The Surprising Truth About FII Flows and the Stock Market: Logical Thinking Lessons and more...
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- Опубліковано 13 жов 2024
- What a High School Maths teacher taught Devina Mehra!
Or where mathematics and FII flows intersect
A journey back to Devina Mehra's school days, where a strict math teacher left an indelible mark on her with the importance of logical thinking.
Highlights:
✨ Uncover the key lesson that reshaped her perspective on problem-solving.
🔍 Learn how logical thinking can help you avoid costly mistakes.
📊 Explore the surprising truth about FII flows in the stock market and much more...
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नमस्ते देवीना जी, दिलीप शर्मा, राजस्थान से .. हिंदी भी आपके मुख से बहुत अच्छी लगती है, और हमारा ज्ञान भी बढ़ जाएगा।
Thank you.🙏
Very critical point Mam. Thanks.
Thank you
Eye opening indeed. But there are no fixed rules,and there are so many factors that move the market.
Thank you for your kind words and support!
Mam it's always great to listen to you. One question then who controls the euphoria or downfall? I feel since May 01 FII are net sellers if they would have held onto the position then this crazy bull market would have gone further up. Felt FII sold and went to markets where valuations are reasonable like China, Japan and Taiwan.
Thank you Madam for all the videos you make. Indeed such information is useful for retail investors like us.
I just fell in love when I heard you first on TV and have been a fan since then.
Thank you for your kind words and support!
So good to see you after such a long time!
Thanks madam for sharing, always a pleasure to listen to your wisdom .
Thank you for your support and encouragement!
I always learn a lot from you... thanks mam
Glad to hear that! Thank you for watching
BEAUTIFUL VIDEO
Thanks!
Thank you.... the message was clear.
😊 Thank you!
Yes indeed, Madam 😀. A lot of fund houses have created array of funds based on this theory !!!
Thank you!
Interesting view!! But is it not that DIIs/liquidity are holding the market by investing in overvalued stocks??
If all the stocks are overvalued at all times in the market, then what is this India growth story? Is India not growing? Are the companies earnings not going up? Is the India growth story a fad or a trap?
@@religionofpeace782 Mr market always factors fwd growth .. nd once we reach will grow further .. but in pockets still we shld hunt for fair valued assets and market will give opportunities.. my views !!
The Indian market had a very poor performing decade from 2010 to 2020 where instead of the 15-16 per cent compounding that we expect, the Nifty and Sensex compounded only around 8.5 per cent - hardly beating Fixed Deposit returns.
This created room for a bull market during the present decade.
We do not see valuations reaching bubble proportion, at least for the large-cap mainstream stocks.
In price-earnings ratio (P/E) terms, we are not at very low levels, but we are not at extreme levels either.
That's good to know! But what I would like to know is why it doesn't correlate?
That's because markets, in the long run will go up only if the earnings of the companies go up. But if earnings aren't going up and the incoming money is just getting invested without significant EPS growth, markets will sense it and factor that in within few months to years and stop moving.
Ma’m , you have mentioned this several times earlier in your interviews, as well. The question then is does it imply that sips and retail money coming in will not be able to hold the markets up and there could be correction despite money getting deployed as it is being now?
No, we do not anticipate any major crash, though there could be near term volatilities. Indian equities have been far below the 15-16% average compounding for years. In 2010-20, the compounding was only 8.8% - barely above fixed deposit returns. A Rs. 100 investment would have become Rs. 230 over this decade. Contrast this with Rs. 100 invested in 1980 that would have become Rs. 700 over a decade.
In short, the equity market was far below the trend line at the beginning of this decade, and even since then, the mainstream indices have not given returns that would even bring them to the trend line, let alone above it. In such a situation, the risk of a crash is minimal.
It's difficult to test because of simultaneity - i.e difficult to delineate the question as to whether the markets moved bcz of the flows or did the fii's invest anticipating the market movement?.
