Mad Market or Just out of a Sad Market. Part 1


A long post after quite some time. Writing it in two Parts.


The Standard Questions to me in last various interactions with all types of Market Participants whether a CIO,Fund Manager,HNI, Retail Investor, Trader, Business Man etc.


  • Market Kya Lagta Hai. Correction Kab Aayega.
  • Is there Madness in Markets.
  • Options Participation.


As usual we will try to see it with different Angles and Data.


Market Kya Lagta Hai & Is there Madness in the Market.


Nifty50 – Nowhere close to Mad but was Sad for 2 years.


Nifty Sadness


  • From October 2021 to October 2023 the return for Nifty was near Zero.
  • October 2021 highs were not crossed meaningfully till June 2023.
  • From peak of 2021 to highs of 2024 the return is sub 20% cumulative.
  • From the lows of March 2023 to peak of 22k the move is 31% in 10 months.


On what numbers does it look Mad ?

Rather the Index was Sad for 2 years.

  • Problem is Anchoring on 2020 lows which was the real Madness of the Uncertain World we live in. Removing the 7500 Low from the Calculations everything looks more Normal or Sad.
  • Taking CAGR return over different time frames.

1) Jan 18 to Jan 2024 is 12% cagr

2) Jan 2020 to Jan 2024 is 15% cagr

3) Jan 2014 to Jan 2024 is 14% Cagr.


So where is the Problem.


There have been some amazing returns in Sectors/Segments which have given super returns. This creates a problem.

1) Those who own these names cannot digest the Outperformance and call it Madness.

2) Those who missed it obviously are envious and call it Madness.


The Classical 3 Idiots Movie Problem.


Dost fail ho jaye toh dukh hota hai lekin dost first aa jaye ...

You might be outperforming the Benchmarks and hitting Boundaries but there are many who are hitting Sixers out of the Park.


For example some Sectors/Segments.

1) Public Sector Enterprises as a basket have gone up Multi-Fold.

  • Railway Sector stocks are up 3-5x in less than 1 year.
  • Defence Stocks are up 3-5x in less than 1-2 years.
  • CPSE Index itself is up almost 90% for the Financial Year.
  • NTPC is up 100% +
  • This whole sector did well after Nifty topped in October 21.

We came out with a report titled “ The Most Hated Promoter group is Changing Long Term Trends”  on 11th October 2021

An interesting slide from the report.



The PSU market cap has gone from 25 lakh cr to 55 lakh cr in little over 2 years . Ex of Large Names the Smaller Basket is up almost 3x.

We actually had a subscriber of the Report who asked for a Refund. His statement – I hate PSU stocks. ! ( We gave it but that was a good signal.)

The fact that the Most Hated Group did a 90% move on the PSE Indices and many stocks up 3-5x when Nifty was sad is what shows how Market loves to surprise everyone.

Whattay Satisfying piece of Work.


From Hate to Fan Following.


#IRFC at 2.3 lakh crore market cap !! It has more #Retail Shareholders compared to many large-caps like #SBI and retail favorites like #Idea 🙂 . 32.5 lakh shareholders !! #FACT is > #Coromandel in Mkt cap.

A lot of speculation and over participation is happening in some parts of the PSE pack given the low float.

But who is to guess where it stops. But time to be very careful in Railways/Defence at least. The Larger names still look promising.


2) Manufacturing, Infra, Capital Goods Value, Old Economy did Well.

  • 2020-2021 was all about IT,Pharma, Digital across the world.
  • Real Estate Index is up 100-120%. Infra 90%. Manufacturing no major index but would be up 80-100%. Capital Goods Index up 70-80%
  • Many stocks are again up 3-5x in last 1 year.
  • Most of these stocks did well even in the October 2021 to March 2023 sad period of Index and caught up more speed.

3) Smallcap/Midcap Index up 50-70%

  • Going into March 2023 the Smallcap Index was down 15% and many stocks had a 20-25 % correction.
  • With Fed Rates, War etc. the mood was nothing great is in store in coming months.
  • From the lows of March 2023 to now the Smallcap/Midcap Indices are up 50-70%.
  • SME space has also seen some crazy upmoves. ( Cannot comment much as I do not track it. Lack of Liquidity has been my Excuse! A bad one )


So if we look at all this Data it looks like a Normal Bull Market which will have its corrections.


How do I quickly define Market Corrections .

Shakeoff of say 5-8%, Correction of 10-20%.Only beyond 25% is what we can term a Crash.

