Phreak's Thoughts, Ideas and Opinions

[Chandragupta]

Excellent post (as usual) @phreakv6. Totally agree with the conclusion here:

@phreakv6

All these point to a tough few quarters ahead, esp for small/micros due to valuations and liquidity issues.

I would like to just add one more point. While F&O speculators have shifted to the cash market; a contrary outflow away from the cash market is also happening simultaneously. A lot of DIY retail & HNI investors had entered the market post-Covid, thinking this was an easy route to making money. Terms like “multibagger” and 5X & 10X were being thrown around with alarming impunity. Many of these investors are probably throwing in the towel now. This money is exiting the small & micro caps and going back to mutual funds, from where it is getting rerouted to larger, more stable businesses. That is why MF inflows have largely remained strong. This is not a bad thing from a macro perspective.

[sougataG]

The theory seems to hold water going by the Google search trends, the popularity of the term multi-bagger has fallen in recent times.

[hitesh_gangwani]

@phreakv6 main concern is in the USA ,

First due to high volume of gambling in nifty, thanks to Jane street , nifty is not going to 22k

Like we used to see 15k to 18k then again 15k

It is either up or sideways now days ,

USA has three issues ,

Housing Crisis
Ai Bubble
31 trillion dollar debt (now 38 trillion debt )

Ai bubble, housing crisis can be avoided by government and they can show everything is going good

Experts were already know. About housing situation in 2022 -2023 this problem is going for two three years

In every debt instrument in USA , there is issue

Main issue interest on 38 trillion $ debt is 1.2 trillion dollars which is 6% of GDP

According to My thoughts ,

Trump will do nothing and Debt will go to 45 trillion dollars in 2028 -2029

This issue will can go for 10 years , until it reaches to 100 trillion dollar debt that’s when markets reacts to this issue bcoz no one is taking problem seriously or we would have already seen major correction

American Residents are already facing many Tailwinds

According to YouTube hyped videos : -

There is only one solution to this problem
Printing money

But American government cannot do directly

There are doing it old way
Debt reduction by decreasing by value of dollar

How it will happen : -

To solve this solution

American government , will announce there are larger holder of Gold

We declare Gold price is 10x of current market price

Gold which is still valued 42$ in their balance sheet
Will now be re-rated to current 10x price in their balance sheet

Which will reduce their debt by 1 trillion dollars

Second Role will Be Cryptocurrency ,
Also in cryptocurrency only BTC

American has already signed executive order to gather 1 million btc

When America has major portion of cryptocurrency. Like. Gold.
When America become largest holder in btc in the world

They will announce btc is legal and will also announce btc price according to them is. 100x of current price

It will be an asset in their balance sheet

Debt will come Down to 24 trillion Dollars from 40 trillion dollars

And also They will attach Gold to US dollar as backing

Sucesfully ,

They have fooled people and decreased the value of. Dollar

If this process happens

Dollar will lose 70% of its value
And inflation will be 30-40 %
Retail will suffer
End of YouTube hyped story

Current scenario :-

Trump has already signed executive order to bitcoin reserve to get 1 million btc ( indirectly they are trying to major holder in world as gold )

BTC is collected by government from criminals and hackers which are arrested and they have BTC

they transfer it to BTC Reserves

American government is not collecting by purchasing from market

Due to this step by America , china government is also mining BTC
And they are targeting 400 - 500 thousand BTC

China is also buying from local market

China is doing it because they want to have edge in the game

If America do something in future and China don’t to be left out of the game that’s why they are acquiring by mining and purchasing

Moral of the story :

Interest of 38$ trillion dollar is debt is 1.2 trillion dollar which is 6% of GDP

This is the Main Reason which is making problem year by year and forcing government to do something

I think AI Bubble and housing bubble will not burst directly , they will try to protect as much as possible to. Avoid effect on stock market

I think trump will not take action as per YouTube hyped video and Debt will 45 trillion dollars

All it depends on new government what they will do

Now inflation will be the first which can spike in coming. Quarters due to many issues

I am not predicting it , I am saying to just look inflation data check every quarter

(Also to add , if American government. Re rates Gold price

Indian economy will also see reduce in their Debt to GDP ratio currently which is now 89% and every country in the world’s will benefit in their debt due to gold re rating )

[Investor_No_1]

I think gold prices are determined by economic reasons of demand and supply.

