We have got a fantastic government at the centre. Dr.Manmohan Singh is Prime Minister, Congress a secular party has emerged single largest party in the coalition with more than 2/3rds of MPs in the UPA from Congress itself. In terms of the baggage, this time Congress has fewer and larger allies. Interestingly 2 of the largest allies are also ex-congress like Sharad Pawar and Mamta Banerjee. Apart from this if needed anytime during next 5 years Congress also has few more secular parties as choices for new allies like Biju Janatha Dal and Nitish Kumar who are efficient and big with large number of MPS.

So since 1991 Narashimha Rao government this is the first stable goverment India has elected in almost 15 years. This is a reform oriented government and Dr.Manhoman Singh will have full power to implement reforms in Pensions, Insurance, Retail and other sectors with free hand. This stable government that has come to power is fantastic for investments and smooth steady reforms.

While I am happy that a first class choice has been made to form elected government I have suddenly turned bearish for next 6 months. I am bearish on everything (1) Stocks (2) Real Estate (yes I am bearish on RE) (3) IT jobs.

Reasons: During times when such good news is around investors become euphoric and suddenly start behaving crazy. Expect BSE index reaching big highs, expect DLF and Unitech annoucing that their bookings have gone up and their debt is reducing. Market expectations are very high now. After 2 months when things don't happen quickly as expected Markets will see their biggest fall.

I am bearish for next 6 months and will avoid both stocks and real estate. I am taking a vacation from any investment or buying and will decide after 6 months.

However will continue to post here just as an observer with some analysis. But the baseline is I am a BEAR now in Stocks, Real Estate and IT jobs.
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  • forgot to add,

    Whatever has already been invested or bought in recent past will continue to HOLD. After many months (6 months or even later 24 months) long term fundamentals will return unnoticed and RE should again appreciate to newer higher levels especially in emerging locations like Velachery, OMR, GST road, etc.
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  • Contra ,

    Your views are appreciated and the reasons you attributed has relavance as the stock prices in short term will be based on feel-good sentiments due to the stable Govt rather than the strength of the underlying stock performance.

    Stocks in overall has been all along overvalued & will be undergoing further corrections post the short term advancement.This will be mainly due to the effects of global credit crunch and impact will be felt in Asian countries too shortly.However small Iceland is, not insulated by the global credit crunch and even went to the extent of Govt collapse.

    I dont have much faith in the Capitalist promoters will have an soci-ali-stic mindset in distributing the profits earned with the equity holders.Rather they will divert the profit to their fully owned subsidiaries like what happened with Satyam.Indian promoters and companies need lot of changes on this and the Board of Directors act as just puppets of the promoters rather than active proponents of the Equity Shareholders.

    Capital Markets rather acting as the platform to raise money for fund-needed companies now turned to be a place of parking the excess money in the name of tax savings , quick profit and greediness. And so the prices are atm over valued and does not correspond to the asset base. RE also has become victim of this excess money & greediness.

    On RE , I see this as a necessity for me at this moment as I am planning to R2I rather than an investment .So when the prices are perceived as reasonable & value-for-money I dont see myself anytime as bear and quickly will clinch the deal. I could see many here primarily Wiseman BigBear and Nabishek, telling that RE is good investment but NOT at this over priced rates. Unfortunately they are called as bears.When the prices are inflated and refuse to come down , there are many options ... FDs & other investments and go with a brand new rental house as there are plenty available on reasonable rent. And the rentals are further falling down.

