You know who said this?
“ When we were young kids growing up in
America, we were told to eat our vegetables at
dinner and not leave them. Mothers said, think of
the starving children in India and finish the
dinner.”
And now I tell my children: 'Finish your
homework. Think of the children in India who
would make you starve, if you don't?'
THE WORLD IS FLAT
- BY THOMAS FRIEDMAN
Indian Market Maturing?
It is real nice to see that today market didn't mimic DOW.
Our market is coming out of the hoodoo of DOW movement and the achilles hills for our market was it use to mimic down movement and not the upside of the Dow.But I like this movement.It says , one can't take clue from overseas market and dump the stocks.Otherwise what people use to do was , just see how Dow has fared previous night and short sell heavily in Indian market and market will oblige them veery gleefully as if Dow was to go up next day, our market do not use to go up and hence BEARS use to have field day as they have not to worry about Dow going up as Sensex would not go up if Dow goes up.
Now the scenario has changed.
The present new trend says that Indian market will not go down if Dow goes down.Indian market will see if the fall is real.Means there is really big damage in US economy as it has been seen that Dow tanks one day and goes up double next day.Bulls have seen that Bears breaks the market when Dow goes down but market do not come up when Dow goes up.Bears use to sell saying US economy is under recession and India will be affected but market do not com up on Dow rally.So now the rein of the Indian market is in the hand of Bulls who saw the real contrast and see the anamoly that Bears are taking undue liberty to break the market.
More over Bulls got the solace that individual stocks has fallen down so low , by over 50-60% that there was actually no room to further go down and the only way was to go up..... as almost all stocks are available at 5-6-7 P/E.......
So henceforth, our market will not try to mimick Dow movement.But will wait for more bad news for 3-4 days and if Dow still go down for more days may Sensex go down.But if US economy bounceback then just imagine what can happen and according to me chances are great in second half that US economy can bounce back .
It is the dollar value that is depreciating, that Oil/gas is costlier in USA which is $3.3/gallon.....but as soon as Dollar aprreciate Gas prices will come down and so will Inflation in US because it is obvious that as soon as the Gas price will come down, consumer goods price etc will also come down and inflation will be tamed.
No wonder Warren Bufffet is having no anxiety on US economy.I am having a bullish stance for US economy.I again reiterate that 16,000 Dow is possible by Dec 2008!Let us keep the fingures crossed.
As I have written in my last post, 19k we can see in May/June......
Hi Rajeev,
ReplyDeleteThought-provoking article from you.
As you said,nowadays Indian market is decoupled from US and that is what we have been seeing for the past few days.I also read in some financial magazine that US economy will be in track by the end of this year.We hope for the best and as you said long-term investors need not worry about these temporary slow-downs.
Regards,
Sambath
i would like to share this news.
ReplyDeleteNEW YORK (Reuters) - Warren Buffett, the world's richest person, said
on Monday the U.S. economy is in a recession that will be more severe
than most people expect.
Buffett made his comments on CNBC television after his Berkshire
Hathaway Inc (BRKa.N) (BRKb.N) agreed to invest $6.5 billion in the
takeover of chewing gum maker Wm Wrigley Jr Co (WWY.N) by Mars Inc in
a $23 billion transaction.
"This is not a field of specialty for me, but my general feeling is
that the recession will be longer and deeper than most people think,"
Buffett said. "This will not be short and shallow.
"I think consumers are feeling gas and food prices," he added, "and
not feeling they've got a lot of money for other things."
He was not immediately available for further comment. Known for his
frugality, the 77-year-old Buffett has lived in the same 10-room
Omaha, Nebraska, house for a half-century, despite being worth an
estimated $62 billion.
On Wednesday, the U.S. Commerce Department is expected to say how fast
the economy grew in the first quarter. Economists on average have
projected that gross domestic product grew at an annualized 0.2
percent rate in the quarter.
Two quarters of declining GDP is a traditional indicator of recession.
That last happened in 2001. Economists expect the U.S. Federal Reserve
on Wednesday to cut a key lending rate for a seventh time beginning
last September.
Berkshire is a $197 billion conglomerate best known for its insurance
holdings, such as auto insurer Geico Corp, but it owns more than 70
businesses.
Many of those businesses are tied to the housing market, including
Acme Brick Co, insulation maker Johns Manville, and the real estate
brokerage HomeServices of America Inc.
Others depend on consumers to spend more on discretionary items, such
as Ben Bridge Jeweler and Borsheims Fine Jewelry.
"In the retail businesses ... if anything, they've gotten a little
worse," Buffett said. "Of course, things connected with housing,
whether it's in brick or whether it's in carpet, those businesses have
shown no uptick at all. Jewelry had a bad Christmas ... and it stayed
that way."
Buffett sees no respite from the housing slump.
"I think this is going to be fairly long and fairly deep, but who
knows," he said.
In March, Forbes magazine pegged Buffett's net worth at $62 billion,
ahead of Mexican tycoon Carlos Slim's $60 billion and Microsoft Corp
(MSFT.O) Chairman Bill Gates's $58 billion. Gates is a friend of
Buffett and a Berkshire director.
Ahmed