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Where to invest in HIGH INFLATION? (3 Key Stocks!) - YouTube
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[4]
what stocks you can purchase in terms of
[7]
hedging yourself or protecting yourself
[9]
to an extent against inflation buy some
[11]
real estate now i am not necessarily
[13]
talking about house but please remember
[16]
that your bet can go terribly off
[18]
hi everyone welcome to today's video so
[20]
let me start today's video by showing
[22]
you some very interesting data about
[23]
inflation so back in october of 2021 we
[26]
were hitting an inflation of four and a
[28]
half percent in india
[30]
right now that inflation number is
[32]
roughly eight percent so the inflation
[34]
has almost two eggs within a span of few
[37]
months same is the situation in the us
[39]
and same is the situation all across the
[41]
globe that the world is struggling to
[43]
fight with inflation
[45]
as a result what the governments are
[46]
doing is that the u.s feds have been
[48]
increasing interest rates and it is
[50]
expected that this year they are going
[52]
to undertake five interest rate hikes
[55]
indian government also or rbi precisely
[58]
has been increasing the interest rate
[59]
they increased the interest rate
[61]
prematurely earlier this month and it is
[63]
expected that in june also they are
[65]
going to increase the interest rate so
[67]
every time the interest rates are
[68]
increased the crypto market falls the
[70]
stock market falls and people start
[72]
panicking that akshath guy barbara and
[74]
now we will never be able to get back in
[76]
the stock market etc etc so first and
[79]
foremost very important message that the
[80]
u.s stock index i'm not talking about
[83]
individual stocks u.s stock index have
[85]
fallen by 15 percent indian nifty has
[88]
fallen by roughly 14 over the last six
[90]
months these are big faults in the
[92]
indices if you see your portfolio in red
[94]
please do not panic it is a basic common
[97]
sense that there are years when you will
[98]
be making a lot of gains for example
[100]
2020 to middle of 2021 people made
[103]
insane amount of returns and over the
[105]
last one year the returns have gone down
[107]
it's cyclical stock market is also
[109]
cyclical that's the only thing that i
[111]
can say as a rational investor and think
[113]
about it yourself that right now you
[115]
have two options option one is that you
[117]
will sit on cash and do nothing in that
[119]
event you are losing hundred percent you
[121]
are losing due to high inflation option
[123]
two is that you take risk you invest in
[126]
that scenario also there can be
[127]
short-term pain so which of these
[129]
options will you pick 100 loss
[131]
guaranteed or more volatility more
[133]
chances of loss but also more chances of
[135]
return the choice is yours and
[137]
accordingly you will need to take bits
[139]
so on this video i am going to talk
[141]
about six key options that you can
[142]
explore in terms of handling inflation
[145]
now are you guaranteed to make returns
[147]
on these options that i am talking about
[149]
no but historically speaking looking at
[151]
the data these six options can be a good
[154]
bit to hedge against your risk that come
[156]
with high inflation so i will talk about
[158]
six options that can help you somewhat
[160]
profit from inflation so before speaking
[162]
about these six options i would like to
[164]
briefly touch upon the theoretical
[165]
aspect of inflation and how many types
[168]
of inflation are there if you understand
[170]
this basic economics it will help you
[172]
understand what is happening in the
[173]
world and you will not panic whenever
[175]
you see these type of faults and
[176]
situations so there are three types of
[178]
inflation that is there and i will give
[180]
you a very quick easy to understand
[182]
explanation so first is called as demand
[184]
pull inflation in simple words it means
[186]
that the demand of things has risen
[189]
temporarily but the supply has not risen
[192]
so think about it this way that india
[193]
has the capacity to produce only one
[195]
million shampoo bottles every year now
[198]
suddenly there is a surge in demand that
[199]
instead of one million demand of shampoo
[201]
there is two million demand of shampoo
[203]
so as a result because the demand has
[205]
gone up the price is two will rise and
[207]
that will lead to something called as
[208]
demand pull inflation so this is
[210]
something that we witnessed in the early
[212]
part of 2020 that a lot of factories
[214]
shut down due to covet problem and
[216]
supply took a hit and people started
[218]
holding also and there was a lot of
[220]
increased demand of things also so this
[222]
situation primarily is persisting even
