Nimesh retains his Aug 2025 view that market is like a coiled spring – its just beginning to uncoil now, there’s clearly more to come.
While we may be disappointed that 2025 has been a flat year, we must appreciate that market made a new nominal high in December despite the year witnessing relentless FII selling, currency pressures, war with Pakistan, US slapping their highest tariffs on India.
As these issues abate, the uncoiling of the market’s spring will quicken its pace. Expect some FOMO to kick in as worries get addressed, one by one.
Small cap to large cap ratio is back at its median after small caps’ underperformance in 2025 – good time to invest selectively into small caps now.
Talking about the growing fears of AI being in bubble zone in the US which can burst and drag down global markets with it, Nimesh gives us some context: Mag 7 stocks account for 35% of US market cap (S&P500), 50% of earnings growth, 24% of the profit pool and 12% of the revenue pool. These are nowhere as skewed as the dot com bubble.
AI stocks are over-owned and could suffer from sector rotation – but Nimesh does not see a crash on the horizon for AI stocks.
Gold and silver are looking stretched after record runs in 2025; FOMO is clearly visible in silver. Investors should expect a correction before the rally can continue. The story is not over, but expectations need to be tempered now.
Income effect (from income tax cuts) + savings effect (from GST cuts and lower EMIs) + wealth effect (from gold price rise) = potent combination for big consumption boost. India is an aspirational society – expect consumption to remain a strong megatrend for several years ahead.
Digitization of consumer finance and capital markets and financialization of savings are key megatrends Nimesh will continue to invest in.
CRAMS/CDMO within healthcare is another exciting megatrend, especially since US signed its BioSecure Act.
He is bullish on telecom and power – which are indirect AI plays as incremental demand will be increasingly driven by AI consumption.