0:10 i'm actually running a workshop in Dubai right So in case you are interested I will teach about UAE stores I'll teach about real estate in Dubai I will share entire perspective I'll bring like external speakers So it's going to be a very interesting event You'll get to network meet with a lot of people who are doing well in Dubai They have been based in Dubai So this is an investment summit that I'm holding So in case you are a serious investor who wants to grow your network in Dubai Definitely come and attend The primary USP of this event is that a you will learn structured investing across different asset classes including cryptos including US stocks and on top of that you will be able to build a physical network I in fact plan on converting this into a Dubai investment club where you'll be able to meet regularly with people right and that will be a major value ad of this
0:56 event So in case you are interested there are only handful of seats right so please do sign up most of these have already been sold I have not even publicly announced it was bought my existing students only right so uh they are enjoying the courses so in case you are interested in being a part of this summit it's very very interesting please do sign up and read the details hi everyone so on this video we will speak about Trump 2.0 0 tariffs This has created massive panic into the stock market So how much more can the stock market fall That's one piece of analysis Will it lead to a recession and what would be the impact of a recession To what extent India and the US stocks are going to get hit So I'm going to give you a complete holistic commentary For people who are new to my channel my name is Axhat Shravast Currently I am based in UAE I run a hedge fund here and
1:41 investment is my full-time profession I spend a lot of time analyzing global markets and giving commentary around it I get to meet a lot of HNIs NRIs So I'll bring that entire knowledge to you In case you're interested you could subscribe to the channel So let's begin And the first key point that you must understand and I'll go point wise is that is there going to be a recession and what is the meaning of a recession So I've done a complete video here but just very quick recap A recession means that there are two quarters of GDP slowdown So this does not mean that the GDP becomes negative It means that the rate at which the GDP was growing that slows down and if it happens for two quarters then people come out start giving the news hey recession is here or this that stuff and generally the market corrects quite a bit So there have been
2:27 two recession periods and let me just mark it out on the graph So please watch this this is very important So the last recession phase was this This was 2020 right And here the market collapsed or NASDAQ collapsed by 29% Okay So this was the one recession period or the last major recession that had happened before that this situation arose in 2008 and here and the markets from the top corrected by roughly 51 52% In fact S&P 500 is close to like maybe 60% Right So this is the impact of recession Now people are looking at this chart right now Right And here we are So this is the latest chart that you can see There had been a parabolic drop Right and NASDAQ has corrected from its peak by roughly
3:12 22% Okay And this has been a very sharp parabolic fall So by parabolic I mean it's really really sharp right This is how usually it happens that whenever there is any kind of major global drama that you know what North Korea is going to do some attack or whatever it is then people panic people sell a lot of their stocks and you see this type of a sharp correction This is very different from a valuation correction So for example this phase right Right So here again the market eroded by 36% NASDAQ corrected by 36% But this was not a recession Okay Now recession means from a GDP perspective Right But this was a valuation correction because the markets has risen at such a fast pace it needed to correct So for example if something went from let's say 100 to 250 okay Then of course there is going to be
3:58 correction right This correction might look really big correction But this was a valuation correction Natural question comes that you have given us this understanding that okay recession maybe maybe it will happen maybe it will not happen what is your take will recession happen I don't know okay it depends on the tariff situation how do renegotiations happen how Trumps react whether zi jingpin agrees to whatever Trump is saying or wherever they find that middle solution middle ground that will dictate whether a recession is going to come or not but here is what some major banks are saying earlier they issued a commentary that okay recession probability is 30% Now one of the key banks they have jacked up their recession probability to 60% Right So they are predicting that a recession will be there But honestly their guess
4:43 is as good as mine and my guess is as good as theirs because no one knows what's going in the head of Mr Donald Trump or other prime minister presidents of the world So it's just pure speculation Do not buy stocks because of that Which brings us to the second point that hey is it a great time to be buying stocks The short answer is a definite yes So let me just highlight the recent history of NASDAQ Then I will take you to Nifty50 also in case you're looking to make investments in the Indian market What you would notice is that if you try to figure out 20% or more correction it does not happen that frequently right So for example this is one phase right in 2018 and before this if you study the entire thing right I mean from 2015 right from like if you go back so right from let's say here 2014 to 2018 if you
