Monday, June 28, 2010

ZeeNut's Grizzlies ....

A couple of months ago ,on a couple of investor forums, this author had listed a set of issues that could potentially rear up & trip the current bull run in the Indian Stock Markets. The same are reproduced below in random order, as they hold true even today.

A close watch on these grizzlies over the coming weeks & months would perhaps be prudent, as the situation continues to be volatile & uncertain :
1. Trade War resulting from US branding China a Currency Manipulator
2. Burst of the China Property / Debt Bubble
3. Middle East flare up / Iran Nuclear Issue Snowballing
4. Any Sovereign Default (prime candidates : PIIGS) & it's Domino effect
5. End Of The Great Liquidity Cycle : Unwinding of Stimulus in US / India / Globally; belt tightening by various governments
6. Double Dip Recession
7. Tension with our neighbours Pakistan / China
8. Big rise in Oil & Metals
9. Unexpected political uncertainity with UPA's LS majority coming under question
10. Rise in India's own Bank Rates to control rising Inflation
11. Internal Security Issues : Naxalite issue snowballs, or a major terrorist strike
12. Further SCAM's  - accounting ones or stock market ones 
13. Company Earnings Disappointments
14. Adverse impact of Direct Tax Code proposals
15. Failure of the 2010 Monsoon
16. Impact of US Financial Reforms.

[ Note : Some of the above grizzlies are closely linked with each other, for example fiscal contraction arising out of an end to the great liquidity cycle can actually prompt the "double dip recession" if not timed right. ]

With so many uncertainities, the author would advise a cautious rather than a cavalier approach to the stock markets at the current moment, and keeping Capital Preservation top of mind.