Market Fall-Every Fall is not a Water Fall

Market is falling as expected. But no need to panic...i was always negative on china growth story. China made a big mistake by focusing big on exports rather than focusing more on stable internal growth. It was never a good strategy to provide excessive loans to go overboard in building export capacities that too at the cost of internal stable growth. You can not sell your car by removing all the workers from factory by using robots because who will have the money to buy your car when most of people are unemployed. China becoming a global production factory was never a solution, neither for china nor for the world. Now as china’s cost dividend is falling…it is getting the bigger picture clear.

But i do not think we are going to see 2008 again. We are much better here, there are no assets bubble which can cause ripple effects and create havoc on banks....only exception is indian real estate...but it is mostly financed with black money so not much of worry to banks.

Buyers are here for real estate but they are not buying due to high rates...so prices will come down and inventory will be sold. it is quite unlike USA subprime where assets were overbought with loan money.

India is not a high exporter to china neither to world...our story is 70% internal. But this fall will prompt to make policy changes like GST. China meltdown will soften the commodity prices more which is just great for india. Oil is already at $ 45...it will fall even more...nothing more to say except that it is killed by substitution effect. 

But indian Govt's role is very crucial here...it needs big time to start up the policy engine to boost the investments because we will lose jobs due to shrinking export market. So there is a big need to stop the ripple effect of that by upping the investments inside india.

i think we are at near bottom for indian stocks...so wait for some stability then buy stocks...but remember...buy quality stocks only. Be rational and do not loose hope. India is in a much better situation.

Will follow with more updates soon.