Why Predictions Are Iffy

Predictions, barring a few, are iffy. Newspapers wrote reams, and business news channels expended hours with "experts" about everything from stock prices, movements of indices, and oil prices per barrel, in the months leading up to the Corona crisis.

And what do you have now?

Sensex at 29,000 instead of 41,000

Oil prices at 30 dollars a barrel instead of 60 and climbing

Consumer sentiment at zilch

Job cuts in most sectors, unprecedented in aviation, tourism and allied sectors like hotels, restaurants (except where they have home-delivery options)

The most-in-demand are doctors who have sane advice, and politicians who have their hearts in the right place- a few may still be around.

Those who keep the wheels running in these tough times, well, hats off to all of them.

Stock Market Crash

It appears there is a stock market crash in most major world markets today. It includes India, the U.S. and others such as Hong Kong and of course, the root cause of all these-China.

I do understand that stock markets are meant to go up and down-if not, they would not be markets. But China has managed to spook the world markets almost as much as Greece did a few weeks/months ago, almost single-handedly. I now feel that the house of cards that is the exchange market is also going to collapse one day, given that no one seems to understand the true worth of a national currency any more. If the currency is low, it is with an agenda in mind-usually the agenda is cheaper exports. But if everyone devalues their currency, who are they going to export to? It should even out in the end, assuming all are playing that game.

The answer may be the U.S., which usually does not end up devaluing the dollar so much, as all the devaluers expect the dollar to remain strong (if they are to remain weak) and the U.S. to increase imports of their goods (or services). Like all games we play, this has to show its true colours and reach an end game too. So let's wait and watch what happens. Another effect of this is that the Economic News channels are suddenly beating the TRP of Friends re-runs and Big Bang Theory.

Interview with a Stock Market Analyst

Mr. Shah, expert on stock markets, is being interviewed by the PYA (Pretty Young Anchor, of which there are many on television)-

PYA: Mr. Shah, what do you recommend today?

Shah: Well, I think half the Gujjus will have dhokla today, so I see an upside in flour making companies specialising in Chana Dal....

PYA: How about Banking, Pharma, IT, and Metals? Should you go long or short, Mr. Shah?

Shah: Well, it’s been a long time since I was so bullish on IT stocks. If the rupee goes to a hundred against the dollar, they’ll double their sales turnover by doing nothing. It’s like a magic trick, or alchemy.. so I am going gaga (no threat to the Lady) over IT now.

Pharma, I am also sure will also do well, as the rupee is giving high BP and heart trouble to all the importers in our country. So they have to do well, there is no option..

Banking, I will say that people don’t want their hard-earned rupees to go waste, so they will buy gold as that is the only tangible asset they can see. Real-estate is more likely to melt down than the yellow metal....as a result, banks will have a tough time, so I would say sell banking stocks.

PYA: Brilliant analysis, Mr. Shah. What advice do you have for the retail investor?

Shah: There was always conventional wisdom that to be a successful investor, you must know your onions. Never so true, never so true as today. You must stock up on onions like there is no tomorrow. Even if you don’t eat them, stock up on them. Buy a deep freezer and stock up on onions. That can ensure your daughter’s marriage, your son’s education, and a hedge for rising petrol prices. Since you can’t stock up on petrol, stocking up on onions is the only way out.

PYA: Thank you soo... much, Mr. Shah.

Viewer (Switching channels to Ekta Kapoor’s serial) : Am I the only one going bananas out here?

Paper Tigers

Stock markets give us an illusion of wealth. The world (at least most of it) is composed of stock markets. And therefore, the world is an illusion. What does the paper money really represent? Why don't all investors cash out while the going is good? And settle down in the Bahamas? Don't know if there is a stock market there. A wise friend of mine who is into real estate broking once told me- the only guys who consistently make money (win-win, if you please) are the agents/brokers/traders etc. in any trading activity. The ongoing hulchul reminds me of that wise guy.