MIPA

Make India Prosperous Again

The adjective prosperous often describes a person or a person’s future, but it can apply to anything that’s experiencing growth and success. Prosperous derives from the Latin word prosperus, meaning “doing well.” Great pronouns of this happy word include golden, well-heeled, flourishing, and thriving.

Routine vs Potential days
Most days are normal routine days and some days have potential. Potential to change normal and routine into exciting possibilities. Union budget 2017 on Feb 1st could be one of those days. Not saying it will be for sure, but it could be. Opportunity is not lottery, it is a possibility. An opportunity turns into success only for those who bet on the possibility it opens up.
What if the opportunity doesn't work and becomes a threat? Accidents happen, we recover from them and look for new opportunities. That's simple.

Budget'17 the opportunity
I have high hopes from this budget. The banking system is flush with cash, thanks to demonetization. Rural sector is on a recovery path, thanks to monsoon. The groundwork behind most of the major reforms like GST, land acquisition bill, bankruptcy code are in place, thanks to Modi & his team. The government has ambitious plans digitization, FDI reforms, defense, housing for all, infrastructure, smart cities, 24*7 power and electrification. Modi government has completed 2.5 years in office , enjoys massive public support and goodwill .. it's now or never for the Modi government. I would be very disappointed if the Budget on 1st Feb is anything short of revolutionary. As a high stakes investor I am always prepared that things may not work out the way I want it to but at the same time I am always hopeful that the next opportunity will be a life changing opportunity.

Make India Prosperous Again (MIPA)
If it works out the rocket is ready to launch, get onboard. If it doesn't, remember the day had the potential. There will be another day and we will bet on it again. Now I will keep quiet and leave it for Jaitley to decide to make India prosperous again or wait for another time.
Why a Trumpistic angle to this blog? .. because public don't like Trump but I think there are two sides to everything and I am not afraid to appreciate the good side .. Make America Great Again was an absolute master stroke .. this blog is dedicated to a similar idea of making India prosperous again !

accept facts to win

How can you deny what has happened? What is the point in wishing that it should have not happened? Once something has happened, it has happened. What happens is not random, it is a function of everything else that happens. Unless you believe in parallel universes, this is what it is. Off-course in future you can try to change things but first you need to accept what has happened. Denial of facts is for losers.

The world is constantly moving in a direction. Your best chances of winning lies in aligning yourself to this direction. On the opposite side lies nothing. Note I am not saying that you cannot change things, but even to change things you still have to align yourself to this larger direction. If you try to change things by going in the opposite direction, you will be left behind and forgotten.

The winning formula
Keep an open mind. Accept. Move forward. Move in the strongest direction. If you want change, lead the change from the strongest direction. Over time movement in all other directions will perish, only the one's in the strongest direction will persist.

Trust me, you will need it this year
In stock markets, I believe being able to align yourself to the strongest direction will be the winning attribute that will get you through this year.  2017 is going to be a tough year. Trump policies, aggressive rate hikes by US Fed, instability in EU, volatility in currency, commodity, bond markets. These things will happen. You have to accept it, find the strongest direction and move in that direction. If you try to go in the denial mode, run away from these events, you will perish in any other direction.

For me a lot is at stake always in the stock markets at any time. After 2016, it is painful to think that we have another year ahead of us full of uncertainties and volatility, but it is what it is. Will not try to run or hide from it. 2017 will be the year I will bet on the market most aggressively and will wait for the strongest direction to emerge and when it happens, hopefully will be among the front runners in that direction. And that's the way to go for me !

threats and opportunities

Threats

US FED Rate hike
US Fed has guided for 3 rate hikes during the year 2017 which is one of the dangers for the markets addicted to free money. The FED meeting dates are given below and is important to watch out for

Oil price
India is a developing economy and heavily dependent on oil imports. Rising oil price can throw all the govt plan of lower deficit and higher developmental spending out of order completely screwing the macro picture. It will also lead to higher inflation hitting the household budget. If oil spikes above $60, we will have to re-think everything. This will be a difficult problem even for Modi-Jaitley-Patel together. Similar argument applies to other commodities also where India is a net importer.

EU
Elections and referendums are expected to happen throughout the year in EU. Be it a follow up on Brexit, fiver star movement from Italy, German elections, Scottish referendum, Greek debt problem. They are all going to haunt the markets throughout the year.

Geopolitics & Terrorism
While situation in Syria is slightly better, the problem is far from over. EU refugee crisis, terrorist attacks around the world, the south china sea problem, the north korea problem, the African & M.E crisis, I wonder how long can the market ignore all this...

Trump effect
If market finds investing in America more attractive then very little is left to invest into emerging markets. These are tectonic shift events that can lead to few earthquakes here and there. However things will settle down eventually. Not all that worried about this.

US bond market
Something about rising yields and crashing bond markets that could lead to chaos in the world markets. US bond market is supposedly in a big bubble that can burst anytime, however we have been saying so for nearly everything realty, stocks, bonds, .. so let's see.

Opportunities

Economic recovery from demonetisation
As the cash availability improves there will be a burst in the commercial activity due to pent up demand. All I can say is that the worst is behind us and golden days are ahead. This was a historic event and I am just happy that we are done with it

Gloal India Rankings & Ratings
Expect India to improve in several areas in global rankings like ease of doing business, corruption, etc which will make it an attractive investment destination

Politics
Hopefully recent measures has only strengthened Modi's position in Indian politics as a leader who genuinely wants to fight corruption and uplift the huge poor population of the country. It is only in India that people will accept so much suffering and still support the leader. It is called being invested. The suffering was not optional so people want to give Modi some more time hoping that the rewards will follow. UP election will be a litmus test for the same, but an adverse outcome will not be disastrous either.

GST
GST along with demonetization and digitization brings huge opportunities for the organized sector in India to grow into global behemoths.Expect huge wave of consolidation in the market. We will soon enter the phase when the big will keep getting bigger and better. This will present one of the largest wealth creation opportunities once the snowball starts rolling.

Infrastructure/Housing for all/Defense/Digitization push
It is a super ambitious project and could trigger a China like growth in India. I am not sure how much we will achieve on the ground but surely this can lead to some spectacular gains in stock markets

monsoon
Another year of good monsoon is extremely important. The rural sector could not leverage the good monsoon to the fullest due to demonetization and is still very fragile. A bad monsoon this year will be disastrous, but let's just hope that la nina was not just a one year wonder. A good monsoon on the other hand will bring in all round prosperity for everyone.