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Update on the Indian Equity Market:

On Friday, NIFTY closed flat with a marginal 0.01% gain. Yes Bank (+11.2%), SBI (+7.6%) and ICICI Bank (+3.2%) were the top NIFTY50 gainers. Bharti Infratel (-8.6%), Tata Motors (-5.4%) and Titan (-2.9%) were the top NIFTY50 losers. Among the sectors, NIFTY PSU BANK (+3.4%), NIFTY IT (+0.8%) and NIFTY MEDIA (+0.5%) were the top performers while NIFTY METAL (-0.4%), NIFTY AUTO (-0.3%) and NIFTY FMCG (-0.2%) were the top losers.

Excerpts from an interview with Mr Ashok Kajaria broadcasted on CNBC on 23^rd October 2019.

• Kajaria Ceramics reported 1% volume growth in 2QFY20. The quarter was an aberration. Bad market sentiment, tight liquidity situation, floods in several parts of the country and Kashmir situation impacted the volume growth. Kashmir comprises 6% of Kajaria’s market share and there were no dispatches to Kashmir from 5^th August 2019.
• Things have started turning positive. 3QFY20E and 4QFY20E will be more like 10% volume growth reported in 1QFY20 or slightly better.
• EBITDA margin was 14.7% in 2QFY20. Management has guided FY20E margins to be close to 15.0%-16.0%. 
• Earlier the management had guided to volume growth of 15.0% for 2HFY20E and 12.0%-13.0% for FY20E. As per the current scenario, the growth guidance is moderated to 11.0%-12.0% for 2HFY20E and 10.0% for FY20E.
• On the real estate demand front, retail demand is very good. Commercial real estate demand is very bad. Improvement has come in the government sector in healthcare and education by way of projects by various state governments. Marked improvement has been seen in these 2 sectors in the last 2-2.5 years. Private real estate is still very bad. 
• Smaller business verticals of Kajaria have been growing faster than the overall business. Bathware and sanitaryware closed at Rs 2,000 mn in FY19. Management had guided to 30% growth in FY20E. They haven’t been able to achieve that yet but are confident of achieving the target. 
• Plywood business was a Rs 170 mn business in FY19. Management is targeting Rs 360 mn revenue in FY20E.
• On the industry in Morbi, Gujarat, the topline growth was negative in FY19 and FY20E is expected to be flat. The reasons being plant shutdowns in Morbi due to gasifiers being shut down, and the industry players being in deep trouble with a lot of cash flow problems due to GST.
• One positive thing for the industry in Morbi is the exports. In FY19, the Morbi industry did  Rs 70,000 mn of exports out of total industry size on Rs 285,000 mn. In FY20E, the industry target for exports is more than Rs 90,000 mn. If the exports pan out, the players will be okay as the domestic market continues to have a lot of problems. 

Consensus Estimate (Source: market screener website) 

The stock price was Rs 548/- as of close price of 25-10-19 and traded at 30.8x /26.0x /21.8x the consensus EPS for FY20E / 21E / 22E of Rs 17.8/21.1/25.1 respectively.

Consensus target price of ₹ 608/- implies a Price to earnings multiple of 24.2x on FY22E EPS of ₹ 25.1/-.

Dated 19th September 2019

Updates on the market: The stock market traded higher to close the day 0.2% higher at 10,840. This was largely on the back of 5% fall in the price of crude oil, after the historic spike in oil prices following the drone attacks on Aramco’s oil supply. Saudi’s Energy Minister Prince Abdulaziz bin Salman said that 50% of production has already been restored, the Kingdom expects to be at full capacity by the end of September. There is speculation that the Indian government is ready with the 4^th fiscal package to boost the economy. This coupled with the fall in crude prices helped the market stay in the positive territory. Among the sectoral indices, Realty (1.5%), Metals (1.1%) and PSU banks (1%) led the index higher. Media (-0.4%), Pharma (-0.1%) and Auto (-0.1%) were the laggards. Within the Nifty stocks, Tata steel (3.7%), BPCL (3.6%) and Vedanta (3.2%) carried the index higher whereas Britannia (-2.9%), Indiabulls Hsg (-2.8%) and Coal India (-2.6%) declined.

