lets go - time to make serious money :)

sr55662 · Post by **sr55662** » Thu Oct 13, 2011 7:31 am

I just wanted to propose a hypothesis on what is going to move the markets and see what the learned folks here think about it.

I think the main game in town is Obama?s re election plan. He is colluding with Bernanke to actually flood the market with liquidity and regardless of what Beranke say?s there is QE3 actually underway. The only thing which was spoiling the party was Europe and finally the local populace in Europe is scared enough by the markets that the leadership in Europe finally has incentive and motivation to provide a reasonable backstop plan. Off course the political process is never a linear process and there will be more twists in this tale but I think that Q3 earnings will have enough positive surprise ( I think the recession fears are overblown here, look at the preorder stat for iPhone 4s) to drive the market higher. Also I do not think that dollar will strengthen anymore which will mean that smart money will start to enter India market soon. So my game plan is
Buy growth sectors like Technology ( By the way avoid financials at all cost. Obama will make an example out of the Investment banks and because of massive de risking and compliance costs there earnings will continue to underwhelm)

Get Into India with rate sensitive ( I think RBI is ready to pause)
Buy Gold ( I think in 12 months further dollar devaluation)

What u guys think
Regards
SR

ThorlaPatil · Post by **ThorlaPatil** » Fri Oct 14, 2011 2:26 am

Amen Brother, Hope you bought GOOG.

sr55662 · Post by **sr55662** » Fri Oct 14, 2011 6:00 am

even better , out of money calls :)

gujju · Post by **gujju** » Fri Oct 14, 2011 7:35 am

sr55662;416053I just wanted to propose a hypothesis on what is going to move the markets and see what the learned folks here think about it.

I think the main game in town is Obama’s re election plan. He is colluding with Bernanke to actually flood the market with liquidity and regardless of what Beranke say’s there is QE3 actually underway. The only thing which was spoiling the party was Europe and finally the local populace in Europe is scared enough by the markets that the leadership in Europe finally has incentive and motivation to provide a reasonable backstop plan. Off course the political process is never a linear process and there will be more twists in this tale but I think that Q3 earnings will have enough positive surprise ( I think the recession fears are overblown here, look at the preorder stat for iPhone 4s) to drive the market higher. Also I do not think that dollar will strengthen anymore which will mean that smart money will start to enter India market soon. So my game plan is
Buy growth sectors like Technology ( By the way avoid financials at all cost. Obama will make an example out of the Investment banks and because of massive de risking and compliance costs there earnings will continue to underwhelm)

Get Into India with rate sensitive ( I think RBI is ready to pause)
Buy Gold ( I think in 12 months further dollar devaluation)

What u guys think
Regards
SR

Are you an MBA?

sr55662 · Post by **sr55662** » Fri Oct 14, 2011 7:50 am

no just a garden variety Techie :wink

sr55662 · Post by **sr55662** » Fri Oct 14, 2011 8:13 am

Any takers for this theory ? so far 2 out of 2. Shorted JPM and Long GOOG. I am scared that I have started to believe too much into it. China CPI & PPI came better then expected today. I think time to go long on BANKNIFTY. Please ... Please ... Please where are the Guru's ???

Sid · Post by **Sid** » Fri Oct 14, 2011 9:16 am

Well I do believe that this is the right time to buy equities in both India and US. Not so sure about Gold at this point. I don't want to hold too many Dollars in cash.

deardude · Post by **deardude** » Wed Oct 19, 2011 7:19 am

Whether this is a good time to invest depends on the time horizon, long term I am bullish on India. There really isn't much growth left in the western countries, emerging is the place to be. Short term, hard to predict, but I am not as optimistic about Europe. I think things will get worse before they get better, there will be many panics simply because the memories of 08 are still fresh. This will impact markets everywhere, including India. I'd wait it out and hang on to dear cash.

sr55662 · Post by **sr55662** » Sat Oct 22, 2011 5:54 am

Hope all of you are hedged for next week's event. I enjoyed the run while it lasted but am going in with only a slight long exposure. Anyway I wanted to revise my stance on Indian market and that is based on my expectation on Inflation. I do not think Indian inflation can be tamed without excessive demand compression which means that RBI will have to keep the interest rates at elevated level which will continue to bring the growth rate down.
The Indian inflation is totally dependent on commodity prices . The piece I missed earlier was that it is Rupee denominated price not dollar denominated price.
Looking at the European event there are two possibilities
1. Europe comes out with a reasonable backstop plan. The market will rally and global inflation expectation will go up ( Europe will join US party in printing the money) and so will commodities. This will
be bad for indian Inflation. < ADDED - This is also the case for being long GOLD. there is exactly 50 % probability of being right :) . I would rather go and wager that in Atlantic city :) at least I am assured a free Buffet :) >
2. Europe comes out with a weak plan - all hell will break loose - dollar will be the safe heaven again and Rupee to Dollar rate may go to 60. Very bad for Indian inflation.
Looks like India is in a loose -loose situation for no fault of its own. I think this is the primary reason that unlike 2008 India has not seen any substantial smart money flow and hence under-performance to global markets.

So is there a winning trade to be had ?
I think the winner trade is trading the ADR's of Infy , CTSH and wipro in US. the rational is simple if europe collapses the dollar becomes stronger hence the rupee denominated earnings of these companies looks even better. In the event europe comes with a reasonable plan whole market rallies and these companies benefit from that. There is another factor. Financial firms are under extreme pressure to cut costs. They have no other option but to leverage indian IT companies even more. This will continue to increase their deal flow. There may be margin compression but I am very positive about net revenue growth.

Do this trade and brig the lakshmi home this deepawli :)
Shubh Labh
SR

bigdreamer · Post by **bigdreamer** » Sat Oct 22, 2011 9:58 am

sid_earth;416442Well I do believe that this is the right time to buy equities in both India and US. Not so sure about Gold at this point. I don't want to hold too many Dollars in cash.

Time to offload $$$ and exchange to rupees.
Breached past 50 rupees per $