koolprakash said:
Hi Amit/ Senior members,
Your thoughts on the fifth day of the rally is very interesting.
I am not sure if this post would be too much relevant here but would be interesting to get a perspective anyways.
- The financial major (DSP Merrill Lynch) mentioning in their report that India is very expensive and a strong SELL is advised for the short term. (They are bullish on the long term India story).
- A mention that India is among the most EXPENSIVE emerging markets
In a broader sense, how do you see markets behaving to such news?
Thanks,
Prakash
Your thoughts on the fifth day of the rally is very interesting.
I am not sure if this post would be too much relevant here but would be interesting to get a perspective anyways.
- The financial major (DSP Merrill Lynch) mentioning in their report that India is very expensive and a strong SELL is advised for the short term. (They are bullish on the long term India story).
- A mention that India is among the most EXPENSIVE emerging markets
In a broader sense, how do you see markets behaving to such news?
Thanks,
Prakash
This kind of a report is projecting into the earnings over the next couple of quarters at least and factoring in those numbers into the current levels as well. The target audience is the mid to long term investor community seeking a decent entry and in the last couple of months such opportunities have been rare in the fronline counters both in large and midcaps. Mostly the valuations have been way too stretched. The FIIs and domestic funds have been the main players behind this push, and they are the ones who will depress the market when they decide to sell.
However, the market as we know it on a day to day basis comprises of day traders, momentum chasers, swing traders, position traders etc. These are the worker bees as in a beehive and the pistons of an engine. All the wealth creation happens at their participation.
The final and the most essential layer is the health of the companies, industrial, agricultural, sevice or whatever. These are not only the drivers of the market but of the economy as a whole. As long as they keep up their earning schedule, the economy and the markets will follow.
The state of our industry, and economy are on a sound footing and should only get better. A drop here in quarterly earnings, or a spike there, are incidental in the bigger picture of a sound company or economy.
So to the markets, the very basic and fundamental nature of which is that it is cyclical. Now it's expensive and now not so. Now it's overbought and now to the contrary.
As players in the market, it our business to survive in both cycles.
The report you have quoted is merely statistical and indicative thereof, as far as I am concerned.