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Growth decelerating to 5% a surprise, reviving the economy is the top priority- RBI Governor

Excerpts from an interview with Mr Shaktikanta Das, Governor of the Reserve Bank of India (RBI), printed in Mint dated 17^th September 2019

·        Saudi oil production represents roughly about 10% of the world oil production and supply. Roughly 50% of that, which means around 5% of the total global output, is affected because of the drone strikes on the Aramco oil installations. This has impacted the crude prices, which in turn impacted the Indian currency. Depending on how it persists, it will have some impact on the Current Account Deficit. If it lasts longer, it will also have implications on the Fiscal deficit.

·        About the current inflation numbers, he mentioned that food prices are cyclical within a year. There are months when the food prices, particularly the vegetable prices or fruit prices, tend to be higher and then they soften.

·        He was asked about the reasons for having high inflation in urban areas compared to rural areas. He said that urban price inflation is mostly because of the prices of egg, milk, etc. have increased. In rural sector, not much of milk purchase happens. Milk purchase is mostly in the urban sector. Milk prices have gone up across states and in a few more states it is yet to go up. So it is things such as the prices of eggs, milk are impacting urban inflation.

·        In August, RBI worked on the GDP (Gross Domestic Product) number of 6.9% with the downside risk. Especially in the first quarter, they had projected a 5.8% growth in GDP. The actual number of 5% came as a surprise to the apex bank.

·        To revive the economy, he added that all stakeholders, all policymakers, including the private sector players have to play their part. Just monetary policy cannot play its role. However, so far as monetary policy is concerned, they have already articulated growth is a matter of priority.

·        The RBI has given 35 bps rate cut in the last policy. Since then, the 10-year yield is standing at 6.7%. He was asked why the yields have not fallen in line with a rate cut. He answered that this has happened due to international factors. The benchmark yield has gone up 8-9 bps because of the airstrike on Saudi oil facilities.  Especially in last one month, every round of increase in yield by few basis points is linked to an international event. Domestically, nothing different has happened to expect the first-quarter numbers came some time ago.

·        The RBI does not have any specific target for the Rupee. The bank’s role is to manage the volatility of the exchange rate.

·        There is speculation that the owners of Paytm bank may take a stake in Yes bank. He said that under universal banking, anybody can apply for a banking license. RBI has certain criteria. Whoever it is, if he passes the criteria he will get a banking licence.

·        About the weakness in the private sector banks, he mentioned that there are strengths and weaknesses in both public and private sector bank and as the regulator and as the supervisor of the banking sector, they are aware of what is going on in various banks and it is very closely monitored by RBI.

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Update on the market: On Thursday, Nifty ended 5 days streak by closing -0.5% at 10,980. Yes Bank, Maruti Suzuki, Tata motors were among the biggest losers. Indiabulls Housing finance ltd, Asian paints, Axis bank were the gainers. Among sectoral indices Auto (-1.81%), Realty (-0.69%), IT(-0.68%), FMCG(-0.71%) closed lower while PSU banks (0.18%),Pharma (0.18%), Financial services (0.24%) ended on a positive note.

