Happy Diwali 2025! More Useless Predictions Even Though...

Here's wishing you all a Joyous, Prosperous Diwali! May the year ahead be full of happiness and good health.

Every year, I make this folly of trying to predict what will happen in the next year. At the bottom of this post are all my past attempts, and in each post I make a report card of what I had predicted a year ago. Eventually I wait for the laughter to subside and say what I have to anyhow. Our motto is to not predict, but to respond instead. But once a year, I give in to this folly and am reminded of how much of a folly it is.

The Scorecard of 2024's predictions

What did we say last year? Let's take a look.

It's probably going to be Trump. I think I want it to be, so that we can be entertained. Also hopefully there's a bigger attempt at not having another big war.

This one deserves a 9/10. Because a) it is Trump. b) It is entertaining, in a dark sort of way. c) His attempts at winning the Nobel Prize was that we didn't get ANOTHER big war, but we got more of the existing ones that he will take credit eventually for stopping or something. We did get a kinda sorta war in India-Pakistan, so I'll deduct a point for that.

This had no economic implication - it was just a prediction.

Indian politics will turn nasty in the next year, possibly changing our geopolitical stances too. Politicians turning 75 is an age for them to leave power, apparently, but not many actually want to.

I think this is a 3/10. Firstly politics is always nasty. And we have a changed geopolitical stance in that we have distanced ourselves from the US (for good reasons, mostly because their politicians are acting like deranged bullies). And gone closer to Russia, and er, China.

Age doesn't seem to deter any politician, and it's increasingly obvious that we have to do things ourselves rather than rely on the people in power to do so.

The markets will correct, worldwide, finally, and I mean a 20% correction at least, in the US. This is going to be driven by geopolitics, and India will also suffer. But it will be really quick, simply because news flows are so fast and strong.

This was true for at least the US market. The S&P 500 ETF chart was:

It was really quick. and the recovery was within two months!

Even Japan, Germany and the UK had similar falls (and charts). The Indian markets fell but even now have barely recovered to last year's highs.

I'll say 8/10.

Interest rates in India will fall after Feb 2025. Markets will fall after the rate cuts but recover towards the second half of the year.

Bang on for the interest rate cuts. The RBI started the rate cuts in Feb 2025 and moved fast!

The market did fall right after and recovered slowly after April. It's still recovering.

Seemed quite easy, that prediction.

So yeah, 9/10.

Finally, we will see RCB win the IPL. (Gotta throw this one in)

This is what makes me the happiest.

It was mostly hope. And it feels like somehow, we in Bangalore, willed it to happen by the sheer force of having waited forever.

And in that sense, this is truly a prediction that didn't have any shady language that somehow makes predictions look good. Like "markets will go up, unless they come down". Which is always true. Or "Gold is going to be rallying beyond 4000 USD per ounce but not if it falls below that". Because falling below a number means it hasn't rallied by definition.

And I didn't say RCB would be in the last four; or that they would demonstrate their skill. I said they would win, which can only be done by one team. And that one team, this time, was RCB.

So 10/10. And some joy.

The scorecard: 39/50.

It's a waste of time to predict, usually. So:

Predictions for the next year:

To invariably be more wrong than right we need strong but easily scorable predictions. Here goes:

India will see a big 20% upmove and hit 30,000 on the Nifty before next Diwali. There will be a layer of insane momentum on the upside and make people question everything they knew about valuations.
Gold will crash more than 20% from the peak. Silver, too. (It's a prediction with no meaningful basis. If you're long gold, I hope I'm wrong)
The US will see a recession and inflation at the same time, hurting their ability to reduce interest rates meaningfully. The recession will cause them to reduce some of the crazy tariffs they have imposed on themselves. But the world will slowly have to deal with the fallout of the China-US trade wars, and there will be some thinking on the alternatives to these two giants.
India will see a lot more investment happen domestically by investors into mutual funds and stocks. Foreign investors will slow down on sales, but by and large become less important for India's growth story. This will result in - and here's the prediction - India's growth hitting 7% next year in real terms (10%+ in nominal terms).
The rupee should hit 90 at some point, but will reverse to be in much happier territory by Diwali 2026, around the 80-85 levels. Again, this is probably more hope than logic, but that's what predictions usually are.

At Capitalmind: The Mutual Fund is up, and more!

We got our SEBI license to set up a mutual fund in April and by July, had launched the Capitalmind Flexi Cap fund. Check us out at Capitalmind Mutual Fund!

It's a little early to speak of performance at the Mutual Fund, but it has been a rough time, for performance in the PMS. Momentum's taken an absolute whacking in the last year and Surge India itself has about a 1% underperformance in the last year (but it outperforms on every other longer time frame). My personal belief is that markets take breathers once in a while, and this is one of those times when things don't look great. The broad market itself is in the low single digit gain/loss territory in percentage terms. As markets start to trend upwards again, I expect that our performance will be more meaningful for our investors.

We look forward to helping you invest and scale your portfolios in the coming year. We have a new set of "Mutual Fund Portfolios" in the PMS, to help with reduced tax implications and a well diversified investment structure. Check them out!

What do we expect to do? We will add more products in the Capitalmind Mutual Fund itself to allow you to invest in debt and hybrid schemes too, apart from equity. In the PMS, we are working to build better portfolios, pushing deeper into reducing Momentum's drawdowns and for Surge India to adapt to the newer listings which complement the concept of a Surging India. We'll have more interesting things for investing: from well defined tools, to more quantitative data, to strategic opportunities. It's time to grow, like we have grown, slowly.

We also welcome the investment from Zerodha's investment arm, Rainmatter, into Capitalmind! We've closely worked with Zerodha for over a decade, and I know Nithin for even longer. It's an honour to have their confidence and support, and we hope for two things now:

a) that we never need to raise funding again, so that with this cash we can get to profitability soon, and

b) that investing in Capitalmind makes them proud as we build carefully, and slowly as a trustworthy asset manager.

I'm so kicked about it that even I'm investing more into the company at this valuation, and I believe it will still be my best investment ever. But, as you might imagine, I'm severely biased.

We do a lot more than just invest. We write, we tweet, we make podcasts, we clean footpaths and we make corny jokes. (The last two "we" should be "I", I know) Here's what else we've done in the last year:

What we've written for you:

Some of our podcast videos:

As we slowly scale and grow out of our office space (we have doubled headcount in the last year), we hope you'll be around for the next irrelevant prediction post from our stable. My stable. I'm the prediction guy. Everyone else does real work here.

To all of you: Win at Life. If there's one thing this 50 year old can tell you, it's that every single day is worth enjoying and smiling and having fun. Don't oversave. Invest, but spend what you don't need to invest. Your money makes even more money when you spend the rest of it well. Happy Diwali again!

Happy Diwali 2025! More Useless Predictions Even Though...Happy Diwali 2025! More Useless Predictions Even Though...

The Scorecard of 2024's predictions

Predictions for the next year:

At Capitalmind: The Mutual Fund is up, and more!

Earlier Diwali Posts:

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