We do not agree that liquidity is what drives the markets, because that is simply coming through from the statistics.
If you look at 1993/94 when we opened up the market to FIIs and the money started flowing in and our market went nowhere for many years or if you look at more recently after the P-Note changes and the money outflows, our market actually made a high. So the money follows. On a single day you may or may not find an apparent linkage but on an ongoing basis, there is really no linkage of any dramatic kind between the liquidity and what happens to the markets.
Mam u r brilliant I am from jammu, ❤❤
Thank you so much! Greetings to Jammu!
Mam mai MIDC Navi Mumbai mai 2002 mai trading karnai aata tha ek din mari mulkaat Shankar sir Sai hui unhonai tab mughe tip diya tha sell all it Hfcl global telly penta midiya silver line. Or bye karwaya sbi BHEL or Hdfc. Thanks sir
"Logical leap" a very polite term .....😂😁
I wonder what the synonyms are ...😅
😅
Here the comparison FII flows with total market liquidity could be useful ,if at all reliable data is available. FII flows as a proportion of market liquidity should be important parameter
We do not agree that liquidity is what drives the markets, because that is simply coming from the statistics.
If you look at 1993/94 when we opened up the market to FIIs and the money started flowing in and our market went nowhere for many years or if you look at more recently after the P-Note changes and the money outflows, our market actually made a high. So the money follows. On a single day, you may find an apparent linkage but on an ongoing basis, there is really no linkage of any dramatic kind between the liquidity and what happens to the markets.
Mam, please discuss on how to select multibagger
Sure! Discover the reality of finding multi-baggers in this insight video from Devina Ma'am: ua-cam.com/video/VKgWzL4s7Mo/v-deo.html.
market needs to correct.
Jay hind mam me aap ko regular sunta hu aap Hindi sashan kabhi khabi kare
Jai Hind! We'll try to include more Hindi content in the future.
Namaskar
Namaskar!
Mam namste 🙏
Namaste!
Mam,.interpretation is wrong because marketcap to GDP ratio is 150% without any innovation. Our Economy is very small compare to developped Economy so every country need FII. Without FII country cant grow chek history in the world from 1450 to 2022 worldbank data.
We go by data and the data shows that FII flows have no correlation with the market movements.
1994 to 2003 is the only 9 year period in the Indian market history where the index return was zero, inspite the fact that 1994 was the year when the FII inflows started in earnest. So this new slew of money came in and did nothing at all for the markets. Even on a month to month basis, there was and is no correlation between FII flows and the market movement.
There is only one God and that is data. Look at where the data leads and do not fall for fallacies.
When market big fall that time FII buy stack than after DII buy than after market goes up than after retail buy stocks and market goes up and up if market very bullish than FII sell it's stack and DII & Retail buy but high PE stocks not sustainable for long time and right now our country PE ratio is around 23 and USA pe is 20 this is not sustainable because indian total market cap bifurcation is 40% is company owner 30% own by FII and 18% is mutual fund and 12% retail participation. You assuming that if FII sell it's 30% stack from indian stock market than what happened. Our GDP 8.2 with inflation adjusted so our actual GDP is 2.5-3%% and our rupees deprecated yoy so market not sustainable for long time.
Mam please tell me if interest rates of fed gets lower, will IT stocks move higher or there is some step we miss Or will miss out❤
If I can share my understanding.. immediate benefits may not be there unless interest rates in the US go down to zero .. which is unlikely .. but over 12 to 18 months say fed cuts by say 2% or 2.5% then discretionary spending by the American corporations will increase and our IT services benefits .. so net net long IT on selected fair valued stocks!
If the rupee depreciation continues, then that bodes well for the Indian IT sector. As revenue comes in dollars, depreciation helps boost the earnings and profitability of IT companies.
We do think that sometime this year, the IT sector will bottom out and will provide a good investment opportunity.
We do have some investments in the sector, but we are not currently overweight this sector in the First Global PMS. We are still waiting and watching.