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“In India, companies may fall sick, but promoters rarely do!”

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Woe-latile Equity Markets in 2015 ! ~ Look beyond 2015

As 2014 ended with Sensex at 27500 levels ,I had warned that 2015 will be a Volatile & Vulnerable Year though the underlying remains bullish.I reiterated this View a fortnight ago on March 31,2015 on ET Now in an 8 pm Interview on Market Hour

It was and is difficult to see 2015 replicating the 2014 upmove on the Sensex & Nifty Indices and even greater upmove across the board in Non Index Stocks on all the four legs of the Equity Table ~ Sentiment,Momentum,Liquidity and the most important,Valuation

FPI which hit a record US $ 46 b in FY 15 should ebb in FY 16 to an indicated half these levels or even lesser

Sensex did record an all time high of 30000+ only to pullback to sub 28000 and year end 2014 levels before once again crossing 29000.Today it reacted in the last half an hour to sub 29000

Q 4 FY 15 Corporate Earnings Announcement Season is beginning and expectations of 15% growth are now muted down to 5% though FY 16 & FY 17 should see 15%+ Earnings Growth as Interest Rates drop further and GDP growth moves past 7.5%….Earnings as a % of GDP should double from current 4% levels to 8% in each of the next two years

Market Cap to GDP Ratio is reasonably attractive at just over 0.8 and going forward even more reasonable at 0.7….it was  a heady 1.9 in 2007/8 after a spectacular 3 year Bull Run which saw Markets race ahead of Fundamentals on Great Expectations

However if you want to repeat  2014 Performance in 2015,you’ll have to play a tactical which would increase Risk of  Improper Selection as it would involve Concentration in a Few Stocks for the Short Term…..Your Conviction levels thus need to be very high when adopting such a strategy

Traders & Speculators may more than often find  that the Volatility Trend is not their Friend

🙂 Long Term beckons but Short Term wreck-ons !  😥

Look beyond 2015 when Investing in Equity and know why you’re doing what with a high level of conviction when it comes to Specific Stock Selections….they must have base & basis both….assess them in this order….Promoter Pedigree,Business Model,Financials and Valuation

As I said on ET Now the ‘I’ Theme beckons ~ Interest & Infrastructure and specific within

Cheers !


3 thoughts on “Woe-latile Equity Markets in 2015 ! ~ Look beyond 2015”

  1. Gaurav, can u please write post on global events this year as no major India specific event(rate cut by RBI seems predictable) likely to happen…like SSE might be making life time high, Fed raising rates, Greece exit, Dollor/Gold volatility. Geopolitical events etc that can add lot to expected volatility in India as well as globally….(like SSE futures collapsed 7% on Friday after SSE closed but nothing happened today :))

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