By Nigam Arora & Dr. Natasha Arora
Signal(s) to enter, add, reduce, exit, hold or change.
India represents an opportunity for long term investors. However, India is a developing market. It is important to follow billionaire techniques as encapsulated in Trade Management Guidelines by The Arora Report to do exceptionally well as an investor, especially in emerging markets.
The Chart
Please click here for a chart that compares India Small Caps ETF SMIN to U.S. Small Cap ETF IWM. Note the following:
- The chart shows that year to date, small caps in India have outperformed small caps in the U.S. by 18.2%.
- Small caps are often more inefficient than large caps due to lack of analyst coverage. For this reason, for prudent long term investors, small caps often provide a better opportunity than large caps.
- India represents a large opportunity in small caps.
Apple News
Apple (AAPL) is increasing production in India. iPhone 15s made in India were available for launch day, which is progress from over last year when made in India iPhones were available after a delay.
There are indications that Apple intends to increase production in India to approximately $40B by 2028.
In The Arora Report analysis, while Apple has not yet shared plans to manufacture iPads and MacBooks in India, Apple will likely begin making AirPods in India next year.
Magnificent Seven
Among the Magnificent Seven stocks, Tesla (TSLA) is exploring major investments in India. Alphabet (GOOG, GOOGL), Microsoft (MSFT), Amazon (AMZN) and Meta (META) already have major investments in India. Expect them to add to their investments in India.
Manufacturing Powerhouse
We previously shared with you that manufacturing is moving out of China and into India. India wants to be a manufacturing powerhouse.
Challenges
At present, India must overcome two hurdles to become a manufacturing powerhouse.
- India does not have a strong supply chain for materials comparable to China’s strong supply chain.
- India does not have a trained workforce on par with China.
On a positive note, India is rapidly training new workers and has a young demographic.
Technicals
In the short term, technicals are overbought. This means that investors need to be patient and wait for a pullback in the buy zone.
Valuation
One of the risks investors should be aware of is that India is an expensive market. This is due to great long term growth prospects. This is also another reason to buy only on a pullback in the buy zone.
Opportunity
In The Arora Report analysis, India is one of the best opportunities in large economies for the long term. In the short term, India is overbought and expensive.
Small Caps
Small caps are doing well. In The Arora Report analysis, they will continue to do well. In India, over the long term, small caps may perform better than large caps.
ETFs Of Choice
ETFs for investing in India are:
- DGIN
- EPI
- FLIN
- GLIN
- INCO
- INDA
- INDF
- INDL
- INDY
- INQQ
- IXSE
- NFTY
- PIN
- SMIN
The Arora Report call is to focus on EPI and SMIN.
Prudent investors should be patient and wait for a pullback.
EPI Zones
The buy zone is *** (To see the locked content, please take a 30 day free trial).
The short term rating is ***.
The medium term rating is ***.
The long term rating is a ***.
SMIN Zones
The buy zone is ***.
The short term rating is ***.
The medium term rating is ***.
The long term rating is a ***.
What To Do Now
Those in India ETF EPI or India Small Caps ETF SMIN who have taken partial profits taking advantage of the strength may consider continuing to hold.
Those who have not taken partial profits may consider taking partial profits.
Those not in EPI or SMIN may consider following the parameters given above.
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Nigam Arora
Nigam Arora is known for his accurate stock market calls. Nigam is a distinguished master of the macro. He is a popular columnist with over 100 million page views, an engineer, and nuclear physicist by background. Nigam has founded two Inc. 500 fastest growing companies and has been involved in over 50 entrepreneurial ventures. He is the developer of Theory ZYX of Successful Change Management and is the author of the book on Theory ZYX, as well as the developer of the ZYX Change Method for Investing.
Dr. Natasha Arora
Dr. Natasha Arora has significant expertise in investment analysis especially biotech, healthcare, and technology. Natasha is a graduate of Harvard Medical School followed by a postdoc at MIT. She has published several peer reviewed research papers in top science journals.
