?

If you want to grow holistically in your life and in your investing – you need a holistic thought process. If you wish, you can take our help in the same.

Have a great investing.

Follow me on Twitter @hiteshmparikh / WhatsApp - +91-9869425399.

Learn a Lesson. Live with Passion & Invest with Reason.

Hitesh Parikh.