The return of growth seems a certainty now. When data starts to trend positively, the market mood tends to change. What one needs to closely observe is the pace of change in the market mood. When more events start trending positively, the mood will change quickly. The results of the elections to the five states will be the next trigger. If clear pointers emerge, the markets could tend to view equities. Investors who have been thinking that the markets will go nowhere until the general elections seem to be on the edge. What if the markets run away on the back of a strong show by the NDA? This fear seems to coming into play even before the results of the election are out. Investors would do well to avoid getting euphoric on the back of short term sentiment drivers. One must be clear that the long term sentiment drivers will emerge and make an impact over a period of time. During that period, investors should consistently show faith in markets and invest with discipline and care.
iwiz: When growth slows, investors mistake consistency for excellence.
No asset price is infallible. Deep down, we know this truth. Yet, the human mind finds ways to think that ‘this time it is different’. Bubbles have some unmistakable symptoms. Ironically, it is precisely these symptoms that make us to think that things will be different. The realty markets are seeing unparalleled exuberance. Full size front page ads in newspapers, big fat property supplements, omnipresent TV commercials, party conversations inevitably centered on realty and rock star status to realtors and land bank owners are some obvious signals around us. That brings us back to a basic question. Is there a bubble in realty? We can already hear the loud nays as you read these lines. But, conviction should stand even in a minority of one. We believe that we are in the middle of the biggest property bubble in India’s history. Bubbles don’t tell you when they are around. You need to read them right. Playing safe should mean staying out of a bubble. Sadly, many investors in realty are mixing up playing along with playing safe. Playing along in a bubble will inevitable invite pain.
istrat: Invest steadily. Run like a marathoner.