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Party time again: Time to buy panic for the Sensex ride to 80000
With fear starting to take over the stock markets on one hand, and recovery in the Indian economy progressing well on the other, this seems like a party time for professional investors to accumulate equities. After a great accumulation opportunity towards the end of last year, it seems Mr Market is offering another one on a platter.
I continue to stand by my forecast of Sensex reaching 80K (min 45K) by 2016. I made the first version of that forecast in March 2008 and have not yet seen any reasons to revise it. In fact, as part of the same forecast, I had also projected that we would go through a major bear market first, before the ride to 80,000 begins. The subsequent bear market and the lows made in October 2008 are, of course, now history.
Coming back to the present, markets are likely to continue to be spooked by the Eurozone and Greece’s minuscule economy, providing some great entry opportunities.
Investing literature, and quotes from the likes of Warren Buffett, are full of descriptions for times like these. The one I like is “Buy fear, sell greed,’’ although I don’t remember who said it (probably Buffett).
And this, to me, seems like one of those times to buy fear.
Take a look at the following charts of P/E and IIP data for the past six years. P/E’s are already in the undervalued zone and are about to enter the extreme undervaluation zone. Meanwhile, the IIP seems to be northward bound, as if the sky is the limit.
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And what about global markets? Well, I believe the long-term professional investor must be looking at a time frame of seven years or more. In that time frame, does it make a difference whether the Eurozone remains or melts down, let alone Greece?
Even from a short-term perspective of the next year or so, my analysis shows that global recovery is intact. This notwithstanding the latest PMI numbers for the U.S., China and the Eurozone released today, which on a superficial basis might cause further fear. A deeper analysis reveals the recovery is intact.
Coming back to the projection of 80,000 (minimum 45,000) for the Sensex, that number, is really not that terribly large, if we keep in mind that the Sensex was at around 3,000 just a decade back and at around 6,000 about seven years back. As for growth estimates, I am not even banking on a 10% range of GDP growth and a 20% range of EPS growth. My growth estimates are far more conservative, but that is probably better covered in another story.
I’ll end this story with another one of those nice quotes: “What we learn from history is that people don’t learn from history.”...
who says we are not grwoing, in fact and in real terms we are grwoing at jet speeds, after three years our country scam have crossed all the presumed figures. One must appreciate and congratulaes our growth figures which are astonished - the debeat is not direction but it must be focused on amount and that is extra oridinery tremendous...
Due to growing population the per capita income is reducing, this is one of the biggest problem in India.Various scams and money laundring de rails our economy....
volatility thru short trading........dosent attract investors into the market...
Global economy has affected all stock markets of the world including India. Look at Indian bank ICIC.Inspite of making record profits stock price is much low.India is still growing at 7% yet market has hardly done anything.
India being consumer market may be it will do better from now on....
The UPA govt. is to be blamed for the current mess in the Indian economy.The robust growth has come to a grinding halt on a/c of
the govt. inaction to carry out the fiscal reforms.Time is running out for this govt. to act ....
It is due to flawed govt policies, inaction and blaming the opposition to cover up the inefficiency and no decision making..capability.. UPA 2 is the worst govt in the last 15 years.
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Government is playing safe by taking no actions heading to staglation in the economy. Higher inflation is inevitable, erosion of capital too inevitable, investments drying up, only time can heal, patience in the market is an important virtue more so now....
Exactly three years ago, trading was halted for the first time in the history of the Indian stock market, after there were only buyers. The Sensex surged 2100 points as the return of UPA to power with a stronger electoral mandate raised hopes of speedy economic reforms that would help India defy the gloom in the developed world. Three years on, the world is a much different place and India, despite its higher relative growth, is worse off than most other emerging markets. At current levels, the Sensex is barely 11% higher than what it was this day three years ago.
What do you think? Are flawed government policies to be blamed more than the turmoil in the global economy?
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Market Outlook - Long Term
पोस्ट करनेवाले :
subh_monika
Must read for Satyam Investors,Before you sell your shares ,click on link to see who is buying & holding & how much
http://t.in.com/7mE0...
