Proud Secular

Why following the Diwali stock 'picks' may be injurious to your portfolio's health Eagerly taking down every expert's Diwali picks and their Nifty projections for the coming Samvat? Planning to use those to guide your Investments? The facts may startle you! Here is the data by @livemint collected last year on what happened to the previous two years’ Diwali picks. In both the years you would have been far better off picking stocks at RANDOM rather than going by the ‘expert’ picks!! As for the index projections‌, go back to earlier years and see what each of the experts had predicted and what happened. There are some interesting patterns that emerge. Let me give you a couple of examples. One there are Permabulls who will give aggressive index projections every year - sometimes the VERY SAME projection for two or three years in a row without as much as a token apology that they have been consistently wrong. Of course they will be right SOME year or the other, at which time they can applaud themselves. Another one that comes to mind is a loud-mouthed, self styled expert who is on record in an interview in July 2024 to the largest Business TV channel saying that India's Bull market was structural and not cyclical and there was absolutely no case to be made for a bear market ever in India. (The anchor has had the grace to admit publicly that he was wrong at the time to say that FIIs HAD to come to India). But this guy has permanent amnesia on what he said earlier. So a year and a half later he was equally vocal (at far lower index levels) that India was a basket case and will never see a bull market, that Indians were idiots to keep investing in the market. Now he is again changing his tune. That is the way it goes! The truth? Projections of what the market will do in year or two is in a category called 'Objective Ignorance' in the book 'Noise', by Daniel Kahneman, Cass R. Sunstein, & Olivier Sibony Index predictions are only one example of humans forecasting things which are not just not known, but cannot be known. Yet they are made with huge conviction & confidence, in January and Diwali time. "We maintain unchastened willingness to make bold predictions about the future from little useful information", as Daniel Kahneman says. I understood this phrase only in 2023, but I have never given index projections for the last three decades that I have been in the market because I intuitively understood that it was impossible for me to predict a one year market move. A Bloomberg study found that the projections on the US market were equally completely off over very many decades. These were from venerable banks and Wall Street firms like Goldman Sachs, Bank of America/Merill Lynch, Citigroup, HSBC, Deutsche Bank etc, exactly the sort of organisations you listen to very carefully when they appear on your TV screen thinking they have great insights into the global markets. Will Share the details of that study and the reasons WHY they are so ‘off’ another time. Another interesting aspect of projections is that it is arguably easier to predict how the market would compound over a somewhat longer period of time, say 10 or 20 years than it is to predict how it would do over one year. Have a great new Samvat 🎇🎇🪔🪔🪔 Use Diwali projections only for entertainment... better still use that time to hangout with family and friends DM @firstglobalsec if you want to know what to do instead @MayurBhalerao1