Thought for the day
"There is no less invention in aptly applying a
thought found in a book, than in being the first author of the thought."
—Pierre Bayle (French, 1647-1706)
Word for the day
Nonbook (n)
A book without artistic or literary merit or substance,
especially one that has been developed primarily to exploit a fad or make a
profit quickly.
Malice towards none
Regardless of the outcome of controversy around Padmavati movie,
one thing is certain that 10yr hence the legend of Padmavati will have a face
and that will be of Deepika Padukone, much the same way as Anarkali is imagined
as Madhubala!
First random thought this morning
I can confidently say that movies inspire a lot of people in
India, and may be elsewhere also. The inspirations people derive from movies
vary from fashion, career choices, relationship management, political choices, crime
ideas, and even life changing idea, e.g., committing or not committing suicide,
etc
What I understand from media reports, the case of a young girl
that unfortunately died of dengue in a Gurugram corporate hospital is very
similar to what was shown in a 2015 Hindi movie starring Akshay Kumar.
I am not sure whether the movie was inspired by some real life
instance (s), or the Hospital's conduct is inspired from the movie. Regardless,
there is a case for implementing serious reforms in the healthcare sector.
Market Cap to GDP
One of the most popular data point used by the market participants
to justify (or otherwise) the current market level is GDP to Market
Capitalization ratio.
The latest argument in this context is that the last bull market
peaked at 103% Market Cap to GDP ratio. The current ratio being 87%, there is
still scope for market to move higher.
I have never fully understood the rationale behind applying this
criterion to equity markets, especially Indian markets, for the following
reasons.
(a) This argument assumes
near perfect correlation between economic growth and stock market performance.
This assumption may not be correct in most circumstances.
(b) This argument
completely ignores the rise in private equity investments. In Indian context
for example, the equity investment in self owned enterprise and home equity has
risen sharply in past one decade, as compared to the decade prior to that.
Besides, the size of unlisted private businesses has increased significantly.
Factor in the estimated market value of Amazon India, Vodafone India, PayTM,
FlipKart, Honda India, Hyundai India, LG India, Samsung India, Apple India,
etc. and you will find this ratio running much higher than what the chart below
shows.
(c) The rise in market cap
purely due to PE re-rating due to excess liquidity or other reasons, may not
actually represent any improvement in underlying economic fundamentals.
(d) The equity valuations of
stressed companies and lenders to these companies may not be adequately
reflecting the realizable value of assets and future business potential
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