Thought for the day
”It seems, in fact, as though the second half of a man's life is
made up of nothing, but the habits he has accumulated during the first half.”
-
Fyodor Dostoevsky (Russian, 1821-1881)
Word for the day
Farceur
(n)
A joker; A wag
(Source:
Dictionary.com)
Teaser for the day
Will the caged parrot make his master Sing?
Greed overwhelming fear
One of the critical condition for a sustainable bull market is
the exuberance and optimism of investors and traders. Greed of investors and
traders as defined by his eagerness to take higher risk for some extra return
usually leads to PE rerating of the market. A greedy investor or trader
ventures out of his comfort zone and explores newer opportunities. P&L,
especially projected topline of P&L,
becomes the dominant evaluation matrix against the balance sheet in
fearful days.
I identify this market condition from sharp performance of
smallcap and midcap stocks versus benchmark indices.
From this angle, we are currently deep into a bull market.
Though by strict technical parameters, NIFTY is very close to overbought zone
and is more likely to correct in near term. The risk reward from 1-3months
perspective is negative at 5-1 (downside 500points for an upside of 100points).
The small and midcaps could correct even sharply. However from 3-5years
perspective the risk reward is extremely favorable at 1-8 (500pts downside and
4000points upside).
Broader markets substantially outperformed post May election
results
Sensex PE getting rerated
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