Excerpts from an interview of P.S.Jayakumar, CEO Bank of Baroda with  CNBC-TV18

• While having a discussion on amalgamation Mr Jayakumar says 3 things stand out of his mind, one is how do they define new business proposition, the second thing is around the people integration and the third which is equally important is the technology integration.
• Mr Jayakumar says, one of the biggest challenge while integrating is to articulate new business model post the merger or amalgamation.
• In BOB’s case it is about the synergies, the cost structures, cost savings and the revenue pickups that are coming in.
• Customers are getting the benefit of a larger overseas and product platform.
• Mr Jayakumar says, getting the technology integration is the more difficult task because it takes much effort and energy to get in line with core banking systems.
• Speaking about Products link to repo rate, Mr Jayakumar says that there could be some challenges with respect to margins, because pricing depends on external benchmark.
• From earnings perspective, if the dilution that happens because of NPA’s is managed than then there is a pick up that is coming.
• Further adding on margins, he says the consensus view seems to be further decline of 50 basis points (bps) in repo rate.
• From a short-term perspective if the treasury portfolio is improved and some resolutions that the bank is expecting are passed than the bank will be in position to handle the net interest margins (NIM)
• From a long- term perspective, he believes that the monetary transmission takes place and will not affect the margins of the bank.
• Taking about NPA’s Mr Jayakumar says, there are two elements one is slippage number and other is recovery number. He says, that the recovery number would start moving up in Q3 and Q4 as the insolvency and bankruptcy code (IBC) process and the changes then on resolves itself.
• Speaking with respect to BOB’s portfolio, the bank expects the net NPA as of March to be lower than the prior period or prior March and going towards the 3% or sub-3 % percent level.

Consensus Estimate (Source: market screener website)

• The closing price of Bank of Baroda was Rs 96 /- as of 12th September 2019. It traded at a price to Book Multiple (P/B) multiple of 0.6x/0.5x the consensus Book value estimates for FY20/21E of Rs 165/ 179 respectively.
• Consensus target price of Rs 132/- implies a P/B multiple of 0.7x on B/V of Rs 179 for the year ending Mar-21E.

Update on Indian market: On Friday, Nifty gained (+0.91%) to 10,946. Within NIFTY stocks, top performers were Maruti (+3.9%), Tech M (+3.8%) and Tata Steel (+3.4%) and worst performers were Indiabulls Housing (-4.6%) and Yes bank (-1.9%). Among the sectoral indices, best performers were Auto (+2.6%) and Media (+1.9%) and Pvt banks (+1.4%). Worst performing sectors were Realty (-0.6%) and FMCG (-0.2).  

Excerpts from an interview with Mr Ajith Rai, chairman and managing director of Suprajit Engineering published in Livemint dated 5th September 2019.

• The auto ancillaries are probably weathering the storm slightly better. In Suprajit’s case, quite a few of these OEMs have reduced their shares of the business because of their business slow down by 10-20%.
• Companies such as Suprajit have diverse exposure, not only customer wise, across the segment from two-wheelers to LCV, HCV and automotive. They also have multi-sector exposure.
• They are in two-wheelers, they are in the aftermarkets, they are in exports and they are in non-automotive business. So, fortunately, for Suprajit, though the Indian OEM business is an insignificant part for them, from the overall perspective they have not been that badly affected.
• From an overall point of view, this slowdown is certainly affecting all of the auto ancillary companies but it is a question of how badly or how least affected one is. Suprajit is one of the least affected ones in this business.
• Suprajit has 17 plants across with capacity utilization of around 75% at this moment plus or minus 5% depending upon the plant and the units.
• They are improving their operational efficiencies. They are able to deal with the slowdown more efficiently.
• They get regular schedules from OEMs. At the end of the month, they get the schedule for the next month but during the month also, there is a lot of fluctuation that happens with the OEMs because they also go by what their distributors and the end-users want. So there is a change during the month itself.
• Mr Rai said that “Over the 35 years of my life as an auto ancillary, there have been at least four slowdowns or cyclical downturns and these downturns typically last anywhere from 12 months to 24 months. We are through for about 12 months. It started somewhere in last September. So we are already one year into it and probably at least another six months to 12 months is still pending.”
• There are multiple reasons for the slowdown or the cyclical downturn. Right now it could be the EV threat, it could be the additional cost or it could be the BS-VI issues or the GST. 
• They all are basically waiting for whether the GST comes down or not, whether the GST effect is there or not, whenever that happens, somebody has to take a hit. 
• However, the real story is that the demand itself has to pick up. He thinks it will have to go through the whole cycle to get back to normalcy.

Consensus Estimate (Source: marketscreener website)

• The closing price of Suprajit engineering was Rs 160/- as on 6^th September 2019. It traded at 17x / 14x the consensus EPS for FY 20E / FY 21E of Rs 9.4 / 11.1 respectively. 
• Consensus target price of Rs 182/- implies a PE of 16x on FY21E EPS of Rs 11.1.