    Managing the wealth is in our own hand. Claiming bull and investing in inflated assets & Calling bear and prolonged waiting are equally hazardous.
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  • Can someone please type and save soci-ali-stic without the hyphens ? Its uploaded as sotic ... Is it because I am using this word with the word Capitalistic ? and they dont go well together ?
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  • sotic
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  • why would the markets and RE go down

    i thought that with stabler govt been voted in and with commies out and lesser no.of regional parties, the markets would love it.
    the same goes for RE. Now, for some strange reason, unlike other cities, chennai RE hasnt really gone down in city at the most 15-20% only and now i though it will start going up again.
    i am confused about the bearish tone here. is it due to job situation or due to overexpetation.
    i will be happy if it turns out true though.:)
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  • Dear friend,

    Now we can expect a turn around with Congress in saddle with more MPs and need not have to depend on left parties or Jayalalitha or Mayavathi. But Mamta is there to give problem to the Congress in the foreseeable future. However, I feel it is good for the economy as also for the RE sector to revive to a bull phase by the end of this year Dec. 2009. I also feel that the interest rates may go down in stages by 2% and reaching as low as 7.5% before March 2010 which will be good for the RE sector revival.

    ks2071746
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  • Originally Posted by ks2071746
    Dear friend,

    Now we can expect a turn around with Congress in saddle with more MPs and need not have to depend on left parties or Jayalalitha or Mayavathi. But Mamta is there to give problem to the Congress in the foreseeable future. However, I feel it is good for the economy as also for the RE sector to revive to a bull phase by the end of this year Dec. 2009. I also feel that the interest rates may go down in stages by 2% and reaching as low as 7.5% before March 2010 which will be good for the RE sector revival.

    ks2071746

    I am not talking fundamentals. Pure technicals. RE will shoot up. Infact in the past few days I am having a lot enquiries for my plots and they seem to be informed buyers like those who bought 4000 Calls in Nifty on Friday. They seemed to know the result.
    The bottom of Chennai RE is over. It only has one way to go now for the next 4 years. UPWARDS.
    Sethugm, Wiseman, Bigbear are all going to disappear over time. They know they wont get their 20rupee payment per post for writing bear crap. ROTFL.
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  • Long term prospects of RE is still strong, and the possibility of a stable government at the centre will just strengthen it more.

    For developing countries like India, Appreciation of assets like RE are essential for sustainable economic growth and critical for the success of government.

    We can expect lower interest rates, sops for builders, more private/public partnership schemes, increasing in tax exemption bracket etc.

    I personally feel all these are band-aid solutions for a wound, whose infection has seeped deep down the skin.The issues are greater.

    The government needs to address issues like broken consumer confidence, creation and protection of jobs,overvaluation of assets,demand/supply mismatch etc.Hope the government priorities are alligned such.

    Today people are willing to buy, but not spend.

    The decision to enter RE is tied to affordability,attractiveness of the asset,earning capacity and confidence of the Buyers.

    Insisting on fair and value pricing is not a crime, its consumer right.

    RE has been a dependable wealth creator in India.I see investing in RE as insulating my future against uncertainties.

    In my opinion, A correction of another 20-30% in RE is very necessary and is inevitable to revive interest and maintain the demand for continous growth of RE in tandem with the economic and income growth of the people.
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  • Nothin has really changed on the ground! Only the hopes

    Originally Posted by yeskrish
    i thought that with stabler govt been voted in and with commies out and lesser no.of regional parties, the markets would love it.
    the same goes for RE. Now, for some strange reason, unlike other cities, chennai RE hasnt really gone down in city at the most 15-20% only and now i though it will start going up again.
    i am confused about the bearish tone here. is it due to job situation or due to overexpetation.
    i will be happy if it turns out true though.:)



    Yeskrish,

    To do a reality check, wait for 1-2 weeks and go out into the market and do the following:
    1. Ask your company for a raise - see the incredulous look on your boss' face :D
    2. Ask you bank for a ridiculous loan
    3. Ask any potential buyer of land for a 20% increase in price!!! :D

    Tell me the reaction of these people!!!

    People are living on hopes. And in these fairly desperate times, this manifests in sharp swings into euphoric behavior which has nothing to do with reality. Nats also must be in some kind of trouble since he too is exhibiting such behavior as soon as the chance came up!

    The $$$ is starting to tumble sharply. Deficits in the US may go all the way up to between 55% and 80% of GDP which will kick off Inflation to levels never seen before - lets talk of 25%-30% pa or more. Nothing has changed anywhere, except that the UPA has got a mandate and that too not a clear mandate. They still need around 25 seats to form a stable format, which I assume would not be too much of a problem!

