Morning Jewel-22.10.2020

 

• ·         SBI has announced another 25 bps cut in rates below already multiyear low rates for retail loans. This is good for consumer demand its a negative for many smaller banks & NBFC's which don't have a cheap CASA funds profile Margins get squeezed while Asset Quality under pressure.
• ·         When you are buying a stock trading at a PE of 120-150X you are essentially looking at accelerating growth over the next 3-5 years with improving profits. Highly unlikely in Avenue Supermarts .
• ·         US adds $5 trillion to GDP every 10 years. GDP of United States 1990: $5.9 trillion 2000: $10.2 trillion 2010: $14.9 trillion 2020: $20.8 trillion.
• ·         There will be a rotation from growth which has led for the last 10 years,into value . Value guys have got wiped out and are not heard of . Markets will bring them back when all have written them off . Saw it in 2000. Similar stage is set, waiting for the spark.
• ·         The segments that may be worst affected due to COVID19 are  urban poor, informal sector workers & smaller informal enterprises. The challenge is in devising targeted scheme. Distributing benefits to these segments, and not fiscal space, is our principal challenge:
• ·         1.6% of GDP is School Transportation . 33 Cr students are there and it represents 1.5% of GDP.
• ·         2.0 Cr Tourists come every year; It will take more time before normalcy could return here. It has its lag effect on GDP as well.
• ·         Construction is 85% back to normal.

Morning Jewels : 19.10.2020

•     "Free education is abundant, all over the internet. It’s the desire to learn that’s scarce.
•     "I think the best way to prepare for the future 20 years is find something you love to do, to have a shot at being one of the best people in the world at it. Build an independent brand around it, with your name."
•   Who is powerful? He that governs his passions.
•   To compound wealth, need to compound learning. The more you learn, the more you earn.
•  "In the post covid world, geography is history".This will give Indian founders an unprecedented opportunity for the global markets, not just in SaaS, but also in consumer internet and Fintech.
• · Hong Kong Sees "Alarming Rise" In Suicide And Depression Among Young People

Morning Jewels ( 18.10.2020)

 1. 10 Chart patterns you should know:

1) Cup and handle 2) Volatility contraction pattern (VCP) 3) Double bottom/top 4) Rounded bottom/top 5) Flat base 6) High tight flag 7) Ascending/descending triangle 8) Head and shoulders 9) Rising/falling wedge 10) Bullish/bearish pennant

2. 5 inspiring books for Traders:

1) The Richest Man in Babylon (Clason) 2) The Alchemist (Coelho) 3) Outliers (Gladwell) 4) Atomic Habits (Clear) 5) Power of Habit (Duhigg)

3, Best Trading Books for growth and momentum Traders:

1) How to Make Money in Stocks (O'Neil) 2) Trade Like a Stock Market Wizard (Minervini) 3) Momentum Masters (Minervini) 4) How to Trade In Stocks (Livermore) 5) How I Made $2,000,000 in the Stock Market (Darvas)

Indian Economy : In the Midst of a Pandemic

 India is facing three crises at one time- Economic crisis; Financial crisis & Medical Crisis.Unemployment at all-time high.

The MSME sector, which constitutes 30% of GDP, 45% of manufacturing, 50% of exports and perhaps employs 12 crore people is in bad shape.
Agriculture displays what’s wrong with Indian policy making–
·         remains a family enterprise and not a business enterprise.
·          we overuse urea whilst under-consuming potassium and nitrates.
·         unchecked wastage of agricultural produce which is as high as 30-40% of the country’s agricultural output.
The Netherlands, a very small country, exports  USD 80 billion worth of agricultural products each year. India, an incomparably far bigger country, only exports $25 billion of agricultural products.
 
