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News Analysis


04/09/2013
YES – On 19 July 2013, our product users (MySmartStocks.com, IPM Advisor) and all our financial advisory clients knew about this earthquake. This knowledge became visible 33 days before it completely devastated. Let me bring up two types of earthquakes – a) geographical and b) financial. Los Angeles (Est. population 3.8m) and San Francisco (Est. population 0.8m) are near globally known San Andreas fault – a continental transform fault that passes 1300 km through coastal California in United States. This fault produces an earthquake about magnitude 6 every 20-30 years on average since 1857, 1881, 1906,…2004. Similarly, coastal state of Gujarat (Est. population 60m) in India experienced 7.7 magnitude earthquake in 2001 killing 20,000 people. Geographical earthquakes are still being studied and cannot be predicted to protect the damages. If so, millions of lives can be saved. Regarding financial earthquakes - there has been many to remember including 1929, 1987, 2001, 2008 and who knows next? NOW WHAT IS THE VALUE OF KNOWING FINANCIAL EARTHQUAKE PRECISELY BEFORE TIME? INCREDIBLE VALUE – The attached image (on the side) is the exact screen warning about the upcoming financial earthquake of magnitude 11.86 you would have seen, IF you were our software or advisory client as on 19-Jul-2013. You may find other systems where it says if it crosses this level, it will go to that level. But they fail to pinpoint the magnitude of the damage and most importantly the timeline. Our financial intelligence has no ifs-or-buts. Our research is pure, pristine and based on human behavior. And most importantly, it informs on the time factor by what time this damage is likely to occur. Knowing this, there are many things you can do as an investor or fund manager – 1) Exercise financial diligence with deep comfort zone 2) Lock your investment profits 3) Protect against further losses 4) Create new cash One of our HNI clients in fact sold Rs.30Cr (USD 4.6m) assets within couple of days of knowledge. The best part is - the knowledge itself prepares you for necessary action with stable mind unlike people who underestimate the damage this earthquake is capable of doing and then forcing you to make impromptu loss-making decisions. UNFOLDING OF GLOBAL EVENTS: Whatever has happened recently, more things are slowly and nearly visible… Sep 6, 2013 – US Jobs data is scheduled. This is the key data based on which US Fed will decide course of action on QE (quantitative easing). Sep 9, 2013 – US congress vote on attack against Syria. Despite two recent expensive wars, the US considers that it should play another role even though many countries are against it. The test missile on Sept 3, 2013 was actually an early glimpse of what can unsettle (even ruin) already damaged Indian markets losing 651 points on Sensex. Sep 18, 2013 – FOMC, US Fed open market committee meets to discuss and act on intended future action on tapering of QE. It is important to see what Sep 9, 2013 brings and the following 9 days. One thing is though clear no matter what FOMC meeting outcome is or the scale of tapering, current fed chair is retiring in January 2014. He would certainly like to start unwinding some fed action to bring credible things to US economy during his tenure. And it seems, the central banker (RBI) of world’s largest democracy, India decided to meet only after FOMC meeting of Sep 18, 2013 on reviewing their monetary policy in their attempt to save this dwindling economy. Day by day, we feel major global and national events are forming what I call foundation for next crisis on the brink. Considering consistent failure to control inflation, respectable exchange rate, foreign reserves and derailing the growth, India’s problem is not Current Account Deficit (CAD) but is Leadership Deficit (LD). MESSAGE FOR INVESTORS: 1) Be aware that every election brings bad news for currency. 2) Whether you are a ‘Long term’ or ‘Buy-and-hold’ investor, any inaction while knowing about financial earthquakes only adds damage to your assets. 3) In US financial world they inform you that ‘It may lose value’. To optimize risk-adjusted returns, first you need to know what is risk? It is about how people associate with money rather than returns. 4) Informed investor is an Intelligent Investor. CONCLUSION: Unfolding global events like mentioned above occur infrequently. But our message is clear - this is a BEAR market for speculators and a BULL market for investors. You will get Blue Chips going for a song – keep your cash ready. Not sure how to react to these circumstances or opportunities or what to do with your present investment, you may reach us for advisory services. Happy Investing!!! Mihir Sandesara – www.MySmartStocks.com esoftcircle@gmail.com


Source : RBI, US Census Bureau, Wikipedia