Do it yourself

Last weekend I had an opportunity to address a gathering of stock market intermediaries. The interface provided some useful insights which I find pertinent to share with the readers. All the participants deal with small and medium sized household investors and traders, commonly referred to as the Retail Investors. The common refrain was that the recent stock market rally has not benefitted the retail investors. Most of these investors are stuck with the struggling mid and small cap momentum stocks which are down anywhere between 25%-75% from their cost of acquisition and no hope of recovery. To make the matter worst, many of their active clients are still looking to buy the fallen angels, the stocks where the equity value is negligible or even negative in some cases. Most popular stocks with this segment are stock of JPA group, ADAG Group, Jet Air, DHFL etc. Tata Motors, SAIL, Nalco, Coal India and Yes Bank are some of the stocks which have perhaps disappointed t...

Since I reviewed my investment strategy three months ago ( see here ), few things have changed in the economy and market place; the most noteworthy being the following: (i)     The economic slowdown has become more pronounced. Both consumption and investment demand have slowed to multiyear low levels. The government has admitted that this slowdown is unique in nature, since it is for the first time in India that a economic slowdown has been triggered by poor demand growth rather than the usual supply side constraints. Many corporates, especially consumer facing businesses like FMCG and Automobile have echoed similar views. However, the recognition of the unique character of the slowdown within the government has been quite delayed. This has resulted in some misdirected policy actions. (ii)    The government has started the process of restructuring of tax laws, beginning with the announcement of new structure of the corporate tax rates. This has ...

The first half of the current fiscal (1HFY20) is almost over. On the domestic front, the past six months have been quite eventful for the country in general, and the economy & financial markets in particular. Politically , the six month period witnessed the PM Modi led NDA returning to power with unexpectedly strong majority. Continuing with the tradition of unpredictable policy responses, the government has rewritten the rules for engagement with Pakistan and China by abrogating the controversial Article 370 of the constitution. Besides, a definitive move has been made towards implementing a uniform civil code by outlawing the practice of triple talaq (The right of men to divorce their wives instantly through oral or text communication) prevalent amongst Indian Muslims. A long standing dispute over the construction of Sri Ram Temple in Ayodhya has been fast tracked and a final Supreme Court Verdict on the dispute is expected in next 2 months. These developments ha...