[ranvir]

Whichever way u slice it, the only way out of debt is running the economy hot, indulging in some form of money printing ( like QE, yeild curve control, any other fancy sounding stuff ) + revaluing Gold / BTC etc and thereby reducing the debt burden ( over a period of 5-7 yrs )

Result - High inflation, Lower USD, higher Equity, Precious Metals and RE prices

That’s the path of least resistance ( and the least painful path - obviously ). And - I can’t think of any other way out

[Vikramratnoo]

In the balance sheet of Government

[Cshar]

. In case US govt tax collections are lessor than their interest rate payout, US govt will be in a virtual default situation and that situation csn arise as total Debt reaches 48-50 T USD.

All tariff war saga done by trump is to reduce import bill and have some additional USD in form of tariffs to cushion the rising debts. Last two auctions of 300 B USD by US Govt failed as their was no external buyer for these bonds, US Fed had to bail out US Govt by printing additional bills.

USA is in a catch 22 situation as due to rising bond yields in Japan which has reached 3.5% a historical level in last 35 years, rate differential between US/Japan has reduced to 1% after libor adjustments, Japanese investors have no logic to park additional money in US treasury. Japan is largest buyer of US treasury. China already converting US treasury investments to gold and real estate. Going forward any efforts by US to raise more debt will be funded by US Fed by printing more currency and that will circulate internally and increase inflation which will take interest rates higher which they can’t afford as interest payments will rise on existing situation. Slowdown in US is imminent.

US may sell their gold reserve to offset some debt portion. Another step they are trying to link debt to stable coin and crash stable coin however thats not easy as no country will accept that.

So if you take more debts than overall interest rate rise on existing debt and if you don’t than again you slow down and you are in a virtual default scene. End to this is going to be very deadly outcome. All money will flow out from US and move to safer assets

AI is a bubble and will remain, only 10 cent is revenue for every dollar spent on AI Infra, Ponzi scheme wouldn’t run for long.

[hitesh_gangwani]

As long as Indian small caps are running properly , we do not care about world market

Only US exporting Companies will take the effect

Recession is also good sign For investors to invest in cheap price but it is not going to happen easily

Simple rule is hold
average if market goes down and.
Don’t bother if nifty rallies with 2-3k points

At this point by god grace , I have 12 grams of sgb at 5147 of AUG 30

SBAUG30 made low of 12100-12400 and it is now rallying to 13500

Gold is good option but also risk making entry at higher level ( 1000 rs downside is the risk )

Many market participants are suggesting Buy physical Gold and silver bars at right now

But storage is the main issue ,
Metals are in bull phase
Gold silver copper

Copper and silver are tough to find investment options

I have only 14k of silver at 79 rs as I had already information of shortage of silver in advance ,
I bought Silverbees etf

Buy physical to hedge or SGB from secondary market is the option

[StonePitbull]

@Cshar

AI is a bubble and will remain, only 10 cent is revenue for every dollar spent on AI Infra, Ponzi scheme wouldn’t run for long.

There are worse ponzis in cryptoland running far longer than AI Capex, makes no sense to target AI, which has the potential to actually benefit humanity.

[MomentumStocks]

Nvidia is being compared to Cisco of dot com era

[Investor_No_1]

Thanks Vikas, Gold prices globally are indeed determined by economic result of demand and supply. Pls correct me if my understanding is still incorrect.

[Simrat]

I think we can do “n” number of macro analysis and reach to different conclusions. Few days back I looked back at the data of winners over last 1 year and simple conclusion came forward that earnings growth delivered led to market beating returns in several stocks. The same is evident in Q2’25 results where strong earnings growth + mispricing to begin with has rewarded investors.

