Where exactly are we headed?

– A government which has no clue what is happening. The Finance Minister talks about a 8% growth. The reality is more like a 6.5% growth (well the government says 7.1 with a downward bias)

-The Rupee headed towards 55 if not worse.

-The RBI wondering what to do. It is clearly not responsible for the European Crisis or the coming Chinese hard landing!

-Portfolio investors (especially US $ investors) have been taken to the cleaners, they want the RBI to intervene!

-The government of course has no clue about what is happening. If Subramanyam Swamy has his way, the Home Minister will be inside Tihar too!

-Suddenly growth has vanished, portfolio investors have vanished…and the deficit is heading towards the US $ 15 billion (fiscal first quarter). Overall it will be about US $ 55 billion.

-The government assumed US $ 30 billion of portfolio investment…we are at a figure of -60 million perhaps.

– If the government cannot (or will not) control the deficit, cannot do any of the reforms…it might as well call for polls!

– Indians are happily exploring the possibilities of investing abroad – remember we all can invest upto US $ 200,000. If 100,000 people do it, the Rupee-Dollar rate will get worse..

-RBI has no clue about what to do next. To me it is looking like Alice in Wonderland or like a general physician who keeps doling out a red medicine,and refuses to recommend you to a specialist.

-Into all this gloom you have to keep buying shares – assuming you or your company have not been downsized 🙂

Remember what Peter Lynch says?

If you spent 10 minutes in a year wondering what the economy will do (instead of what your portfolio will do) you have already wasted 7 minutes…

so relax…

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  1. Hi Subra Sir, well said. I always wonder why the most influential people dont speak about Corruption, Bad Governance in open Public. By influential people, I mean Film stars (Amitabh, Shahrukh, etc.), Sports person (Sachin, Dhoni). Are these people only there to speak when they get money and they do not have any social reponsibilities? Nowadays big businessmen speak against corruption and bad economy.

  2. All these days, media in every form is flashing news that food inflation had hit 2 yrs low. I really wonder whether it is true & possible that in 2 wks time, whole scenario gets changed. Similar doubts lingered in the minds of people when all time low numbers of IIP were published.

    Earlier we could not trust govt policies, bills and regulations. Looks like even these data and forecasts could not be trusted and going beyond govt control.

  3. One should always focus on controllable(s). State of economy (& World) is an uncontrollable thing. But what one can control is his own portfolio, as rightly pointed by you.
    Small investors should use this opportunity to prepare themselves to enter market at ‘investment-delicious’ valuations in times to come.

  4. Always felt the last time India escaped the worse effects of the economic downturn was not because the RBI had any clue. Rather the RBI was so slow that by the time they got around to thinking about doing anything , the crisis had already hit the peak. Like Narasimha Rao, their ‘pout’ was intrepreted as intelligent conservatism (though Mr.Rao did have the vision once forced!).
    As for the government they still believe announcing stupid commie schemes like MNREGA and Food Security will help them get votes. Fact – they are ruining the economy.

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