Why I Want Indian Elections To Fail This Time?

Don’t get me wrong guys. I am not against our country.

If one was to take the current national mood (as suggested by opinion polls) and mediaproduced content as dependable indicators of election results, there are decent chances that India might get a strong and stable government.

India Elections 2014 Voting Machine
Indian Elections 2014 – To decide course of markets for next 5 years

Who would it be?

I don’t know. And atleast for this post, its immaterial which party or alliance it is.

But before I tell you why I want Indian elections to fail, I want to caution everyone.

What I Am Concerned About…

In last 6 months, Indian stock markets have made new highs and moved up from 19,000 to a new high of more than 22,000. This means a good 15% increase in less than 6 months!!  And if one thinks carefully, it has only been in last 6 months that various political parties have become ‘electionally’ active.

Fundamentally, almost nothing has changed apart from Rupee appreciation.

So as far as I am concerned, this rally is fueled mostly by hope and people’s expectations.

And there is nothing wrong in being hopeful and optimistic about a strong leader. But to think that someone has a magic wand and would change everything with the word go is like… being very unintelligent.

People have already started talking about newer and bigger targets like 40,000 for Sensex. 

And headlines like the below ones have become very common
India Elections 2014 New Headlines
Common Newspaper / Online New Site Headlines
So guys..

Let’s be a little rational, if not wise.

Stock Markets are riskier when moving up. And as of now, markets are moving up pretty fast.

A number like 40,000 or 42,000 is not unachievable. And it is possible that it might happen over the next five years. But stock market history bears witness that whenever things get a little too optimistic, and markets run up without any improvement in fundamentals, there is a reversion towards the mean, which means…


When will this happen?

I don’t know.

Will this happen?

Of course.

And gods forbid, if the new government is unable to deliver on its promises within the first year, the markets would definitely overreact and start grinding down.

So..

Why Do I Actually Want These Elections To Fail In Giving A Clear Majority To Anyone…

Once again, don’t get me wrong. I am not against our country. But I am an investor too.
Anyways the government would be formed. But in case there is no one with clear majority, then markets would not take this as good news.

And that is what I like. Markets go down because of bad news or because of absence of good news. So to bring sanity back to Indian markets, it would be a good correction to have. And for long term investors, what better can happen than a decent correction?

I will get to buy stocks I like & want to buy in high numbers but at lower prices. And to be honest, I regularly pray for stock market corrections.

These are my views and you can throw bricks on me for these thoughts about 2014 election results. I accept all kinds of bricks. 🙂

______

4 comments

  1. Hmmm… sounds penny wise, pound foolish… If the next govt. receives a clear mandate, then it would have the power to also reform all the bad stuff that has happened upto now… I'd rather not pray for stock market success, only to lose out as a citizen… this seems short sighted… As far as I can see, the stock market will go up or go down anyway, no need to pray for it! 🙂 However, the way the country is going, we should actually be praying that it turns around, and conditions for all start improving… that will be real value addition, and will ultimately make the stock market stronger as well… if this current rise is not on fundamentals, we just need to wait for a while (hoard cash) and wait for the plummet. Happy reapings! 🙂

  2. A market going down is good for a long term investor. This is irrespective of the fact that we prayed for it or not 😉
    But the hype around Modi seems to be a little overdone here. I don't think one guy can be a magician for the entire country and change everything for the good. Lets wait and watch if things actually turn around if the elections throw up the expected results. BTW, I still pray for market crashes 😉

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