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The Return of Uncertainty, and How You Can Deal With It

Here is what a Safal Niveshak tribesman, Mr. Ramanand, wrote as a comment on my previous post…

“Reading all this (article and comments), as well as various traps such as “Growth Traps” and “Value Traps”, is it any wonder that the Stock Market is just a bunch of “traps” to any investor without a specific edge over others? Specific edge can be things like insider information, front runner, market operator, full time disciplined trader etc.

I just read an article in Yahoo today on Macro vs. Micro by Deepak Shenoy. This is another nail in the coffin of any person wishing to invest his hard earned money into the stock market. If even value investors cannot do a reasonable analysis due to so much uncertainty, is it any wonder that retail participation in the equity markets is declining day by day?

So now, on top of concerns like share price/value, market capitalization, company position, pricing power, market share, growth rate, EPS/ROC/ROE, and management competence….you have to additionally deal with unethical management, corrupt auditors, fudged balance sheets, fake earnings, hidden liabilities…and *NOW* you also have to worry about dollar exchange rates, govt inaction and policy about-turns, oil price shocks, terrorist attacks (both domestic/elsewhere), diplomatic relations *between* foreign countries (India may not be involved at all), Spanish Interest rates(!??!), Greek Utility companies payments (?!??!) and what not.

I’m beginning to wonder whether it is worth remaining in the Markets! Wouldn’t I be better off investing my savings in tangible assets (to protect against inflation), suspend my recommendation services, close my demat/trading account, and stay away from the stock markets for good (of course not making the mistake of coming back just because they went up after a year).

What do you say Vishal? Is this a real possibility now?

Mr. Ramanand, here is my humble reply to your observations, doubts and questions, which I believe must be shared by a lot of other investors as well.

Here’s my presentation titled “The Return of Uncertainty”.

For better visuals, expand to full screen by clicking on the button at the bottom-right of the slideshow.

If you can’t see the presentation above, click here to see.

You can also view and download the PDF report from Scribd or Slideshare.

Let me know your feedback on the same in the Comments below.

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About the Author

Vishal Khandelwal is the founder of Safal Niveshak. He works with small investors to help them become smart and independent in their stock market investing decisions. He is a SEBI registered Research Analyst. Connect with Vishal on Twitter.


  1. vishal

    just superb…first would like to learn presentation skills from you…
    please dedicate one post in a month for this…
    will comeback later on seeing full presentation

  2. Superb effort and a great outcome Vishal. It is pithy.
    One could relate to every slide and every word/ phrase.
    I liked the explanation of Risk and Uncertainty esp the Jerry mouse example.
    Can the ppt be turned into a pdf and made available ? Thanks in anticipation.

  3. Sanjeev Bhatia says:

    Wonderful Work. Superb presentation skills. You really have knack for making it sound so simple without losing out on essence.

    Too Good. I second Sudhir’s idea of making it into a pdf/ppt form which one can save. Things like these have to be savored again and again.

    • Thanks Sanjeev! I hope I’ve been able to put my thoughts across to Mr. Ramanand (and all investors who are fearful of the current uncertainty), whose questions were the inspiration behind this presentation.

      Anyways, I’ve put the links for PDF download at the end of the post above. Regards.

  4. Vishal,
    A “vivid” and thought provoking piece of work for every person who is in doubts when the markets are shadowed by dark clouds . Can u also write something on black swans and the sectors which are likely to be impacted by these events (indian context).


    • Thanks you Vikash! Let me see how I can work upon your suggestion. Regards.

    • After all the hard work and research and number crunching which is in your control, there is that element of luck which can play spoilsport. Let us focus on what we can try and do and leave external factors to themselves. Another option is ‘asset allocation’ which precisely does this hedging vis-a-vis luck.

