Thought for the day
“There are two things in New York, euphoria and disaster.”
-
Bill Parcells (American, 1941 - )
Word for the day
Infinitesimal (Adj)
Immeasurably small; less than an assignable quantity:
(Source: Dictionary.com)
Teaser for the day
What if AAP leads the Left Front in general elections to
provide a true third dimension to Indian politics with Congress led UPA at
center and BJP led NDA to the right?
It’s
like FY2000 only
The Indian stock markets are on the edge, waiting to plunge in
the bubble territory, much like 1999-00. The long term stock returns (Nifty 5yr
CAGR) in 2013 were 16% (much higher than 25yr average of 12%); the yoy delta in
long term equity return in 2013 was 17%, highest in three decades. This happened
when the long term economic growth slumped below four decade trend line and
long term earnings growth had been consistently down to single to low double
digit.
The market breadth is as narrow as it was in 1999-00 and volumes
poor. The only saving grace is low volatility and low retail participation. I
shall watch out for these two factors to turn negative to get a signal of
bubble reaching the bursting point.
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