hi everyone welcome to today's video so there is a bit of panic in the markets right now and probably for the right reasons three very important pieces of news news number one is that Mr Warren Buffett has sold 50% 50% of his position on Apple stock now you'll say yeah St so warrren Buffett selling one stock what big deal is that the big deal is that Mr Warren Buffett majority of his portfolio is made up of four stocks right and the most prominent one is Apple he has roughly 160 billion dollar of stock and so 50% is done this is very big piece of news number two NASDAQ in one single day fell by 2 and a half% now this is a very very big fall for the index number three piece of news time span Horizon increase and that for the last one month some big tech stocks for example Microsoft here it has fallen by roughly 133% now this is little bit worrisome sign you have to understand why this is happening and accordingly set your Market expectations realistically so I'll explain you the macroeconomics also in case you are new to my channel my name is akat sastav I am a full-time investor I run a hedge fund now this gives me an opportunity to speak with a series of different styles of investors and by aggregating that knowledge I try to bring it through my YouTube channel so I will explain some of the points that I am practically observing so okay let's begin and also a very quick note that there are a lot of concerns that are being raised regarding recession recession recession so I'm going to speak about that also and to what extent Market can fall now like the recession and all is a part and parcel of investing and if you are a good investor then even these recessionary concerns are not going to impact you in a very similar way you have to Future proof your career by upscaling yourself and learning relevant skills now these days one of the most important skills to learn is how to use artificial intelligence which brings us to the partners of today's video is growth 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so okay so point one is that why is this happening that suddenly all of a sudden there the market has been spooked is it due to bad employment data for example us unemployment data and you will see that us unemployment rate ticks up to 4.3% amid signs of broader economic slowdown complic no one is telling you why this is happening okay so the real reason why this is happening is due to Japan so in order to understand this there used to be an interest rate Arbitrage in Japan and this is a very good macro point that you need to understand so Japan as an economy what it used to do was that it used to keep its interest rates very low right so for example that if in India the interest rates are 0% hypothetically will you borrow money the short answer is yes you will borrow money and a lot of it and you will buy a lot of stuff with it so in Japan almost for a decade decade and a half the bank of Japan held the interest rate close to zero now suddenly last week they increased this to 0.25% now what this has done is that this has killed the interest rate Arbitrage because a lot of people a lot of investors were borrowing at a very low rate in Japan and they used to have that in Yen right and then they used to transfer it and invest across Assets in the world right and a large chunk of it used to go to US Stocks the bank of Japan has changed this to 0.25% so this borrowing cost has gone up and as a result your interest rate Arbitrage has come down a little bit and as a result this has led to a little bit of Market Panic so this is the reason why why the market is correcting economy slow slow down it's not as that yesterday only economy has slowed down economy has been in a Slowdown for a while now Europe problem has been going on for a while now Russia Ukraine war is still going believe it or not right Israel Iran War is going on and what not so to cut the long story short all the problems that were existing in the world suddenly people have started talking about it without bringing this interest Arbitrage thing into the mix okay so this is what the major critical change has been and it has spooked the markets so this is the core explanation now let us go Point by Point as to what moves Mr Warren Buffett is making Warr buff portfolio this is something that I had explained earlier also but now we will systematically understand it because this change has recently happened in fact this is the complete portfolio of Mr Warren Buffett and you will see that he had started cutting his position in the last quarter itself and now news comes out that Mr Warren Buffett has sold up to 50% of this Apple stock okay so AB I don't know when this filing will be done exactly on which specific date then on this you will see portfolio updates so he has exited his position and he because he has sold his Apple stock now what is he doing with that money has he reinvested it so it looks like no that he has not reinvested it he's simply sitting on cash so he's sitting on a lot of cash portfolio analysis and let me show you this part here so for example here you will see that he's sitting on $331 billion right this was before the Apple sale right and is have billion or Aldo right $70 billion so and assuming that he has not reinvested and he was earlier sitting on roughly $30 billion of cash so he is roughly sitting on $100 billion of cash right which he will deploy subsequently so what does that indicate what is he waiting for by he's waiting for Nasdaq to fall or like the Market to fall and he will be patiently