Of late the Indian stock markets have seen a choppy ride. Whenever I speak to my stock advisors around where the markets are headed their advice more or less remains the same – forget about the market direction, be stock specific, look at strong fundamentals, good stocks will always outperform etc etc etc. They are wrong... but they don't know they are wrong. They think markets move up and down because of factors such as fundamentals, technicals, and sentiments. However, being a student of Austrian School of economics I know that markets only move up based on one main factor - liquidity which is an outcome of loose monetary policies. Being a student of the Austrian School of economics, I find it difficult to share their enthusiasm about going long on the .
In this report (which is my first in hopefully what would be a chain of helpful reports for my readers) I share my views around:
- The driving factors behind the stock market
- What liquidity signals show us around where Indian bourses are headed [Hint: Down]
- How central banks can warn your portfolio - lessons from Capital Theory
- How I would "play" the markets
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