Science Is What Will Get Us Across

While the entire world is trying to do damage control by announcing funding and relief,

the real answer lies in science. The solution to the pandemic is not going to come

through economics but from science. Economic moves can only apply a bandage or act

as a pain-killer until science addresses the root cause of eliminating this virus threat. Prime

Minister Narendra Modi has yet once again dared to take a bold step. The 21-day lockdown will

impact our economy big time but saving peoples’ lives is paramount. I just wanted each of my

readers to grasp the gravity of the situation in its entirety and the seriousness of this lockdown. As

long as we take care of ourselves during this lockdown period, we have a beautiful future waiting

ahead of us.

The solution to this pandemic can come in either of the following ways: a) Medical science

develops a vaccine; b) Humans develop a natural resistance to this virus; c) It disappears just the

way it appeared. I have full faith in our science know-how as we have solved many bigger puzzles

and problems in the past. This will be a no-brainer though it will take its time.

Meanwhile, on the markets’ front, it has turned into a buyer’s delight. It appears the stock market

is running a sale offer with discounts of up to 50%. Yet, people are too paralysed to act. Yes, the

market has slid drastically and continues to display some weakness. Those investors who have

bought a little earlier are regretful about not having waited a bit more. However, I would like to

clarify that people who have entered are better off than those who are thinking of doing so as they

are likely to miss the opportunity. The person who entered early may make 80% gains instead of

90% post two years. Does timing that 10% extra really matter in this scenario? What matters is

missing the entire opportunity and ending up with a meagre 7% fixed deposit gain post two years.

Do note that while the fear in people is immense, the return opportunity from the market is also

the highest. To gain something substantial, you need to indulge in risks. Period!

It does seem prudent that you may want to enter when the risk appears less while the reward

appears at a maximum. Well, we are at such an opportunity as of NOW! One can argue that this is

still not the bottom! Hence, what we are suggesting to you is to not deploy all your investible

funds in one go. Plan to spread it over the next 12 to 16 weeks evenly. This process will help you

catch the bottom as well as average out very close to the bottom. If you do not do this, you are

going to see the prices run away from you when the vaccine or antidote gets officially announced

and the Saudi Arabia-Russia spat ends. You will not be able to catch the stock then since the entire

world will go on a buying spree and the prices would be over the top at the blink of an eye. Also,

at every rise, you will not buy because you have seen a lower value and will want the price to come

down to that level again, which by the way is available only now. I leave you with this thought to

ponder upon. As for this issue, in the cover story we have discussed how the large-cap stocks have

fared and have shared our outlook on the same. The cover story is a ‘must read’ as we have

discussed which type of stocks to avoid and where the opportunities lie going forward.

In our special story we have explained how best to identify dividend paying stocks and whether

such stocks have any potential to beat the markets.

In addition, algorithm trading is picking up in India like in other developed markets. In a special

story on algorithm trading we have explained what exactly this term means and why trading

strategies using algorithms is gaining momentum. To conclude, I would like to reiterate that the

investment opportunity is too big to give it a miss. Move your portfolio to higher market-cap

quality stocks for now. And most importantly, ‘stay safe’ and adhere to the lockdown guidance.

Finally, what matters in the long run is your own personal well-being. If you are fine, the rest will

shine too!

RAJESH V PADODE

Managing Director & Editor

Courtesy : DALALSTREET INVESTMENT J