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28 Aug 2013. Nifty index 5,285. That day, the fortunes of Indian equity markets turned, and how! Markets are wiser than all of us, they bottom in the depths of despair. They looked beyond the immediate despair of a falling currency, shrinking savings, rampant inflation, tight monetary conditions, banks saddled with NPAs, struggling corporates, deteriorating capex cycle, and thinning profits. Markets are prescient.
They believed in the long-term potential of India and recognised that the pall of gloom was but an aberration. Markets were preparing for the catalyst of good governance and good policies. And they finally found that catalyst in the emphatic mandate to Narendra Modi for change and development. During the challenging years of 2008-13, Indian corporates have restructured and become more competitive
Corporate governance has become better; and yet Indian investors have become more risk-averse and grossly underexposed to equity. We have come to believe that high interest rates, poor earnings growth and net outflows for domestic equity investors are the new normal. These factors are about to change, and for a very long time. This change is inevitable and irreversible.
We are at the cusp of an era of strong policy framework, business and investor friendly environment, elimination of supply-side constraints, initiation of a new capex cycle, falling interest rates, resumption of job creation, rising savings and a wall of foreign inflows combined with domestic outflows reversing into domestic inflows with a vengeance. While this is more obvious now, most of us are unable to comprehend the scale and the longevity of this change. We are at a stage where we are blin ..
CPI inflation in India has been persistent, driven by unabated protein food inflation. In light of the stable rupee and reversal of factors pushing food inflation, and core inflation coming under control, long-term interest rates have most likely peaked.
They believed in the long-term potential of India and recognised that the pall of gloom was but an aberration. Markets were preparing for the catalyst of good governance and good policies. And they finally found that catalyst in the emphatic mandate to Narendra Modi for change and development. During the challenging years of 2008-13, Indian corporates have restructured and become more competitive
Corporate governance has become better; and yet Indian investors have become more risk-averse and grossly underexposed to equity. We have come to believe that high interest rates, poor earnings growth and net outflows for domestic equity investors are the new normal. These factors are about to change, and for a very long time. This change is inevitable and irreversible.
We are at the cusp of an era of strong policy framework, business and investor friendly environment, elimination of supply-side constraints, initiation of a new capex cycle, falling interest rates, resumption of job creation, rising savings and a wall of foreign inflows combined with domestic outflows reversing into domestic inflows with a vengeance. While this is more obvious now, most of us are unable to comprehend the scale and the longevity of this change. We are at a stage where we are blin ..
CPI inflation in India has been persistent, driven by unabated protein food inflation. In light of the stable rupee and reversal of factors pushing food inflation, and core inflation coming under control, long-term interest rates have most likely peaked.
We all know Price = EPS x PE. We have forgotten what happens when both EPS and PE expand rapidly and correct years of suppression and depression. Marc Faber said: "Bull markets are conceived in the depths of depression, and are reared on declining interest rates and increasing corporate profits."
Any numbers on earnings, interest rates and valuations will be inadequate to describe the quantity and quality of improvement that can and will happen in every dimension impacting equity markets. The current earnings are so unrepresentative of the likely future earnings that valuation ratios predicated on current earnings will result in missing out on a structural and secular bull run. This will not be a multi-year bull run, but a multidecade bull run.
While the recent rise appears to be "too much, too soon", it is a preview of the structural and secular bull market that we have been deprived of. The 1991 peak was decisively overcome in 2000 but was shortcircuited by the Internet bubble burst. India did have a great run from 2003-08, but that was cut short by the global financial crisis, the Euro crisis and poor governance during the UPA 2 regime.
In the structural and secular bull market that began in 2013, I expect that we will have a benign global scenario starved of growth and an unprecedented virtuous domestic cycle.
In the last few years, there has been a great polarisation of valuations between the defensive and high free cash flow (FCF) sectors of IT, pharma and consumer stocks as compared to the cyclical and leveraged plays of infrastructure, capital goods banking and real estate. There has also been a high premium for large-cap stocks as compared to small and midcap stocks. It's my belief that these polarisations and premiums will revert to the mean.