  5. Hi Vishal,

    Excellent Work..Superb presentation skill…

    Jigisha Shah

  6. R K Chandrashekar says:

    Vishal, you have done a great job- a magnum opus. No one could have dealt with this topic better.
    Slide 74 is the bible for every investor and needs to be etched in gold.
    You have put to rest-risk and uncertainty with your best.
    Hearty congratulations.

    • Thank you so much, Mr. Chandrashekar! Your words are a great motivation for me.

      One correction on Slide 74 – The correct statement at the end must read – “When preparation meets opportunity (which uncertainty brings), that’s when great investments are made.” I’ve corrected it in PDF, but not able to do so as of now in the slideshow, so will try and do that later.

      Thanks again for the wonderful feedback!

  7. Ramanand says:

    Excellent post Vishal, really does give a sense of focus in the midst of the current environment. Thank you so much for giving me credit!

    Best Regards

  8. The whole feel and content of the website is just world class. Would appreciate if you shorten the presentation to say, 60 odd. 30 secs a slide should be reasonable concentrated time.

    cant agree more with on the need to focus on the long term. Keep enlightening investors. Cheers

  9. As usual amazing especially the last few slides 🙂

  10. Mansoor says:

    Better late than never, this is a great article. I think the crisp combination of pictures and short sentences makes it more interesting and fun to read & understand. I am sure some of these slides will be in my mind for a long time.
    Most of the facts you have presented for the US are true and inspiring. I have my share of doubts on the Indian portion, especially on the slide “Stocks (always) outperform Bonds”. You must have noticed that bonds are paying at a much higher interest rates lately, and stocks/mutual funds have not returned anything in the last 5 years. This also recalls the definition “long term” – is not 5 years :(.
    Some of your slides reminded me of your workshop, very nicely sync in this presentation. Thanks for sharing Vishal.

    • Thanks for your feedback and inputs, Mansoor! Well, the headline that stocks always outperform bonds was with the perspective of the table under it that shows stocks have outperformed across time horizons. Yes there are periods of under-performance (like the last 5 years), but then we started this period on top of the valuation mountain, so the ride had to be downhill.

  11. Awanish Chandra says:

    A great presentation……well i dont like ppt having so many slides…..bit it never looked as i was going through it….a good way to convey the message

  12. vikrant says:

    Undoubtedly Superb presentation, I read every side, and felt that may be some of it is already seen by me, May be in your workshop that i attended.

    I do have a feedback, Is there a way you can check how many people spend how much time on this presentation, i am asking that because i felt the presentation was a little too long, If you need to keep the reader or audience stick to your presentation it should not be more than 15 to 20 slides. Thats what i usually follow for my sales Presentation. So think about it 🙂

    • Thanks for your feedback, Vikrant! Yes you had seen 4 out of these 82 slides in my Bangalore Workshop. 🙂

      As the stats show, the average time readers spent on this page was 3 minutes 42 seconds, which was among the highest time they’ve spent on any other post in the last one month. So I can assume that most of them must have been through the entire presentation.

      As for the length of presentation, I have a slightly different take on the same. More than the length of the story, I am interested in whether it engages me or not. So while I can get completely engrossed in a 50 page “Who Moved My Cheese”, so am I in a 600 page “Snowball”. So the engagement matters, and I believe the above presentation did the same to you, and that’s why you read through the 82 slides. 🙂

      Secondly, when you are presenting your sales presentation, it’s most likely that you and your audience is at the same level of understanding. So a 15-20 slide show would be enough to get your point through to them. However, I am writing into the unknown. So for every Vikrant who is reading my presentation and gets the idea in 15-20 slides, there is one Mr. Chandrakant (an assumed name), who might need a greater explanation. And that’s why I’ve explained the entire idea via so many slides. Got my point, right?

      After leaving my job as an analyst, I’ve also left the “one-size-fits-all” assumption behind…and thus, I try to convey my ideas in such simple (and longer) ways, that even a reader with minimal understanding can get the point. Hope you got my point. 🙂

      Anyways, I will definitely keep your suggestion in mind and go for shorter presentations in the future.

