French writer Jean-Baptiste Alphonse Karr wrote “plus ça change, plus c’est la même chose. i.e. The more it changes the more it stays the same.
Reacting to the current situation Howard Marks co-founder and co-chairman of Oaktree Capital ( the largest investor in distressed securities world-wide) wrote "today we’re experiencing unprecedented (or at least highly exceptional) developments in four areas: the pandemic, the economic contraction, the oil price collapse and the Fed/government response"
There is "uncertainty" arising from all of the factors mentioned by Howard Marks and even many more (from an Indian perspective).
As the uncertainty increases so does "risk" as in a way "uncertainty" is nothing but heightened risk.
A careful look at market indices - leads us to conclude that the US markets have recovered faster than the Indian markets.
Why is that?
A possible explanation is that the US has a stimulus program (for the economy) which is much larger than the Indian one.True.
But then consider also the fact that many large US companies like Google, Microsoft, Facebook, Netflix and Apple continue to do business even during the lockdown - while other companies are suffering because of lockdown.
Apple and Microsoft together have approx 14% weightage on DOW Jones.
So amongst the "less or not impacted because of lockdown" universe of companies - if you can identify companies which are market leaders you have a suitable case for investing. Of course more needs to be researched.
Also if one can identify the companies which are likely to "rebound" faster after the lockdown/pandemic is over, then those also can be good cases for investing.
How? - look for good leaders for its the leaders which make the quick turnaround possible especially those who have a previous experience of managing a crisis.
There is no doubt though that this is a big crisis - perhaps the biggest in our lifetimes and hence it is time to worry.
But then as they say "worry sharpens your focus"
Thats what we continue to do..
Reacting to the current situation Howard Marks co-founder and co-chairman of Oaktree Capital ( the largest investor in distressed securities world-wide) wrote "today we’re experiencing unprecedented (or at least highly exceptional) developments in four areas: the pandemic, the economic contraction, the oil price collapse and the Fed/government response"
There is "uncertainty" arising from all of the factors mentioned by Howard Marks and even many more (from an Indian perspective).
As the uncertainty increases so does "risk" as in a way "uncertainty" is nothing but heightened risk.
DOW JONES IS DOWN 17.07% FROM ITS PEAK
NIFTY IS DOWN 27.6% FROM ITS PEAK
A careful look at market indices - leads us to conclude that the US markets have recovered faster than the Indian markets.
Why is that?
A possible explanation is that the US has a stimulus program (for the economy) which is much larger than the Indian one.True.
But then consider also the fact that many large US companies like Google, Microsoft, Facebook, Netflix and Apple continue to do business even during the lockdown - while other companies are suffering because of lockdown.
Apple and Microsoft together have approx 14% weightage on DOW Jones.
So amongst the "less or not impacted because of lockdown" universe of companies - if you can identify companies which are market leaders you have a suitable case for investing. Of course more needs to be researched.
Also if one can identify the companies which are likely to "rebound" faster after the lockdown/pandemic is over, then those also can be good cases for investing.
How? - look for good leaders for its the leaders which make the quick turnaround possible especially those who have a previous experience of managing a crisis.
There is no doubt though that this is a big crisis - perhaps the biggest in our lifetimes and hence it is time to worry.
But then as they say "worry sharpens your focus"
Thats what we continue to do..