waiting last time right roughly in like 2021 right he was sitting on a lot of cash positions and then what happened then the market continued to rise right and he missed that rally right and inv War buff inv that right so then he eventually build up positions what I'm trying to tell you is that Mr Warren Buffett was smart then right and yet he was wrong he could not time the market perfectly no one can and eventually it turned out that he was right so when the market started correcting from 2022 is onwards or 2021 end onwards he deployed that cash and he was able to make money right then he decreased it then he increased it then he decreased it decrease and now he will eventually increase it right whenever the time comes so I hope that this point is clear this is very important point which brings us to a next important point to discuss that what will happen in the market NASDAQ right and what is the move that we should make so okay so I will quickly take you to NASDAQ so okay so let me just highlight it and then I'll tell you what is the expected fall so it has breed its support right so this has been breached the next major support comes somewhere around here right and after that the next major support will be somewhere around here right so this is support two this will be support three right now comes a very natural response from this point right this is like a 2 2 and a half% fall okay so this is very very likely to happen from this stage after that because this is just 99 and a half% fall so there is a very good chance that nasda can correct by roughly 10% from this point then comes the next natural question 10% correction on index now should we wait or should we continue to invest seeis again going back to Mr Warren buff portfolio again this is a very important point to learn that he is still sitting on how much roughly like $250 billion in the market right investment and he has kept h100 billion in cash roughly okay so what is he doing he's almost like what like 250 plus 100 right so almost like oneir cash he's sitting okay so this is what he's doing now what he has not done it's not as if that he's pulling out his entire investment out from the market just because Market ales okay so this is an important lesson for us that hey if we have like let's say one CR portfolio hypothetically speaking then having like maybe 20% cash position makes a lot of sense this is what I've been precisely coaching my investment Community also for the last 2 three months M Cas positions there are good opportunities that are coming and it looks like that these opportunities will come now so you can go and speak with my member Community students also they will all vouch for this fact because things looked a little bit heated up right so this is First Central Point that anyone should have done then you should have some kind of a hedging strategy at play what I was teaching you was a cash hedging strategy this is fairly easy to follow and quite intuitive now what about Indian markets can they also fall so there is a good chance now I'm making this video on Sunday I'm not sure but this is something that I explained earlier so I'll not waste a lot of time s% fall to definitely from this point there is a very good chance that there could be an 8% fall also at this 8% fall is where your bulk buying opportunity lies right and that is the money making game because if the market Falls from 100 to 90 this is a 10% correction right now if it goes from 90 to 100 what is the gain that you will have you will have roughly 11.11% gain okay because base becomes this okay so it's very very important to have money to buy things here this is what smart investors are doing and this is what cash hedging strategy is so now comes the next Point US market then is there a point also to invest because I'm looking at Microsoft so Microsoft stock and I'll show you that that in the last 6 months it has not done much in the last one year it has given 25% run up so a on Microsoft stock right and performance so then the stock has gone up from 245 in December up to now so this is now in a correction mode okay so individual stocks then it is very very important not to rush to buy you should buy at sensible levels natural what are the sensible levels they that depends on Market development right this is an important point right you must understand where the market is going number two you must understand how to build positions right build positions then you go and invest and you know all the money is in that stock no so that is not the way to build or do any kind of investing so you have to build positions which stocks to buy which stocks to hedge Microsoft with I am personally putting a lot of money in the US markets right now my goal is to go from like let's say split 80% Indian market 20% US market over time over the next 1 to two years I would be like almost 50/50 right 50% Indian stocks 50% US Stocks why because International hedging is really critical now this is something that I teach on wisdom hatch NRI community in case you guys are interested in case you want to understand how International investing Works which global markets you can explore I will teach you all that stuff through my personal experiences I do travel quite a lot I get to speak with a lot of investors I keep on spending a lot of time across southeast Asia I studied the Malaysian Market I will study the European market so investment opportunities I'll try to explain it through NRI wisdom hatch Community Link is in the description box in case you guys are interested