Dated: 30th August 2019

Update on Indian market: The week ended on a positive note. The Nifty gained 0.68% on Friday to close at 11,023. Indian equity benchmarks ended higher in anticipation of another set of measures from the government to support a slowing economy. Finance Minister Nirmala Sitharaman announced a mega public sector bank merger where 10 banks will be amalgamated into 4 entities. India’s growth rate for April-June 2019 slipped to 5% compared to 8% a year ago, as per the latest data from the Central Statistics Office (CSO) released on Friday. The growth slowest in 25 quarters is being attributed to a sharp deceleration in the manufacturing sector and sluggish agriculture output.

Among the sectoral indices, Pharma was an outlier with the index rising 2.02%. Within the stocks, Yes Bank (+5.23%), Sun Pharma (+4.03%) and Zeel (+3.69%) were the best performers while Bharti Infratel (-3.23%), Coal India (-2.28%) and Eicher Motors (-1.68%) were the worst performers.

Thyrocare Technologies Ltd – A shift to organised sector to increase in the next 20 years.

Key highlights of the interview given by Mr A. Velumani, Promoter, Chairman, MD & CEO of Thyrocare Technologies Ltd on Economic Times:

1.      Shift from the unorganised sector to organised sector in healthcare space is happening for the last 10 years. This shift is happening with people becoming aware of brands. According to him, the brands are communicating and hence they are visible. So, the move from unorganised to organised has been happening. But the move is very slow. He sees the contribution of the organised sector to reach 20% in the time horizon of 20 years. Currently, the organised market contributes around 5-7% of the total market.

2.      He has seen unorganised players operating recklessly having no control on quality. There are instances where they pay no tax at all. So, the entry of such players is much faster than the growth of the industry.

3.      The preventive care segment is the key reason for the shift in organised space which contributes 10% of the total turnover of the industry. The preventive care segment is growing because of the increased awareness amongst the people. Increase in the per capita income and also the rates of the preventive care which is competitive are supporting the balance sheet of all organised listed players. 

4.      According to him, B2C (Business-to-Consumer) players are comfortable as they do not have true competition on a large scale. The price competition is not sensed in the B2C segment because common man does not know what test costs how much. This is not the case with the B2B (Business-to-Business) players. B2B players like Thyrocare has to deal with another businessman who knows what is the cost and what is the pricing. 80% of the business of Thyrocare is B2B. 

5.      Thyrocare has been facing some challenges in growth but is confident of gaining the growth back on track and believe that the current EBITDA level is sustainable for five more years.

Consensus estimates (Marketscreener website):

·        The stock price was Rs 463/- as of close price of 30th August 2019 and trades at P/E multiple of 25x / 22x / 19x the consensus EPS of Rs 18.6/ 20.8/23.8 for FY20E /21E / 22E respectively. 

·        Consensus target price is Rs 530.4/- implying P/E of 22x for FY22E EPS of Rs 23.8/-

Dated: 29th August 2019
Market update:
With no big catalyst today, the markets continued to fall for third straight day as Nifty dropped -0.9% to 10,948. Today was also the monthly F&O (Futures and Options) expiry day which led to volatile trading session. It is important to note that the FIIs have continued to sell their positions in spite of rollback of additional surcharge. This highlights that the focus is on the economy and corporate earnings growth.

Among the sectoral indices, Pharma was an outlier with the index rising 2.3%. 7 out of 11 major indices were in the red zone with Financial services (-1.9%) and Banks (-1.8%) led the drop. Within the stocks, Sun pharma (+5.2%) bharti infratel (+3.5%), JSW steel (+3.0%) were the best performers while SBI (-3.7%), Yes bank (-3.5%) and HDFC (-2.68%) were the worst performers.

Lupin Ltd: complex generics and specialty to drive US revenues

Following are the excerpts from the interview given by Mr Nilesh Gupta, Managing Director of Lupin, published in Livemint.