[224]
now why because there has been a lot of
[226]
quantitative easing printing of money
[229]
and dumping it onto the economy that
[231]
still exists a lot of free money still
[233]
exists in the economy and as a result
[235]
the demand has not come down so this
[237]
inflation is still going on second is
[240]
something called as cost push inflation
[242]
it simply means that the input cost of
[244]
things are becoming higher this happens
[246]
due to supply chain disruptions
[247]
predominantly due to russia ukraine
[249]
crisis supply chain disruption has
[251]
happened in the world and it is leading
[253]
to very high cost push inflation the
[256]
third type of inflation is called as
[258]
built in inflation it happens when
[260]
people start demanding higher salaries
[262]
so you might have noticed that very
[263]
recently a lot of it companies saw very
[266]
high rate of iteration and that was
[268]
primarily because of the fact that
[270]
people demanded higher salaries and they
[272]
were getting those salaries with
[273]
startups so right now the interesting
[275]
part is that we are witnessing all these
[277]
three different types of inflation that
[279]
is impacting the economy when you think
[282]
ask people around that what is their
[284]
outlook on the economy there is a lot of
[286]
confusion going around because in 2022
[288]
we are witnessing a confluence of all
[291]
three different types of inflation so
[292]
the word of the day today is confluence
[294]
let me know what does that mean so with
[296]
that said let us start discussing six
[298]
simple options through which you can
[299]
somewhat protect yourself against
[301]
inflation is it a guarantee of returns
[303]
absolutely not because if the entire
[305]
world is going down and irrespective of
[307]
which asset you are investing in you
[309]
will still take a hit you will still
[311]
take a loss and also remember the key
[313]
point that if you are just keeping your
[314]
money in the bank account you are still
[316]
taking a loss you are not seeing that
[318]
loss that's the only thing so option one
[320]
is that if you have any kind of debt
[322]
please pay it so pay your debt if you
[325]
have student loan if you have housing
[326]
loan if you have etc etc alone please
[328]
pay it and get done with it why because
[331]
any form of cash right now is the worst
[333]
form of investment that you can make at
[335]
this juncture why is that because during
[337]
high inflation period what does high
[340]
inflation period indicates it indicates
[342]
that your money is getting depleted by
[344]
that same amount if the inflation is
[346]
eight percent it simply means that keep
[348]
hundred rupees in your bank account you
[350]
will get two percent savings rate eight
[352]
percent is the inflation so net net you
[354]
are losing six percent and your 100
[356]
rupee becomes 94 rupees so if you have
[359]
debt to pay anyone please pay it if you
[361]
have taken utdhar from your friends with
[363]
them it will become their headache how
[365]
they will spend that money now in fact
[367]
this is the same roadmap that a lot of
[369]
corporates undertook you might have seen
[371]
that in the last one year a lot of
[373]
corporate firms have been repaying their
[375]
debt why is that because holding a lot
[377]
of cash might be a losing proposition so
[379]
a lot of companies that raised money
[381]
they ended up repaying their debt and
[383]
this is the same roadmap that you should
[385]
also follow that if you have any kind of
[387]
debt please repay it and be done with it
[389]
the second option to protect yourself
[390]
from inflation would be to buy some real
[393]
estate now i'm not necessarily talking
[395]
about house if you can buy a commercial
[397]
real estate or agricultural land that
[399]
will be an interesting option why am i
[401]
saying it because think about it this
[402]
way that every quarter the interest
[405]
rates are being increased now if
[407]
interest rates are increased what does
[408]
that mean it simply means that the
[410]
housing loan becomes more expensive or
[412]
any type of loan that you are taking
[414]
whether to buy a commercial property or
[416]
if you can procure it for an
[417]
agricultural land etc it also becomes
[420]
expensive so what will happen is that
[422]
there will be fewer people who will be
[423]
availing these type of loans going
[425]
forward at least in the next year or so
[427]
but the number of commercial properties
[429]
and agricultural land they remain the
[431]
same it's not as if that the numbers are
[433]
coming down or some property will get
[435]
automatically vanished because interest
[437]
rates are high no the supply of property
[439]
remains somewhat the same but the demand
[441]
of property will come down as the
