As COVID cases rise in India, Markets also rise. WTF?!
The last week has been really chaotic. The number of COVID cases were shooting up in India, mostly because of a mutant strain of the Corona Virus. It was only like yesterday, when last year around this time I was returning to India. This is Deja Vu on a larger scale.
But what is really annoying is the lack of lessons learned. The one thing the Prime Minister Modi did do right imho, is avoid a lockdown. The cost of doing so was more damaging than trying to cope with it. As much as human lives matter, a lockdown did not improve anything. I had been suggesting this a long time ago, only to be rebuffed as an inhumane person.
In hindsight, we know what's working and what hasn't. At least this time, people are willing to act like human beings and help each other, when the government has failed to do its job.
Apparently the government had a detailed report that there could be a second even more severe wave. And yet what did our politicians do... nothing, as they always have. They love chaos, so they can feel important - that's the way they are.
Hopefully people will learn from this episode and decide who they want to govern them next time. Not like they have much of a choice, but it is about time we held our politicians accountable and transparent, no matter.
So with all this, why wasn't the market correcting or crashing. Well for one, people were not surprised, they knew what the virus was, the uncertainty had been reduced. We knew the implications of this and what the mortality rate was.
But there's also some psychology, people are waiting for a crash like we had in March 2020. And that may not happen, you don't get crashes every year. You get them every 7-8 years, some times in 10 years.
And with this, people are probably buying the dip, in the hopes of finding a bottom. But there is no bottom, at least for now. And typically, as we say... bull markets climb the wall of worry.
I was also having mixed reactions, my mind was saying there should be some correction, if not a crash, but even that wasn't happening. Shorting the markets was a disaster, and add to that the volatility intraday. If you were to step back and look at the larger picture... the market has done nothing but gone sideways.
I was fortunate to have a call with a well known investor in the Indian markets. And he called my thinking amateurish. He was probably right. The markets have been showing underlying strength, which is why you are seeing it move up.
And it may continue to do just that, if the global cues continue to remain positive. At present the problem is only within India, the spike is only here. We are on the news. But the buying continues, the markets will indicate when the economy is doing bad before the economy shows it.
That's how it has worked, and continues to work.
I even postponed my annual review for this month, only to see the stock prices either hold itself, or rise. Anyways, I will be doing some cleaning with the portfolio. If you'd like to know what's in my portfolio, sign up.
The Zen Master
While there are no lockdowns, people are pretty much locked up in their homes, either because they got the virus, or they're taking precaution. Anyways...
Whatever, the case, I thought I'd push myself to document on a daily basis. Why? Well, because I'd like to have some accountability, and the only way to do that is to actually religiously record your journey. That's something I haven't been able to do consistently, weekly is tough, so daily will be even tougher!
But I'm reminded about Richard Russell, the American financial newsletter writer who wrote the Dow Theory for around 57 years, ever.single.day. That's something to aspire to! I used to subscribe to his newsletter, and it was very difficult towards the end as he had others write for him. But he continued, with one focus. May his soul rest in peace.
To conclude... just adding this after a friend responded:
The market is like your wife, you never know how she will behave, you can't argue with your wife and win, in the same way you cant argue with the market and win...
So if I'd be really happy, if you do enjoy reading this - to recommend it to your friends and family.
Take care, stay safe, and may your longs go up and your shorts go down!
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