• The industry is going through a major transformation at this point of time. He mentioned that the industry had 10 years of strong growth where the Indian generics markets were doing well.
• In the last 2-3 years, the generics industry is under pressure in the US. He attributed two reasons for this slowdown. First, in the beginning, the industry used to have at least 10 customers controlling about 90% of the market. In the current markets, only three customers control the 90% of the market. This shift happened 2 years ago. The second reason is hyper competition among the players for market share which led to pricing pressure.
• Lupin was a late entrant in the generics market. The other companies were already present in the generics market 15 year ago. In spite of that, the company was able to execute the story well for 10 years. In the last 2-3 years, things have started to go down.
• On the generics front, currently the company is facing single digit price erosion. During the times when the consolidation of customers took place, the price erosion was in the range of 12-15%. He mentioned that price increases were very permissible in the past. In the present market, nobody would take any rational price increase.
• Gupta was bullish about Indian market. Lupin is number five in the Indian market. The market is growing in the range of 8-10%, which is above most of the markets. The company has more market share in US than in India. He was of the opinion that as the affordability of India increases, with that increases the ability to get diagnosed and then get treated as well. This will be a great long term opportunity for Indian market.
• About the lawsuit against Indian pharma companies including Lupin in US, the company has done internal investigation. He is confident about the company’s position and merits of the case.
• Biosimilars is a great opportunity for the company. Lupin is expanding heavily in this segment. The company has six products in the pipeline. Three of them are more later stage and the remaining three are in the early stage of development.
• According to Gupta, the big growth drivers for the companies, especially in the US, are going to be from complex generics and specialty in the next five years.

Consensus Estimate (Source: marketscreener website)

• The closing price of Lupin was Rs 734/- as of 29^th August 2019. It traded at a price to Earnings Multiple (P/E) multiple of 19x/16x the consensus EPS estimates for FY20/21E of Rs 38.2/45.8 respectively.
• Consensus target price of Rs 794/- implies a P/E multiple of 17x on EPS of Rs 45.8 for the year ending Mar-21E.

Dated: 29th August 2019
Market update:

With no big catalyst today, the markets continued to fall for third straight day as Nifty dropped -0.9% to 10,948. Today was also the monthly F&O (Futures and Options) expiry day which led to volatile trading session. It is important to note that the FIIs have continued to sell their positions in spite of rollback of additional surcharge. This highlights that the focus is on the economy and corporate earnings growth.

Among the sectoral indices, Pharma was an outlier with the index rising 2.3%. 7 out of 11 major indices were in the red zone with Financial services (-1.9%) and Banks (-1.8%) led the drop. Within the stocks, Sun pharma (+5.2%) bharti infratel (+3.5%), JSW steel (+3.0%) were the best performers while SBI (-3.7%), Yes bank (-3.5%) and HDFC (-2.68%) were the worst performers.

HDFC Life – Robust FY20 strategy to drive growth

Key highlights from interview with Mrs. VIbha Padalkar (CEO- HDFC Life) that appeared in Economic Times – 29^th August 2019

• The market realises a couple of things. One is that insurance companies have a much longer horizon in terms of everything and fundamentals of Indian macros are pretty strong and worldwide it is seen as very strong emerging market.
• The understanding of what insurance products can offer which are different from investment related insurance products as it was known earlier, is becoming more and more apparent.
• Protection is something that insurance companies are beginning to focus on and HFDC Life has been the market leaders in that space.
• They expect the industry to grow from strength to strength despite all the macro level volatility that they are seeing.
• HDFC Life has always believed in the principles of strong growth and profitability. Market share is an outcome. It will continue to beat overall industry growth but not necessarily be the first in terms of profitability as well as market share.
• 1Q margins were very robust, just shy of 30% and this was on the back of a lot of focus on  non-par product which is Sanchay Plus. However, on a full year basis, this will stabilize somewhat. It will certainly be higher than where it ended last year but nevertheless rationalise.
• She believes in a balanced product mix. HDFC life might be exiting the year with a non-par portfolio in the range of about 35 odd per cent.
• HDFC Life continues to be interested in evaluating inorganic growth opportunities that come its way. They have a currency and a strong balance sheet but they want to do this in a sensible manner. As regards Max Life, nothing is on the table right now but they continue to remain interested.