[443]
interest rate keeps on going up so the
[445]
important point to note is that if you
[446]
are looking to buy any property then you
[448]
must prefer a floating interest rate
[450]
over a fixed interest rate as of now i
[453]
will also explain you the rationale
[454]
behind it but very quickly let us
[456]
understand the difference between fixed
[457]
and floating interest rate fixed
[459]
interest rate means that if a bank gives
[461]
you an interest rate of 7 for a period
[463]
of 30 years then they will be charging a
[465]
7 fixed interest rate for those 30 years
[468]
a floating interest rate on the other
[470]
hand means that the interest rates are
[472]
adjusted as per the increase or decrease
[474]
in inflation so since right now the
[476]
inflation is very high and going forward
[478]
the inflation is likely to come down
[481]
therefore if you take a floating
[483]
interest rate you are slightly better
[484]
off now of course this is a much more
[486]
complex topic in case you want i'll make
[488]
a separate video on this topic but i
[490]
just wanted to give you a very high
[492]
level summary as to what a sensible
[494]
argument here economically might be now
[496]
the third way of protecting yourself
[498]
against inflation is that you bet on
[500]
some commodities that you feel
[502]
comfortable betting on but please
[504]
remember that your bet can go terribly
[506]
off so let me explain this point by
[508]
using a few examples so let us pick the
[509]
example of adani vilmar and you must
[512]
have seen that adani willmar went from
[514]
approximately 340 rupees to all the way
[517]
to 850 rupees and then it started
[520]
correcting now why did it go up because
[522]
everyone was playing with the edible oil
[524]
cycle edible oil is a commodity there
[526]
was a recent shortage of edible oil and
[529]
everyone thought that you know what
[530]
adani wilmar is going to become like a
[532]
massive rocket and it will forever
[534]
continue to go up but that did not play
[536]
out why because the edible oil supply
[538]
crunch somewhat ended to a very large
[540]
extent so same thing happened in oil
[542]
india limited also that back in december
[544]
or towards the end of the year when
[546]
russia ukraine crisis started to
[547]
accelerate what happened was that oil
[550]
india limited grew from all the way to
[551]
approximately 175
[554]
all the way to 250. so this was a
[556]
massive jump and since then the stock
[559]
has corrected and it has come down in
[560]
the last one month itself by roughly
[562]
seven percent so this was again an oil
[565]
cycle at play these type of commodity
[567]
cycles keep on going up and down so now
[569]
you would say that okay this is like a
[570]
fun exercise if we can just predict the
[572]
commodities where some kind of crunch
[574]
will happen
[575]
just invest in stocks that deal with
[577]
those commodities and get super rich
[579]
yeah so two problems so problem number
[581]
one is that it is almost impossible to
[583]
predict the commodity cycles so consider
[586]
for example the auto industry and if you
[588]
see the last 5 years the auto industry
[591]
has barely moved there are equal number
[593]
of vehicles that got sold in 2017 and
[596]
almost same number of vehicles are
[597]
getting sold in 2022. so this is a big
[600]
problem and it reflects in the
[601]
performance of some of the leading
[603]
automobile players in india consider for
[605]
example maruti that in the last five
[607]
years maruti stock has given only five
[610]
percent return and here we are talking
[612]
about a leading automobile player in
[614]
india if you were trying to time the
[616]
cycle of how many automobiles will get
[618]
sold in india you would have had a very
[620]
tough time predicting that move also and
[622]
this is something that we get to see on
[624]
everyday basis we get stuck in traffic
[626]
all the time and here we are not even
[628]
able to predict the sales volume of
[630]
automobiles so how will we be able to
[632]
predict the supply or demand volume of
[634]
different commodities but if you say
[636]
that okay you know what i want to play
[637]
around with commodity stocks and do tell
[640]
me your two favorite commodities then i
[642]
would say that i am bullish on steel as
[644]
of now and second i am bullish on
[646]
palladium so why is that if you want
[648]
i'll make a separate video but if i have
[650]
to pick two commodities that i'm
[652]
somewhat bullish about at this stage it
[653]
would be palladium and it would be steel
[655]
separate video on that just let me know
[657]
now comes the fourth option of saving
[659]
yourself from inflation which is to
[661]
invest in government-linked
[663]
inflation-adjusted bonds now these are
[665]
called as tips in the u.s and these are
