The stock market is not a mirror image of the economy. So, please do not flash your low intellect by making statements like the stock market is disconnected from reality.

You have no idea then what the stock market does.
The stock market is a discounting engine. It looks at the current economic situation and then visualizes a new economic landscape and picks winners and losers. At this point in time, the only thing that matters - What the market believes the future will be. It's only belief
When the covid crisis started, the market quickly visualized that people will work from home and companies will under pressure to digitize to be in business and hence all those stocks rallied. The market started discounting accelerated Digitization growth. Was that disconnected
Apple, Microsoft, Amazon rallied but Google did not.
Why - because biggest advertisers on Google are travel portal companies and they pulled back on all advertizing. So Google still trades at $1 trillion while rest trade near 1.5 trillion dollar. Is this Disconnected from reality
The market quickly realized that the US Govt will pump in money in people's hands and that will drive up the consumption. So was market wrong in pricing up consumption plays
The sad part is that there are a large number of so-called intellectuals who have zero knowledge about how the market functions and they keep pushing the theory....oh the market is disconnected from the reality as if they only know the reality
As a price action have to watch price action to understand what the market is visualizing and trust me it makes so much sense. You can clearly see the new future the market believes in. Now there is no guarantee that whatever the market thinks will happen for sure.

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More from @smarket

22 Feb
Let's teach some basic economics to educated idiots:

How fuel price @100 today is different and better than fuel price @100 back in 2013:

It was a hyperinflationary period in India and higher fuel prices were adding more fuel to inflationary expectations killing economic growth
Fuel price @100 today is adding more taxes to Govt kitty. It's easy to collect and helping Govt to plug in some deficits. The inflationary environment is benign. The value of Rs. 100 today is a lot less than Rs. 100 nine years back. It's not apple to apple comparison
Nine years back, when a consumer paid Rs. 100 a liter for petrol, a huge component of that went to Oil-producing nations. Today, a huge component goes to your Govt.
Tell me which option is better.
Read 4 tweets
21 Sep 20
Lots of people do not understand dividend growth investing. It does not mean investing in a stock that gives you a high dividend yield. Actually, doing that leads to more destruction of wealth.
Dividend Growth investing is positioning for high yield income in the future. Example:

You buy a strong company that's available at a 3% dividend yield right now. But has a track record of increasing dividends and is a growth story, not a dead business
Two components

Dividend Payout ratio i.e. How much profit is distributed as dividend [Example: 40%. If it makes a profit of $1, it gives 40 cents as dividend] It means management has headroom to increase the payout

Profit Growth: As profit grows, same payout means more dividend
Read 5 tweets
18 Sep 20
Bullish theme:

Digitization - Data and Digital properties

Distributed Supply Chain means more market share for Indian Pharma Supply Chain and Chemical companies faciliatetd by
Anti China sentiment and Atmanirbhar Policy (domestic manufacturing for domestic consumption)
Accelerated Digitization of Global companies to drive big deals for Indian Tech companies and Remote working to drive high margin offshoring which can be done in Tier 2 Tier 3 town. It means low-cost scaling. It's a structural reset for Indian IT companies
No wonder there has been a big bull market in
Specialty Chemicals
Read 5 tweets
16 Sep 20
Reading Price Action is all about reading price moves and then investigating fundamental reasons to find out if this is for real...

The real issue...have an open mind of why something is happening

It helps you discover great ideas very early
Let me share some examples:
During last week of March, US Secretary of State Pompeo tweeted about his phone conversation with Indian Foreign Minister and reconfig of Pharma Supply Chain

It started the bull market in Pharma. I covered it as a Buy
When Pharma/Chemical became the theme, then all you had to look out for a breakout

IOL Chemicals at 265 now at 773
Granules at 155 now at 369
Glenmark Pharma at 315 now at 493
Balaji Amines at 500 now at 873
Alembic Pharma APLL at 740 now at 943
Solara Activa at 780 now at 1003
Read 6 tweets
9 Sep 20
My view on Tesla:

1. Tesla made a big bull run precovid when it rallied to 190
2. Covid crash pulled the stock down, no fault of Tesla and the stock pulled back to 50-week ma of 80
3. Covid recovery happened and this stock rallied early and broke out above > 190 Image
Tesla stock took a leadership position and rallied from 200 to 340. It was an insane rally.
The stock then went quiet and the board announced a stock split on August 11 and the stock made another insane move from 275 to 500
Now there is nothing left to price in Image
Tesla is now the top 20 most valuable company in the world
Every stock witnesses an insane momentum and once the momentum fizzles out, it becomes a difficult volatile stock to trade.

Nobody knows the trajectory now. It can bounce from here at 50 dma or sell off to 275
Read 4 tweets
24 Aug 20
The market always makes sense in hindsight. Let me share why the market has been crazy about Tesla since Nov 2019.

Once upon a time i.e. before Oct 2019: Tesla was known for missing delivery targets, production milestones. Musk was never considered good at managing expectations
Tesla's factory in Shanghai changed that perception for good. That was the biggest shock element for the market which was extremely bearish on Tesla. There were people who had bet everything that Tesla would go down to zero.

The world turned upside down
Stock Price movement is a function of how people are positioned in the stock which usually reflects expectations and when that change...the price movement is dramatic.

Breakout to new high is the starting point of a new journey Image
Read 5 tweets

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