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hi everyone welcome to today's video so
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on today's video I'm going to help you
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understand where the market is likely to
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be in the next 2 to three years and how
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you should from a macroeconomics point
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of view reshape your portfolio because
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this is exactly what I'm doing and I'll
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help you understand the macro story
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there what do I mean by macro story so
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in very simple terms over the last 2
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three years you would have seen that
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public sector Banks or public sector
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units have given exceptional returns
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right for example I invested a lot of
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money in public sector bands that team
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did really well but recently I've cut
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literally all my positions this is not
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an investment advice please do your own
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due diligence do whatever you like I'm
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just helping you present a viewpoint but
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on the flip side there were stocks for
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example Railway stocks ET on which I did
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not build any portfolio and even those
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themes have done well so that's a macro
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theme right so what type of macro themes
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are going to pick up in the next few
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years that's the conversation that we
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are going to have in very simple easy to
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understand language please watch this
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video till the very end if you watch
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half of it just try to pick up the stock
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names that I'm talking about that's not
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the goal you will actually run into
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losses it's a better okay so a better
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thing is that please watch the video
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till the very end this is a serious
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Learning Channel this is geared toward
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serious investors in case you're a
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serious investor again a push from my
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site is please join my YouTube member
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Community it is very very important that
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you learn fundamental style of investing
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which I teach fundamental macro style of
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investing so you will learn a lot of
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tidbits lot of knowledge that you will
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pick from that community so definitely
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you do give it a go so all of us get
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very excited about investing in stocks
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and growing our well similarly we should
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be excited about having a very solid
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career and one of the best ways of
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with that said let's move over to the
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main video so the the first key point is
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that markets go up because someone is
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spending money okay so for what do I
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mean by someone spending money so there
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are basically two parties right one
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party is called as the government they
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spend money they spend a lot of money
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and the second party is called as
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private spending so private spending
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means right that is private spending now
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one of this has to go up ideally both of
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them have to go up for the markets to go
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up because if you think of an opposite
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case ke government is also not spending
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money and and private individuals are
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also not spending money then what will
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happen well then no one is spending
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money and as a result companies are
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selling less and less and if companies
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are selling less and less then their
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next quarter results next three four
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quarter results are going to be bad and
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as a result the stock price will also
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drop off very common sensical but very
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very important point so let me take you
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to my whiteboard and explain this
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concept little bit more in detail and
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please do not worry about the fact he
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stock I will I am going to cover some
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stocks also okay so let's begin so okay
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so two types of spending number one is
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government spending and what we have
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seen from the year 2021 up until almost
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like the beginning of 2024 the
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government spending was going up like
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crazy for example India infrastructure
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story India manufacturing story India EV
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story roads for roads etc etc now see
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I'm not saying that India's government
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is not going to spend money they are
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going to undertake spending that's not
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the point what stock market investors
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need to be concerned about is called as
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the growth rate of that spending what
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has happened is that in 2020 because of
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covid the total spending just slumped
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out right there was no one spending
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money so government printed a lot of
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money borrowed a lot of money and
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started spending crazy amount of money
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in 2021 2022 2023 and maybe even in 2024
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and more importantly the growth rate of
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that spending was going up Up and Up Now
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a major change that is happening in the
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economy is that see theoretically this
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spending rate is not going to escalate
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from this point for example let's say
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our total budget or total outlay is
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let's say 100 rupees by the government
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okay now this year it's not going to go
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up by like crazy right it will go up by
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a sensible number only but between 2020
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and 2023 the rate of growth of
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government spending was crazy and as a
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result be it like you know any kind of
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infra stock it has given very good
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run-ups most of the infra stocks have
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given a runup most of the government
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psus have given a run up including
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public sector bands so that has been a
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major Trend major macroeconomic picture
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that has been shaping up so I hope that
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this first point is clear now the change
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that has happened is that if you study
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the last two years the private spending
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has been really really slow for example
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Hindustan un Li which is one of the top
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companies in India their management is
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complaining that you know what boss we
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are not seeing any volume growth now
