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 !