Dear Members,

12 AUGUST 2017 

In this weeks video/podcast i rant for 20 mins [link below] about my belief system. This on the eve of the biggest decline in 6 months in the Nifty. Also aided by geopolitics surrounding N.Korea. News based market moves are always disturbing because sentiment can quickly capitulate. But my sense is that the market is reacting to its own overbought state and the news is just part of the trend. Still a news based capitulation can quickly give us an oversold condition and a bounce back from a trading perspective. That said my concern has always been with the longer term picture where I maintain my contrarian stance with most on the street as nothing has happened to change that opinion. Retail investors have been capitulating into SIPs and MFs at a record pace and have chosen that route this time over the IPO or direct market route as seen in previous occasions. That combined with the bubble in Midcap stocks and bottom up investing has created a self reinforcing belief in buy and hold. The markets are never normal and never reward consensus. The last 4 years have rewarded everyone who has recommended individual stocks and everyone is a star. That in the back drop of the following economic report this weekend [pic below]. We now need stimulus. Well that is what I said for the last two years on budget day. But with most funds diverted to farm loan waivers and other popular programs and the need to fund the NPAs there is little room for expansionary policy putting the entire pressure on the RBI to cut rates at a time when global interest rates are due to rise for months to come.