Finally the most awaited Budget for 2018 was presented in Parliament on 1st Feb 2018. Budget’s main Focus was on Agriculture, Rural India, Infrastructure, Health Care, Employment generation. It was mentioned that Indian Economy is likely to expand 7.5% in FY 2018 and India on Course of 8% GDP growth.
Back in 2001, Warren Buffett had talked about the Mcap to GDP ratio as probably being one of the best measures of valuation. On a top down basis this is one of the indicators that he tracked to identify extremes of market irrationality. Like all valuation indicators there certainly are limitations to the measure. And in pursuit of perfection one could make multiple adjustments to make the measure more robust. But as Buffett puts it “On a macro basis, quantification doesn’t have to be complicated at all”.
“The party is on and nobody wants to leave the dance floor in a hurry”. 2017 has been a super year for the majority of markets across the globe with the US Market, the world’s biggest market represented by S&P 500 Index, seeing a continuous uptrend giving 19.42% return for the year with not even a 5% correction during the year. India’s NIFTY 50 has outperformed S&P 500 and has given a return of 28.65% for the year.
This article was originally published on ValueWalk
“The less prudence with which others conduct their affairs, the greater the prudence with which we should conduct our own affairs.” – Warren Buffett 1
While the long expected earnings recovery has continued to push its realization date further out, equity markets have continued to march upwards. As indices have moved up while earnings have largely failed to keep pace, valuations, to the extent that one bases them on the current earnings power of the business, have increasingly extended themselves in the overvalued zone. The willingness of market participants to pay significantly more for the same stream of earnings is also reflected in exuberant behavior in primary markets.
- 1986, Chairman’s letter, Berkshire Hathaway. ↩
This article first appeared on Value Walk.
“The key to investing is not assessing how much an industry is going to affect society, or how much it will grow, but rather determining the competitive advantage of any given company and, above all, the durability of that advantage. The products or services that have wide, sustainable moats around them are the ones that deliver rewards to investors.” – Warren E. Buffett
Gold has been in use as a form of currency or a high value commodity for at least three millennia. Records show that India has had an intense relationship with this glittering metal for almost as long. The picture of an Indian bride is incomplete without her being weighted down by masses of gold jewellery and tales of palaces being inlaid with gold leaf abound.
The advent of cloud and artificial intelligence along with Trump’s protectionist policies is causing Indian investors to shun the IT sector.
Learn the real reasons for the slowdown in the Indian IT sector and find out whether this could actually be an opportunity in disguise for investors.
In this article:
Raghuram Rajan’s monetary policies have received both praise and flak. On one hand, they have been praised as stabilizing forces in a tumultuous global economy awash with central bankers’ reduced interest rates. On the other hand, critics have denounced Raghuram Rajan’s policy changes as being detrimental to growth. This article assesses the impacts of Raghuram Rajan’s policies on the economy and the ‘real’ effects of the global banking crisis. You’ll read insights on how these inflation targeting policies have safeguarded the Indian economy. Read this Raghuram Rajan monetary policy review to find out if Raghuram Rajan’s successor should continue them, or implement new policies. Read More
Dalbar, a Boston based analytics group has been studying the US markets for over 20 years and they have been publishing reports which compare the performance of an average Mutual Fund investor as compared to the Market Indices. Important point to note here is that the performance calculated was for the investor in the Mutual Fund and not the Mutual Fund itself which is more readily available.