Do it yourself

For past couple of weeks I have shared many random thoughts and feedback from my sources, and views of some experts regarding the current state of affairs in India. As promised, I shall now present my thoughts on investment strategy for post lock down period. Key message 1.     The current crisis is unprecedented in the sense that it has seriously impacted the liquidity, solvency and viability of a large number of businesses, all at the same time. The number of businesses going out of business before this crisis ends would therefore be much larger than the crises faced by global economy in past 75 years since the end of WWII. 2.     The only way out of this crisis is to inflate a colossal bubble in asset prices, which is equally unprecedented. I believe that the foundation of next big global bull market will be laid in next 12 months. Like every time before, the next bull market will be much bigger than the previous one. We shal...

For past one month, I have been struggling to suitably modify my investment strategy to factor in three things: 1.     Narrow physical global borders and wider and more liberal and freer international information highways. 2.     Zero cash flows for businesses for a protracted period. This factor used to be an integral part of equity valuation during the days of strong trade unions in 1960s to 1980s. 3.     Potential new leadership that will drive the markets in 2020s. During my quest, I remembered an event from my childhood, when we used to live in Agra town of UP. It was summer of 1979, when suddenly one day one of my uncles came to our house and announced that he will take everyone in the family to show the latest Bollywood blockbuster Gol Maal . Those were the days when children were least interested in indoor things like Cinema and TV. To lure the children, the uncle promised a grand treat post movie show. ...

Continuing from last week (see here and here ), I would like to share some of my random thoughts on what this outbreak of COVID-19 could potentially mean for India, particularly in the short to medium term. The present state of affairs India is in the state of total lock down since past 3 weeks. In this period about 40-45% of the overall economic activities which are exempted from the lock down stipulations are only working. Presently it is estimated that it may take 3-6 months before the economy could return to the pre March level of activity. It is important to note that the Indian economy had been consistently slowing down for past 3 years, especially due to the impact of demonetization (November 2016) and GST (July 2017). Unusual weather pattern have resulted in wide divergence in the regional economic performances. The rural stress in the regions that suffered from poor weather (flood, drought, etc) has been elevated; even though the overall farm sector g...