Macro Economics: Impact on Global Markets

Whenever one does financial modelling and after that possible valuation of a company to reach for an investment conclusion macro-economics play an important role in the decision making process. I personally garner a lot of insights when I am doing an investment report from what ever is going on in the macro economics of the world. Now if one considers a cyclical stock which moves with how the economy is going forward the consensus is easy as to see GDP numbers, PMI index and numbers that reflect up on the economy as a whole. Government policy intervention, RBI interest rate cuts or hikes are also an important indicator if you are tracking the banking sector or India Inc as a round of development. So both as an investor and as an analyst one needs to be cautious with the entire market perspective over laying macro-economic principles and it's impact on markets. 
While one forecasts Indian companies the industry average might be a good number to watch out for, so we have to gauge risk factor (beta as a number) and percentages of growth in years to come. Basically the set norm is five year forecast but some analysts do three years for a more realistic and short term advent of the markets on a particular stock. 
Running out of time you need not analyze almost every indicator possible but yes some numbers gives you an overall assumptions as to how ans when the numbers creep in the market, so we have both leading and lagging indicators which provides a holistic approach for looking at the market. Luckily macro economics has always been a subject I was concerned with, the indicating figures, the way markets depend on it and react to a particular news catches my eye and analysis. I love self engrossing my self in facts impacting global and local markets and how the reaction surpasses to investors. 
So value investing is something an investor should follow rather than indulging in blind games. So if a tip by our so called market experts are compelling you to Buy a particular stock do not just blindly follow the herd. It could cause some adverse losses in your kitty, rather do some thought full research and then buy stock for a long term instead of just making some quick bucks in day trading. For day traders if you are making money for ten consecutive sessions at a go the eleventh would be so detrimental that you would loose the entire amount and much more in the last. So investing is an art which is basically instinctive usually based on some guess but yes take calculated risk after some possible research on the company you are thinking of buying. 
This blog post is inspired by the blogging marathon hosted on IndiBlogger for the launch of the #Fantastico Zica from Tata Motors. You can apply for a test drive of the hatchback Zica today.

2 comments :

  1. The macros for #TataMotors, Whats your view, considering strong fundamentals of the Company and weak Global Macros.

    P.S. MVN = BAD OMEN :p

    ReplyDelete
    Replies
    1. Hi Udeeksh,
      Welcome to my blog. I had this intro done some 5 years back so year I interpreted the times as bad :) Yeah we sure can discuss on TM though I do not rely on giving any stock tips :D. DO ping me on gmail Take care !

      Delete

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