Global Market Capitalization crosses $100 trillion
Dear Investors, I have been saying this for a couple of days now, that this is perhaps the greatest time in the entire life span of all of us alive reading this article, to invest in the stocks. I am making it very explicit, we have not seen such times before, and we might not see such times for whatever period we life from this point. I am referring to an impending bull run, whatever half remains of it for the weeks and months to come…..well I am saying this will be more visible and discernible than the first half, which sadly has already run its course, since march this year.
Some of you may be wondering where did we see any bull run in march, on the contrary that was the period when most of us lost money in the stock markets….I want to reiterate Warren Buffet here: “the best time to buy stocks is when there is blood on the streets…..even if its your own blood” – My friends, March 2020 was when most lockdown were formally announced and the stock market reflected the grim realities of a new normal….that where the industrial and manufacturing productivity came to a grinding halt, along with the service and hospitality sectors, it was widely believed that a recession is almost overdue and no one, just about no one, in any country, any geography, any investing temperament was willing to shed a single extra penny over what was considered to be any sort of extravagant expenditure.
This was also the time when the stock valuations were down and there seemed to be no trust on the streets…the governments the world over were clueless over their strategic direction and lockdowns seemed to be flavor all over the globe, only to realize that a handful of weeks of lockdown was no answer to a galloping pandemic that was almost as bloody as the world war 2, if we count the coffins sold, but only this time around no bullets were fired….but we did see some skirmishes and muscle flexing between India and China, and China and Taiwan/US, and China and rest of the south China sea countries and China and the Japan, so much so that even today the Indian and Chinese army are in a eye ball to eyeball stand off on the icy Himalayan heights. He global supply chain got disrupted and since then almost all bug companies have made it a point to have a manufacturing diversification from China to other parts of the globe, of which the major beneficiaries have been the south east Asian countries and India.
I can confirm my own first-hand account of the losses I saw, in my own portfolio – I was down by 35%, in the red, stark red and I felt a knot in my throat every day I saw more erosion on my already depressed portfolio. But I stuck around and didn’t panic, well there wasn’t much I could have done in a lockdown….and that ‘inaction’ in the investor speak, paid off…..today not only I recovered what I lost, but I am at-least 20% up on my valuations before the markets crashed and if I were to assess basis the bottom of the portfolio to the current valuations I see, I am at-least 73% up on my depressed valuations….beat that!!!!!!!!!
The global market capitalization crossing $100 trillion mark is a big milestone, if I were to present some facts to you, based on the Bloomberg report, you will realize the magnitude of this news:
· The increase in market capitalization from March 2020 has been about 63% (So I beat the market hands-down!!)
· The Year to date increase from 2019 has been 15.5% - not bad for the year 2020, which was marred with all things going wrong that could have gone wrong.
· The Global Market capitalization had crashed to $61.6 trillion in March 2020, the las time market cap was at this level was back in 2016, which was a good year.
· The V shaped recovery phenomena manifested itself between March and now, and is happening as you read this piece – this is a rare event that the economists all over the world only study academically and see very little of it first hand, if any and at the scale as big as this one!
· The market capitalization of US and China has increased, and they now together account for approx.. 52% of all of the market capitalization, so doesn’t look like the muscle flexing harmed any of the investors picking up and stocking up their portfolios with stocks from these 2 giants.
· The next 8 of the top 10, except Canada, have generally lost out a bit on their share of the market cap, Japan was the this largest at $6.3 trillion.
Now, coming back to what I was trying to emphasize here, don’t loose hope if you missed the half bull run, which was less discernible to unseasoned investors, as the other half, which is going to be more discernible is still to run. Stay invested and put in your cash, if you are hoarding some, there is more juice that going to be released and hence you must take advantage and create some wealth.