Setting the Record Straight | A Response to the Market Despair Debate

The real issue I wanted to highlight in my post wasn’t about doubting Indian businesses or at least the businesses I have in my PF… it was about the regulations and limitations the government has imposed on trading inside and outside India’s stock market. For someone with limited capital who wants to trade freely, the options were less. Instead of providing more opportunities, they increased position sizes, closed the doors on forex and crypto, and left small investors with no choice but to put their entire capital into a single, manipulated market and hedging isn’t even an option anymore due to increased lot sizes. The government needs to understand that simply increasing lot sizes won’t stop losses for options traders. In fact, it hurts investors who actually use options to hedge their investments. Retail participation in the market has surged post-COVID, but not everyone enters with a large capital base. How are new investors supposed to protect themselves in volatile market conditions when all the options to hedge are being taken away? If they’re banning forex and crypto, they should at least provide an alternative, so the average investor doesn’t feel forced to look outside the Indian market. But instead, people are now trapped, watching their investments bleed every single day unable to do anything about it. And we're expected to stay silent? Are we not supposed to panic? Are we not supposed to raise our voices when we see our portfolios collapsing due to avoidable restrictions? I have never complained about the taxes the government takes just look at my past posts. But why are they closing doors for investors instead of opening them? Why are they forcing people into a market where manipulation is rampant, leaving them defenseless? If we had the right tools, we could have protected our investments. But because of these short sighted regulations, we couldn’t. And now, when people are losing money daily, they’re expected to just accept it quietly? Stop blindly defending the government. Being patriotic is fine, but blind loyalty is dangerous. We can’t even breathe clean air in this country without developing respiratory issues, but sure, let’s ignore that too. I agree with the investments part, and yeah, you covered the surface well. Buffett and Lynch those were facts, and I don’t deny them. But our issues are completely different from their investment philosophies, right? And you know why people panic not because of the businesses themselves, but because of the restrictions. The system isn’t designed for traders or the middle class, the ones stuck at the bottom of this pyramid scheme, just trying to make something work. I don’t want to shift this into political talks or point out incompetence because that takes away from the actual issue. So, I’ll keep my responses to your replies as short as possible: >“I knew this as soon I started reading your rant because anybody with decent experience in the market would say this. They would know how things operate and would be playing the contrarian bet.” I didn’t expect someone who considers themselves advanced, experienced, and old enough in the market to say this. There's a word called diversification or hedge, which I’ve been talking about. Not sure why it was so hard for you to understand with your biased, patriotic mindset, but maybe now you will after reading the text above. Investing isn’t just about buying on dips and chasing returns. Capital preservation plays an important role too, which you need to be aware of. I also urge new investors reading this to take their time and learn about it, rather than just closing their demat accounts in frustration lol. Instead, point the blame where it belongs, on the restrictions imposed by the government. >“It has not even been a full year of consolidation; this is the most short-term outlook you can have. The Hang Seng index is on the same value as it was back in 2007. Side note: Nifty has grown five times since. If you were fine with a 3-year bull run, and you are getting burnt in a few months of consolidation, then I can only assume that your stock picking skills are very questionable.” Why compare it with Hang Seng? I never intended to compare NIFTY with any stock exchange because that’s completely beside the point I made. If you want to compare, why not do it with the S&P 500, which has consistently outperformed NIFTY? Lol. What you’re seeing with Hang Seng can happen to India too if the government starts interfering too much and puts regulations on businesses and people. >“It really depends on the companies you have picked. Will the Nifty reach all-time highs again? Definitely. When will that happen? That nobody can tell you, but it will! But if you have invested in doomed companies like Yes Bank was back in the day, then you might never see your money coming back. This statement really depends on what you have picked.” I said already why I asked it. >“This happens all the time. Go look at AMD right now, they have had a stellar quarter, and the stock is at an all-time low. Does that mean that there are problems with the US stock markets? No. Markets in a short term (1-2 years) work on sentiment and momentum. This includes analysts, retail, and FIIs. But if you have ever read a book on value investing, you will know that the price will always come back to their fair valuations. You can go and back-test this for the past 30 years and you will see the same results every single time.” That single stock doesn’t define the entire Indian stock market. The conditions are completely different in both cases. Here, everything from strong stocks to weak ones, from high earnings to low earnings, is getting hammered. This correction often feels more like manipulation and that’s exactly why some of us are urging for diversification. But the government has made sure to limit our options and make things even more difficult. I’m sorry, but someone who considers themselves experienced shouldn’t be making such comparisons. >“I mean if you don't know how to take advantage of this, then I really don't know what to tell you. It's like you go shopping and you are blaming the store for putting a discount on the thing that you really wanted to buy.” There's more to investing than just treating every fall as a dip and buying blindly. >“They jump around from market to market based on sentiments and momentum. FIIs generally invest in companies that are in the MSCI index or reliable and established companies, both resulting in being large caps. FIIs mostly hold large-cap stocks, so it is obvious that if they are selling, it will result in what is currently happening.” Yeah, I see. >“Highly speculative statement with no foundation as an argument. There were also millions and billions being poured in after the pandemic, did you ever think of questioning that? The simple answer is that post-pandemic, the valuations were very cheap, so it made India an attractive destination. After three years of a bull-run, the valuations are obscene, which is why they are exiting. It is as simple as this.” What? Lmao. Did you even check their buy-sell data before making such statements? I’m damn sure you’re not as experienced as you pretend to be. The data clearly shows that they have been net sellers since 2021, and their total net selling has even surpassed what they bought since 2008. Retail participation surged post-COVID, and DIIs were absorbing those orders, which is why the market pumped. Please, at least check the facts before making a claim you can misguiding people. >“Firstly, nobody is stopping you from trading in forex, there are no regulatory restrictions.” I could have used stronger words for this statement, but I won’t. I just request you to read the FEMA Act and RBI rules before making such claims about forex beyond INR. Banks literally ask for proo**f** that you’re not using funds for crypto or Bitcoin before remitting, and if they suspect otherwise, they can close your account without notice or even jail you for years. This is the third time I’m disappointed with your response. Also, learn the difference between trading and gambling. The law allows gambling in India but treats forex and crypto trading as something worse all in a failed attempt to protect the rupee from depreciating. >“Why are investment banking firms like Morgan Stanley establishing offices in Mumbai? Why is BlackRock returning to India?” All those investments are in businesses, not the government. There’s a clear difference between politicians, the government, and the businesses operating in the country. I never said I had an issue with businesses, my concern is with the regulations and rules imposed by the government. Thank you for your time. Please ignore any of my words if they sounded offensive. I appreciate the effort you put into explaining things, but you seem a bit unaware of certain aspects, and the argument didn’t really stay on point. It felt like you were making assumptions about me and responding based on that rather than researching the points I raised. Now, I think we should conclude this discussion, as no policies will change, and debating here won’t make a difference. Wishing you all the best with your investments