"In a war, you
must hate somebody or love somebody; you must have a position or you cannot
stand what goes on."
—Robert Capa (American, 1913-1954)
Word
for the day
Thunderstruck (adj)
Overcome with consternation; confounded; astounded, e.g., He was thunderstruck by the news of his promotion.
Malice
towards none
Is MSY's family taking Ram
and Ramayana too seriously?
First random thought this morning
The way Virat Kohli is going, he may obliterate many great names
from the Cricket's record book. The age is on his side and he is already a
youth icon and worshipped ahead of the greats Sachin & Lara.
I wonder will that automatically entitle him for a Bharat Ratna,
or he would need do little more to earn the honor!
Waiting for the tide to turn
In past three decades Indian
market has seen three major market cycles. The most notable bull markets have
been in 1989-1992 and 2003-2007. In these two bull phases S&P BSE Sensex
had returned approximately 5x to 6x returns from the lows of the immediately
preceding bear market.
The current bull market that
started in March 2009 is inarguably the longest one. Interestingly it follows the
shortest bear market (January 2008 to March 2009) and has already yielded 3.5x
return (8k to 28k).
I may lack any knowledge of data
analytics beyond basic operations of MS Excel, but intuitively I know for sure
that all market cycles in India so far have been a mirror image of a global
trend.
·
Massive commodities cycle in late 1980s fueled
the global rally in commodity stocks. The nascent and closed Indian markets
also participated.
·
The mammoth global credit cycle in 2003-2007
that was created to stem the losses from the bust of dotcom bubble percolated
to emerging markets and fueled a capex driven rally. The rally eventually ended
with a colossal sub-prime crisis. Indian financial system is still buried under
the debris.
·
The unconventional monetary policies (QE and
ZIRP) followed by the global central bankers to stabilize the global financial
system in the aftermath of the financial crisis have fueled the rally in global
markets since 2009.
The current bull market, like the
earlier ones, shall too end with the tide turning in the global markets. In my
view, no one should have any doubts in that.
More important given the rise in
the degree of integration with the global markets since previous instances, our
markets should feel the tremors right away with virtually no reaction time
available.
The questions which are bothering
my mind presently are:
(a) When the global tide is likely to turn?
(b) What will signal the turn in the global tide putting an end to the
current market rally?
(c) Is there any likelihood that in near future India will have her
own bull market as US and Japan had in Post WWII era?....to continue tomorrow
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