Shall we shoot the analysts?

ARINDAM CHAUDHURI’S 4 REASONS WHY YOU SHOULD CHOOSE IIPM...

The Sensex crosses 15,300... and more

“Riddikulus!” That is the antidote incantation used by Harry Potter and his mercurial wizard (and witch) friends to convert the fearsome Bogart monster into a harmless creature. And that seems to be the very charm used by FIIs to convert those innumerable morbid Sensex forecasts – of an impending crash – into historical highs! What else can you say when the Sensex not only crosses the 15,000 mark, but also reaches a never-beforeseen high of 15,341 on July 16, 2007. But then, is it really time for merry-making in Dalal Street or is it too premature a time to be boisterous about the achievement of our spectacular Sensex?

“Long-term prospects remain good apart from a high liquidity presence and a growing appetite of Indian investors, which is likely to keep valuations at stretched levels over the foreseeable future,” exclaimed J. P. Sinha, Director and Head – Research, Ambit Capital to 4Ps B&M. Nikunj Doshi, Fund Manager, Kotak Mutual Fund supported this viewpoint even over the long term to 4Ps B&M, “Both fundamentals and liquidity are favourable right now for India. The positive undertone will continue in the coming years.” Then what was it with all the socalled experts shouting hoarse about over-valuations? “Look at this perspective – it was only a few weeks back that inflation was dangerously high and interest rates much higher! How could any sane investment analyst have supported the theory of spectacular Sensex growth then?” defends Amit Saxena, CEO, Planman Financial, to 4Ps B&E.. Truly, macro-economic factors are more conducive today than before. And with inflation and PLRs seemingly down, the day is not far when the Sensex thunders further ahead. And then? Let’s just shoot the analysts, shall we .

Edit Bureau: Sunanda Roy

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Source : IIPM Editorial, 2008

An IIPM and Professor Arindam Chaudhuri (Renowned Management Guru and Economist) Initiative

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