My Learnings From 2016
2016 was all about Anti-Consensus, a year where most analyst went wrong most of the Time. Personally i delivered the worse performance in 6 years even though it was positive it was below my historical standards, but my learning curve has gone to the next level. We Started 2016 at 7946 on Nifty and we will probably end it at between 7900 and 8000. But nifty doesn’t show the volatility an investor has gone through in 2016.
#Anticoncensus 1 – Crude Price Doubles- 2016 Started with Fall of Crude Price. The consensus target among Large Investment banks like Goldman Sacks, Barclays, RBS etc for Crude price Target was 10-15$, well as we see it today, crude prices have doubled from its February low of 26$. Infact commodities have been the best performing stocks in 2017, where Nifty metals is up 40% for the year. This has happened on backdrop of lower Chinese demand.
#Anticoncensus 2 – Brexit- In july Majority of people expected that Brexit wouldn’t happened and Incase it did market’s would crash as that would be the start of fall of EuroZone. Well Brexit did happen, but FTSE has rallied 20% since then and is very close to its lifetime high.
#Anticoncensus 3 – Donald Trump – The odds of Hillary Clinton winning was 91% till 3 days before election day. The Market was expecting that if Hillary wins, the market will rally and incase Trump Wins, markets would Crash. Well Trump won, and US Markets went on to hit Lifetime highs and have rallied 10% in last 45 days.
#Anticoncensus 4 – Buy India,Sell Brazil – India was the biggest overweight country among emerging Market by majority of Global Funds as it was the fastest growing country in the world beating China, turns out its has been the worse performing. Brazil which has been in recession for last 11 quarter, saw its currency crash, in mist of a political turmoil which was the biggest underweight for global funds has been the best performing Index with MSCI Brazil Returns of 56%
#Anticoncensus 5 – NBFC/MFI are in Multiyear Bull Market – This is where i myself have been hurt and believed that NBFC had the perfect ingredients to lead this bull market, Turns out that they have crashed 30-50% from their highs after demonetization.
Conclusion – Markets have a short Memory, today the consensus is that everyone is expecting that nifty might be weak in 2017, demonetization will hurt the economy really badly, who knows by the end of 2017 Nifty might be Hitting a New lifetime high.