"You can't do without
philosophy, since everything has its hidden meaning which we must know."
—Maxim Gorky (Russian,
1868-1936)
Word for the day
Antipodes (n)
Places diametrically
opposite each other on the globe.
(Source: Dictionary.com)
Malice towards none
Punjab - once the richest state in the country has reportedly gone bust.
Courtesy who?
First random thought this morning
It is high time that We, the
People of India get together to change the Constitution to make the Act of
disrupting the proper functioning of Parliament and any other assembly of
People's representation an act of Sedition, punishable with rigorous
imprisonment and permanent disqualification from holding any public office. (If
you agree click here to sign the petition to the President of India)
As feared (see
here) the Indian stock market has tripped from the edge and begin to slide
rather sharply. Assuming Nifty closes the year 2015 around the current level of
7600, it will be second consecutive year of over negative 6% delta in long term
Nifty returns (5 yr CAGR). Nifty would have returned an 5yr CAGR of 10% in 2014
and 4% 2015, much below 25yr average of 12% and 2013 delta of 17%.
The long term stock returns (Nifty 5yr CAGR) in 2013 were 16%; 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 worrisome part is that at present broader market
outperformance is as significant as it was in 1999-2000 and 2007; and retail
participation had been rising at higher market levels, that means that we are still far away from the bottom. (read
more here)
The key positive is that incremental investments made in next six
months may result in above average long term return (5yr CAGR), assuming our
economy would grow 7% CAGR for next 5yrs.
I however, do not expect above average long term returns for at
least next three years.
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