Nifty has seen a more than 25-30 % correction last in 2020 and 2008 and 2006 in last 20 years.


One of the classical signs of a Market Top is a Sector or Theme which goes crazy and sees a one way run with stocks going 10x and New Valuation Paradigms are created to justify it.

1992 – Cements and Replacement Value.

2000 – Y2K Boom

2007 – Infra,Real Estate, Power. NAV and SOTP.


For now its been a Market which has seen only Rotations. ( Speciality Chemicals, Pharma,CDMO, PSE, Railways,Defense, IT, Digital, Capital Goods,Banking). Cannot find a theme which has hogged all the Limelight and Money.




This is the way I am thinking.


1) Hope to Reality

  • Over the last 10 years of Bull Market 2013-2023. Majority of it has been on Hope but not much turning to Reality.
  • Hope of PSU reforms in 2014. PSE peaked in 2015. Reality 5-10 years later.
  • First Year where Brokers had to upgrade earnings. FY+ 1, FY+ 2 Optimism turning to Reality.
  • From looking a Railway Wagon order not changing for years to order every week.
  • Remember the Unorganized to Organized Reports post GST/Demon. Now it seems to be happening after many years.
  • Power Sector in shambles for a decade. Now going bonkers.
  • Capital Goods – Perpetual Hope Cycle from 2010 changed 10 years later.
  • AtmaNirbhar, Defence Indegenization all got announced many years back.
  • FIIs now own PSE. 32% of Powergrid is FIIs, HAL – LIC has gone from 16% to 3%.
  • A lot of Hope is turning into Reality and the previous Scars make it difficult to Accept it.
  • All Crazy Performance,Alpha has come if one accepted the Reality with an Open Mind.


Out of Syllabus Period Ending ?


Over the last 3-6 years all Risks have been Out of Syllabus.

  • LTCG and SEBI Classification of Stocks.
  • IL&FS Credit Crunch
  • Covid multiple waves
  • Russia Ukraine.
  • Israel Hamas.
  • Inflation Spike/Fed Rates.

If you could predict these Events – You would definitely lose Money and go Broke. ( If a Mystic told you extent of Covid Impact would you expect World Indices to hit new all time Highs in less than a year. Demonetization year best performer was real estate )

Last 3-6 years a lot of Out Of Syllabus hits  have been coming every year or in 6 months. By the time you understand the New Thing there is another to Worry About.

This has kept us all on in a State of Worry of something will come out of the Blue. A Black Swan is just lurking around.

Are we getting into period where everything goes as per Syllabus or Out of Syllabus hits do not come as Often ?


Open Mind

  • The longer you stay in the Market more is the Wisdom but at times there is a lot of Prejudice/Bias/Disbelief and Scars from Previous Cycles.
  • Its tough to keep an Open Mind. We find excuses – Beyond My Circle of Competence, Its a Commodity, Its a PSU, Too Young a Company, Too small, Chor etc etc.
  • There have been Many Opportunities in 2021-2023 sad Nifty period. Same was in 2015-2016.
  • But if you were worrying about the Madness in Digital/IT/Pharma  and the BAAP stocks in 2021 you would miss out on Cap Goods/Manuf/PSU.
  • Keeping an Open Mind and keep Adapting is what one should focus on.
  • So keep doing what you were doing in terms of Research, Hard Work instead of getting too caught up into whether its a Mad Market or Not.

To Keep it Simple it still looks Like a Bull Market. Picture abhi Baaki Hai. An Interval may come Soon but Climax would be very Thrilling.


In the next post on this we will look at more Technical Data & Options Participation etc !


  1. Gopal Agarwal
    January 31, 2024

    One of the finest blog to describe market.

    A most hated bull market.

    Best part

    Quote from

    3 idiots.

  2. Sanjay agarwal
    January 31, 2024

    Nooresh sir

    Pl post nifty / small cap index

    Your thoughts in that ratio


  3. K R Suryawanshi
    January 31, 2024

    Excellent post.

  4. Rajinder Danng
    January 31, 2024

    Avery intresting interpretation ofsome very stunning but true facts about the market for last four years Pls follow it up with some very precise insight into the future direction and some sectors to focus on Thanks

    January 31, 2024

    Thank you sir for detail analysis.

  6. Rekha Maheswari
    February 1, 2024

    Nooresh sir , excellent read , thanku so much to keep us informed n sharing your insights !!


Leave a Reply

Your email address will not be published. Required fields are marked *

This site uses Akismet to reduce spam. Learn how your comment data is processed.