About 20 days back 2 senior politicians told me the trust vote would go through comfortably. One was from Congress and the other from BJP. One senior journalist also told me that the trust vote would go through.
However, none of them were correct about the margin of votes. That is the problem about predictions – on TV you need to predict that “the markets will go down” – to make money you need to be far, far smarter than that. Simple, you need to get the direction, speed, intensity ALL correct every time. This is not just difficult, it is impossible.
If there are 542 Members of Parliament, and they do represent the country, it is fair that some of them (most) of them will be honest, some dishonest, some will have criminal intentions, and some of them will be actual criminals. If 5 of them are criminals – it is only being representative, is it not? The media however plays some much on our minds about the negative elements that it would like us to believe that all Parliamentarians are criminals. It is not so, not by a mile. The media should show some restraint and not chase TRP so desperately. It sucks.
Impact on the market because of the trust vote can at best be marginal – buy on rumors and sell on news – so today (23 July) the market may actually give up some of the gains that it built yesterday and earlier! That is the market. Also the market would surely have known that the congress would be returned safe.
The nuclear deal is of course a superb market story…if India sign the nuclear treaty TODAY, it will mean Indian companies can start talking about nuclear power. Then the government of India will have to come up with the guidelines – eligibility, criteria, locations, financial safeguards, physical safeguards etc. Given out track record this will take about 2 years. Once that is out, and say Tata Power, NTPC, National Nuclear Power Corporation are the 3 companies which are “eligible” for nuclear power. They will then scout for partners – the whole process will take 1 year to become a JV.
Then they will choose a location – remember Tatas could not put a car plant so easily, so a nuclear plant (thank you Green Peace) will not be the easiest thing in life! So add 5 years to set up the plant. Then that plant has to go critical – generate power. This will be then sold and the cost (incurred in crores) will be now recovered from end users – frankly I think the impact on the EPS will be felt after about 12 years, but we will buy now. What will we buy ? We will buy Areva, Tata Power, Esab, L&T, NTPC – because the nuclear deal is done….hoping that the next quarter will see an upsurge in earnings. God bless us.
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