For 1,000%+ Gains, Follow the 8-Year Cycle in the Stock Market

Jan 17, 2020

Apurva Sheth, Editor,Profit Hunter Pro

Hi,

I'm Apurva Sheth and this is the Fast Profits Daily.

Today, I would like to talk about an exciting topic. It's all about big profits... very big profits!

Four-digit percentage gains are rare, but they do happen.

Do you have to get lucky for these gains?

Or is there a method you can follow?

Well, it's a bit of both because there is a method...

...and you are also in luck because I'll show it to you in this video!

Enjoy...

Do you want to generate gains like 2,115% or 1,253% or 2,881% or 2,473% from the markets?

I bet you want to generate returns like these from the stock markets. Don't worry, I will show you how you could generate such kind of returns from the markets today in this video.

Hi, I'm Apurva Sheth and I welcome you to this brand-new addition of Fast Profits Daily.

In last week's video, I showed you how we use trends in the natural resources to identify profitable trading opportunities in the equity markets.

But that's not the only reason why we look at natural resources. Actually, natural resources are key to finding multibaggers in the next 4 to 5 years and today I'm going to reveal all about it to you.

Now before I begin, let me tell you a story. Two years ago, I stood at the podium of the Taj Mahal, Hotel, in Mumbai. I was facing a crowd of 215 people. I asked them one simple question.

Do you believe that Sensex could touch 100,000 by 2024?

About 15 to 20 hands went up in the air.

20 minutes after my presentation, I asked the same question and this time around, 50 hands went up in the year.

So what was it that I spoke in this in this 20 minutes? How come so many people changed their minds?

This is exactly what I want to tell you today and this is exactly why natural resources are the thing that you should watch out for in the next 4 to 5 years and this is the key to generating the kind of returns that I just spoke to you.

Now look at this chart. This is the monthly chart of Sensex since inception.

Now Sensex follows a greed and fear cycle. It follows the cycle over a period of 8 years.

So eight years it will stay in the greed phase and for the next eight years it will remain in the fear phase.

Now this keeps on alternating after every eight years in the month of April. Now, what is the tendency of the markets during these phases?

So in the greed phase, the markets or Sensex moves up and in the fear phase it trades sideways or probably goes down as well.

So in this chart, as you can see, the first greed phase ended in April 1992 and the returns that Sensex generated in this period was 469%.

Now, over the next eight years, Sensex was in the fear phase and the returns in this phase were only 20%.

Now, the Sensex and entered the greed phase in the month of April and the year was 2000. From 2000 till 2008, Sensex was in the greed phase and the returns during this greed phase were 271%.

Now the Sensex moved back into the fear phase from April 2008 till April 2016. Now the Sensex remained sideways and the returns were 48%.

48% returns might look large but still from an eight-year perspective, that is nothing. It's next to peanuts and this is we are talking about Sensex.

So the markets remained sideways for an 8-year period. The markets entered into the greed phase once again in the month of April 2016.

So from there on markets or Sensex has moved up 62% and we are not done yet. The greed phase is still on and it will end in the month of April and the year will be 2024.

So for the next 4 to 5 years, four years, to be precise, the Sensex is in a large structural bull market and we are ready to head higher.

Now, there is one more characteristic of markets during the greed and fear phase. The type of stocks which moves up in greed and fear phase are different.

So in the greed phase, the stocks which are from the which you normally called the old economy stocks or, in common parlance, the stocks which are related to roti, kapda, and makkan move up. So these are all the stocks which are related to natural resources.

So in the greed phase of 1992, the two sectors which did phenomenally well were cement and textiles. ACC was the Sensex stock back then as well, and it moved up 2,115% in the greed phase of 1992.

In the greed phase of 2008, the stocks from metals, realty, and infrastructure basket did well. So some of the stocks, like Tata Steel, went up by 1,253%, Tata Power went up 2,881% during this eight year period. L&T went up 2,473% during this period.

And now in the fear phase, the stocks which normally do well, are the new age stocks or stocks which are related to technology companies.

So in the fear phase of 2000, the stocks from Technology, Media, and Telecom basket did phenomenally well.

Stocks like Wipro moved by 20,000%. Wipro, Zee, and even HFCL and all these were from the technology companies and they did well.

In the fear phase of 2016, stocks from housing finance, pharma and consumption companies did well.

Now we back again in the greed phase and the companies which are likely to do well are the same old companies which are related to naturally resources which are from the old economy sectors.

So that's an important reason why we believe that one should look at natural resources for the next 4 to 5 years because that's where the major money is going to be made.

So I'm making two bold calls in this video today.

First, Sensex will touch 100,00 by 2024 and second, old economy stocks will to do well in this bull run.

So as you just saw that old economy stocks could be from cement, textile, from power, infrastructure, realty, metals... from such kind of sectors. So the flavour might change but on a broader perspective, the sector which outperforms would be these natural resources based the stocks and companies.

So it's important for you to keep an eye on stocks which are related to natural resources because that's where big money is going to be made for the next 4 to 5 years.

These are the places where you would be finding your next multibaggers. So watch out for it.

So that's all from me for today.

Now, before I sign off, I'd like to remind you to sign up to the Instant Income Summit. Now, Vijay will be conducting this summit for all the attendees in the next week. It will be held on 21st of January at 5 pm.

So don't miss it at any cost. That's all from me for today. Thanks a lot and have a nice day.

I'll be back again next Friday with another video. Do let me know what you thought about this one. Vijay and I love to hear from you.

Vijay will be back on Monday with another video.

Until then have a great weekend ahead!

Warm regards,

Apurva Sheth
Apurva Sheth
Analyst, Fast Profits Report
Equitymaster Agora Research Private Limited (Research Analyst)

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1 Responses to "For 1,000%+ Gains, Follow the 8-Year Cycle in the Stock Market"

sundaravaradan

Feb 7, 2020

Dear apurva , great analytics.

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Equitymaster requests your view! Post a comment on "For 1,000%+ Gains, Follow the 8-Year Cycle in the Stock Market". Click here!