Do it yourself

For the past two weeks my message inbox has been flooded with messages highlighting that recently “Hindenburg Omen Signal”, which preceded the 2008 and 2020 stock market crashes, has been triggered and a stock market collapse may be imminent. There are several other technical and strategy reports cautioning investors against an apparent bubble in the Artificial Intelligence (AI) related stocks. Hindenburg Omen Signal:  The Hindenburg omen is a technical indicator designed to signal the  increased likelihood  of a stock market crash. It compares the percentage of new 52-week highs and new 52-week lows in stock prices to a preset reference percentage (typically 2.2%) to predict the increasing likelihood of a market crash. The indicator is said to be suitable for about 30 days out, though it's been a false alarm more often than not in the past decade. Four criteria must be met to signal a Hindenburg omen: ·           The daily num...

  Wishing all readers a joyous New Year,  and a brilliant 2021 ahead.  Stay Healthy, Stay Blessed.   Top performers of 2020 In this last post of 2020, I would like to pay my tributes to those, who in my view are top performers of the year. Many readers may find it deeply personal view, totally unrelated to the investment strategy. However, I keep these at the core of my investment strategy. Without these performers, making any case for investing in Indian equities would be tough for me. Migrant Laborers One section of the population that has been hit the hardest by the pandemic is migrant laborers. These people mostly sustain on daily wages and have negligible savings. On announcement of lockdown, these people lost their livelihood, shelter and savings in no time. The uncertainty over resumption of normal life forced them to leave “unaffordable” cities and return to their villages. They got almost no support from the baffled and paranoid administration or industry. N...

The year 2020 has been a period of extremes for markets. During past 12months, the equity markets have kept swinging between extreme fear and greed. The year began on a buoyant note. The benchmark indices scaled their all-time high levels on 24 January, after rallying for past 4 months. In the following 2 months the indices corrected ~40% from their January highs, refreshing the fading memories of 2008 crash. A sustained rally thereafter saw the benchmark indices scaling new highs in next 9 months. This rally was remarkably different from September 2019-January 2020 rally in terms of volumes, market breadth, and participation. Foreign investors and domestic household investor have been notable buyers in 2020 rally, while the domestic institutions have been net sellers. In my view the top 10 highlights of the performance of Indian equities in 2020 were as follows: 1.    Though benchmark indices indicate that mid and small cap indices have done materially better than th...

 The two thousand twentieth year of Christ is coming to an end. This year has been totally forgettable and remarkably transforming at the same time. It reminds me of the title of the autobiography of legendry poet Dr. Harivansh Rai Bachachan – “ क्या भूलूँ , क्या याद करूँ ”. Notwithstanding the all-time high levels of stock market indices in most countries; the global financial system inundated with trillions of dollars in free liquidity; over US$20trn worth of bonds yielding negative return globally; the massive economic and social shock of Covid-19 pandemic has left billions of people in distress. The inequalities of income, wealth and opportunities have risen to new highs. Significant developments have been reported on the front of vaccine development to check the spread of Covid-19 virus. Many countries have already authorized emergency use of some vaccines; and people are being administered such authorized vaccines. Nonetheless, recently a fresh wave of mutated version ...

Thirty years ago, the period between May 1990 and December 1990, was a watershed in global social, political and economic order. In the 7 months, the world changed the most in the post WWII era. For India, in particular that was a defining period in post independence history. In global context, some of the key events that took place in those seven months included the following: (a)    Apartheid ended in South Africa, marking the end of one of the darkest chapter in world history. (b)    The process of USSR dissolution begins. The Supreme Soviet of the Soviet Union grants Gorbachev special powers to secure the Soviet Union's transition to a market economy. (c)     Soviet Union collapse marked the end of a bipolar world that had divided the world in two camps in post WWII era. In the subsequent two decades, USA would reign over the world as the only super power. (d)    End of cold war between USA and USSR with...