Hello
The question of substantiating my statement with evidence has been raised.
First, it was a prediction. As far as I believe, correct evidence cannot be given to substantiate your predictions, at least, in the world of finance-not by a novice like me.
Secondly, if you would like me to make a wild guess at the reasoning (and not evidence), it goes like this:
For the current financial year FY-05-06, stock market has been gaining new peaks every 80 or 81 days. This was not happening before this FY, or to extend it little bit, before Manmohan Singh's ministry came into power.
For this, I have attached a mail that has a financial analyst's viewpoint, who happens to by my friend, Pankaj's cousin. I have replied to him about the analysis.
I hope this will help you in some way. There are many terms, which many of us <even me> cannot understand.
Apart from this, I would like to say something even stronger. Be ready for a shock in the stock market in a month or so.
Regards
Kanuj
The question of substantiating my statement with evidence has been raised.
First, it was a prediction. As far as I believe, correct evidence cannot be given to substantiate your predictions, at least, in the world of finance-not by a novice like me.
Secondly, if you would like me to make a wild guess at the reasoning (and not evidence), it goes like this:
For the current financial year FY-05-06, stock market has been gaining new peaks every 80 or 81 days. This was not happening before this FY, or to extend it little bit, before Manmohan Singh's ministry came into power.
For this, I have attached a mail that has a financial analyst's viewpoint, who happens to by my friend, Pankaj's cousin. I have replied to him about the analysis.
I hope this will help you in some way. There are many terms, which many of us <even me> cannot understand.
Apart from this, I would like to say something even stronger. Be ready for a shock in the stock market in a month or so.
Regards
Kanuj
Original mail under consideration:
Kanuj Gupta wrote
Hello
Bhai Log!
Aaj ek aur badmashi hogayi hai! Jara sambhal ke rehne ka! Bole to thoda sa careful!
Market 11000 cross karke rukeli hai! Yes market has finally closed at above 11000 though it had crossed once earlier, but didnt stablise.
But for all those who are involved in trading business, i've one note : 'Darna zaroori hai'!!
Good Luck!
Kanuj
----------Attached mail for reference ----------
From: Kanuj Gupta
Date: Mar 27, 2006 2:55 PM
Subject: Re: your query about the indian markets
To: Pankaj Bilandani
Hi pankaj
Thanks for the great technical report. That was great. The same was what I read approx-about the P/E but that was how to select MFs. The thing about FIIs fuelling the market growth is what I told you and is very clear in daily market. whenever the market rises, it is very clearly said that FIIs are behind it...but the same question :Till how long? There has to be saturation. But what I’ll say is, still it will take time, since there are many undiscovered, un-exploited areas in the Indian economy...take the case of hospital areas. There are not many private players and I think there is no equity openings in that field apart from escorts if I am not wrong.
The only problem I see is the rapid growth leading to a new benchmarking. There has to be some evil thing- don’t know but something tells me. It has never been so fast-how come suddenly this government has changed so much in the Indian economy. But I can say one thing, there are many forces keeping a strong watch and the scams , specially in the stock markets are out very fast...SEBI is doing a great job and I trust chidambaram-intelligent guy!
So let the bull run but ride it with caution. That’s what I will say! Reap the benefits but only that much what we can afford!
Good Luck!
Kanuj
On 3/27/06, Pankaj Bilandani wrote:
kanuj,
he is my cousin working for …….I asked him his viewpoint today..read his reply below..
regards
---------- Forwarded message ----------
….
Anyways, u asked me about the Indian market reaching its zenith and whether is it good enough anymore... now what i am giving u is just my personal view and not related to that of ……'s view all right...!! I was very skeptical about the market even when it crossed the 10,000 points limit... now its above 11000 ... P/E multiples of the market were displaying expensiveness even then but were being considered sorta ok... even at those levels the indian market was an overvalued one. now its crazy.... As of now, India is the most expensive market in Asia ex Japan based on either 12 month forward PE or dividend yields. 12months forward P/E for emerging high growth markets like china is 13.1 & brazil is 7.9 but for india it is 17.1... not a very good number... I am strongly believing that the market will turn direction but the timing is not sure... the fact is some bullish macro newsflow keeps coming in and the market keeps that well in mind all the time and stays up... but for how long...?? The current account deficit is deteriorating and the banks have given more credit than they should and the monetary conditions are tightening and thats not a very good picture too. What the market is facing right now is the over confidence normally seen in most emerging markets at peak times... and the situation is quite vulnerable to shocks... we have had very good exports growth and GDP growth and the rupee is strong right now but unfortunately stronger than people thought it would... so u understand what its like... some disturbing news and rupee starts tumbling down... rupee tumbles down and the govt intervenes to stabilise it by increasing interest rates... interest rates move up and the forward forecasts of strong economic growth will fall down resulting in a foreign capital flight from india... mind you the markets are buoyant just because FIIs have built up positions that support it... if that support goes thats that... its a herd instinct right now i believe... i would not build very high positions but keep myself limited to favorite stocks in the market and watch my positions closely on a daily basis and exit at the first signs of falling down...
