6 MOST IMPORTANT market predictions 2022 | Akshat Shrivastava

hi everyone welcome to today's video so let me start today's video by telling you the story of um this is a very brief story but very important story so the story of aam or mango goes like this that if you go and ask your parents or grandparents that at what price did you use to eat mango they would say 2 rupees a kg or 5 rupees a kg nowadays if you go and try to buy a mango you probably will have to pay via credit card or you would have to take an emi so that is the world where we live in the important message of this story is that the currencies across the globe have been devalued i'll give you an exercise tell me in the comment box what can you buy with a five rupee note or five rupee coin list out like five items now don't say like i can buy like five pulse candy or i can buy like a shot a packet of parley g i hope you are getting my message that hey with five rupees these days you can't do much even with 10 rupees you can't do much with the market the moral of these stories is very simple that the currencies are getting devalued you will say how does it matter to me it's fine i'm rich i can keep on buying more stuff i don't mind taking emi i don't mind doing bnpl so yeah good situation for me no even if you're a stock market investor this situation is going to hurt you a lot and i'm going to help you understand this point by making six critical very important stock market predictions by looking at this phenomenon so let us get the video started so prediction number one is that bad cash will compete with each other what is the meaning of bad cash bad cash simply means that whether you look at inr whether you look at usd whether you look at chinese remnant all these currencies in real purchasing power terms are going down and this has a significant impact on the stock market so let us first hear mr ray dalio's commentary on this all currencies have a lot of debt and so when you look at one relative to the other there will be a lot of printing i mean currency equals debt and when you hold a currency you're holding a debt instrument and so all of those will decline in value relative to other things now will the dollar decline more than other currencies it's almost certain that we're going to come into this environment we're in this environment and whereas there's a shifting of the those currencies um so you're going to see more of china's ram and b being used you're seeing it uh india have a direct link uh with russia on the uh currency so we're an important so in simple terms what mr dalia is saying is this that hey there is more money printing leads to more money in the economy and that leads to less purchasing power so with every dollar or every rupee that is there in the economy going forward you will be able to buy things less and less with it so this is the simple philosophy behind bad money and now let me show you three specific graphics that will help you consolidate this point so take a look at this particular chart it shows the buying power of one us dollar back in 1930 you could purchase 30 hershey bars full bars i'm not talking about pulse candy i'm talking about proper hershey's bar with one us dollar you could purchase 30 such hershey's bar nowadays with one dollar you can't do much one dollar is roughly 75 76 rupees honestly like 75 rupees again with 75 rupees it is very difficult to have one full proper meal now the worrisome sign is that again zoom into this chart and you will see the rate at which this dollar is getting devalued now this is the same case with inr inr in fact depreciates much faster compared to us dollar so every year in comparison to us dollar inr falls by roughly four percent so inr situation is even worse from that now majority of the currencies in the world keep on following this pattern now you would say that akshat you know what you are just painting half the picture because what happens is that the world also grows people get richer so of course in the olden times people did not have a very high five standard of living they could maybe once a year buy mangoes now zoom in today people can't even buy mango ones so again i'm deviating from the story let me complete the story so if you go back see that hey the standard of living in the past used to be really poor over time world grew the income levels grew so of course manga will be there i get it so let me show you chart number two now this shows the gdp growth of usa now if you put chart 1 and chart 2 together what you will find is that the rate at which the gdp growth is happening and the rate at which the currency is getting devalued those rates are not matching the currencies are getting devalued at a much much faster rate compared to how rich people are getting each year so what does this phenomena tell you it simply tells you that in real purchasing power parity terms the world is getting poorer by the day due to increased currency devaluation and right now holding currency is probably the worst form of investment that is not my opinion for this let me show you chart number three here is chart number three which shows the performance of the equity market over the last several decades and you can clearly see that the equity market is going up but the currency as an asset class it is going now so before moving on to point two very important for us to conclude three critical learnings from this discussion so first currency as an asset class if you consider bond as an asset class if you consider real estate as an asset class if you consider stock market as an asset