Current Bull market in India started in 2020.
Factors:
- Quantitative Easing, lower interest rates
- Media induced optimism
- China Plus One, promotion of Manufacturing, PLI schemes
- 2022-2023: Government’s vast number of schemes to ensure victory in 2024 (And for India’s growth too)
- FOMO by retail investors, putting money into Mutual funds which DII use to support the market
- People leaving jobs or losing jobs and entering the Markets permanently. Professions have been created and players can’t afford to let the optimism die.
Why does it seem like this bull market will last forever
- Market has been recovering from crashes quicker than it was ever before.
2008 Crash: 18 months
Covid Crash: 6 months.
December’22 downtrend: 4 months.
- Average holding period of a stock has dropped. There is a huge churn in Portfolio as well as Indexes, with rebalancing of weights too. We are focused on Momentum investing, and losers are thrown away. Indexes keep performing well. Long term investing has declined.
Factors which can stop this Bull market and trigger medium term downtrend
- Worldwide war, Terror attacks in India, Riots whatever
- Interest rate hikes, inflation continues further (Less likely)
- Big scandals in India or the USA. Trusted popular faces part of a scam. Could be politicians, businessman, anyone to create distrust in the public.
- USA Election, Indian Election results. Ruling goverment, policies change or are slowed down.
FII’s & DII’s will churn heavily, their investing is based on current policies.
- Zerodha stops working again (For the third time in a month)
- Basically any Black Swan event. Otherwise, there is no way we can enter a Bear Market at this point.The optimism is unreal.
Will appreciate the VP community’s take on this 
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I am of the view, or have an unclear view, when retail participation either direct or via MF would slow down, or even get halved, if indeed it happens. And a part of such participation, I feel, will cease to exist if there is a sound fall which impacts all the markets. Or maybe it could happen that, it will not cease to exist, because every participant becomes somewhat informed, understands the situation, and does not leave. I read comments from regular people, who I believe don’t work in corporate, talk about Fed meetings, G20 summits etc. So maybe the change has begun or it is still under construction and may tremble. I am not sure.
Like an economy fueled by debt, maybe our market too is running in motion with the help of continuous inflows from new entrants, who are replacing disgruntled or loss hit participants, so the machine may very well keep running until the next catastrophe from the West occurs.
While I am concerned about the misinformation and misleading aspects of the education, I like the current environment as I get to see good liquidity all around, for my shorter term bets. And I don’t know what would I do if indeed there is a crash and PF becomes halved. I was not in the market when GFC occurred.
So I guess, I should learn to go along with the tide, and have an ark too, if indeed a crash is around the corner.
Just some random thoughts.
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Most likely US and probably world economies are entering into recession by early next year.
We will see a big crash at that point however commodities will continue to do well due to underinvestment during covid. Crude will rise, so will gold, iron, steel etc so that sector might continue doing well
Besides you are comparing GFC. There were mini bear markets in 2011, 2018 in small caps. They took a long time to recover but weren’t so steep.
GFC type crashes are once in a generation if that. They compared it to 1929 crises. My company bought $5m of physical gold as they were worried of bank run
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I don’t agree with your point (FII’s are selling for long time), FII are net buyers for last 5 years
2019 : 135995 Crores
2020: 103156 Crores
2021: 50089 Crores
2022: -132815 Crores
2023: 140294 Crores
What is the source for your 2023 data?
Oh I meant FII’s selling starting this year, will edit the original post.
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Stock market has multiple phases, besides Bull and Bear we hv steady, range bound and indecisiveness market. It’s reflects both sentiments and economy growth & money supply.
I like to focus on growth in companies, and profits… Find such companies and grow.
The irony is that when many people start asking this question, a bubble is probably forming or has already formed. Caution warranted.
We are in Euphoria phase now. Bubble could take 1-2 years to form and burst.
Expect a 30-40% fall in markets every 5-8 years.
