PM Modi on demonetization & My take on Markets
How Nifty has reacted to the announcement since 8th Nov, its been down 6.3% in a matter of few days. There are many stocks which are down more then 25% this month.
Is this a opportunity to buy into stocks ?
Answer always is "Yes", as there is always a risk on upside and don't forget the best pickup line of all times "Short-term Pain, Long-term Gain" but the important thing this time is; there was a event which can have a impact on spending nature of the consumer and no one knows how consumer will react. Anyways India is a young country and all, we have both the arguments in place.
Best way to judge is buy stocks which have a valuations comfort and earnings visibility and nothing more. Time frame of investment will matter more. Moreover the old fancy names which were rising may not do well, because they didn't had valuation comfort and were running on momentum in markets i.e Chemical names, all mid-small finance cos (which BTW had also done QIPs lately and are over-owned in markets), since auto segment may witness a slowdown, the auto ancillary segment may also see a valuation discount.
In all, market is in search of leadership and its not coming from any segment as of now. Things needs to be seen and a investment decision should be made after that analysis.
But when you see things in global context, all emerging markets have seen a sell off post US election results, what happened with us is we had a concentrated fall in stocks which were impacted by the curb on black money. PM made the stock selection for people to sell stocks :)
Happy Investing, time to trade is yet to come for me; since all the short term moving averages are far away from the prices, i would give markets sometime to breath here.
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