Modi-nomics Trumps Everything - Part 2 ( of 2 )

NSE:NIFTY   Nifty 50
140 0 3
See Part 1 in link

A Case For Recession
You don't use sword when knife is needed. Being a good trader, you need to have a touch of cynicism. Don't take anything at the face value. Rather than being dragged emotionally, you need to understand the things with realistic perspective.
While it is true that many millions have been wiped out of the pockets of the rich but still they are rich and powerful enough ! It is not a mass revolution where people gonna go crazy lynching the corrupt. If more rigorous steps are not being taken then they just simply have to do some psychiatric consulting for sudden shock and then get back to business of rebuilding the wealth again - read as - start taking the bribes by being innovative ;)
Of course, 1 % of India has a lot to lose but if you take out 90 crore from someone worth 100 crore, he/she still has 10 crore left and that is still much more than other 99% 's 2.5 lacks. Besides, that person is still eligible to hog all those juicy government contracts and do all sort of fancy things which other middle class and poor people can't. They belong to the employer class and they can simple shut the shutter of the business and live off the wealth stashed in other countries, while what's going to happen to the people who has nothing else but that monthly paying 'job'.
If this step is just a political stunt then India is going to suffer a lot. Economy will come to a thudding stop and rupee can devalue to unimaginable levels.
This step looks pretty premature without supporting infrastructure. To see which way the pendulum is leaning, we have to wait for couple of months. Then only we can make sound investing decisions.
Right now, approach should be just wait and watch and keep the shopping list ready with good stocks of the companies which are more likely to survive and prosper in next 20/30 years to buy at good levels when the market start catering. And if it start going higher based on upbeat emotional attitude then it's time to be cautious and start shorting it selectively via puts.
Banking, IT, Infra and auto sector is untouchable until they go down the drain. FMCG             and Industrials should be accumulated from good levels when we start getting them cheap, looking forward to next 10/15 years.
Time for just living on interest income ( because interest rates will be slashed in this scenario too) and real-estate flipping is dead at least for next 10 years.
We are living in very volatile times. Demagogues and dividers are ruling the roost. Macro investing is almost dead because nobody will be able to predict anything beyond 10 days. So it's traders time ! Stay nimble and play technical. Because it works ! ( Check out the Link )
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