Strategy for FY20:

1. In Q1, agency channel grew 121%, bancassurance grew upwards of 45%, broker channel grew three times, online channel almost doubled. In FY20, they want to continue to forge ahead through all its channels. They want to be firing on all the channels.
2. They want to continue to be known as product innovator and they have a few in the pipeline and they are hoping that by the end of 3Q, they can take some more blockbuster products to market which will be first of its kind.
3. They are known as a technology-focussed life insurer. On that part as well, they have mentioned in the past that they have tied up with Ivy Camp and they are looking under their Futurance umbrella at a whole host of start-ups that can work with them.
4. Be it in the pension space or the life insurance space, they are looking at it as an end-to-end platform.
5. Forging ahead in the ecosystem such as the recent tie up with Airtel. They are having more conversations that are happening with the new ecosystem partners who at present have a very huge customer base who have not really thought that they could sell financial services products through their own channels.

Consensus estimates (Marketscreener website):

• The stock price was Rs 541/- as of close price of 29^th August 2019 and trades at P/E multiple of 72x / 62x / 56x the consensus EPS of Rs 7.5/ 8.8 /9.6 for FY20E /21E / 22E respectively. 
• Consensus target price is Rs 529/- implying P/E of 55x for FY22E EPS of Rs 9.6.

Dated : 27th August 2019

Update on Indian Market:

Indian markets moved up on Tuesday. Nifty closed 0.43% higher. Among the sectoral Nifty indices, Bank (0.63%), Auto (1.85%), Metal (2.09%) closed higher, whereas Pharma (-0.16%), IT (-1.35%), Media (-0.18%) closed lower.

Is it the best time to buy cars?

Excerpts from an interview of Mr Nikunj Sanghi, Director Federation of Automobile Dealers Associations (FADA) given to ETNOW – dated 19 August 2019

• Large amounts of discounts are given by OEM’s, dealers to tackle the pressure to push inventory out, as BS-VI transition is just around the corner.
• Speaking about the discounts Mr Sanghi says, the discount on diesel vehicles are the highest because in smaller vehicles, diesel as a fuel is taking a hit and the customer is shifting towards petrol.
• Most manufacturers have said that they will not produce diesel variant of small cars, because the cost of small car becoming a BS-VI is higher as a proportion to total cost.
• Mr Sanghi don’t expect further increase in discounts because they are already on peak, also the monsoon has done reasonably and a lot of shortfall of the monsoon has been covered.
• The festive season is also on its way and both dealers and manufacturers are looking at a much better festival season than the past five, six months that they have already seen.
• Mr Sanghi believes that major correction took place in passenger vehicle segment, but inventory continues to be a concern for two-wheeler and Commercial vehicles dealers and manufacturers.
• A relief is expected from the guarantee scheme for the NBFC’s that the government of India has floated, which will help in inventory funding. When money comes in system, it creates a better environment for dealers.
•  Corrections have also taken place in terms of man power a lot of OEM’s are now cutting down production and hiving off staff, he believes the pain is likely to continue for some period of time.
• Mr Sanghi says, that the level of inventory in the pipeline is sufficient for the festival season and don’t expect a build up in inventory as it normally happens.

Our views – In our view, the festive season is expected to be robust because of the heavy discounts offered by auto manufacturers. The other factor is that most of the companies are expected to roll out the BS-VI compliant vehicles as early as this December. This is expected to increase price of vehicles. Hence this might be a strong festive season for companies 

Dated: 26th August 2019

Update on the Indian market:

Indian markets rallied on Monday amid weak global macros. Nifty 50 closed 2.1% higher.  The rally was driven by various announcements made by the Finance Minister on Friday evening. The details about the announcements are discussed in today’s update.  Among the sectoral indices, Financial services (4.0%), Banks (3.9%) and Media (3.6%) were the best performers while only Metal (-0.9%) ended in the negative zone.

