Well frankly, I do not have an answer…

– Domestic growth has slowed in recent months to pretty low levels, and a senior banker saying be happy with 6% growth next year

– A fallen and further falling Rupee?

-Inflation stuck at double digits – latest is 10%!

– RBI’s constant raising of interest rates have NO impact on inflation.

Foreign investors have bought just a net $800 million of Indian shares vs.  $29 billion last year!

Korean won has slipped about 1% this year

Malaysian ringgit is down around 2.4%.

The rupee has fallen 14%, ONLY  Turkish lira, down 17%, and the Kenyan shilling, – 15% are behind us.

In October, India’s trade deficit rose to $19.6 billion!

Exports are falling, oil, gold, and coal imports are hurting bad…

Slow FDI and slow FII – The benchmark Sensex is down 20% this year.

Indian government has  raised the limit for foreign institutional investment in sovereign and corporate bonds by $5 billion each. Impact on the currency? Marginal and short term!

The great Mani Shankar Iyer says we should not let the currency float…and should be in the pre 1991 era.

For any good thing to happen, we should get rid of the Congress, or ensure that the Congress gets rid of the ‘left’ inside the Congress.

My vote is for a grinding to lower levels of the sensex – no dramatic fall…but a slow process of 16500-15000 but via 17000 – so SIP will work, do not try timing…

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  1. subra: I know you dont like stock specific calls..

    Still a request: hows Areva to enter at this moment.. for 5 years + period of investment?

  2. Thank you Subra for guidance..

    Noted and acted..

    I checked on its return WRT Sensex..

    Areva along with Coromandel etc is amazingly ahead of sensex…

  3. I actually started building My Mutual Fund portfolio since last 4 years when sensex was at 14K.
    Have invested at all time high of 21K and also at all time low of 8K.

    Since last one and half years I stared doing substantial monthly SIP.

    The Net result as of today is that I am sitting at no profit no loss situation. This though means I am getting negative inflation adjusted returns

    On the hindsight I actually want market to come down further so that
    I can put more money and build a big portfolio so that any upside from here would be result in good gains.

  4. Adjusted for inflation Sensex is at 10000 level of 2008. If you happen to look outside Sensex/Nifty there are lots of stocks below 2008 crash level.

  5. >>> do not try timing…

    TRUE, but having a good sense of when is the right time to get in and out is absolutely necessary especially if you want to BUILD WEALTH.

    e.g. Market has started its drift downwards from mid-2010 onwards. Imagine if you had a way to know this and move to cash or bond funds then you might be better off today with your initial gains intact, Isn’t it!!!

    Unfortunately, everyone tells you where to invest but NO ONE tells you when to get in and out of the markets. Its not like there are no ways to know when the market turn happens or likely, ofcourse there are ways to know this. Either many folks just don’t know or do not have enough good skills to know how to find this.

    Well, take a look at below site. Its purely for educational purpose but provides you with some basic ideas of how to understand markets and ALIGN yourself with the markets. It uses free public data and does not rely on any paid service or news events. The intent is to educate folks to make better financial decisions and not rely on news channels or noise.

    http://www.mysensex.weebly.com

    REMEMBER, capital preservation should always be your top priority along with reasonable risk… 🙂

  6. “we should get rid of the Congress…”

    if this happens that’s more *effective* and long term solution we can have…

  7. “RBI’s constant raising of interest rates have NO impact on inflation.”

    – not sure. Without these hikes, inflation could’ve been much higher. RBI was probably behind the curve and started late.

    And the govt. still is. Even when the auto sales were booming, it did not want to revert to the pre-crisis excise duty levels. When crude is eating into our forex reserves and with no space to drive or park the car, the govt. wanted ever increase car sales! And there is so much debate about increasing duties on diesel cars when Mercs and BMWs are guzzling subsidized diesel.

  8. Sreekant – RBI’s behaviour is like a doctor who says ‘I have this red color syrup and I will keep giving it to you’ – it hardly matters if you have malaria, jaundice, cholera….

    this cannot work. We have a huge, huge demand pull on agri. We need quick infra development like refrig vans, agri processing plants, etc. all that is missing.

    The govt. of course has people like Mani Shankar Iyer who by playing around with petrol prices are keeping the market cap of IOC, ONGC, etc. much lower than Suzuki motors – sounds stupid.

    Monetary and Fisc policy have to go hand in hand. No point in RBI doing its work and the govt not controlling its expenses. With sucha high deficit, zero fii inflow – we are in for hard times….

    However I have enough risk appetite to pick stocks now…

  9. Absolutely true sir. Nearly 40% of our food production seems to be wasted – either rots or eaten by the pests. And basically there is a huge mismatch between supply and demand (not just in food). Improving supply is squarely in the govts hands but it is not doing anything. No policy, no initiatives – just posturing. Montek is angry that inflation is not obeying his commands.

    When one side of the equation (supply) is rigid, the other side of the equation (demand) has to adjust accordingly and that is what RBI seems to trying to achieve.

    And I am putting my money in too, slowly but surely.

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