so anyways explaining you the next point this has to do with the recession concerns all that okay Yi curve inversion the spread between 10 year and one year risk-free bonds has become negative simp when you do fds for long term what do you expect you expect your 8% okay and short what does the say okay why because short term they will give you less long term they will give you more but when this equation changes that for the short term they start giving you more returns compared to longterm that is called as yield curve inversion in very simple language this is an anomaly but right so for example here if you take a look this is where it indicates okay and whenever this happens there is a recession that comes okay because this is not a healthy sign for economy broadly speaking this indicates that there is some funky stuff going on in economy this is the overarching explanation comp but I tried to simplify and explain it to you now recession once there are two successive quarter quarter one quarter two once there is negative growth or negative GDP growth right so for example India grow R 8% okay but then next quarter data it become seven so this is contraction of GDP then it goes to six so this is decline of GDP right so two successive quarters of decline of GDP is called as recession right this is a lagging indicator growth rate come announcement will be made okay recession this has got nothing to do with the stock market so don't confuse recession announcement eom eom with where the stock market will go from here in fact when you buy when there are recessionary concerns that is probably the best time okay which brings me to the final point of the video most likely and this is my prognosis of course I can be wrong but I'll still give you my verdict on this entire thing how you need to process it so there are three four key points okay the first key point is that in the short term the stock markets are likely to correct and a 10% correction is very likely okay especially on the US market and India Maybe ch% very very likely scenario right where the correction can come in India this correction is likely to come in small cap midcap so TI keep some Capital so that you can downward average okay this is very important point point number three is that interest rate cut announcements are already underway the usfed has said categorically that in September they are going to cut the interest rate which means what that quantitative easing and because this is being done the stock market should ideally rally but the problem is that there is something called as factoring in of news now everyone knows this right now the market will not go up because of this the market will go up because there might be a second interest rate cut which might be a surprise for the market rally okay so what am I trying to say I'm trying to say that hey it's very likely that a 3 months we are in a correction mode okay very good good opportunity to aggregate stocks in this zone right and deploy your cash whenever the second interest rate cut which is what to be a surprise interest cut okay so this is a surprise positive surprise right and that is when the markets will start rallying time tech stocks are likely to do very well now I am already studying the stocks that I'm going to individually pick up I'm going to help you understand the investment thesis behind it also so in case you want to be a member you can definitely go and check out my link in the comment and description box that will help you understand more individual stock commentary not from a buying selling point of view but more from an education point of view what are like good additions that you can make to your portfolio especially if you're doing this International investing now final Point people are predicting that there is a mega crash that is happening there will be a 30% correction 40% correction I don't think so that that is likely to happen 10 to 15% ction is very much on the cards at this point in time anything above 20% correction is considered as the start of a bare run now those type of events typically happen when there is uncertainty right and we do not know what is going to happen and suddenly type yeah 2008 crisis type those were unexpected events all that is expected it's not as if suran Bank of Japan s say they have increased the interest rate but due to policy actions markets do not typically go by like 20 30% in a single day unless it's like a horrific policy action so to say okay so therefore pulling out money from the market does not make much sense I'm going to pull out everything wait for the market to go down by 10 15% and then I'll deploy cash with Mr Warren Buffet but you cannot typically do it you cannot time the bottom and the top of the market netet analysis therefore it's very critical not to stay invested in overvalued stocks right now I have been saying it for the last 2 3 months categorically that don't hold very expensive valuation type of companies Val not an issue I have also sold 70 80% of my holding on zomato now why because I felt that the stock was expensive again I had explained my entire thesis why I had done that on my member community so all these knowledge oriented points you must pick right now great time to build portfolio especially now correction that is when you should be buying things Market 10 15% down from its peak that's a wonderful time to pick high quality stocks stay invested in it and then wait for returns I hope you enjoyed this commentary if you did do press the like button and I'll see you soon