[667]
treasury inflation protection securities
[670]
these are essentially government bonds
[672]
so basically when you are going and
[673]
investing in stocks stocks are equities
[676]
now bonds are a completely different
[678]
market altogether commercial players
[680]
like itc hdfc they also issue their
[682]
bonds and government also issues their
[684]
bonds so in the us this tips bonds are
[687]
issued by the u.s government and if you
[689]
are worried that there will be high
[690]
inflation in the economy then you can go
[692]
and buy tips based etfs in the u.s for
[695]
example pro share inflation expectation
[697]
etf is another etf that you could
[699]
purchase in the us which will give you
[701]
somewhat of an inflation hedge so such
[703]
an option does it exist in india so
[705]
interestingly in 2013 rbi experimented
[708]
with these categories of
[710]
inflation-adjusted bonds so they learned
[712]
something called as inflation index nss
[714]
and these were instruments that used to
[717]
give returns adjusted to inflation that
[719]
was existing in india but unfortunately
[721]
that experiment did not gain a lot of
[723]
traction because a majority of the
[725]
corporate investors were not interested
[727]
in buying those bonds
[729]
so as a result the rbi is still muelling
[731]
whether to launch the next series of
[733]
those bonds bonds that were launched in
[735]
2013 they are still active i don't think
[737]
that they are traded on a secondary
[739]
exchange so therefore you will have to
[741]
go to the us in case you are interested
[743]
in investing in government bank etfs
[746]
which are inflation protected now comes
[748]
the fifth option of saving yourself from
[750]
inflation it is very simple that you try
[753]
to earn in u.s dollars now you would say
[756]
why what's the benefit okay so you need
[758]
to understand the fact that inr is
[760]
losing its value by four percent every
[762]
year compared to u.s dollars
[765]
yes earning in usd also might not save
[768]
you from inflation simply because of the
[770]
fact that the inflation in the u.s is
[772]
still quite high but the bottom line is
[774]
that if you are only earning an inr then
[776]
it might become an even greater problem
[778]
for you so try to earn a us dollar i had
[781]
made a separate video explaining some of
[783]
the parts that you can use in order to
[785]
earn in us dollars this is especially
[787]
important now because the imf forecast
[789]
tells us by 2028 one us dollar will
[792]
roughly become 95 rupees which is going
[795]
to be a huge fall for inr so if you can
[797]
figure out ways to invest in the u.s and
[800]
make money from it that can give you
[802]
some hedging against this following inr
[804]
in case you want a separate video i'll
[806]
make a separate video on this following
[807]
inr as well that will hopefully give you
[809]
more clarity now coming to sixth and
[811]
final option of what stocks you can
[813]
purchase in terms of hedging yourself or
[815]
protecting yourself to an extent against
[817]
inflation then this section is going to
[819]
be very relevant for you but before
[821]
talking about some important stocks here
[823]
let me give you a very quick theory
[825]
around it this is a very important
[826]
historic data so what you would notice
[828]
is that between 2002 when the dot-com
[831]
crash ended and 2008 the value stocks
[834]
did better than growth stocks and
[837]
opposite happened from 2008 to roughly
[840]
2022
[841]
now what is the difference between
[843]
growth stocks and value stocks so value
[845]
stocks are stocks like pepsico hindustan
[847]
unilever itc which are stable cash flow
[850]
oriented businesses what are growth
[852]
stocks growth stocks are stocks which
[854]
are tech driven which are experimenting
[856]
on new ideas where the growth potential
[858]
is very high etc etc so the important
[861]
point to note is that it's not as if
[863]
that all the time growth stocks are
[865]
better or value stocks are better there
[867]
are cycles when value stocks are better
[869]
and then there are cycles when growth
[870]
stocks are better so the million dollar
[873]
question right now is that hey in the
[874]
next phase when this crash is over this
[877]
2020 covet crash and russia ukraine
[879]
crash gets over which of these stocks
[881]
are going to go higher in valuation and
[884]
which of these areas you should be
[885]
betting on so this brings me to the
[887]
theory of inflation that i was
[888]
explaining that what type of inflation
[891]
currently are we in so we are into all
[894]
types of inflation there are three
[895]
primary types and we are into all three
[897]
types of inflation but my hypothesis or
[899]
my prediction going forward is that
[901]
monopoly based growth stocks and
[903]
