Well, if you are an investor, you have to be an optimist. Rather, ONLY if you are an optimist will you look at equity investing.

By the time you can act on this note the Bihar results would be out. Honestly to me the outcome does not matter. Yes the next state election is far away and Na Mo can afford to come off his electioneering mode, and that is good. He can now concentrate better on his main task. I am an admirer of Namo’s solutions, and like his style.

Let us look at simple solutions like gas subsidy. How many of us thought it could be solved by making an appeal? or solutions like rations – a few union territories are trying to abolish the rations and giving a direct subsidy. He did not ignore the aadhar just because it was introduced by the UPA. He is using the grains stock well, and has handled the pulses situation also well. If the gold scheme launched is a success (and even if a few big temples take the bait) it will be another awesome advantage. Really huge advantage I would say.

Let us look at what is happening in the Indian economy under Narendra Modi.

Here is a man who has a clean, blemishless track record and whom the Congress could not tarnish in its UPA regime. He is the man who brought a lot of investments to Gujarat, and improved Gujarat in almost all its parameters. I had the luck of meeting a few officials of the Gujarat government, and the enthu that they had was awesome.

I have no personal interaction with anybody in the Na Mo government but I am assuming that the same level of enthu must be prevailing at the PMO too. No, namo has not done anything path breaking if you ask the Congress, but some of the initiatives stand out.

After 66 years of independence it required a PM to ask Indians to keep India clean, so over a 5-10 year period, we will be physically cleaner. Let us hope this extends to our economy, government, and environment too.

The coal auction, spectrum auction, etc. have been closed brilliantly. Our media does not have enough time to write about these things. Impact of this will be felt over a longish period of time, measured in terms of quarters and years. The media wants something hourly. That is unnecessary for a government. Clearly the PM is running the country for good results, not brownie points. Not sure how many people are calculating the ABSOLUTE numbers in our growth. A 8% growth of 2015 is a much, much bigger figure than say 10% growth of say 2002. Please remember the size of the economy has become much bigger. The question is when does India cross China as the ย fastest growing economy – 2016 or 2017. NOT WHETHER.

Political ownership of banks, crony capitalism, Trade unions – a horrible combination while dealing with banks! However creating the banking Board, bringing outside talent at the board level, allocating capital on the basis of good ratios, …hey the ingredients are all fine and right sounding. Let us be optimistic about this (not as optimistic as Morgan Stanley which has already called for a higher pe for the state owned banks).

Remember it was Atal Bihari Vajpayee who rescued the Telecom industry from the bureaucratic shackles of high bid, and low volumes. It was in 1999 that a committee headed by Jaswant Singh came to the revenue share model.

Today it is the turn of State Minister of Petroleum and Natural gas that the energy industry is being freed for gas pricing, and reducing the crony capitalism. How many of us remember that C Rangarajan wanted to recommend $ 8.4 for Reliance’s gas? Now it is 5.6 and is ready to fall to 4.3….well, let us appreciate what NaMo has done.

The national fund for Infrastructure has a corpus of US $ 3 billion EVERY YEAR. Please see the enormity of this fund. This fund is also expected to raise money from the private sector for investment in infra.

Remember the Rs. 150,000 crore that Suresh Prabhu has been able to borrow from LiC for investing in the Railways?

Gadkari has ensured that Shipping corporation is making profits and we are building about 20 km of roads a day.

The SEB losses are being added to the deficit of the state government, and SEBs will now have access to the state’s credit rating – and thus drop the cost of funds for SEB. Not bad at all.

These are some of the initiatives. When the Trade Unions keep calling for a bandh you are sure that something right is happening in the labour front also. GST will become a reality in 2016 if not in 2015.

What next? Na Mo wants to improve the ranking of “best places to invest / ease of doing business”. We are at the nadir. He wants India to move from 189 to a score of sub 50.

Jim Rogers saying India has no hope. There is a risk that interest rates in India will go UP, especially if growth picks up. Fed could increase interest rates. The falling SIP returns could cause panic and the flow into MUTUAL FUNDS could go down, reducing demand.

In an uncertain market gold prices could go up. The joker in the pack Oil could go up to say $ 80 if not 130! The quality of debt in bank portfolios is shitty. My portfolio has Cholamandalam, and Hdfc Bank, and Hdfc. Many of the banks have too much shit in their portfolio. Kingfisher and Amtek are out in the open. GVK, GMR, Adag, …steel, other metals, Real estate …there are too may skeletons.

What if the index falls to 23000? I am still buying. What if it falls to 21000? I am still buying ๐Ÿ™‚ …but remember mine is an mnc dominated portfolio ๐Ÿ™‚

Yes I am worried too. However the money that I do not need for the next 10-20-30 years goes into equity. Period.

What more signals are you waiting for? And what ability do you have to read the signals? I have NONE.

Let me stick my neck out again. We will see 50,000 sensex in Na Mo’s tenure.

 

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  1. So sad…. I would love to see a 21000 rather than 50000 in Namo’s time. I don’t need any monies in there for the next 3-4 yrs ๐Ÿ˜‰

  2. Great article Subra Sir. He has been/is doing great job, but i think the same level of energy and cooperation from the state government is missing. Do you not think without support from state govt it will be difficult to see his dreams comes true??

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