Market Musings: Week 2-2021
India’s vaccination exercise is underway. The healthcare and frontline workers will get their first doses beginning this week. This should spur an improvement in the health of both individuals and the economy! The market is trading at 24 times forward earnings!!
The markets continued trending up, except on Friday, with the “Buffett Indicator” crossing 1 for the first time since September 2010. The BSE listed companies’ market cap of Rs 197.7 Trillion against the nominal GDP of Rs 190 Trillion during 2020.
According to moneycontrol, this happened last in September 2010, when this ratio was 100.7%. The current ratio is, however, much lower than the all-time high of 149.4 per cent in December 2007.
India has one the highest market cap to GDP ratios among the emerging markets. The ratio is 75% for China, 70% for Brazil, and 47% for Russia.
Meanwhile, the RBI Financial Stability report essentially said that improvements in bank balance sheets are primarily on account of asset classification and regulatory relief and that things will go bad if these were removed. The Tech corporate results were stellar with Infy having the largest deal in its history and TCS gave a glimpse of multi-year technology upcycle.
On Jan 13, SEBI passed an interim order banning a TV show host on CNBC Awaaz and two of his family members from recommending stocks. SEBI believes that he relied on a simple strategy – buy the stocks on day 1 in his wife and mother’s name and then recommend the same on day 2! He made profits to the tune of Rs 3 Crores by dumping it as gullible investors bought the recommendations!! A potent combination of Robinhood investors, Twitter traders and Tv channel recommendations!!
No amount of financial wizardry will yield accurate projections. Do your research and invest for your goals and STOP listening to such predictions!!
Source: Moneycontrol
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