Sanctions on Russia could also sting US, but for now the geo-political impact on stock markets is not likely to be huge in the medium term. First Global’s Devina Mehra tells Moneycontrol, It is time to orient towards companies that can gain from a weakening Rupee.
First Global’s Devina Mehra believes the impact of ongoing geopolitical crisis on the Indian stock market will fizzle out over the next 3-6 months. In conversation with Moneycontrol during a Twitter Spaces conversation, Devina cited data to conclude that there has not been a single instance in the last 40 years, when the impact of an international war-like event has sustained beyond a year, except for markets (whether stock markets or commodities) which are directly impacted. In fact, most of the impact may have happened in the run up to the actual event, she went on to add.
World During Major Geopolitical Crises
The two pockets where one usually sees some impact of a global turmoil like the ongoing Ukraine crisis are oil and gold, according to Devina Mehra. History shows that a year into a major war-like confrontation, demand for crude oil and safe haven like gold have been positive, she added. More so, she goes on to add, because many of these confrontations have been in oil-rich geographies.
In this particular conflict, several other commodities have been impacted where Ukraine or Russia are major players. Prices of several agri-commodities, potash, metals like palladium, aluminum, nickel etc have gone up 20-30% since the beginning of 2022 - in some cases even more. Sectors and companies with these as inputs and outputs will be impacted and that has to be factored into your estimates.
Sanctions on Russia
Devina believes any serious and significant sanctions on Russia would also imply a risk of aggravating inflation. She doubts any democracy would have the stomach for it. Already, the commodities where Russia and Ukraine are major players are up sizeably this year. It is doubtful that the West would want to worsen that situation.
India Impact
At First Global, the consensus is that inflation will be a big factor influencing India Inc’s earnings. Already, many sectors are facing margin compression and some are not able to pass on price hikes. This, Devina feels, is a crucial factor in defining the India impact of any turmoil. The other major area of weakness is currency, according to her. Devina is of the opinion that this year we will see a weakness in Rupee playing out. Currency and fixed income markets will give a clearer indication of how the year will pan out for investors, she told Moneycontrol.
Navigating The Turmoil
Devina Mehra’s advice to investors is to stay picky this year, when it comes to sectors and companies. She is gravitating towards companies which stand to gain from any potential weakness in Rupee. She also has liked IT for a long time. But over a 10-12 year period, market returns have been been sub par, and there is still a lot of ground to cover. Hence the risk of a major crash is limited. Even last year, on relative basis, India was only the 6th best in the world. Before that, for many years, India has not been a below average performer.
Her final take captures the dichotomy of our times so well. “Don't be at either end of the spectrum, investing in either Fixed Deposits, or trading cryptos”.
(A version of this article first appeared in Moneycontrol)
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Einstein taught us about relativity in nature. Now come Devina Mehra and Shankar Sharma of First Global to teach us about relativity in financial markets -- and raise some serious questions about just what is driving stock prices.
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At 11 times trailing earnings, Energizer is cheaper; Gillette's multiple is 25. But cheaper doesn't mean better, says First Global.
Bipinchandra Dugam @bipinchandra90
@devinamehra @firtglobalsec
invested in both GFF-GTS and Super I50. Thank you very much for such wonderful investing experience with completely new approach. In my 15years of investing first product I felt which close to what customer want.
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@firstglobalsec @devinamehra
by far you are the best, I have not come across transparency, acumen, global expertise, exposure, protection of capital, delivering return from any fund/ fund managers. Invested very small size in 3 products will keep on increasing it over the period
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@devinamehra @firstglobalsec
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@KarmathNaveen the person with whom I always interact
Sumeet Goel @GoelSumeet
Very happy & relaxed to be invested with first global pms
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With so much of volatility in the market, risk management is very important part & considering that FG is doing awesome work!!! Kudos to you Chief
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We can load above testimonials on site as a scroller, and just below that we can add a section for compliments . Below tweets are comments and praises are related to our content, performance and some our direct compliments to you.
ADIT PATEL @ADITPAT11226924
Good team...
Special mention @KarmathNaveen .. he is soo helpful anytime of the day or night..
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Bought Peace with FG-Hum.Moving all funds from DIY investing to well managed and diversified PF at low cost.
It has doubled almost, excellent pick.Every small investor must invest in her FG-HUM Smallcase.
Suresh Nair @Suresh_Nair_23
I have 8 small cases and your has been the most rewarding ones .. thank you Devina.
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There is absolutely no doubt that she is one of the best investors of India in modern times but more importantly, she shares the most sincere and sane advice with retail investors.
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Congratulations Devina, results talk in itself!
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We are learning More about markets (& Life ) thanks to U than we learnt in our Professional courses.A BIg Thank You, Wish all get Teachers Like You!!
Sumit Sharma @MediaSumit
"The ability to be comfortable with being outside consensus is a superpower in investing...and in life." Devina ji hits the nail on its head!
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Congratulations @devinamehra mam! All the best for long term returns as well.
Vinay Kumar @VinayKu05949123
This is the wonderful session I have ever attended till date. One of the most fruitful hour of my life. Devina madam, ur clarity on financial mkts is simply superb.The way u portray the facts supported by "data" about stock mkts is really astonishing.I will listen again.Thanks.
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I loved to read your journey, insight and philosophy. It's a pleasure to read and know of your takes on market and life.
MNC🏹 @Focus_SME
Check & follow @devinamehra's timeline for lots of post debunking such rosy stories. Also, she gives amazing 🤩 sector directions/hints.
KLN Murthy @KLNMurthy2016
Good actionable insights, great article!
Suresh Nair @gkumarsuresh
Devina Madam is simply terrific... good knowledge, straight and simple thinking.
Very difficult to emulate such traits. I listen her past interviews from youtube.
Respect...!!!!
DD @AliensDelight
One of the brightest minds in the world of finance :)
Radhakrishnan Chonat @RCxNair
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siddarthmohta @siddarthmohta
Excellent performance. Flexibility is the key as you have mentioned it earlier also. Cannot have finite rules for infinite mkt opportunities.
Boom (বুম)@Booombaastic
To be honest, the insights which Devina madam brings in is very enriching..have learnt a lot from them...
Himanssh Kukreja @Himansh02428907
One of the most accurate analysts :)
I always look forward to you interviews mam
Abhijeet Deshpande @AbhijeetD2018
Madam, It is always a treat to read your insight, not only on business but on other topics also!!
Dada.AI @dada_on_twit
Thanks for this wisdom ma'am. Always love hearing your thoughts on everything equity. :-)
adil @zinndadil
Excellent points!
Can clearly feel this thread is a product of marination of many books and years of experience. 👍
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Superb !!
Your knowledge, analysis & articulation is simply great 👍
Tanay @Tanay36232730
Follower on Twitter and Subsciber on YouTube of First Global, really helping me in my investment desicion. Thanks
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