Indian vs Indian

There are two types of Indians .. some who support demonetization and others who don't. However there is only one fact, demonetization is done. The other type of Indians who don't support demonetization are continuously cribbing about it. Not sure if they believe that if they crib enough about it on facebook & twitter, possibly demonetization will be rolled back? :) Let's see what we can learn from stock markets in such situations.

bulls vs bears vs looser
In stock markets, there are two types of people on any trading day bulls & bears. By the time market closes, it closes up or down and depending upon how it closes either the bulls win the day or the bears. The wise one's accept their defeat and start fresh. The fools stick to their side even after they have lost and what happens to them? they loose more. They loose more everyday until they accept that market is always right.

what's done is done
I am not saying one is correct or the other. It could be short term thinking vs long term thinking. It could be well informed vs ill informed. But guys put the guns down and have a beer or something. It's done. Yes, if you are still hopeful of anything different, let me tell you once again, DEMONETIZATION IS DONE. Whether you like it or not is of little significance now. I believe it will be great for our country but let's not fight about it. Time will prove one of us wrong and one of us right. Till then, let's not kill each other. BTW same goes for Clinton supporters vs Trump supporters... but that blog would be called .. American vs American :)

yes no worries

So some big changes have happened in India with the demonetisation drive and in US with Donald Trump winning the presidential election. Indian markets have fallen from 4% at the index level to 10% at the small cap index level leaving everyone wondering what is going to happen now? Here are few concerns and my opinion regarding the same.

• The black money cleanup will lead to lot of pain in the short term. Yes, no worries.
• People will find loopholes and exploit the black money crackdown. Yes, no worries.
• There could be a prolonged correction in the stock markets. Yes, no worries.
• Real estate sector will be impacted severely, construction of many projects will freeze and many small builders will default. Yes, no worries.
• Small business that rely heavily on cash transactions will suffer. Yes, no worries.
• Consumption will slow down leading to de-acceleration of growth cycle. Yes, no worries.
•  Many small borrowers like farmers, laborers will default leading to increased NPA's in the system affecting MFI's, small banks, NBFC's,  small lenders. Yes, no worries.
• Discretionary spending will take a huge hit. Yes, no worries.
• Luxury goods market will slow down for a really long time. Yes, no worries.
• Black money will regenerate again in the system once new notes are available. Yes, no worries.
• FII's are exiting Indian & other emerging markets. Yes, no worries.
• Anything and everything else. Yes, no worries.

Why no worries?
I don't want to spend too many words on the long term benefits of the black money crackdown like reduced money in terrorism, movement toward cashless economy, reduced corruption, political consensus for the ruling party, higher tax collection & widening of the tax base, huge investments in high priority sectors like defense, infrastructure, healthcare, stronger banking system, improved rankings for the country, stable currency, better credit ratings for the country, redistribution of wealth, upliftment of the rural & poor section of the society, all inclusive growth, effective implementation of progressive schemes by the government like GST, new growth cycle for the country based on solid fundamentals and lot's and lot's of infinite positives that is nearly impossible to list down in a single blog.

India is on its way to becoming one of the greatest economic superpowers in the world irrespective of all the concerns raised. Remember for a complex & massive country like India, we must never do the mistake of thinking in binary terms .. all good or all bad, all black or all white. What matters is the direction and we are on the right direction, hence no worries! Just wait patiently, keep the faith and participate in the revolution, be a part of this history in the making and stop worrying ! I have no doubt in my mind that we will all be rewarded and rewarded YUGE. Hold on and stay with me on this.