DSIJ Mindshare

Fore(Telling) It Like It Is

Just when the noise was getting louder about how the economic scenario is anything but good, our honourable Finance Minster Shri P Chidambaram did what his predecessor should have done long ago. He has set the reforms ball rolling, and at a speed which, in all its probability, will see the economy soon gain its lost ground. Had this been done earlier, it would have at least spared the ruling UPA II the scathing criticism of having applied brakes on India’s scorching growth pace.

It takes immense courage to defy your peers and make decisions that are looked upon to be rather radical but all the same, essential for the progress of the nation. It is the experience and maturity of understanding what is right in the interest of the nation and timing it perfectly with global happenings that probably makes the present scenario as one that will be remembered by generations to come. The Indian economic growth story has been brought back to life just when the world thought it was all dead at the hands of a paralytic stroke triggered by the government’s inaction.

Why are we relating so much with what Shri Chidambaram has done over the past fortnight? Not that we would like to, but there are natural parallels to be drawn in the courage and conviction that we have had and that of Shri Chidambaram in the Indian growth story and the way ahead for the Indian capital market. He has, in all earnestness, unleashed a spate of reforms, believing in the capability of the Indian economy to go that extra mile if provided a proper direction. What have we done on our part?

The markets are as much about calling the bottom as they are about predicting bull runs. In fact, the more adept and savvy analysts would do well in calling the right bottoms, so that investors can benefit from the oncoming Bull Run(s). Dalal Street Investment Journal has been a front-runner in predicting the course of the markets incisively, and this is exemplified by the way our analyses over the past couple of months have turned out to be true.

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It all began with an open letter to the Prime Minister that we wrote way back in May 2012, urging him to take strong steps towards reforms and put the economy back on track. This was towards the end of May (DSIJ Vol. 27 Issue No. 13, dated 17th June, 2012), when we had talked about rampant corruption, spiralling prices, volatile markets and a nosediving currency as some of the key problems that our country was facing. Needless to say, these were only the first few of a long list, and we had, in our open letter to the Prime Minister, Dr Manmohan Singh, asked the ‘CEO of India’ some hard questions.

With time, the voices clamouring for a need to do something about the deteriorating economic condition only became louder. But we also sensed the probability of the economy bouncing back soon. This was based on the long-standing reputation that Dalal Street Investment Journal has had in predicting the future course of the markets correctly based on the vast and accurate research base that we have about the markets and the economy.

It was time to spot the silver lining to the dark clouds, unlike the others who were only grappling in the dark. All it needed was to have a strong conviction in the inherent strength of the Indian economy, that was what we had (DSIJ Vol. 27 Issue No. 15, dated 15th July, 2012). “The fundamental strength of the Indian economy has reflected well in the growth numbers that we have clocked until a couple of years ago. How can any economy which has been on such a sound growth path suddenly find itself struggling to get even its basic parameters right? Is the situation so bad as to warrant so much of pessimism? We, at Dalal Street Investment Journal, do not think so…” is what we said then.

It pays to keep an all-round vigil when there is too much of optimism in the air. Our vigilance with regard to the markets is reflected in the way we have looked at all corners that could spell boom or bust. Maintaining our bullish posture, we then looked at how FIIs, one of the most important market forces, were perceiving the present market conditions. Taking cues from their positions, we had suggested that the markets are about to rally (DSIJ Vol 27. Issue No. 16, dated 29th July, 2012).

After providing ample reasons as to why we thought the Indian economy was well placed in getting past through all the negatives and believed that all that spelled doom was about to vanish (DSIJ Vol. 27 Issue No. 18, dated 26th August, 2012), we went all out to raise that one important question on everyone’s mind – ‘Has The Bull Run Begun?’ Based on all the positive vibes that were emanating on the economic and political fronts, we felt sure that the markets are moving upwards and negativism is on the wane. DSIJ took an in-depth look at whether the Bull Run has really begun (DSIJ Vol. 27 Issue No. 20, dated 23rd September, 2012). The US, Euro zone and China, which were all pulling the markets down, have suddenly found a course that was only wished for by many but rightly predicted by us. Moreover, Chidambaram’s braveheart approach of unleashing reforms has been the one last thing that was needed to put the Bull in charge.

We have been consistently saying that the worst is over, and that seems to be the reality of today. While we continue our sincere efforts at guiding our readers in the right direction, we take great pride in the fact that we have been the only ones to have predicted what seems to be the bottom of the market for now!

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