I know why Economics is called a dismal science – because economists and economic writers an see only the bleak part of life. They first demonised demonetisation. Then they took all deaths all over and converted that to a gau rakshak based lynching. Now they are saying GST can only create huge inflation and burn the economy.
So some of my observations
- For all the people around me, standard of living has ONLY gone up
- Rate of change of prices aka inflation is around 3% – an all time low that I have seen
- NOBODY is complaining about inflation at all
- Commodity pricing power has collapsed
- All children of cousins and friends are studying abroad or in expensive Indian institutions
- Middle class India is found in airports, railway stations are for the poor.
- Indian Growth rate is either 7% or higher – the arguments are only about the decimals over 7is!
- Middle class India is paying more than Rs. 50L for education for each kid
- Middle class India is spending in millions for children’s wedding
- The question is always – ‘which car do you have’ our parents asked ‘do you have a car?
- Child mortality has collapsed
- Longevity is increasing – 90+ is the new norm?
- Middle class is cribbing about luxury items price rise – higher education and expensive treatments
- Exponential growth in capital available for young entrepreneurs
- World GDP is at an all time high, adjusted for inflation
- India’s cabinet ministers are ALL talking about growth – and achieving them partially at least
- Our airlines are growing at 25% p.a. and look like they will do for 5 more years
- 3 of our airlines have/ have orderedpr more than 100 aircrafts
- Our planes and hotels are full, and you cannot find parking in clubs and restaurants
- Poverty is collapsing INTERNATIONALLY
- Migration out of UP, Bihar and AP is again at an all time low
- Agricultural labor is in short supply because low end jobs are being created – talk to the farmer
You still want to find a reason to crib? I agree that a bull market has lulled a lot of people into believing that 18% is the new normal and 22% p.a return in midcaps is their birthright. I find IFA assuming 18% pa. equity fund returns over 20 years, and find that amusing.
PS: I do think that people are generally pessimistic and love criticising those in power and those who are successful. The middle class will keep cribbing about how honest they are – while taking their money and investing in their parents name in order to divert income. The younger kids will routinely provide fake rent receipts, fake medical bills, throw thrash all over – and say ‘how clean is Singapore’. Like Rama Bijapurkar said ‘we are like that only’. We are.
I am aware that the market is at an all time high. I do agree that the risk reward ratio is not favoring the new investor or the coward investor. I am fully invested – and my cash is waiting for some more juicy deals. All said, I am not expecting an imminent crash. We could remain at elevated PE levels – which means LOWER returns. We may correct the PE by increasing earnings, or market stagnating till ‘E’ increases.
Let me reiterate, I am fully invested, but do have a nice big trading position – and not willing to commit too much to investing at current levels. Repeat, I do not mean a crash is imminent.
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