monopoly based value stocks are going to
[906]
do better why is that this is a theory
[908]
that i've explained on several of my
[909]
videos that the world is getting
[911]
increasingly monopolized if you consider
[914]
the business model of amazon it is
[916]
literally crushing a lot of small
[917]
distributors if you consider fmcg
[920]
companies then big fmcg companies have
[922]
very high profit margins and pricing
[924]
power compared to small players so the
[926]
important point or forecast is that
[928]
going forward monopoly based growth
[930]
stocks and monopoly based value stocks
[932]
are going to do exceedingly well so what
[934]
are three or four key areas that i will
[936]
point you to so in order of risk what i
[938]
would say is that if you are looking to
[940]
buy most stable type of stocks as of now
[943]
i'm talking as of now entire market has
[945]
fallen of course these stocks have also
[946]
fallen but the most stable type of
[949]
monopoly stocks right now would be
[951]
something like hindustani unilever and
[952]
something like apple these have massive
[955]
brands the prices that they command are
[957]
premium prices and guess what even when
[959]
the inflation problem goes away these
[961]
stocks will still stand and they will
[963]
still come on very high premiums in the
[965]
market i know i'll get a lot of heat
[967]
because i'm saying hul again i'm bullish
[969]
about it i'm not pushing you to invest
[970]
in it but please don't expect magic in
[972]
the next six months if you have
[974]
conviction in these companies only then
[976]
buy it otherwise equity investing itself
[978]
is not a game where you should be
[979]
participating then please simply do
[982]
index investing please simply do bond
[984]
investing please simply do fix deposit
[986]
investing that might give you better
[987]
peace of mind now if you want to take
[989]
little bit more risk then i would say
[991]
that something like amazon is at a good
[993]
sensible buying level i'm investing in
[995]
it again not a push from my side to make
[997]
you invest into it now if you want to
[999]
invest in even slightly more risky asset
[1001]
then you could consider investing in
[1003]
slightly growth oriented stocks for
[1005]
example airbnb is a classic case in
[1007]
point you could definitely consider that
[1009]
travel industry is coming back something
[1011]
like airbnb might have a higher chance
[1012]
of rebounding but yes again not an
[1015]
investment advice very risky time for
[1017]
akshay there's a finance influencer
[1019]
there now comes the most risky category
[1021]
and it starts with c and ends with o you
[1023]
can fill the blanks and here i have
[1026]
always advocated that i personally am
[1028]
investing 90 of my money into blue chip
[1030]
cryptos you know which those two blue
[1032]
chip cryptos are so i will leave the
[1034]
discussion there and this also comprises
[1036]
of hyper growth assets for example it
[1039]
could be companies like uipath coinbase
[1041]
etc i am still very much bullish on it
[1044]
can these companies lose 90 percent of
[1045]
their value also the answer is yes these
[1047]
are hyper dangerous companies no doubt
[1049]
about that i will link my video below
[1051]
where i have spoken about revealing my
[1053]
portfolio and i have spoken about the
[1055]
fact that how you should go about taking
[1057]
positions in these hyper growth
[1058]
companies if you are considering a
[1060]
company like delta corp in india it is a
[1062]
hyper growth company but it has a very
[1064]
high chances of failure when you are
[1066]
buying these type of hyper growth
[1068]
companies you should assume that out of
[1070]
10 investments that you are making seven
[1072]
of them will go to zero right you only
[1074]
need three of your investment to succeed
[1076]
to make crazy returns the classic case
[1078]
in point was amazon back in 2000's that
[1081]
when the dot-com bubble ended amazon
[1083]
lost 90 percent nine zero percent of its
[1086]
value but let's imagine that you would
[1088]
have purchased 20 stocks like amazon 19
[1090]
of them went to zero would you be
[1092]
sitting at a loss as of now the answer
[1094]
is no you would not have and that is the
[1096]
concept behind investing in hyper growth
[1098]
companies you can't invest in hyper
[1100]
growth companies and then say that you
[1102]
know what i'm not ready to face the
[1103]
volatility it would not work out so
[1105]
depending on your risk appetite i have
[1107]
already suggested four tiers so
[1108]
whichever tier you are comfortable
[1110]
please go and invest please do your own
[1112]
due diligence that is the most important
[1114]
point thank you so much for watching
[1115]
this video and i will see you tomorrow
[1137]
you
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