Fairval

Notes on Indian equities, sectors and economy

Talking up the Markets: One sane voice, Anand Tandon

Posted by fairval on September 22, 2010

One guy who has the balls to say it like it is. Maybe TV channels will not call him for the next few months. Anand told CNBC it is time to  sell. I am sure anchor must have had a tough time..

Some excerpts:

  • Tandon added that incremental earnings growths do not justify share prices. (one of the guys we cited earlier said exactly the opposite – earnings momentum is better this time, he said)
  • Given the momentum that you are seeing in the market, it is entirely possible that it can rise a few hundred points more on the Nifty. This means that it could take off the previous high, but if you leave cheerleading aside for an investor, now is the time to be actually looking to get out if you haven’t already got out (Bravo, no broker says this on live television!)
  • This is too good. I have to quote the question as well:

If the view is caution at this point in time, which is the one space that makes you most uncomfortable and where you would advice investors to exit?

A: It is called the equity market. We have been warning about the risks globally but also being aware of the fact that there is a huge liquidity surge that is likely. Right now, you are in middle of that liquidity surge and from here on the incremental risk return is hugely against you as an investor. So while you maybe okay as a momentum player to try and ride the last 3 or 4%, as an investor there is absolutely no case now to stay invested.

  • You have to remember that you should not be trusting the regulators too much. RBI in its earlier report in the last review had said that by September we will have 5.5%. As you can see that after fudging figures (hey, someone else saying what we have been saying for a year) we are 8.5% and in spite of that RBI continues to maintain a negative real interest rate for inexplicable reasons. We have had a mother of all stimuli being presented to the Indian economy. I don’t think that we will be in a position to continue with that for far too long. Unlike the US, we are not an economy where you can continue to print money and hope that the currency will not suffer.
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