5:30 were waiting for a correction period this correction happened here in 2018 this was one 20% correction then after this there was a covid crash which was in March of 2020 so after 2 years there was another 20% crash and since then how many years have passed right so this is approximately 2 and a half years now right And now we are seeing a 20% correction Right Now generally if you would have purchased any of these 20% drops right So here here here you would have made very good money Right So the markets went all the way from here to here Now how much was this rise that you would have missed So let me just try to see this Right So this was approximately a 76% rise Okay So okay So let's assume the average right So let's not pick the the thing from the bottom Let's pick it
6:16 from the middle here This was a 100% rise right Now again there was another drop Now what happened here Now here again let's pick it from the average So let's pick the middle point as this This was another 70 80% rise Okay So right now right what is happening in the market is this that you're looking at this 20% fall So let me mark this in red You are worried that boss what if it goes to minus 40% What will I do then Okay fine that's minus 18% notional loss Okay on whatever new money you are investing from Monday Okay but if there is a 60 70% rise and you just keep on waiting and waiting and waiting No I don't want to take this like you know 18 20% hit another 18 20% hit on my portfolio then which is a bigger loss right here this this strategy is called
7:03 as riskreward equation strategy So in very simple financial words what I mean is that the risk toreward ratio right now of investing is like maybe 1 is to4 Okay So for every 10% drop there is a potential that you might make like another 30 to 40% profit or at least 20% profit So if you try to play around with this equation the worst case scenario would be 1 is to2 and optimistic scenario would be 1 is to4 So this is a great riskreward equation to invest your money in and therefore I am buying heavily So yesterday I bought the market heavily I bought close to maybe like 1 cr of US equities I am buying more and this might be a very heavy buying week for me Now this does not mean that you invest everything on a Monday You have to study the for you know need to know
7:48 the techniques So for that I do run a US stock investing community In case you are interested definitely consider joining it I do regular classes I disclose my portfolio Everything that I'm buying selling I teach it using macroeconomics So in case you are a serious investor in the US stock market definitely consider checking out that community So I hope that the second point is clear that this is a great time to be buying stocks Then comes the third key point that is it a great time to buy Indian stocks and what is likely going to be the impact of this Donald Trump tariffs on India So this is where the Indian market stands right So this is Nifty50 chart We are looking at large cap because small cap and midcap volatile investments generally should be avoided in a parabolic drop type of a
8:33 market Now see Indian market was going through a valuation correction This was not a parabolic drop the way it happened in NASDAQ Now my estimate is that we will fall by another four 5% Why Because the global markets are falling So this will become a great excuse for the Indian equities to get corrected a little bit more Okay Now the drop might be even more but I have to run my estimates as an investor So from the top if this 4% fall happens then we will get nifty at like almost 16 16 and a half 17% So this is something which is which seems like a very likely scenario right now given the global circumstances But if we step back and think about it that hey is it like a good time to buy here if the market falls the short answer is again a yes because you need to
9:19 understand if three things about Trump tariffs The first key point that you need to understand about Trump tariff is that oil prices have gone down In fact from its peak it was roughly at $100 a barrel and now it is at $50 a barrel So approximately 50% correction on oil prices have happened Now what does this mean and how does it benefit India Well India is a net importer Okay And our oil bill is very high Now with oil prices going down it kind of benefits India because India is a net importer country Okay So we are not a net exporter country We are a net importer country and oil prices going down is wonderful for us right It helps us So this is the
10:04 first key thing that is happening Second take a look at INR to USD exchange rate Now INR had been falling for the last four years right and there was a lot of erosion of INR Now recently INR has started to gain strength or in simple words our currency is becoming strong Okay So our currency is becoming strong Is this a good thing for us Yes it is a very good thing for us because again we are not a net exporter country We are a net importer country So if our currency is strong it kind of helps us It kind of helps us manage the inflation situation Bunch of other things that come with it Right So this is the second key thing that is there which is positive Third is the nature of tariff Nature of tariff For example if you study what Donald
10:51 Trump is doing he has put 54% tariff on China Okay Now China was very smart in the last 1 two years It went back to a country like Vietnam said that you know what we'll build your ports everything this that stuff and we will bring our Chinese good into Vietnam and we will export to the US via you guys Okay So what did US do now US has imposed a 46% tariff on Vietnam Okay So these two countries have gotten hit the most right and I don't know what the counter implications of this would be but this opens up opportunities to a country like India where a lot of third party supply chains might come For example almost 85% of iPhones get manufactured in China Now they can't be done in Vietnam Where would they move to