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what is the meaning of volume growth
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volume means that for example uh if H
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used to sell like 100 shampoo bottles
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they are still selling almost that
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number the only growth that is coming
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for them is that they are jacking up the
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prices of that product right so price
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times Q or Price times quantity is equal
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to the total revenue of the company so H
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yes it's making more and more revenues
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but there has been no volume growth
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similar story in
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automobiles if you check consumer
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durable stocks we voltas bpool all these
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companies struggled quite aggressively
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voltas may I invested money almost
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doubled by money in the last one year
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which has been fantastic growth but the
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important change and the most important
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change you could consider making on your
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portfolio is gearing your portfolio
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towards private sector spending
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businesses now what do I mean by private
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sector spending business very simple
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example just say for example if the
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government is spending money will it buy
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like HL shampoos the short answer is no
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okay it theoretically cannot it can just
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run like more contracts and give like
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more capex and whatever but they're not
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going to buy like you know HL shampoos
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that will that might be an indirect
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result of everything so this is like one
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key thing that more money is now going
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to shift towards private sector spending
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now what does private sector spending
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depends on this is brings us to point
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number two well it depends on emis or
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the borrowing rate for private
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individuals now this depends on your
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overall interest rates now here is a
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chart of the interest rates in the US
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interest rates in Europe have already
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come down and it is expected that over
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the next 2 to 3 years if this is the
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time frame in which you're getting your
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portfolio that over the next 2 to 3
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years India is going to cut its interest
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rate quite aggressively and we will find
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a new normal New Normal in the US 5.5%
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base interest rates say we might fall to
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like maybe 3% okay so something similar
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might happen in India also now as a
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result what will happen well one of the
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key things that will happen is that the
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home loan rates are going to come down
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people are going to spend more money
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more money will be borrowed etc
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etc well there are indications for
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example over the last 6 months you would
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have seen RBI getting very active in ter
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terms of trying to pre-end the bad loan
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situation in the economy now what do I
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mean by that for example just say P2P
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lending pay it has put very strict
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restrictions even CCH digital banking
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practices have been you know sort of
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being lashed a little bit for example
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PTM money Etc they have been stopped
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from disbursing a lot of credit in the
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economy why this is like prep
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ground we understand that we are going
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to cut the interest rate we have to
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shift from government spending to
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private spending and therefore it
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becomes very critical to at least build
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a solid foundation so in the next 2 to
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three years one of the biggest bit that
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I'm taking is very simple that I
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focusing on companies which will benefit
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from private spending natural question
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which brings us to the next point that
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okay government spending come right the
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growth of government spending will not
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grow very simple right so take a look at
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this chart and what this indicates is
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and this is a very important Point
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actually to discuss so let me spend like
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maybe a few minutes discussing that
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quickly so what you will notice is that
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number one if you take a look at
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government expenditure from 2019 to
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2023 for example you can see that it was
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at 26 units then it jumped to 35 units
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grow rate has been slow so it's not as a
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growth rate generally Del this has been
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a massive Delta from 20120 to 2021 why
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because this was a money printing year
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for majority of the
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governments the government expenditure
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growth rate has been crazy so this is
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point one now your government
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expenditure growth rate does not come
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for free for example if Indian
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government is borrowing this government
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expenses okay now this is loan on the
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government this money is not generated
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for free this is a topic in itself maybe
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we'll cover it someday this money is not
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free for example let's say that there
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was only 80 units of money now it's 100
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units of money in 2021 okay additional
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20 units is the government has to go and
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do what pay the interest RS also even
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when the government actually prints
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money they are borrowing money
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technically and they have to repay the
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interest rate now data is not clear in
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India that how much would the Indian
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government repay as interest but in us
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this is this issue was already blowing
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up so this is what the data tells us
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that there will be an interest repayment
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on the national debt up to 1 trillion
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okay so
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trilon India's GDP is like what4
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trillion right or
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trilon 15 25% of debt repayment from the
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US on its existing debt now this is a
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very very very big number right and now
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this is the reason why you would have
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been hearing the commentary Donald Trump
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came to power and he made Elon Musk the