    Unlike Nats, I went bullish at 2575 on March 9th. I also had picked up 3800 calls as well as puts on Friday last. The calls are up 250 points and the puts down 70 points (still making a handsome profit and will continue to do so). I continue to trade both ways simply because this is still a long term bear and we are in an intermediate bear market rally. Only 2-way trading will consistently make money in these markets.

    Till the US, EU and Japan clearly and unequivocally come out of the massive hole they have jumped into - which may take as many as 2-4 years - there is nothing any politician or party in India can do. India is a $1 Trillion economy. Combined, USA, EU and Japan are over 25 times that!!!

    Just get back to your normal schedules and plan for a recovery over the next few years. Don't get carried away with this 2+ week euphoria.

    Nats has just told us what he gets paid per post! Rs.20!!!

    cheers
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  • Content is important than the count.

    A so-called RE expert calls himself as geniuss intelligent scientific technical mathematical statistical... But all these are for his biological need ..Rs 20 per post ... I dont see any content in his writting its nothing but bull shit.
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  • Dear friend,

    None will give Rs. 20 per post. It can even be that those who want to post may have to pay Rs. 10 per post and if the post is good and worth, he/she may be given the paid Rs. 10 back plus another Rs. 10 or 20 for the usefulness of the post.

    ks2071746
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  • KS, that is a good joke. I like it.
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  • Originally Posted by sethugm
    Content is important than the count.

    A so-called RE expert calls himself as geniuss intelligent scientific technical mathematical statistical... But all these are for his biological need ..Rs 20 per post ... I dont see any content in his writting its nothing but bull shit.

    U bet your first line is apt. And yet you write here. So u r proving that u write here for the Rs 20 dole!
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  • The BSE index hit upper circuit twice and has been halted for a day. This is the first time in the history of the oldest stock exchange in Asia.

    Like I have been saying all the while optimism on India is very important for any investor. I have made more money today then any day without doing anything. When I checked my trading account at 10.06 got a news that BSE index was frozen after hitting upper circuit. Again at 1:05 tried logging in and again got a news that trading was halted for whole day after hitting second upper circuit. That is 2099 points gain for BSE index today.

    As I had been slowly building a portfolio in recent past have made money today.

    But yet I am bearish and will not buy now and just rejoice the appreciation in what were bought recently at dirt cheap valuations.

    Even the Rupee has appreciated and reached 47.7Rs per USD, the highest single day appreciation in Rupee since 1986. Again this is in sync with my optimism on India in recent past.
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  • There are lessons in what you said!

    Originally Posted by contra
    The BSE index hit upper circuit twice and has been halted for a day. This is the first time in the history of the oldest stock exchange in Asia.

    Like I have been saying all the while optimism on India is very important for any investor. I have made more money today then any day without doing anything. When I checked my trading account at 10.06 got a news that BSE index was frozen after hitting upper circuit. Again at 1:05 tried logging in and again got a news that trading was halted for whole day after hitting second upper circuit. That is 2099 points gain for BSE index today.

    As I had been slowly building a portfolio in recent past have made money today.

    But yet I am bearish and will not buy now and just rejoice the appreciation in what were bought recently at dirt cheap valuations.

    Even the Rupee has appreciated and reached 47.7Rs per USD, the highest appreciation in Rupee since 1986. Again this is in sync with my optimism on India in recent past.


    Contra,

    You are a smart guy. While most people get frozen with indecision based on all the opinions being tossed around, you went and bought at what you considered cheap valuations. When prices are genuinely cheaper than intrinsic values, invariably you will profit when prices revert to the mean to reflect true values.

    But this is not the end. You must also sell and leave some profit for the other guy so that you can come back again when prices become ridiculously cheap again - which it will many times over the next few years.

    This is a trading market. So, trade. When genuine bull market returns, then you can invest to hold.

    Unfortunately you can't do this with RE, so you have to be very careful to pick cheap valuations in good locations and hope for the best. This is the problem with RE.

    cheers
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