Sharing the same note I wrote few weeks back below -

Over the past year, while the NIFTY 50 and BSE 500 have largely moved sideways, the market beneath the surface told a very different story. Some stocks delivered supernormal returns, turning into big winners, while others suffered steep drawdowns.

In this post, we’ll explore what truly drove performance during this period, the common traits behind the winners and laggards, and most importantly what lessons investors can carry forward into future bear or flat markets.

One-Year Winners: What Drove Share Price Appreciation

Over the past year, several companies delivered exceptional share price performance , some even turning multibaggers.
Names like Axiscades, AGI Infra, Timex, Shaily Engineering, Lumax Auto, Force Motors, and Acutaas Chemicals stood out with extraordinary gains.
Others such as TD Power, BSE, Muthoot Finance were strong winners, while HDFC AMC, Nippon AMC continued their steady compounding journey.

An obvious pattern emerges, none of these outperformers reported earnings decline during the year.
In fact, most posted blockbuster results across multiple quarters, which directly fuelled their price rallies.

How Earnings Growth Propelled Share Prices

• Asset managers (AMCs) defied the capital markets drawdown by consistently growing earnings. The market rewarded them broadly in line with their EPS growth. The rerating was missing in most cases, because there was no capital markets fillip.
• Blue Jet, despite intra-year volatility, ended up ~29% higher, thanks to strong earnings momentum earlier in the year.
• TD Power Systems’s rise was almost entirely earnings-driven.
• Privi Speciality stood out in a weak chemical sector purely due to resilient EPS growth.
• In some cases, sectoral tailwinds supported even moderate earnings growers, while strong earnings growth led to rerating in others.
• Axiscades, up nearly 200%, benefited equally from EPS growth and valuation expansion.
• Mazagon Dock outperformed the market despite a slowdown in earnings indicating lingering optimism and sectoral strength.
• Even in “cold” sectors like financials, Muthoot Finance and Fedfina thrived as rising gold prices and favorable macro themes played in their favor.

The Discovery Element

Stocks like Timex, Force Motors, AGI Infra, and Lumax Auto had a discovery angle, where earnings acceleration met low starting valuations that didn’t price in such strong growth.

---

The Other Side: Modest or Negative Price Performance

Now lets look at companies where there was significant drawdown or price appreciation was modest.

Companies with modest gains generally either had:

• A supportive theme but limited EPS growth, or
• Reasonable to good earnings growth but valuation derating by the market.

Meanwhile, those that declined saw clear earnings slowdown or de-growth, often accompanied by multiple compression.

Exceptions such as Pokarna, Sansera, Windlas, and Nuvama faced temporary headwinds (like tariff issues or short-term disruptions), not structural deterioration.

---

Summary

Earnings growth is the ultimate driver.

If a company in your portfolio delivers good enough earnings growth, it can not only hold up well in volatile or flat markets but also turn into a multibagger over time.

Valuations matter, but context matters more.

• Low starting valuations create room for re-rating, especially in under-discovered companies where the market hasn’t priced in strong growth. Take AGI Infra or Lumax Auto or Force Motors as last 1 year’s example
• High valuations aren’t inherently bad, as long as there’s commensurate growth to justify them. Think of names like Amber, Shaily, MCX, or Acutaas, where premium multiples were backed by robust earnings momentum.

Earnings slowdown or de-growth is a red flag.

When earnings momentum weakens, it’s often best to trim or exit positions, regardless of how “cheap” the stock may appear. Markets tend to derate such stories quickly.

Top-down investing improves odds.

Analyzing from a thematic or sectoral lens helps you avoid duds. Sectors enjoying structural tailwinds make it easier for most players to grow, as demand naturally flows toward them. Similar point was said by Mr. Madhu Kela in recent TV interview.

The magic happens when three forces align - theme, valuations, and earnings growth.

That’s your ideal multibagger setup. Even having two out of these three, say, a strong theme with earnings growth, or low valuations with earnings growth, can still produce exceptional results.

