Sunday, April 17, 2011

Inflow in EM's......

I just read in BS sunday edition that the Inflow in EM has again started and hence I feel that we should make a new HIGH soon.Of course as of now the probability of 16k is gone and I think that will never come as after market making a new high we will have new retracement levels which in that circumstances will be very hard to break 16k after market makes a new high and then correct.
Experts keep on saying about the reason for market going up like
1)Inflow of money from FII's
2) Short Covering
3)Pull back rally
These are the reasons technical analyst keeps on giving ever since market moved up from mere 3k to 21k in Jan 2008.
Doesn't that look surprising that short covering and pull back rally takes the market from 3k to 21k?
I know many readers donot like my arguements and writing against technicals but I am trying to understand what chrats is saying and what technicals analyst are saying.
It was a very clear signal given sometime back by charts while an inverted head and shoulder pattern was formed on charts and that was a bullish pattern and still technical guys wants to say that it is a false signal then these people are either defying charts or trying to cheat people who listen them.
I again write here that whenever one speak about chart and market course , one who speak needs to be responsible for what he speaks because lots of investor follow them and one can't say that this is my opinion and you can have your own.
All the terchnical analyst coming on CNBC always gives contrary view and they are not responsible for anything.
I have always seen that after market goes up for some 3-4 thousand points and then corrects , any upmove is always termed as pullback rally and various levels are given that this level will be the maximum market will go up and then it will come back to break the previous level and then market will TANK to abysmal level.
But when the level given as a high resistanance level , when those level are broken, these analyst comes out with another levels and say now market will not move up from there but no one ask that you went wrong on first call and we lost money following you, what about that?Then they will say, that that was just my view , you need to follow your view..........LOL.....
I haven't seen a single chratist saying that he went wrong.Have anyone seen?
These short covering headlines also I am seeing throughout from 12k in maybe around year 2005 something.....shortcovering pe market itna upper jata hai kya?Does market makes a new high and goes over 3 times from previous HIGH of 6200 of KP's time?
Well, The point I am trying to raise is, technicals and charts are for traders and those who are following the fundamentals has nothing to do with charts.Let chartist say whatever they wants to say, we have nothing to do with them.
One thing is clear and that is those people who are proving time and again wrong about their prediction is looking at the macro economics wrongly.They are not able to see the things unfolding in internatioanl horizon.Like say with Tsunami and earh quake in Japan , lots of damaged is done and hence there will be reconstruction that will come up and hence there will be lots of orders flowing in for MNC and even Indian Cos.
Well, it is not always seen that with commodities prices going up, market goes down.Somewhere the Cos will passon the increase in end products to the consumer and it will keep on doing that.One can't rely upon history that as commodities prices are going up, market will go down.
If we take an example of last 10 yrs the commodity prices has gone up by 4-5 times to 10 times in some cases but still the markets are headed up or are still way above the previous level.
In India everything has become costly but then wages has also gone up and hence that neutralize the hike in inflation, maybe not fully but still it helps a lot.
I remember when 1st Hero Honda was out the price was something around 5k to 7k and now it cost you something like 40k and still Hero Honda working has gone up, the bottomline has gone up and the stock has outperformed the market in big way.TVS which was a laggard has become a multibagger.The reason for giving example of Hero Honda is , here for making one Hero Honda bike, lots of parts are used and lots of raw material is used in which iron, Alu, Copper, Zinc etc ectc are used and these commodities has become dearer in last 20 yrs and still the Co has made hefty profit because people has bought it even with the price escalation as the buying power has also increased.That is the magic of Emerging markets.People get more money to buy at higher level and keeps the train running.And a country like India where export is just peanuts and is more a domestic comsumption story, we can see a temporary setback but we can't be out and get finished.
Gold , Silver are all time high and will go up higher , which I have pointed out in past but still people buy it, countries buy it.
There is always a talk of excess liquidity that will getting in the countries like India and there is always a talk that what will happen when those money will be drained off.But one can't stop investing thinking like that.
There are very rare economies who are doing over 8% GDP and analyst has the habit of crying foul for every .1 % fall in GDP.I heard last week Nomura speaking concerns about inflation and that very day market went up by 400 points.
All these years from 2003 to 2010 the commodities has been at ATH , even in 2008 Jan when market tanked  the reason was not commodities prices that went up and up ,but the reason was subprime crisis.So where is the way for market to tank on commodities price RISE?The market went on making new highs even when Gold went on making newer highs, or copper making new highs all along from 2003 to 2008.There were scores of commodities that made ATH before market tanked in 2008 , much much earlier then the collapse happend.
According to me, there is no way market can go in tail spin or make a new low or go even near to the pervious low of Mar 2009 on commodities prices going up.
As I said in one of the reply to Sukanya, that if Swiss Bank Money is brought back to India which is as big as $1.5 trillion, then not only we can touch sensex 1,00,000 but we can cross that as well.I think one of the Fin Insti has already predicted a target of 1,00,000 sensex and that can happen.
I have written in past and I want to write it again, in stock market , history never repeats because if it is so then market can never touch a new high.I am seeing no reason why Sensex shouldn't touch 1,00,000 because we are at the very nascent stage of higher growth trajectory and even after one can see that $1.5 trillion is sttting idle in Swiss Bank, the greatest of great Investor, Wareen Buffet is saying that India is a NATURAL DESTINATION.
Even after these money, Swiss Bank, has been sucked out from the system,WB is ready to take a call on India.Maybe experts can say that it is WB mistake to start thinking so late, but if WB is not wrong then I will say we are at the BASE LEVEL of market and Indian market has to climbs up many ladders before one can think of selling everything and sitting down with cash on hand.The time has not come yet.We have a long way to go.I can't imagine what can be the effect if those money comes back and is infused into the system.


