Probably the one thing thats got every one curious in 2005. The word NFO or "Mutual Fund" may be something to which most of have subscribed to....
Since May 11 a new routine, reassuring friends and relatives about the markets and that their money is safe. The phone turns into an alert like the bell in the stock market, a sound which now is a sign of much more I would lose, begining of the carnage and relief @ 3 pm that the carnage has ended.
In all this carnage, porfolios being shaved, NAV's eroded one thing that emerged and was long overdue was the INEVITABLE CORRECTION. And honestly thing that the best thing that could have happened to the markets. Yes!!!!!!!!! its is best thing. Reason
1. The obvious valuation gap.
2. Unwinding of over leveraged postions.
3. The most imptr. , the fact that the Market has presented its full face and what it can offer.
Ever since the sensex which is nothing but a 30 stock index of the best and large cos in India(maybe a moot point), has got the retail investor to consider a shift to equities. Equities/Capital markets have got a face lift and their perception among amny has changed. People are ready to part with their savings and actually consider shares or Equities as an investment which years back would have been veiwed as nothing but an alternate avenue for people who gamble with their savings in stocks that are manipulated by a bunch greedy brokers residing at dalal street.
For a period between which the markets rallied from 6000 to 8000 and then back to 7500 retail investors(RI) have passive and engrosed in thoughts whether the market was a good place to invest also whether it was the right level to enter. And when 10,000 wasnt expensive there was a rush of investors some o my knowledge who even broke thjeir FD's to invest when ? not in an expensive market but when it peaked for the first time. Investors then took assurance of the markets when it then rallied to 12,000 when stocks like HLL were quoting @ 40 p/e!!!!!!!!!... The biggest stamp of assurance came from the Reliance Equity fund and collected a record rs 5700 cr. And then the Tsunami, similar in nature to the havoc it played, A word never heard before and never seen and everyone's caught off guard.. And all this led to the most unwarrented aspect about investing and I repeat investing (not trading)..
Coming back to my earlier point about why this is the best thing, Cause the retail investor is now convinced about the disclaimer which follows each MF ad. In this bloodbath there wasnt any scam, no Ketan,no Harshad or UBS. Just a playout of our markets being integrated globally and unwinding of positions which is part of every market.
Maybe Investors would now look at this as check whether they had invested cause they watched the sensex or whether the India Story was something they wanted to invest in. If it were the India story then its pretty clear that an Index @ 9000 levels and worst @ 12000 levels. No doubt the India stor is intact but expectations out equities need now be more on valuations rather than prices being misguided cause of liquidity be it domestically or the FII's.
Somehow Sensex like the Dow suffers from legacy. Reflective to many as a sign of the Indian Economy and every rise as a stamp of faith in the concept that health of the economy is reflected in a mere 30 stock index.
Since May 11 a new routine, reassuring friends and relatives about the markets and that their money is safe. The phone turns into an alert like the bell in the stock market, a sound which now is a sign of much more I would lose, begining of the carnage and relief @ 3 pm that the carnage has ended.
In all this carnage, porfolios being shaved, NAV's eroded one thing that emerged and was long overdue was the INEVITABLE CORRECTION. And honestly thing that the best thing that could have happened to the markets. Yes!!!!!!!!! its is best thing. Reason
1. The obvious valuation gap.
2. Unwinding of over leveraged postions.
3. The most imptr. , the fact that the Market has presented its full face and what it can offer.
Ever since the sensex which is nothing but a 30 stock index of the best and large cos in India(maybe a moot point), has got the retail investor to consider a shift to equities. Equities/Capital markets have got a face lift and their perception among amny has changed. People are ready to part with their savings and actually consider shares or Equities as an investment which years back would have been veiwed as nothing but an alternate avenue for people who gamble with their savings in stocks that are manipulated by a bunch greedy brokers residing at dalal street.
For a period between which the markets rallied from 6000 to 8000 and then back to 7500 retail investors(RI) have passive and engrosed in thoughts whether the market was a good place to invest also whether it was the right level to enter. And when 10,000 wasnt expensive there was a rush of investors some o my knowledge who even broke thjeir FD's to invest when ? not in an expensive market but when it peaked for the first time. Investors then took assurance of the markets when it then rallied to 12,000 when stocks like HLL were quoting @ 40 p/e!!!!!!!!!... The biggest stamp of assurance came from the Reliance Equity fund and collected a record rs 5700 cr. And then the Tsunami, similar in nature to the havoc it played, A word never heard before and never seen and everyone's caught off guard.. And all this led to the most unwarrented aspect about investing and I repeat investing (not trading)..
Coming back to my earlier point about why this is the best thing, Cause the retail investor is now convinced about the disclaimer which follows each MF ad. In this bloodbath there wasnt any scam, no Ketan,no Harshad or UBS. Just a playout of our markets being integrated globally and unwinding of positions which is part of every market.
Maybe Investors would now look at this as check whether they had invested cause they watched the sensex or whether the India Story was something they wanted to invest in. If it were the India story then its pretty clear that an Index @ 9000 levels and worst @ 12000 levels. No doubt the India stor is intact but expectations out equities need now be more on valuations rather than prices being misguided cause of liquidity be it domestically or the FII's.
Somehow Sensex like the Dow suffers from legacy. Reflective to many as a sign of the Indian Economy and every rise as a stamp of faith in the concept that health of the economy is reflected in a mere 30 stock index.
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