Will we have a Long Bear market? when?

Summary

The speaker discusses optimism in the financial markets, emphasizing the influence of global leaders and historical market cycles. Reflecting on personal experiences, such as surviving the 1992 Bombay Stock Exchange bomb blast, the speaker highlights the resilience of markets and the importance of long-term investment strategies. They caution against market euphoria and urge investors to be mindful of cycles, risks, and fear of missing out. Drawing on past recessions and investment experiences, the speaker advocates for a balanced, patient approach to navigating market volatility and uncertainties, especially with future political developments in mind.

Takeaways

• 📈 Long bear markets are unlikely due to governmental and economic interventions, as seen with leaders and institutions like the Prime Minister and RBI Governor.
• 🕰️ The speaker has a long history in the stock market, having started investing at age 17 in 1979.
• 💥 The speaker narrowly survived the 1992 Bombay Stock Exchange bomb blast, a pivotal event in his market experience.
• 💪 Optimism is a key trait for long-term survival in the market; the speaker has maintained a bullish outlook despite multiple crises.
• 💼 The speaker has never sold equity out of necessity but rather to reallocate investments, such as moving between equities, debt, and cash.
• 🚀 The current market sentiment is euphoric, with many investors overly optimistic, predicting extreme growth like Sensex reaching 100,000 by 2025.
• ⚖️ Market cycles are inevitable; sectors like banking and pharma fluctuate, and one should be prepared for shifts in performance across industries.
• 🔍 Estimations and predictions by analysts are often speculative, and factors like market share don't always guarantee success.
• 🤔 FOMO (Fear of Missing Out) can lead to poor investment decisions; patience and satisfaction with returns are crucial for long-term success.
• 📅 Political and economic uncertainty, such as upcoming elections in 2024, could heavily impact market trends and investor confidence.

Q & A

What is the speaker's perspective on the possibility of a prolonged bear market?

The speaker believes that a long bear market is unlikely today due to the efforts of key figures like prime ministers, RBI governors, and the US president to prevent the market from going down and staying down for extended periods. A long bear market seems like a memory from the past, not something likely in the current market environment.

Why does the speaker consider themselves an optimist in the stock market?

The speaker considers themselves an optimist because they have consistently stayed in the market through various challenges, including major events like the 1992 Bombay bomb blast. Despite setbacks, they maintained optimism and did not sell shares in panic, which contributed to their long-term success in the market.

What significant event did the speaker experience in 1992, and how did it impact their investment decisions?

The speaker narrowly escaped the 1992 Bombay bomb blast by 75 minutes. Despite the chaos and the tragedy, where they attended 12-13 funerals the following day, the speaker chose not to sell their shares. This experience reinforced their belief in resilience and optimism in the market.

How does the speaker approach selling shares in the market?

The speaker mentions that they have never sold shares because they needed money. They have only sold equity to buy other forms of investment, like debt or other equities, and have never sold equity to buy gold.

What does the speaker mean by 'market cycles,' and how should investors prepare for them?

The speaker emphasizes that the market is cyclical, meaning some sectors or companies may perform well at one time while others may not. Investors should be prepared for these shifts and not assume that certain companies or sectors will always perform well. They suggest being cautious and ready for changes in the market's dynamics.

Why does the speaker advise against getting carried away by popular investment ideas or memes?

The speaker warns against getting swept up in popular investment trends or memes, as these may not always be accurate indicators of success. They mention that stories about certain stocks being must-buys, like Yes Bank or Asian Paints, may not always hold true, and investors should carefully evaluate their choices.

What is the speaker’s view on stocks like Yes Bank and Suzlon, which were previously written off?

The speaker notes that companies like Yes Bank and Suzlon, which were previously written off as bad investments, have rebounded and provided good returns for those who invested at the right time. However, they stress that such investments are risky, and past performance does not guarantee future success.

How does the speaker approach building a long-term portfolio?

The speaker explains that they are building a portfolio for the medium-term future, specifically for 2024, rather than for the long term like 2033. They carefully select stocks based on potential rather than chasing short-term gains, emphasizing patience and a long-term view in investing.

What is the speaker’s advice on dealing with 'FOMO' (fear of missing out) in the market?

The speaker advises against letting FOMO (fear of missing out) drive investment decisions. They highlight that people may feel compelled to buy stocks because others are doing so, but caution that such decisions can lead to overvalued purchases. Patience and thoughtful investment strategies are more important than reacting to market trends driven by fear.

How does the speaker relate the unpredictability of life to market forecasts?

The speaker uses the example of Cyrus Mistry’s unexpected death to illustrate how life’s unpredictability can affect market forecasts. They stress that analysts' predictions, while based on data, cannot account for unforeseen events, and therefore investors should be cautious when relying on market estimates.