11:38 they most likely are going to move through India one way or the other or some other country So countries like India where the tariff hit has been lower compared to other parts of the world we benefit disproportionately Now let me explain the next key point that see tariffs have a life Now what is the meaning of tariffs have a life Now tariffs start in different stages Stage one of tariff is over that Donald Trump came slapped tariffs on all the countries right China 54% Vietnam 46% India this percent reciprocal tariff this that stuff lot of news lot of uncertaintity has been built into the market what happens during such times parabolic drop again take a look at this NASDAQ great time to be buying stocks I am adding stocks like crazy right now okay I am done with almost 50% of my
12:24 portfolio I will be building maybe more another 15 20% right and rest will be in cash which will help sustain the situation over the next 6 months Now coming back to the point that stage one of tariff was Trump slapping everyone really hard Okay so he has already done that This is stage one Then what is stage two Stage two is renegotiation So China and US are likely going to sit on a table Okay this might happen 1 month from now 2 months from now 3 months I don't know 6 months Okay so they are going to renegotiate That is stage two Stage three is reaching a new normal Now whenever new normal is reached that for example let's say a fair tariff would be 25% right so both US and China agree that becomes the new baseline right now that might take 3 months 6 months whatever it is but
13:10 whenever that stage three is accomplished what will happen there will be a lot more certaintity in the market and there will be an immediate revival of bullishness okay now the next point is that in case my theory is wrong that this situation takes like maybe four years 5 years to get resolved then what will happened Well the closest indicator here is the 2008 crisis That was a slow bleed crisis You can see that Indian markets fell by roughly 68% And this was not a parabolic fall This was not a fall like that You know what the markets dropped like this This took time right And the recovery also took time So we were in a very long sideways market And this is the worst possible situation we will get into But what people miss about this situation is that there are two three critical points The first key critical point is that 2008 crisis was a
13:57 banking oriented crisis Okay So banking oriented crisis This could not have been solved with a push of a button Okay So unlike tariff thing for example Trump has slapped 54% 55% tariff on China today and if he wants he can roll it back in the next 2 months But this banking crisis was very very different That's one Second is that the current tariff war is more of an ego war It is not a structural defect in the economy Yes ego war if it persists and people just make it like you know a tool for massaging their ego then things can go haywire and can lead to a full-blown crisis which can last multi-deads Who knows But the point is that you know this is Trump's last term It's not as if
14:44 that he will continue after this or something of that sort So people know that also So this situation is likely to get solved fast When I say fast usually less than a year right So we will find that new normal stage three This will lead to trust or more trust from investors which is called as certaintity for investors Now if investors are certain then they start putting money back So we are not looking at a very slow bleed in this market Now this is a structural call that you will have to make This is where you need to follow economics If we also look at macroeconomy right now for example if you look at US GDP growth rate it is okay It is not great but it is not bad China's GDP growth rate it is okay It is not that great but it is not bad Unemployment situation in the US seems to be okay Inflation which is the price
15:31 rise of goods that seems to be okay Many people are worried that you know what because of this tariff suddenly inflation in the US will jack up Might be the case I don't know But see what has happened is that their US Fed or the US or US central bank what it has done is that it has not cut down the interest rates Why Because they were also anticipating probably or probably knew that Trump is going to impose tariff Okay So in case there is a GDP slowdown right Uh the tool that their central bank has in their power is very simple that cut interest rates fast and they can easily do it over the next 3 6 months Maybe they will let the pain in the market persist for the next 3 months After that they will cut the interest rates just to revive and kickstart the economy So again that structural slowdown in economies is unlikely
16:18 because there are a lot of tools available for the US government right now which they can throw and kind of revives the market in case they feel like right now Of course this does not mean that you know there will be no pain going forward There is likely to be a little bit of pain both in the Indian market and the US market But again as I keep saying unless you invest when things are down you will never make money This is like a distress sale going This is like 2020 COVID crisis type of sale happening right that real estate got cut by half right now if you look at any real estate if you would have purchased a real estate during COVID at let's say 50 60 lakhs now it will at least be like you know 1 and a half crores okay so why because that was a discount period right now the market is also at a discount and unless you buy these type of phases there is no way that you are going to make like good gains in the market I hope that you enjoyed this conversation it gave you a
17:05 sense on how to deal with recession if it did do press the thumbs up button and subscribe to this channel and I'll see you soon
