However a bad year is rarely followed by a worse year (yes it has happened in the past, but I am taking a calculated call!)..which means a NEGATIVE 25% will not be followed by a negative year. So assuming that the index’s starting point is 15,500 for Jan 2012 (I am writing this on 2nd Jan at 9.30am and this is the current sensex), I think seeing the sensex at 19500 is not impossible. This means that the current year’s return would be about 25% – just wiping out the 2011 losses.

This is actually from a post of mine on 2nd Jan 2012 about the index at the end of the year i.e. Dec 2012 types.

I had forgotten about this till one reader pointed it out…his name is vinitb……….thanks Vinit.

Let me assure you this is LUCK. I have predicted many times in the past and that too accurately. That makes the exercise even more risky. I have NO clue where the sensex or the nifty will be in Dec 2013. Honest to God. 2012 calendar year has been a good year – and there is no pattern AT ALL in life with which to predict the next year’s return based on the past year’s return. If i do predict it with a lot of research it would still be a future babble. Yes i have got it right in the past, and may get it right in various future attempts too. Famously I remember predicting 9000 when the index was 12000 and saying – ‘not much lower I dare say’ . It actually happened. Luck, naseeb, thukka,…just goddamn luck and guesswork. NOT SKILL.

My skill? In telling a big crowd at a sensex level of 14000 – DO NOT WORRY I AM SURE THAT OVER THE NEXT 5-7 YEARS you will see 28000. I still stick to that number over the next 4 years….28000 for sure.

Will it touch 28k and come back? no clue! It will reach there.

Frankly for me to make money, I HAVE NEVER, EVER, NEVER had to ‘predict’ the sensex. I can with decent sense see how good/ bad a company management is. Seriously, I do not need to see beyond that. Numbers? Well if you do your job well, numbers will follow, right?

http://www.subramoney.com/2012/01/the-worst-year-for-the-markets/

 

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  1. omg read the post again srk and u will find the answer. Btw tell me what happens if i tell you 39000 or 9500? how will you react to each of the situation?

    For heavens sake understand that to create wealth you do not need to know where the market is headed in the short run.

  2. Subra, in the short run , no..but taking a very long term view….10-12% CAGR over a period of 20-25 years from now is a reasonable expectation from the index, is it not ?

  3. country’s growth+inflation+premium of good companies growing at a rate over the country’s growth = rate at which the equity returns grow.

    For MF reduce expenses.

    so if India grows at 5% for next 10 years, inflation is on an avg at 6%..and premium = 2%….sensex will grow at 5+6+2 13%. Reduce 2.5% of amc YOU will earn 10.5%.

    now calculate for yourself…..not negotiable is the amc!!!

  4. Sirjee,
    Charan kaha hai aapke..didnt listen to any market analyst/EXPERT..read subramoney.com, continued SIP in SM Equity Fund(LONG TERM GROWTH OPTION) for past 3 years,spend 2.5/4th of salary on investing,spent the 1.5/4th lavishly on self,never withdrew any amount from it,frowned when market rose,danced when market crashed..here I am sitting on my small SINGHASAN which has grown 25 inch taller..JAI HO BABA SUBRAMONEY!!

  5. Subra, from 2005 to 2008, I have done exactly opposite(indulging in FnO, Day trading, no SIP, no diversification) of your advise and lost all savings! I paused for couple of years looking for some advise and found your blog in mid 2011 and it changed my thinking! I am now better positioned in my financial life with all ingredients like SIPs, Pure Insurance, Retirement planning etc with good diversification.
    I always go back to your older posts just to refresh my knowledge. Thanks Subra for such a wonderful blog!
    And yes, I do think your prediction was just calculated call, no one can predict the index for short term, continue running SIPs!

    -Vinit

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