Bottom-up investing works too, but it demands selectivity. You either need:

• Low starting valuations (e.g., AGI Infra, Lumax Auto), or
• A theme in transition - one that moves from bad → better → good → great.
  • Potential future opportunities could lie in tariff-related plays or select financial subsectors, though caution is warranted. Structural headwinds in such areas can delay profitability until conditions normalize.

---

Hence,

Markets may appear directionless at the index level, but alpha always hides beneath the averages. Recognizing patterns of earnings acceleration, thematic tailwinds, and valuation gaps early and avoiding stories with slowing momentum is how one can not only survive but thrive even in flat or bearish markets.

Utimately, pattern recognition and applying it with discipline is what separates mediocre returns from good ones.

[Cshar]

Internet has benefitted to humanity and i think best innovation in last 3 decades however all companies gone bust who were pioneer for Internet innovation. Cisco was trading at 78$ in 2000, rose from 4 $, Nov 2025 Cisco attained 78 $ level after 25 years. I am not against AI application it will help in too many areas with its pros and cons. From an investor’s mindset, I will compare Nvidia to Cisco, all Cloud Data centers to all fibre optic companies which went bankrupt after setting up large network undersea as revenue didn’t come as projected. Ebay and AOL were declared Internet winners, no one talked about amazon. Reality is amazon and Google are winners which no one thought about. This happens in any disruptive sector be it EV, Major Tech change, batteries. You will come to know about winner only once sector consolidation is over. Google is using TPU’s for Gemini AI that means for AI you are not dependent on Nvidia GPU 100%. Who knows any chinese firm comes up with their own chip. Deepseek development took down Anantraj by 50% and still its there as investors got to know reality that AI algorithm can optimize data center Hardware requirements. What will happen to Netwebb tech if any new development comes which replaces Nvidia GPU? What basis a hardware assembler trades at whopping 147 PE with 17% margin? Its like travelling in a burning train.

[StonePitbull]

America is going all in on AI with Genesis Mission, recession is around the corner if they fail.

Launching the Genesis Mission

[sjain_13]

thanks for sharing this. Where can i access these data points on MTF on regular basis ?

[VALUE2017]

I think we should not muddle this thread as it is specifically for thoughts, ideas and opinion of @phreakv6.

[phreakv6]

The MTF talk has picked up momentum since the last post on social media and there are lot of posts now tracking MTF and largest exposures etc. A lot of them are missing important nuances so I thought I should point them out.

Before the current month there were two accounts following this closely. One here

Another here

I am using these because my portal doesnt have data going back this far.

1. Notice Mar '20 (Covid near bottom) exposure noted in both screenshots is 3061 Cr and today its 113000 Cr. That’s a 37x jump. Thats pretty much the return most of people who have been around from that time with exposure to small/micros have made. Some have made a lesser 60% CAGR and some have doubled every year as well since then depending on when they came in and what they did.
   We have simply been gifted a one time liquidity flood that has redefined expectations. Liquidity defines valuations - hence you kept hearing “rerating” which is the trending term from this rally (like multibagger was trending term in 2017)
2. Most indices - take Nifty Microcap 250 or Nifty smallcap 250 even Nifty 50 - gave negligible returns between Sept '21 and Mar '23. The MTF book during this period has started at 20k Cr and ended at 25k Cr - the low in MTF book in Jun '22 coincided with market bottoming out as well but the consolidation in MTF book here coincides with what we saw on indices. The high correlation should be clear now.
3. It can still be a stock-picker’s market when there’s no big dip in MTF book as the period mentioned in #2 shows (though Oct '21 to Jun '22 was hard for most strategies because MTF dipped during this time after peaking between Sept '21 and Oct '21). Incidentally NSE started making the stock-wise MTF data available from Nov '21 or so.
4. A common misconception in various posts am seeing is that MTF leverage is now reduced after last 10 days fall. This unfortunately is not the case - it has stayed put near ATH both overall, as well as in highly leveraged names mentioned in the screenshot. This is the worst case scenario which has started playing out where market has become aware of a forced seller and has started pricing it down even before seller materializing.
5. The names mentioned in most recent X posts is a lazy job of sorting exposure - with no regard to marketcap. This isnt right. The one I have posted from previous month at least has tried to see by index. Ideally we should see by free float. Even more ideally we should see by median turnover in stock because even rolling averages are being gamed these days by entities like this who are the stock trading equivalent of real-estate “buzz” around a launch.
   
