Deepak Singh Profile picture
I read economic and political trends. Tweets are not advice or recommendations. US stock market: https://t.co/qFEDHSrx5p Indian stock market: https://t.co/NEBEiL4duL
Anjan Profile picture 1 added to My Authors
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
Reliance
IndiaMart/Naukri
Pharma
Specialty Chemicals
IT
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
smarketpremium.com
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
15 Aug 20
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
Read 7 tweets
9 Jul 20
Laws of the market:

1. Every year the market falls in love with one particular stock and then it just takes it to the moon. Such stocks before making the move offer multiple opportunities.

2. You cannot stop an idea whose time has come.

Case Study: IOL Chemicals and Products
IOL Chemicals and Products

Breakout in Feb but covid happened and the stock made a quick 50% move before collapsing

smarketpremium.com/2020/02/24/why… Image
A good idea can get disrupted due to market turbulence but then it does make a comeback.

IOL CP offered another opportunity at 262...the real move this time...now at 627
smarketpremium.com/2020/04/22/wil… Image
Read 5 tweets
26 Mar 20
Indian Govt today announced the CHARITY package. This Govt's obsession with EAT and SHIT economic model is the real reason behind the current economic mess
The problem with Eat and Shit economic model - It depletes your resources with no real progress. It's an endless vicious cycle and is done in the garb of morality. After all who can argue against helping the poor without realizing that you are not helping the poor. [Classic Left]
In any crisis, there are two segments of the population who need no help: (1) People at the top; and (2) People at the bottom. People at the top have resources to weather any storm and People at the bottom have nothing to lose. It's people in the middle that needs the help
Read 6 tweets
23 Dec 19
X Bizmen launched a Real estate project...sold 100 apartments for 1 crore and collected 100 crores from customers. Then he used 100 crores to buy land at some faraway place at obscene prices. Then borrowed 60 crores from PSU Bank through Phone a friend. 1/n
What happened?
1. Bizmen gave lots of ad dollars to sickular channels and got good publicity
2. Channels also helped him create a more high flying profile
3. Customers got Ghanta...no apartment
4. Banks got Ghanta...no loan recovery...no buyer for that land 2/n
Now @narendramodi should do the following:

1. Deliver apartment to those customers
2. Give the money back to the bank
3. Bizmen should not be harassed
4. GDP should skyrocket
5. Jobs should comeback

waah waah Aao bakchodi karein
Read 4 tweets
23 Dec 19
Two things happened in 1991:

1. Liberalization [Foundation for competent private sector]
2. Mandal Implementation [Loss of state competence]

Before 1991: Govt run state and colleges were damn good...but then the Social Justice movement killed the competence for good.
2008-2013: Second big moment in recent history

Shameless crony capitalism
PSU Banks financed corruption
Massive Social Sector spending with incompetent state - Runaway inflation
Things became unaffordable for everyone
It was a difficult choice when Modi Govt came to power. Now there was a deadly combination to deal with:
Corrupt Private sector
Incompetent State

India is blessed that Modi decided to disrupt status quo
Read 8 tweets
20 Dec 19
I don't have a PhD like Arvind Subramanian. I cannot talk about Intellectual trash like him. I am not a professional pessimist like him. I don't watch the rearview mirror to tell the obvious. But I can tell you why the market is moving up. Please read this thread completely.
A financial market is a discounting engine. It does not look backward. It looks ahead. There is only question it debates all the time: What will be the impact of steps Govt is taking today six months, nine months, twelve months from now
Yes the economy looks bad right now. But if you look at the reforms since August - Corp tax cut, FPI tax withdrawal, Bankruptcy laws execution - the market is getting the confidence that the Govt is responding to the situation. The market likes the work being put in right now
Read 6 tweets
8 Dec 19
I am not an economist by training. I understand human behavior, and what drives economic activity. The slowdown in GDP in India has been caused by a multitude of factors:

Complete disruption of old economic architecture [Demonetization, Formalization, GST, Bankruptcy Law]...
Result: Dramatic Negative Wealth Effect. This has caused massive erosion in the Value of stocks, and Real Estate. Also, Govt drive to keep inflation under check has dried up credit
I don't remember any time in recent history when so much wealth destruction has happened in a compressed timeframe. The Value erosion is small-cap midcap reflects that pain. It's a dramatic downward spiral
Read 4 tweets
21 May 18
How Sonia Gandhi and Manmohan Singh destroyed Indian economy that even after 4 years - India is still paying a huge price for their misrule
Sonia Gandhi NGO Lobby first threw fiscal discipline out of the window and she went berserk on entitlement programs [MNREGA, Right to Food, Relentless increase in MSP, Oil Subsidy] but there was no money to pay for it...so what Govt did - it borrowed like crazy
Sonia Gandhi did all this just when Indian Govt increased its wage bill many fold around 2008 and she then undertook ambitious Farm Loan waiver....she literally believed that you can print all this money and hand it over
Read 11 tweets
16 May 18
US Social Security Program:
Working population with a job pays payroll tax [6.2% employee, 6.2% employer] - the money goes into Social security pool and then US Govt pays its retirees - monthly pension from that pool. It's incredibly simple and powerful program
Till date - The Program has worked because it always gets in more money than it has to pay out. As a result - the Program has a $2 trillion reserves. The excess money is parked in Treasuries...so no risk. This is set to change by 2020 when money in will not be sufficient to pay
So from 2020 - US Govt will use the reserves to pay its beneficiaries and as per some estimates - the reserves will be empty by 2034. It means there will no excess fund to compensate for the shortfall in payroll taxes.
Read 4 tweets
3 May 18
Ok Coming to @India_Progress rant against Technical Analysis - well to begin with there is nothing Technical about Technical Analysis. There are two aspects of trading/investing:
1. The underlying Business
2. Buying and Selling of Business that happens in market
It is the job of investing community to determine the price of Business based on hazaar things from cost of money to the cash flow business generates to how much potential business has. It's a guess work all the time when people decide what price to pay for the business
IBM can pay you 4% dividend yield and trade at PE of 10 but nobody will buy in prevailing environment when they can buy Amazon at PE of 200 :)) so to say that there is some perfect way to value business is NON SENSE
Read 7 tweets
30 Mar 18
What's Governance? What's 56-inch chest - to take on the lethargic Govt machinery head on and deliver services to people.
Just watch this 2 min video - Lee Kuan Yew response to Singapore Airlines strike. Unfortunately Modi has refused to take them on and that's disappointing
Democracy is all about creating a compassionate system that cares for its citizens. It's not perpetuating the old feudal system of Governance where everybody wants Govt jobs and nobody cares for citizens. Yes, Modi has been a complete disappointment. This is not a political tweet
GDP Growth, Inflation - all this counts for nothing. Modi was not elected to manage but bring about transformational change the way country is Governed and it has been epic disaster on that front
Read 9 tweets