The Way out :
1.   The cumulative value of India’s gold imports could be as high as $500 billion ( legal and Illegal) .World Gold Council - household gold in India is as much as 25,000 tonnes worth $2 trillion. Much of this is undeclared.
   Announcement of  a Gold amnesty scheme making this gold    legal could easily tap hundreds of billions of dollars.
 President Roosevelt in 1933, to dig the USA out of the prevailing depression, nationalised gold and the American people accepted that decision without demur. In contrast, Morarji Desai’s Gold Control Act, which he emphasised did not nationalise gold but only restricted its holding, was responded to with multiple ways of evasion and avoidance.
2.   Madam Harsimran kaur – Why did you resign?  You liked the  erstwhile draconian and sleepy APMC era?  In a blunt way, what is wrong if  there is a ( unreasoned)  fear of Agriculture getting privatized ?. Is Education not privatized? Is Health not privatized ; Is Banking not privatized? Is the lifeline of communication –Internet- not privatized?  ( In fact, Privatization of country  have saved this Nation from going to penury. Why do not you see Privatization with the eyes of entrepreneurship of hardworking Indian men & women; rather than a fear of Adani or Ambani ( In fact these names have done lesser disservice  to the society) . Postal Services died; Courier companies came to rescue.  Government Policing overloaded or oversatisfied  enough to perform; Private Security Services came with massive employment potential. Endless examples..Therefore,  No vote-bank politics  with Agriculture  Pls.
3.   Please speed up divestment and strategic alliance of BPCL, SCI, CONCOR, AIR INDIA, NBCC, PFC, HUDCO, IRCON, IRCTC etc to unlock huge value and get enough money for Stimulus package or for a financial Thrust to MSMEs ( Pls do not make yourself a laughing stock of selling one PSU to another PSU ( HPCL to ONGC)  and  value destruction to both.  
Economy shrank in Q1 ; would be no better in Q2 and Q3 albeit a little improvement. Corona and financial liquidity if maintained, Q 4 would be positive.
PM Sahab ! Please have control over some sub-standard  Media Channels – They are expert in diverting poor Citizens mind from something serious to non-serious stuff.

Mukesh : Master stroke with Mark during Corona

Mukesh : Master stroke with Mark during Corona

•Tatas & Ambanis- fit in the category of Most Innovative businessmen. Tatas,for obvious reason of diversification from Salt to Software; Dhiru & Mukesh Ambani, for diversification from Crude to Kirana.. Big Goals; small measured steps. Think Global; Act Local.-is nor mere words. Their Enterprise are like Angad’s feet- not to be shaken.

•Mukesh Ambani is gifted genetically with Mega vision and measured action. Jio-is the The Himalaya Parvat of Digital India. Fire, Wheel, Pencillin and Internet are the topmost product-based innovations which shaped Human Civilization on this Earth since its beginning The speed of change of civilization increased geometrically as we time passed. With this analogy, change in The last 20Years may be equaled to the change of last 1000 years, Internet is the undisputed change-maker.

• Mukesh Ambani bet his fortune on this “internet” 20 years ago. He kept on investing ; kept on creating capability silently with unflinching devotion, finally to create “Reliance Jio”- The “Lifeline” of modern India. This is unique “Visionary and Action Leadership” of Mukesh Bhai amongst the Indian Entrepreneurial class.

• This is called bringing Socialism via capitalism through the use of Technology “. Digital Payment; Online Education; Tele Medicine; Smooth and accountable Governance- endless simplification of Life style could be possible due to almost free gift ofJio to the 140 Cr Indian populace. His TV ads 20 Years ago –“Roti, Kapda, Makaan.(And Internet) speak volumes of his clear vision.

• Bill Gates, Elon Musk, Jef Bezoz, Google Brothers, Jack Ma etc are the most technology-Disruptors of current time and, therefore list in the richest persons also on the Planet, My estimate: Indian Mukesh Bhai , one day,shall overlap many; shall give tough competition for No.1 position.

• Jio+Facebook = Connecting unorganized sector of Kirana stores+ Supply Chain Management+ Controlling consumption pattern of 140 Cr Aspirational India via Riding the channel of popular Social Media facebook +Whatsapp.This is win-win for Consumer+kirana store owners and the Aggregator. A true example of Social Capitalism which helps create money for all the stakeholders.