Here comes the relief package from FM, more to follow

The Finance Minister Ms Nirmala Sitharaman, in her press conference on 23^rd August 2019, announced a relief package for Indian economy. Following are the key announcements from the Finance Minister:

• Roll-back of higher surcharge on capital gains tax for FPIs (Foreign Portfolio Investors).
• Immediate recapitalisation of PSB (Public Sector Banks) of Rs 700bn. This can facilitate additional lending and liquidity to the tune of Rs 5000bn by providing upfront capital to PSB.
• Additional liquidity to HFCs (Housing Finance Companies) worth Rs 200 bn by NHB (National Housing Bank)
• Withdrawal of angel tax provisions for start-ups.
• Repayment of pending GST refunds to MSMEs within 30 days and future refunds in 60 days.
• Repayment of 75% of funds in contractual disputes between government/ CPSEs and private entities.
• Launch of repo/external benchmark-linked interest rate products. The government would take further action on the development of Credit Default Swap markets soon, in consultation with RBI and SEBI.

In our view, the roll-back of higher surcharge on FPIs is a positive development for the equities market. Since the announcement of budget on 5^th July 2019, the FIIs sold total Rs 292,360 mn till 23^rd August 2019. We expect the selling pressure from FIIs to slow down with the announcement.

The companies from the Auto industry were demanding a GST rate cut to revive demand. The government has provided some relief like deferring the revision of one-time registration fees till June 2020, higher depreciation on purchases made during FY20, BS-IV vehicles purchased before 31st March 2020 to remain operational for the entire period of registration.

The Finance Minister has mentioned that she will announce more measures to boost the economy in the coming days. The timeline for this is not yet known. While the relief package announcement made by the government is welcome, we hope it does not get overshadowed by increasing bitterness in tariff wars between the US and China.

Michael Batnick writes that one of the biggest challenges investors face is their desire to tinker. Like Pascal said, “All of humanity’s problems stem from man’s inability to sit quietly in a room alone.”

You don’t dig up a young tree every time storms. It needs time to grow. The roots can handle wind and rain and thunder. Likewise, a diversified portfolio needs time to grow, and can also withstand some discomfort. Beyond discomfort, investors will have to survive tornadoes from time to time. 

Morgan Housel recently framed how different investors might deal with market turbulence: If you view every debt-fueled recession, market crash, and asset bubble as an example of your fellow people acting crazy you might get cynical, which makes it hard to be a long-term optimist even when you should be. If you view them as inevitable you realize they’re just part of the ride and an occasional reminder that the fasten-your-seatbelt sign should never be turned off.

So, finally, here are the three things you can do to think and act for the long-term:

• You can’t think long-term if you’re not saving money. Everyone knows what their income is, not everyone has a handle on the other side of the ledger. You don’t have to create an agonizingly detailed spreadsheet of every Rupee that goes out, but you must have a rough idea of what you can afford to save every month. And those savings must be automated. When your income comes in, savings go out. Pay yourself first. (I understand that saving money is a luxury many people don’t have, but if you’re reading this, I assume you’re one of the fortunate ones)
• You can’t think long-term if you are experiencing a short-term cash crunch. The best way to avoid this is to keep your big-ticket items to a reasonable percentage of your income. Coffee won’t break the bank, a mortgage and car payments can. The second best way to avoid a short-term cash crunch is to have cash in the bank. Six months seems reasonable, but if you’re responsible with your bills, I’m okay with having less.
• You can’t think long-term if you take more risk than you can stomach. If you thought about how much higher the market might be in twenty years, would you care how low it went tomorrow? In theory no, in reality, obviously yes. And this is where planning comes into play. If you really hate seeing your account go down, then figure out where your maximum pain point is and work backward. For example, if 10% is the maximum loss you can tolerate, using the assumption that stocks can get cut in half, you should have no more than 20% of your portfolio in stocks at any time. Of course, this will severely limit your upside, but investing isn’t just about maximizing return, it’s about maximizing a return that you can reasonably expect to achieve.

Batnick concludes that if these seem obvious to you, good, that’s the idea. This isn’t rocket science. Thinking long-term is hard, which is why it can be so rewarding. Acting on short-term impulses, on the other hand, is a short cut, which rarely works out well. The most successful investors are able to ignore the things today that they know won’t matter tomorrow.