Time to Connect the Dots
What we are witnessing in the markets right now is a classic tussle between bulls and bears where bears are banking on the rising number of corona virus cases and the fear of lockdown to build confidence while the bulls are focusing on the Q4 results and international markets to build their case. In the near term, the bears may have an edge; however, I have no doubt that things will improve at a surprisingly swifter pace once we are over with the nagging issues thumped on us by the current pandemic.
What is the most comforting factor amidst all the chaos is the confidence and readiness that corporate India has shown this time around. Unlike the previous year, corporate India is much leaner, sharper and flexible in the course of the second wave of the pandemic. The efficiency is getting reflected in profit growths and that is what the investors would be hoping to encash on – by betting on those companies which have improved their efficiencies the most as is being reflected in the latest quarterly results. The ongoing results season talks about the resilience of corporate India and how the companies have adjusted to the pandemic situation. Our cover story in this issue captures the Q4 results and trends this season.
It is a special issue for the readers as we bring the Public Sector Units Awards to you after meticulously observing their performances in the past year. You will be surprised about how well the majority of PSUs have being doing lately and outperforming key benchmark indices by a good margin. Hunt for some investing ideas in this space – it’s not that difficult with the help of our special coverage on PSUs. Further, industry analysis is the key to stock analysis. In one of our special stories we have discussed in detail the various aspects one has to focus on while doing industry analysis. I am sure you all will benefit from the details discussed.
Gold has been out of picture recently with equities and crypto currencies grabbing the headlines. As gold nears the price of Rs 50,000 per gram, we think investors’ and traders’ interest in the asset class may revive. If you want to understand the myriad triggers influencing gold prices in the current market condition, glance through our special story on gold right away. One of the key risks linked to equity markets is the inflation risk. I think inflation is simply great for equity markets when it is in a recovery stage – something we are in right now.
Investors ought to be open-minded to the prospects of markets inching up with rising price levels rather than markets going down owing to inflation risks. We are not there yet when the rising price levels will start hurting the demand. Investors who can connect the dots between the key factors such as economic recovery, commodity prices and equity markets would be in the best position to decode the investing opportunities in the current markets. Beyond identifying quality stocks, wealth creation also depends on how much you invest on your conviction ideas. Do bet handsome on them while remaining diversified in order to strike a balance between risk and reward in the current situation. Happy investing!
RAJESH V PADODE
Managing Director & Editor