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head of the government efficiency
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and government organiz government I'm
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going to fire them like the way I did
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Twitter right but the more serious
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message there is that see governments
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are bloated they are inefficient they
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are too big and they are burning money
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like crazy so you need someone like Elon
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Musk to step in and ensure efficiency
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okay so this is a very very important
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point please remember that that
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governments are going to I'm not saying
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they will become prudent in terms of
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spending money but they have to slow
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down that's the more important message
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they cannot at least at the very least
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escalate the rate of spending so even
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economists in India are saying a similar
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thing and I will show you the article
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here so this is a fairly recent article
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and the headline says economy likely to
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be slowed in July September quarter
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government to release dat on
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Friday so for example there was a very
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important paragraph right so this is by
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Aditi n Chief Economist IC she said that
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the Q2 saw Tailwinds in terms of picking
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up in kex after parliamentary elections
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as well as healthy expansion in sewing
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of major khif crop okay The
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Economist and this was a very important
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Point okay the data point was that see
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this data is actually government back
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data parament elections of what capex of
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the government right
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the will all enjoy and we will then
00:12:08
sayock market and all that stuff and GDP
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is like very
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good now government has no incentive to
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play that game neither in India neither
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in the US so what's the incentive show
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me the incentive why the government is
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going to make the debt crazy right it's
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unlikely that they are going to make the
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debt or escalate the debt very quickly
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from this point because now they a
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macroeconomic risk that if they end up
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doing this type of budgetary expansion
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it will weaken the economy it will
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create inflation problem in the economy
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then that becomes like a you know W bang
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losing thing so there is no incentive
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for them to undertake like capital
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expenditure via the ENT so therefore
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their only hope is interest R right
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let's cut the interest rate Propel the
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private spending this is what they are
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going to focus on and this is what it is
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going to hit your portfolio quite a in
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fact it has already started to hit so
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what do I mean by that so
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HDFC bank right so this is HDFC bank
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right and if you actually understand
00:13:06
technicals fundamentals you will be
00:13:08
happy building like a structure and
00:13:10
investment pis on it you will not keep
00:13:12
on like you know s of getting
00:13:23
B right so all these things were going
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up it's not as if all your stocks in
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your portfolio will go up but but very
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wa let me explain last 6 months HDFC
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last 6 month has gone up by roughly 18%
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okay last 6 months nifty 50 has pered by
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roughly 10% so Alpha in comparison to
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nifty 50 for HDFC has been 28% right
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so right you have to see return in
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context of the market right Market has
00:13:52
been falling HDFC is already up 28%
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comparison to the market this is very
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good run up already right the low on
00:13:58
many right
00:14:04
okay so this is like simple point that I
00:14:06
will tell you this is not a by
00:14:07
recommendation this is what the
00:14:09
technical chart tells
00:14:13
usure and you yourself will be able to
00:14:16
do this technical analysis but you'll
00:14:18
only be able to do technical analysis if
00:14:19
you know how to use that knowledge okay
00:14:21
so therefore I keep on recommending
00:14:31
right have like little bit of patience
00:14:33
on things all the stops cannot run all
00:14:35
the time okay this is a very important
00:14:36
bit okay so then comes the next point
00:14:38
that okay what stocks can we be bullish
00:14:40
on I'll give you like f around it right
00:14:43
and you guys yourself go and do research
00:14:45
okay first is banking stops I already
00:14:48
explained okay why banks are likely to
00:14:50
do well because whenever interest rates
00:14:52
are going to get cut private spending is
00:14:54
going to pick up why private spending
00:14:56
because of Emi borrowing rate that will
00:14:58
go down okay okay second second home
00:15:01
loan companies right home loan companies
00:15:03
for example I have something called as
00:15:05
aptus value Finance in my portfolio AAS
00:15:08
right AAS has already given a little bit
00:15:10
of runup okay1 small pance all these
00:15:12
likely are likely to do well okay then
00:15:14
you have domestic consumption companies
00:15:16
right now what is the meaning of
00:15:17
domestic consumption company for example
00:15:20
s 360 I had purchased it okay now it is
00:15:24
somewhere around 500 rupees it's crazy
00:15:27
run up that has happened it any
00:15:35
private spending what does that allow
00:15:38
these type of companies to do right if
00:15:40
they have to go and raise money more
00:15:42
they can actually do it they can dilute
00:15:44
more Equity whatever right so 100
00:15:46
different ways right actually these type
00:15:47
of companies which are capital hungry
00:15:49
companies and if the cost of credit goes
00:15:52
down which means the cost ofed and they
00:15:55
are already solid companies then
00:15:57
investors will chase these type of
00:15:59
company and this is precisely what is
00:16:00
happening on swiy should you buy swiy
00:16:02
now I don't
00:16:05
know simple Point don't buy it now also
00:16:08
right so that's a simple point I'll tell
00:16:09
you okay then you have unlisted
00:16:11
companies now unlisted space right now
00:16:14
is probably the best bet that I would
00:16:16
say why because whenever the interest
00:16:17
rate gets cut these type of golden
00:16:19
companies and I'm not saying every
00:16:20
unlisted company out there for example
00:16:22
there are a good set of companies for
00:16:24
example there a care rating right now
00:16:26
this is a good company according to me
00:16:28
oo right if if you adjust for the loss
00:16:31
of valuation that is that I'm not giving
00:16:33
recommendation
00:16:34
okay you will have to understand what is
00:16:36
the right price to buy so I'll discuss
00:16:38
all these things on my member Community
00:16:39
also but to cut the long story short
00:16:41
these type of unlisted stock which are
00:16:43
very good unlisted companies or at least
00:16:44
some of the unlisted companies from the
00:16:46
space could potentially 2x I'm not
00:16:48
saying that these companies are going to
00:16:49
2x but there are a set of companies that
00:16:51
could potentially
00:16:52
2x why is it that you're picking these
00:16:54
type of companies right so this is
00:16:56
another important bit that you can take
00:16:58
finally most important L I still feel
00:16:59
that fintech is a great theme right for
00:17:01
example AMC if you're getting these type
00:17:04
of stocks at a discount it makes sense
00:17:06
okay the problem will be valuation of
00:17:08
the company right so there are some
00:17:09
unlisted companies which are at very
00:17:11
high valuation there are listed
00:17:12
companies which have become really high
00:17:14
for example HDFC AMC when I picked it up
00:17:17
it was at 16 1700 1800 aspas right now
00:17:20
it is at 4,000 now it has doubled it's
00:17:22
the market cap is huge should you buy it
00:17:24
should you not buy it really depends on
00:17:25
the type of an investor you are what
00:17:27
your goals are but from from a theme
00:17:29
perspective if you're gearing your
00:17:30
portfolio which are in the private
00:17:33
spending space and which will benefit
00:17:34
from increase in private consumption
00:17:36
private spending and those companies are
00:17:38
likely to do well over the next two to
00:17:40
three years because that is where the
00:17:41
major cycle is turning so this is what I
00:17:44
would be doing in case there are
00:17:45
specific names of the stocks that you
00:17:47
would want me to cover or any specific
00:17:49
questions that you would like to ask me
00:17:50
please put it in the comments I'll try
00:17:52
my level best to answer those thank you
00:17:53
so much for watching I'll see you soon