• I clearly remember- 20Years ago, He had suggested the Government of India ,on similar pattern, to connect all 20,000 almost defunct Primary Health Centres ( PHC) of the country and make them truly functional. He had asked just Rs 10 per person per month as fee. The Pseudo- Social and confused-myopic India had no time for that. Oyo, Ola, Jio-are all private initiative to arrange and aggregate the services. Big aggregation is a daunting task in Healthcare sector. I would suggest –Adhaar,and enhanced version of Aarogya Setu be sinked together to create Unique Medical Id ( UMI) of every Individual. May be a little out of context, T N Sheshan,Verghese Kurien, Team ISRO, Nandan Nilekani were some big people contributing to India’s growth.

• Digital Education & Digital Healthcare remains top Priorities as of now.

• Ambanis are the need of the hour. Facilitators should refrain from the enticement of being the show-makers ( as our TV anchors do most of the talking in the Debates ) and sadistic pleasure-seeker.

Post Lock down Action

Corona seems a Bye-Bye. A Great Relief. Indian immunity and Prime Minister’s Unity of Command played a major role.

A New world order is to unfold- New villains; new Heroes ; New opportunities and new challenges would make the game exciting.

Gained: A 40-odd day lockdown recharged India’s soul. India got ample time to think within; self-dependence on house-hold work increased; Old serials helped pass on cultural legacy to millennial; Cleanliness, Personal hygiene, Yoga, Ayurveda, Digital payment; Online activities got prominence. India is roaring to unshackle itself from 3rd May.

Loss, if Any : 40-Days of India’s Productive contribution to GDP affected .In Numerical terms- Its around 120 Billion USD. We gained-40 Billion USD out of savings in crude ; 20 B USD is the reduction in Trade deficit. Net Affected= 60 Billion USD

Approx Gold Reserve with Indian Household =30000 Tonnes-an unofficial figure). The Price escalated from 30K per 10 gm to 45K per 10 gm. The Total appreciation that took place in India’s household Gold = ( 30k x 1000 x 15 L) = 600 Billion USD ( A mind boggling figure).Giving a gap-stimulus of a 60 Billion USD (a small amount from that standard) is not a big issue for Government of India. ( Gold monetization drive by a stable and strong Government should be done on a serious note. Existing “E-Gold scheme with 2.5% extra return apart from appreciation of Gold Prices” should be promoted in full throttle).

How to do this fiscal stimulus? –

· A zero-GST and Zero Income Tax Enterprise for upto a certain turnover and for a certain period ( say for 3 yrs) on loan interest rate of 4-5% per annum be introduced.

· Agricultural land lease to be allowed; Electricity rates to be reduced ; Contract enforcement to be strengthened; Cheque bounce case disposal timeline be reduced to 4 months with enough further deterrents like -surrender of PAN, DBT benefits; suspension of Ayushmaan facilities etc.

· P M Sahab ! Deepak Parekh; Aditya Puri; Nandan Nilekani etc be made the Central Think-Tank -cum-Executive Body. If Raghuram Agrees; he be just made the Finance Minister. With high energy, sharp intellect and precise guts ,He may prove your Yogi Aditya Nath of Finance sector.

( Just a day before, Indian Revenue Service(IRS) have given a proposal to Govt of –

· Introducing COVID cess;

· Higher income tax provisions for Individuals;

· a surcharge for Super rich etc.

Just wanted to give a figure :As per a study by Nomura Group on 56 companies shifting production out of China, only 03 relocated to India while 26 went to Vietnam, 11 to Taiwan & 08 to Thailand).

Hope we have got the answer. This is wonderful showcasing of Ease of doing Business .

The Drama of USA ,China and International currency is yet to start which would be thrilling to watch ; Smartly, India should play on the fence for its maximum gain .It should not make a mistake of siding with any International political Group.

Market on 3rd March, 2020

• Hindustan Unilever ( 2180) is Sell. Will drop like a stone to below the prior low of 1760. Markets does not pay for doing the obvious. Its overdone.
• Crude may see one more low . But that next low may have a very good chance of being the final low and then a sizzling move that may see crude at least double up QUICKLY. Stay tuned. ONGC ( 65) may be a good bet.
• 50PE@1.4 ( 4100 Lot size) ; 86K/6K
• 60 PE@ 3.5 = 1.08L/15K