What makes equity a good buy at the current PE? Is it justified at all?

Well in life either you need a sale or a story to tell. Since you cannot tell a story every day, you need to sell. To sell you need a story which is easy to believe. Well easy for the end investor I mean. He has to justify to his mind and his wife’s mind that equity will out perform debt, gold, copper, aluminium, real estate,….and therefore equity (direct or mutual funds) is a great buy. How do you justify the current prices? Is that easy? well, hear….

  • Sip is good at any starting point if you have patience (yes it has moved from 5 years to 22 years, but that’s beside the point)
  • Govt. will be in a liberal giving mode from Sep 2017 preparing itself for the 2019 elections
  • The 2018 budget will be very liberal hoping to swing the next election
  • We have still not discounted the UP victory and the 395 seats that NaMo will get in 2019
  • Our current leadership in the country and many states is fantastic
  • Ease of doing business in India
  • If you do SIP you cannot EVER lose all your capital
  • Mid caps can and will be at a premium to large caps (oops we are getting more money in midcaps, need new theory)
  • As more people come under NPS, the money going into the indices keeps increasing
  • Indian fund managers are geniuses they will continue to get alpha permanently – well at least for the next 224 years
  • Our investment penetration is still poor, and we could easily double the sip numbers and the average amount of SIP
  • look at the number of JanDhan accounts, all are potential sip investors
  • GST implementation will mean GDP will go up by 2%
  • Weakening US means more FII inflow
  • Every mutual fund is able to increase its aum..so market has to at least double in 5 years
  • look at the dividends that the psu shares are paying…all that cash will come back into the equity markets
  • SIP always works
  • look at the number of relationship managers – all are selling equity SIP which means that much more cash for fund managers
  • look at the number of ULIP being sold
  • with such aggressive buying by the average middle class markets are bound to go up PERMANENTLY.

Welcome to the world of the perma bull ……….its paradise out there..

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  1. This is the time when the wise words of Howards Marks and other experienced Gurus are needed the most.

    But you know what, I’ve given up on all this.

    Now I think let the world go to hell, who am I to tell anything to anyone? All I need to do is make money for myself and myself only. And for that it’s best if the world does keep going manic-depressive all the time. So I’m cheering this rally, why not create a few greater fools and benefit from them? 😉

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