6. When you see it using the adjustment I have mentioned in #5, things are pretty bad. There is so much leverage in illiquid names that it would takes days to unwind. When these unwind, we will see charts that look like pump and dump, even if they dont do so yet.
7. Leverage is not restricted to MTF and but also LAS (as mentioned correctly in the DSP screenshot above). In 2018 people were worried about promoter pledging but now we have to be worried about non-Promoter pledging because people appear to be pledging shares and using MTF to magnify leverage. So a lot of new liquidity that has come into the system is simply amplified leverage. You can very easily find this though because of automated disclosures which have been mandatory for a few years now. These come directly from the depository (NSDL & CDSL) so it is very reliable indicator
8. The cost of carrying a MTF position is fairly cheap at ~10% so unwinding may not happen in a hurry. But if there are cuts to price leading to margin calls, thats when there will be forced selling. I dont think we are anywhere close to that right now other than in maybe a handful of positions in few stocks because we are still trading above May '25 levels. General leverage is 1:3, so maybe only after 25% cuts from May '25 levels we will start to see this extreme scenario which could end up in a crisis.

The pattern I am seeing repeatedly in data is people are happily catching falling knives on leverage even today with the hope to make it big. The risk:reward is simply not in favor with so much “rerating”. Anything that rerated can also derate. It is better to be cautious about the small/micro space.

The best case scenario is leverage goes up even further - I will not write this scenario off going by how crazy past 5 years have been. I did not expect the crazy jump from 69k Cr to 113 Cr between May-Nov. There’s no reason why it doesn’t go up from 113 Cr to 160 Cr by end of next year and this ends up being a stockpicker’s market like Sep '21 to Mar '23 was. It helps to not get ultra-bearish and just watch the proceedings from the sidelines to make sense of what’s going on.

[RocketMan]

But I wonder if looking at this data is more noise than signal.

MTF leverage is not the same as F&O leverage.

In MTF, the number of outstanding shares remains constant. Even if a stock has large MTF interest, you don’t suddenly get additional shares in the market, the supply stays fixed.

The only thing that changes is the shareholder-to-shares ratio: fewer shareholders end up owning the same number of shares.

I wouldn’t even call MTF “leverage” at the stock level. For an individual investor, yes, it’s leverage. But for the stock itself, with or without MTF, the total tradable float is the same. If the supply doesn’t change, then how does it actually matter?

Only during extreme corporate events can MTF amplify moves, but that’s short-term, and the market quickly resets to fair value.

It does affect volatility to some extent, but since no synthetic liquidity is created, I personally wouldn’t give too much weight to this data.

I would even go as far as to say that MTF has close to zero impact on a stock’s movement over any meaningful period of time, and “meaningful” here can be as short as just few days.

[Cshar]

I will fully agree with your analysis, major issue is not retail investors are opening MTF positions, issue is when pledged stocks are getting squared off my broker once margin calls are triggered. Margin call triggered sell off are automated and execute at same time for a particular brokerage that creates a larger hit on stock as liquidity is low rightnow in cash market. We saw one example yesterday morning selloff. These patterns will be seen in good quality stocks also as pledge is done for stable stocks. MTF is actually a stock cash delivery and loan is by a broker hence speculation is not possible.

[RocketMan]

Yes, and even that impact is extremely short-term. For an investor, looking at MTF data offers no differentiated insight.

It makes no difference whether 1,000 people hold 10 shares each or 400 hold 25 each, the company’s value doesn’t move an inch.

In liquid stocks, this ownership shuffle is pure arithmetic. It means nothing, it changes nothing.