class similarly if you consider currency as an asset class it has given horrible returns so to say because it is getting devalued at a very brisk pace second key point that other asset classes for example if you consider real estate or if you consider equities or even if you consider something like gold it has performed much better compared to currencies now many of you might retaliate in the comment section that you know what akshat the purpose of currencies is not to give returns of course it will go down in value and i agree but there is a rate at which it should get eroded and that rate is going bonkers right now so the word of the day today is bonkers now comes the third and the most important point that going forward bad money problem is going to increase and all the currencies that you see in the world they are going to perform horribly not my viewpoint this is mr ray dalio's viewpoint so this brings us to point number two and prediction number two that people will store less and less money in the debt market or the bond market why bond market because according to mr ray dalio bond market is a representation of the currency how is that because you might have heard that there is a bond called as 10-year treasury bond by the u.s government or u.s fed that is considered as a triple-a guaranteed bond so that mimics the performance of cash so people are right now not taking too many positions in highly saved debt asset classes because the interest rate is close to zero if you are putting money in these triple a category bonds right now in real terms you are losing money that is what is happening can i prove it to you hundred percent yes for example if you go keep hundred rupees in hdfc bank fixed deposit you will make five five and a half percent inflation in india is between six to eight percent now in real terms you are losing money on debt which is a representation of cash because essentially whenever the government prints currency it is a form of a debt so safe debt as an asset class is going to perform horribly going forward now many of you would say that akshat you know what why are you giving like hdfc example you keep on giving hdfc example i give hdfc example because if you go to sbi it might be lunch time and you might not even be able to make your fd no just a joke now natural question will come that okay if fixed deposits are not giving us returns that is the debt market is not giving us returns and the cash is getting evaporated then what is going to happen going forward okay so for this let us understand mr ray dalio's commentary the development of alternative monies we're seeing uh variety i think different types of money will compete with each other in the environment we're in um some maybe it's um crypto maybe it's uh maybe it's gold maybe it's um other things uh maybe the digital or mmb competes with um the us dollar we're going to come into an environment because everybody thinks that there's think about how much money is being stored in debt instruments those debt assets think about how poor those returns are so that kind of a shift i think is very important so he said cryptos i did not say crypto so it was he who said it i'm just building on his argument so please don't bash me in the comment section okay so it's on mr ray dalio for bringing crypto into this discussion so let us have that discussion so take a look at this particular chart this shows vc investments by prominent companies it shows the difference between the aggregated investment from 2016 to 2020 and 2021 alone so what do i mean so let us pick understand horowitz which is a very big vc fund in the us so if you take 2016 to 2020 data they made 39 investments in 2021 alone they made 29 invest okay so let us look at another major player called as tiger global and it has funded a lot of indian startups also so from 2016 to 2020 they funded only two crypto based ventures in 2021 alone they funded 14 ventures now you can make an argument that you know what akshat you pedal like cryptocurrency you benefit this that okay first and foremost i have 80 of my holding in stocks so i'm still a pro stock person not a pro crypto person so to say crypto for me is a diversified asset class like any sensible investor but the data again take a look at this data and go through it this is an independent data and you can clearly see that if the biggest vc funds on earth are taking bigger positions in cryptos what does that tell you as a logical human being it simply tells you that going forward that people are taking more positions in crypto they are moving away from the debt market or cash oriented market into other forms of investments like cryptos so just to conclude the second key trend that going forward this acceleration from debt market into other forms of assets is only going to go up my third prediction is that the stock markets are going to go sideways in fact majority of the crypto market is also going to go sideways there is a very high likelihood of that happening why is that take a look at this segment from mr ray dalio no they're in a position already because of that dynamic spending more than they're earning creation of a lot more debt and a lot of other debt which one man's debts are another man's assets and that as the holder of that assets is losing money imagine holding a bond now and look at how much money is in bond funds and cash okay not only um in cash you don't get any return to compensate for the interest rate and in your bond fund you get negative returns and how's that feel so are you going to continue to hold those bonds in that