SAINIK Profile picture
4 Oct, 16 tweets, 3 min read
1. A brief summary of discussions on CH on 3/10/2021 "Will Oct spring a surprise - Lessons from History ". “October: This is one of the peculiarly dangerous months to speculate in stocks. Others are July, Jan, Sept, Apr, Nov, May, March, June, Dec, August & Feb.”
― Mark Twain,
2. Oct has had the biggest fall (22 %) & the biggest rise (16 %) in a study of S&P 500 since 1964. Oct'29 & '87 are well known. In India too, Oct '94,'98,'08 are known for the downside while '07 rallied. In summary, Oct is a very "dangerous" month due to "mindless" volatility.
3.This time Oct is likely to witness the same kind of mindless volatility due to extended valuations; geo politics; RBI policy; Fed mischief, Inflationary trends, results season, China shenanigans etc .
4. US has again restarted its bullying tactics with USTR calling out China on the reneging on the commitments ( Announcement due today )
5. FED members have been caught with their hand in the cookie jar, 2 of them forced to resign & the third ( Vice Chair) will be under severe pressure this week & finally the noose may tighten on Powell himself. Never in the history of the FED since 1913 has such a thing happened.
6. Inflation is the 600 pound Gorilla in the room which CBs said was "transitory' a couple of months ago & now reluctantly agree that its sticky. Had pointed this out in my pinned tweet 2 months ago. This will continue to roil Risk Assets for quite some time to come.
7. Has a TOP been made ?. Very difficult to say but not so material since the Indices may still make new highs but many sectors ( IT, Auto, FMCG, Cement ) are showing distinct weakness & are unlikely to go along with the Indices should the Indices attempt further highs.
8. Anyway most investors/traders are concerned with stocks. The trick is to identify stocks/sectors which still have "juice" left & get out of the overbought/over priced ones .
9. For LT investments, "Ugly" is still the way to go, while "Dirty" should be avoided. For adventurous traders "Dirty" can be sold short for LT. For those seeking "safety", the "Safe- Risk" portfolio should give solace.
10. Gold has been overshadowed as a "safe haven" since many months. Looks like the time has come ($ 1750) ; Dollar will continue to strengthen; Energy is likely to be on the boil for some more time.
11. Interest rates have bottomed out & will harden as stagflationary pressures put the CBs including RBI under pressure to talk hawkish. This would probably mean the BN could be having its "Last Hurrah"
12. BTFD was the flavour of the season for the last few months. This is likely to be challenged henceforth & SOS (Sell on Strength) is likely to be more profitable.
13.The next 12-14 months is likely to test the nerves of the Bulls with a possible cut of 25-30 % from the ATHs
14. In conclusion, INDIA is a LT bull market & if one is prepared to be choosy, one can get bargains even now, provided one should be prepared to hold on for 3-4 years. "Ugly" likely to provide good returns leading up to 2025. Thanks
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More from @sainik636

1 Oct
1." LOOKING BACK, LOOKING AHEAD" or as @CNBCTV18Live would say: "Quarter se Quarter Thak".Kudos to that copywriter who devised this phrase QSQT.{ As an Ad professional who cut his teeth in Ogilvy Advertising for me this would have been a dream line}👍 Some thoughts on Markets.
2. At the beginning of the last Quarter had charted out mentally that September would most likely be the "peak" month, did not speculate on what would be the Level, though must admit that, the levels did surprise me.
3. While the Indices have come down significantly from the highs of September we still don't know whether they were the "Peaks". Nevertheless the moves indicate that any rallies from here are on, are likely to be sold since "something" has changed.
Read 9 tweets
29 Sep
1."The Train has left the station" aka "Do the Advisors have Skin in the Game" ?.
2. Huge Interest in the Market & large number of market Analysts/Strategists expectedly giving "gyan" on Indices/Markets & collecting huge fees through Webinars/TV Appearances sucking in the naïve retail folks. Recent volatile moves have made these guys go on to overdrive .
3. Moving Targets are being given on Indices with most of them blithely asking followers to sell ONLY Below xyz levels while looking forward to higher & higher targets ignoring ground realities. Recency bias at peak since they have been successful in the past.
Read 9 tweets
29 Sep
Short term UGLY ( one week). : Hind Petro ( 289) SL 286; Target 299. Disc: Skin in the game.
Pushing my SL to cost
Booked half @ 296 , increased SL to 292. Target upped to 305.
Read 4 tweets
26 Sep
1. UGLY DUCKLINGS vs DIRTY DOZEN. Recently ( July 23rd) had devised a hypothetical portfolio of stocks which were popular at one time, but were being shunned by the markets at that point of time. Called them as "Ugly Ducklings". 15 in number.
2. Most of them had good fundamentals ; however where there was a sharp deterioration in fundamentals, it was visible in the exaggerated decline in their prices eg Yes Bank & IDEA.
3. Typical of any powerful Bull Market, this portfolio also has performed well, however the point to note is, that this portfolio was designed to withstand the ensuing Bear Market, whenever it comes. (My definition of a Bear Market is: 25 -30 % drop in Nifty from the TOP).
Read 11 tweets
22 Sep
1. Different Scenarios & Conclusions. A longish thread. Characteristics of Inflation & Deflation. The CBs are making it sound we are in a deflationary situation by calling Inflation as 'Transitory". Do you believe them ?
2. What then is Hyperinflation ?. This may happen if we continue to pump money regardless of the inflationary forces raising their head.
3. How frequent is Hyperinflation & why did it happen?
Read 23 tweets
22 Sep
1.Opinion trump Facts : Was hearing @udayanmukharji's show where Ridham says he has been tracking Sensex since 1985. Sensex came into being only in 1986. ( Jan 2nd 1986 ) 😳
2. In the same program Udayan asks as to what will be the trigger for a major global correction. He should know that there are NO identifiable triggers for any Top/major correction. 🙄
3. @ShekharGupta also on the Evergrande issue. He was saying global markets are already having severe falls because of this fear, including India. All he needed to check was the last couple of weeks moves. Or for that matter even yesterday's moves, especially the US opening.😬
Read 5 tweets

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