hope this helps to some extent... sorry dont know more about the indian markets.. i deal with european markets more...
…………………………..
---------- End of Forwarded message ----------
Kanuj Gupta wrote
Hello
Bhai Log!
Aaj ek aur badmashi hogayi hai! Jara sambhal ke rehne ka! Bole to thoda sa careful!
Market 11000 cross karke rukeli hai! Yes market has finally closed at above 11000 though it had crossed once earlier, but didnt stablise.
But for all those who are involved in trading business, i've one note : 'Darna zaroori hai'!!
Good Luck!
Kanuj
----------Attached mail for reference ----------
From: Kanuj Gupta
Date: Mar 27, 2006 2:55 PM
Subject: Re: your query about the indian markets
To: Pankaj Bilandani
Hi pankaj
Thanks for the great technical report. That was great. The same was what I read approx-about the P/E but that was how to select MFs. The thing about FIIs fuelling the market growth is what I told you and is very clear in daily market. whenever the market rises, it is very clearly said that FIIs are behind it...but the same question :Till how long? There has to be saturation. But what I’ll say is, still it will take time, since there are many undiscovered, un-exploited areas in the Indian economy...take the case of hospital areas. There are not many private players and I think there is no equity openings in that field apart from escorts if I am not wrong.
The only problem I see is the rapid growth leading to a new benchmarking. There has to be some evil thing- don’t know but something tells me. It has never been so fast-how come suddenly this government has changed so much in the Indian economy. But I can say one thing, there are many forces keeping a strong watch and the scams , specially in the stock markets are out very fast...SEBI is doing a great job and I trust chidambaram-intelligent guy!
So let the bull run but ride it with caution. That’s what I will say! Reap the benefits but only that much what we can afford!
Good Luck!
Kanuj
On 3/27/06, Pankaj Bilandani wrote:
kanuj,
he is my cousin working for …….I asked him his viewpoint today..read his reply below..
regards
---------- Forwarded message ----------
….
Anyways, u asked me about the Indian market reaching its zenith and whether is it good enough anymore... now what i am giving u is just my personal view and not related to that of ……'s view all right...!! I was very skeptical about the market even when it crossed the 10,000 points limit... now its above 11000 ... P/E multiples of the market were displaying expensiveness even then but were being considered sorta ok... even at those levels the indian market was an overvalued one. now its crazy.... As of now, India is the most expensive market in Asia ex Japan based on either 12 month forward PE or dividend yields. 12months forward P/E for emerging high growth markets like china is 13.1 & brazil is 7.9 but for india it is 17.1... not a very good number... I am strongly believing that the market will turn direction but the timing is not sure... the fact is some bullish macro newsflow keeps coming in and the market keeps that well in mind all the time and stays up... but for how long...?? The current account deficit is deteriorating and the banks have given more credit than they should and the monetary conditions are tightening and thats not a very good picture too. What the market is facing right now is the over confidence normally seen in most emerging markets at peak times... and the situation is quite vulnerable to shocks... we have had very good exports growth and GDP growth and the rupee is strong right now but unfortunately stronger than people thought it would... so u understand what its like... some disturbing news and rupee starts tumbling down... rupee tumbles down and the govt intervenes to stabilise it by increasing interest rates... interest rates move up and the forward forecasts of strong economic growth will fall down resulting in a foreign capital flight from india... mind you the markets are buoyant just because FIIs have built up positions that support it... if that support goes thats that... its a herd instinct right now i believe... i would not build very high positions but keep myself limited to favorite stocks in the market and watch my positions closely on a daily basis and exit at the first signs of falling down...
hope this helps to some extent... sorry dont know more about the indian markets.. i deal with european markets more...
…………………………..
---------- End of Forwarded message ----------