As investors and traders, it would be a fatal mistake to extrapolate the past into the future when the biggest change is set to unfold. Remember, markets will always surprise both on the upsides and on the downsides.
One must not try to quantify the move in Nifty, but try to buy right and hold tight. It is imperative that we appreciate the impact of surging foreign inflows combined with domestic investors playing catch-up on net inflows to correct the systematic underexposure to equities. Finally, we will have a favourable fund-raising environment enabling the availability of much-needed risk capital for India's growth.
I would advise all Indians to have faith in India and its markets. We should not be underinvested for the mother of all bull markets. Be prepared for the inevitable and irreversible; structural and secular bull market. I believe we will all be pleasantly surprised by the longevity and magnitude of this bull market. Lest we forget, all that we need is God's grace and Elders' blessings. Happy Investing.
India’s current account deficit (CAD) for the quarter ended March this year fell sharply to 0.2 per cent of gross domestic product ($1.2 billion) from 3.6 per cent ($18.1 billion) a year earlier, as the fall in imports was steeper than the drop in exports.
On the balance-of-payments (BoP) front, the March 2014 quarter saw accretion of $7.1 billion to foreign exchange reserves, against accretion of $2.7 billion in the year-ago period. In the December 2013 quarter, accretion stood at $19.1 billion.
For 2013-14, the CAD was 1.7 per cent ($32.4 billion), well within the Reserve Bank of India (RBI)’s comfort level of 2.5 per cent, against 4.7 per cent ($87.8 billion) for 2012-13. For 2013-14, the BoP was in positive territory, with a $15.5 billion rise in reserves, against a rise of $3.8 billion in 2012-13.
For the third consecutive time, RBI sprung a surprise by releasing CAD and BOP data ahead of the standard period of publication of such information.
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Warren Buffett’s investment ideas asks us to buy stocksof only those companies whose “fundamentals” are very strong and its stock is available at “undervalued price”. When we say strong fundamentals we mean a healthy financial report, unique product line which is run by exceptional managers.
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What To Do Today..........
Our Opininon for Today's Market.......
1.Market Looks Volatile.....
1.Some Insider Say NIfTy go up to 6200
What To Do Today........
Nifty....Today Face Resistance at......7318...7365..7435
Nifty.....Today Support at ..7220...7162...7105
Nifty Range...6300--------7900
TRACK ME RESEARCH......
NEXT TGT FOR
Our Opinion for Today's Market.......
1.Stock Specific Movement Expected Today ......
2. Mid-caps Looks Good....
INTRADAY HOT STOCKS: 30/5/2014
rambaxy and sunphr look good
buy auro sl 560 tgt 630/660/680
buy infy sl 2880 tgt 2980/3040/3150
buy drready sl 2340 tgt 2420/2450
sell icicibk around 1460/1475 sl 1520 tgt 1420/1370
sell jswst arounf 1260 /1280 sl 1315 tgt 1225/1200/1170
ALL PSU STOCKS LOOK GOOD
L&T FINANCE HOLDINGS
(BSE TICKER-533519@ Rs.75/-)
Yeessssssssssssssssssssssssss
RBI TO ANNOUNCE NEW BANK LICENCE SOON
L&T HOLDINGS EXPCTED TO GET FIRST BANKING LICENCE !!!!
Rs.90/120/- Rs.150/-
Alert:- Our Subscriber's Long in Stock!!!
DELTA CORP
(Bse Ticker-532848@ Rs.90/-)
Stock Again Ready For Big Up Move
Above Rs.101/-
Uppar Range For Stock Rise to Rs.140/-
TARGET
Rs.120/150 SL Rs.79/-
MARKSANS PHARMA
(Bse Ticker-524404@ Rs.18.80)
Just Watch Rs.19.25 Clsoing Above Rs.19.25
Gate Open For Stock To Cross Rs.28/-
TARGET
Rs.21/- Rs.24/- SL Rs.15/-
Forget Short Term Movment
