- Wealth PMS (50L+)
It’s Deepavali again! Or Diwali! And in the festival of lights, it’s time for us to make predictions and give you our piece of gyan that we end up doing every year. We’ve already talked about how our predictions panned out last year. For this year, we predict the following:
We understand this doesn’t tell you which stocks to buy. Because we are terrible at predicting which stocks will make money in a year. They may make 100% in six months, and then lose all of that in subsequent months. If you get in and have a 10% stop loss, you will still make 80% returns. (Rs. 100 stock goes to Rs. 200 then retraces to Rs. 180, for example, at which time your stop loss is hit and you exit. Then it goes back to Rs. 100 over the next few months).
In such a case, I will be judged on the stock prediction – “it made 0%!”. But to the investor, it had a healthy return. And similarly there might be other stocks where you lose first (and exit at a loss) and then see it move up.
Predicting which stock will do well over a one year period is largely useless and a waste of time, unless you’re doing it purely for entertainment. However there are things we see as concerns.
The Trans-Pacific Agreement could change a lot of things for the textile space, and hurt our yarn and textile exports. It could hurt pharma exports as well.
If the pay commission report gives a big boost to incomes of government employees, we expect more growth in discretionary spending, like air travel, cars, motorbikes and restaurants.
The inflationary impact of a tough monsoon will be visible after February 2016. This gets tricky because the budget’s right about then. A package by the government could hurt the fiscal situation.
NPAs have already hurt banks, but will the public sector banks see a return to investor love, after they’ve been beaten up so much?
The startup bubble will start to deflate, and it could get much worse going forward. Especially with a US Rate Hike and lower economic growth in India. The bubble isn’t very big right now, but there is enough money riding the wave to be affected. Of course, the media will glorify every layoff.
And wish you all a very prosperous year ahead!