  13. Anil Kumar Tulsiram says:

    Excellent Vishal, Superb

    I think your presentation was very timely. Because of events in India and overseas many value investors will start doubting their strategy, atleast I was started wondering whether I should go slow and wait for a crash before investing further, but I agree now such strategy will not work. The entire presentation was great, even then if I have to pick up one section from your entire presentation it will be “Mind your choices and behavior”.

  14. vishal
    you run away with so many posts after this, but am still struck with it.
    my entire trip it was playing on mind.
    In my blog reading experience of over 4 years, never seen a blogger taking comments so seriously in that respect, it was different and nice to see your response to Mr.Ramanand’s Concern on present state of condition of equity market.
    Sure, this response presentation would’ve taken at least full 48 hours which shows how you value your readers and their concerns.
    Presentation not only tries to answer, it also attempts to educate in a subtle way how to keep in mind the experience of successful investors during periods like this which has not only helped them see the passage of time but also made them rich by rewarding for their patience and perseverance.
    for all, once again my heartfelt thanks for the efforts, for precious time spent for the cause of small investors…

    • Thanks Sri! It’s my pleasure to continue to work for small investors, for I am one among them 🙂

      Thanks anyways for your invaluable feedback on the presentation. Regards.

  15. some individual slide related comments.
    Slide No.7 . oil price shock 1973 (black and white pictures with inflation adjusted crude oil price chart..) – where do you got this chart pictures take you to the period and relive ..many of the present generation in market may not be aware of this
    Slidet No.8 – we recently had one such incident involving south and north korea standoff last or year before
    Slide no.12 – dow jones seems to be moving in broad range of 9000 – 12000 from 2001. returns from markets seems to be better during tension periods…
    Slide no.13 – really not comparable as two economies are basically different. Would like to see data for inflation adjusted returns from Indian markets
    Slide no.18 – good chart showing fundamental valuation is always behind the market move.
    it is possible to post sensex EPS calculation if possible
    Slide no.33 – consider it as core of this discussion as it easily registers in the mind of the reader

    • Slide No.7: Thanks to Google! 🙂 Yes, these pictures really bring out the stark difference in the problems the world faced then as compared to the ‘relatively’ comfortable times we are living in now.
      Slide no.12 – Yes, your observation are right.
      Slide no.18 – For calculating Sensex EPS, I just divided Sensex values by its P/E.

  16. Finally,
    1. In bringing out uncertainty, all slides include past history of US markets (ofcourse, markets are markets, I agree) rather love to see Indian Market history covering recent incidents of like P Note, North Korean Standoff, Lehman Collapse etc etc.,
    2. slides covering quotes of successful investors are pretty lengthy. one or two covering the entire wisdom would be fine
    3. the space could’ve used to bring in what investment giants “did” “when” “what” while going through such experiences. That would’ve thrown more light about their style of investment analysis during such critical times of market movement and their psychology of seeing through the phases.

    purely my personal feel….vishal.
    anyway, you are making me do some homework also…thanks for everything.

  17. Hi Vishal,

    I’ve no words to explain my appreciation about this presentation. Simply “A-W-E-S-O-M-E” 🙂

    This is a complex subject to “understand” and more complex to “explain”, you’ve done it so nicely and that too in simple words, really great!!

    I’ve a doubt about ” Vividness Bias” example about Toll company that you mentioned.
    According to you, the risk was “Government”. Can you explain this point please? because like every common investor, I too thought there was not much risk involved looking at the business prospect.


    • Thanks Avadhut! Well, business prospects is one thing, and the risks to those prospects is the other. In this case, for instance, the big risk was the government not agreeing to a hike in toll charges, which is a big risk and a given seeing the poor past track record of our government in handling its past promises.

      Hope this makes sense. Regards.

  18. Great presentation,Vishal–Really Effective


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