bond fund it's a it's a dynamic that they have to deal with that is really beyond their capacity to deal with it they can't change those fundamentals right so before building on to this viewpoint let me quickly clarify the definition of sideways market so there is an upward moving market for example last year we had an upward moving market that the nifty went up like this a downward moving market happened in 2020 crash that hey nifty was trading at roughly 12 and a half thousand it fell all the way to 7000 a sideways moving market means that the markets are going to move in a range bound manner so that range right now for nifty 50 seems to be roughly 15 600 to 18 200. so this is the range in which markets are moving i've already spoken about it quite extensively but let me help you develop a fundamental understanding so that you can manage your crypto and stock market investment in this market so what is happening fundamentally is as per mr ray dalio that see fixed deposits are not giving you any returns in fact they are giving you negative returns why because the interest rates are close to zero so this is the first key problem that people are moving money away from the fixed deposit market now comes a second problem that okay that if the money is moving away from the fixed deposit slash bond market then it might go to the equity market and that analysis is correct but here the problem is that right now the equities market or the crypto market looks very risky why that brings us to point number three that there is a game that is going on between balancing inflation and balancing growth so essentially the inflation has run out of hand this has gone out of hand for the feds i had made another video on that topic so you can go and watch it so now the narrative is that feds will have to control inflation how will they control inflation they will increase the interest rate the moment they increase the interest rate by a lot and there will be a sudden shock to the economy that runs the risk of hitting growth stocks which are equity slash cryptos and that is one of the key concerns that is happening in the economy right now because there have been two back to back major crises that have happened and on top of that the fact that u.s politics is working really badly right now the world seems to be in turmoil from that particular perspective so inflation whenever it runs really fast the feds are going to increase the interest rate and that will shrink the stock market and the crypto market and when the feds start worrying about growth they will follow more quantitative easing that will devalue currencies but it will increase the growth so to summarize all these three points what is the likely or the most optimistic outcome according to me is that we are going to move to a sideways market for at least year year and a half and then when the world starts running on full potential that the economies are producing well all good good things are happening in the economy that is when we are going to see real growth so now comes the fourth prediction that the real estate market in india is going to go up from this point i myself am looking to purchase more real estate and i will be diverting some of my money into real estate investments now i will keep you abreast which investments i am talking about but before you start talking about that akshaya you are against buying a house why are you going into real estate so first and foremost housing is not necessarily equal to real estate so hear me out i will explain you these points very very logically and if there is enough interest i will make a detailed video so point number one is that take a look at this particular chart it clearly shows that over the last one decade real estate sector in india has done horribly it has done really really badly i am talking about the average real estate in india i'm not talking about my chachaji sold like land in gurgaon he became like really rich now he runs like 500 pajeros on uber no so that's not the argument that i'm trying to have with you i'm talking about the average real estate prices in india they have been doing really really bad so this is point number one related point here is that because housing has a very long cycle 10-year cycle seems okay that the market has come down for real estate now whenever the markets recover maybe a year couple of years maybe three years the real estate might become one of the growth sectors in the economy now comes a related point that as per our previous discussion right now people do not have too many options debt is not giving you much money equities look risky so by default what are some of the options left one good option becomes real estate now you'll say super excited i just wanted to hear get that confirmation for you now i'm going to sell all my cryptos all my equities and jump into real estate no please don't do that why is that i will help you understand see from a theoretical viewpoint the real estate prices should go up in india from this point no doubt about that but there are two specific problems that retail investors will face first and foremost the commissions on real estate in india is still very very high that's one part of the equation the second part of the equation is that the price discovery in real estate is a huge challenge for example when you go and try to sell your house in this market also you will not get adequate prices why because the entire market is cornered by middlemen again if you try to buy a house you will get like super bloated prices why because all the real estate motor