Brief take on current situation

Investing Strategies
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Dear All,

As of today the Sensex and Nifty 50 are at 2024 levels. This means that in the last 2 years there has been on a holistic level little to no growth in stocks. Adding to that more than 1 lac crore was wiped out in March 2026.

The one principle I would like to share is this. The current situation is not a stock market crash or a heavy bear market. It is at best a steep correction/bear market. But in my view, this is the hardest time for an investor. In case of a stock market crash the investor knows exactly why stock prices have fallen and then he knows there won’t be further deterioration in prices and prices won’t go down. But in these corrected markets we do not know whether the market will go further down, or whether we should invest at these bargain prices. This is a very difficult and strange dilemma which tests one’s patience. If this was Covid 19 everyone would know that no further decline is possible and fresh capital could be infused at rock bottom prices. But to infuse capital and watch it deteriorate on account of the uncertain West Asia war is harder in my view.

So the question is should one invest in companies offering good prices right now or wait? I would recommend everyone keep some cash ready and at the same time take advantage of the current low prices. But the opportunity should not be completely missed. In case of a crash the cash can be used as well.

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Yes, we are all in the same predicament now. But this is stock market. You are never sure what comes next and however diligent you are, nothing is guaranteed. But that should not deter intelligent investors. Because when you are investing, you are prepared for 20% correction for any reason. And mind you, however precarious the current position is, the market can’t go down for ever. And we were already in this roller coaster ride almost 14 months since Trump became President. So I am keeping liquidity and investing selectively and in instalments only. At the same time I am booking profit wherever I am getting opportunity. And I am not expecting a market rally as soon as war stops, because I am sure some other things will come into play. Moreover the after effects of the war will continue to be reflected in companies bottomline for at least 2-3 quarter. And most important for India point of view is price of oil.

So prepare for a period of volatility and keep a close watch on price and availability of Gas/ Crude oil. If you are not sure then it is better to sit tight and do nothing for few months.

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Interesting Observation from Nakul Sarda (Twitter handle: @nakul_sarda )

“ I’ve stopped reading Gulf war headlines. Here’s what I track instead.

We run an India-focused equity fund. 85% of India’s crude comes from imports. Half of that normally passes through Hormuz. So yes — this crisis is personal.

But the information environment right now is garbage. Trump says the war ends tomorrow. Iran says Hormuz is shut forever. One analyst says $150 oil, another says $60. You can’t build a portfolio view on this.

So I’ve narrowed it down to 4 signals. These are priced by people with real money on the line. They don’t lie.

  1. Ship insurance premiums through Hormuz

This is the single best signal. Lloyd’s underwriters have billions at stake on every pricing call. Before the war, insuring a tanker through Hormuz cost 0.25% of the ship’s value. Today it’s 3.5–10% — and almost nobody is buying. A $100M tanker that cost $250K to insure now costs up to $10M. When this drops below 2%, the people with the most to lose are telling you it’s getting safer. No press conference can replicate that.

  1. How many ships are actually crossing

Every ship carries a GPS tracker (AIS). You can count exactly how many cross Hormuz each day. Before: 100+. Now: 8. That’s a 92% collapse. You can’t spin a ship being somewhere it isn’t. Iran is letting some Chinese and Indian ships through, but it’s a trickle. When this number crosses 30–40, trade is resuming. You can track this free on the WTO Hormuz Trade Tracker.

  1. Paper oil vs real oil

This one most people miss entirely. Brent crude (the headline price) is at $112. But Dubai physical — what Asian buyers actually pay for delivered oil — is at $126. That’s a $14 gap. It exists because Trump’s comments keep pushing paper prices down. Traders call it jawboning. But the refiners buying cargo aren’t getting any discount. If you’re looking at Brent to assess India’s oil bill, you’re looking at the wrong number.

  1. The mid-April cliff

Multiple emergency measures expire around the same time. The 400 million barrel SPR release runs dry ~April 15. The US waiver letting India buy Russian crude expires. Formosa Plastics has declared force majeure from April 1. Right now these stopgaps are keeping the supply gap at ~5 mb/d. Without them, BCA Research estimates it doubles to 10 mb/d — the largest crude disruption ever. If Hormuz doesn’t reopen by mid-April, we’re in uncharted territory.

Bottom line: track the insurance premium, the ship count, the paper-physical spread, and the April timeline. Everything else is noise.

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It’s not just the war.
The FII outflows were very strong from all emerging markets even before the war had started.

Even if the war were to stop tomorrow, it does not automatically mean the crude oil prices will go back to earlier levels. I believe we are in for a sustained consolidation period where most firms will be re-evaluating their risks. With most foreign capital now sitting in reserves, it really remains to be seen what attractive opportunities in the emerging markets will drive towards multi-bagger results.