  1. Hi Rajeev,
    It is a tragedy that people on TV are mis-using the innocent investors.
    I have in this market from 2008 crash, so I know exactly how the poor little investors feel after they follow some technical analyst on TV and their hard earned money goes down the drain.
    In my earlier days, I used to follow them since I did not know anything about market.
    The market is condemned and in-famous because of these TV anchors who give price targets for a week. Such poor small investors loose faith in the market after following these idiots.
    Its a pity that such a great money making machine is mislead and misread.
    I remember these simple people following TV and then loosing money in markets and then they blame the markets as a gamble.
    Its a shame on analysts and they should think about the hard earned money of innocent investors before giving any targets.

  2. Dear Rajeev,
    I am interested in investing for long term. One of the company i have shortlisted is Satyam Computers. Need some suggetion over it. Wats ur take ???

  3. Hi Sanjana,
    I would not go for Satyam even though it is in hands of M&M because of bad debts etc.
    The IT space is too congested and when a Co like Infosys is having hard time how Satyam will be able to do better.There are too many players now in IT but still if you have studied the Co well, you can go ahead with it.
    Have a look on GSS America, Ramco System , Allied Digital which are in cloud computing....I like these Co and any of these should give multibagger returns in 3-4-5 yrs...... The reason I am writing these Co in IT space is because you wrote about Satyam and if you wants to invest in same sector then why not pick up a Co which is in space where the next big thing is happening.
    See Sanjana, where you invest is important, whether the sector or space is growing or not, Satyam, Infy, TCS all are in service area while Cloud Computing is gaining ground.That is the new future space where the investment will be made by MNC.Recently Intel took stake in one Cloud computing service as well....
    Write Cloud computing in Google and find out what is happening in that space.....

  4. Thanx Alot rajeev i will go through those companies as well...

  5. Hi Rajeev ,

    Any view on Mirza International ?


  6. Bipin,
    I had already written to you in past that I do not track Mirza Int.Please do not ask me again on Mirza....

  7. Hi Rajeev,

    When did u have written to me about Mirza ? Is this a reaction to a question I asked about SREI Infra ?

  8. Bipin,
    Someone asked me about Mirza and I thought it was you again asked.I am sorry if u r not....