motor developers are there they are sitting they have created a journal of people and they will keep charging insane amount of commissions for you so that price discovery becomes really difficult and also add upon it the stamp duty the gst and bunch of other host of taxes government has made real estate buying really complicated now so from that particular perspective unless you are well versed with the real estate market please do not buy it so in my case since i will be taking bigger possession of real estate i can have people who will be dedicated to this task who will scout real estate for me and that is how i am going to purchase real estate and i'm mostly going to buy more agricultural lands why is that it requires a separate video but i hope you get that discussion that i'm not going to buy like houses that's a very bad investment you can make once i have done this exercise i will share my perspective with you on what are some of these strategies what are some of the key things that you need to keep in mind if there is enough interest from all of you now comes fifth prediction that cash burn firms or firms with super high debt they are going to go down they are not going to survive why am i saying it this trend has already started to happen so first point related to that is that the total free money available in the economy that is somewhat drying up why because governments cannot keep infusing cash at the same rate that the governments have done across the last two years there has been insane amount of money printing so the rate at which money will be printed right now that has to go down there is just no other option there so the amount of free money available in the economy that is going down as a result you will see companies like lido this is the funding of a company called as lido learning it was one of the biggest startups in india and look at the total amount of funds that they have raised if you aggregate all this it comes out to be approximately 30 million dollars which is like 225 crores so after raising so much money also they were unable to survive right so why is that because they were unable to raise the next round of funding so this market becomes a problem for you if you are a high debt company which is not able to make cash from its operations so these type of companies will continue to go out as a stock investor what are the stocks that you must avoid you must avoid high debt companies in this market at all cost for example don't buy companies like bharti airtel per se why because they have traditionally been super hydrated companies every time a new spectrum auction comes they have to borrow so much money just to buy that spectrum now please don't panic that if you're holding bharti yet lakshatra says something negative no that's not the point i'm just picking bharti airtel as an example and try to sell these type of high debt companies on rise whenever you get an opportunity my viewpoint would be that investors should take an exit this is not a recommendation this is how i am seeing the market play out so i am just outlining my viewpoint now comes the sixth and final prediction that going forward the markets are going to become a winners take all market this is especially going to be true in the crypto market and equity space both so let me help you understand this point by using the example of amazon and nasdaq hundred companies so take a look at five year growth of amazon so these are trailing 12 month profit they were making 135 billion in profits five years ago right now that number has gone up by 4x this is like crazy amount for a big company like amazon to grow at the rate at which it is growing amazon is not just an exclusive example here if you study the growth of tesla if you study the growth of apple if you study some crypto based protocols like ethereum bitcoin all have grown at a massive rate people keep on debating that hey should i be investing in like cryptos or should i be investing only in equities these two are like anti-assets no they are not they are crypto works exactly like tech stocks so if tech monopolies are winning in the stock market then it is given that even in the crypto market monopolies within the crypto space are going to win now why am i saying this so this is the data from 2000 about nasdaq 100 and you will see that three big companies were cisco intel and microsoft and they made roughly 20 of the entire index fast forward 20 years these are the three top companies right now which is apple microsoft amazon and they make roughly 30 of the index so within a span of 20 years 10 percent of index has shifted what does this tell you this simply tells you that we are moving from a model where small companies survived too many of small companies to a model where monopolies are crushing everything and you can notice this if you just simply go on amazon you will see that they are building their own products they are studying the models of small time retailers and crushing them in a way so what is happening is that we are moving towards this world of monopolies where good assets will survive whether they are in the crypto space whether they are in the bond space whether they are in the equity space it does not matter the only asset class that is getting systematically eroded is cash so if you as an investor are sitting on a pile of cash you are doing yourself a disservice i hope you enjoyed the video please press the like button and share it with your friends this was a very important video i hope you enjoyed it and i will see you tomorrow

2022-05-02 02:01

Other news