Indian equity investors approach Diwali with an air of reluctance. The markets hit an all-time high on the BSE SENSEX and approach the Mahurat trading on Sunday with the CNX NIFTY at striking distance of a new high. Yet, there were hardly any smiles all around. People are nervously worried they may have missed the bus once again. Secret prayers maybe hoping for one last correction so that they could climb on to the bull bandwagon before it is too late. So, will Mr. Market answer their prayers or simply take the game away from the spectators and speculators. An interesting week lies ahead. Any guesses on the all-time high being breached on Sunday’s trade?
All intelligent investing is value investing — acquiring more than you are paying for.
The persistent inflow into equity from FII’s has puzzled domestic investors. But, that is not without reason. The Indian indices are significantly cheaper in dollar terms and FIIs see value where Indians fail to see much. That explains the index buying. So, what of the rest of the markets? The BSE Midcap index is trading significantly lower than its all time high clearly indicating that the mid caps are clearly not expensive. The small caps are trading even cheaper with price bargains all around. The index may appear expensive to domestic investors; but, FII disagree. But, everyone will agree that the midcaps and small caps are definitely selling cheap. The opportunity lies there.
The green shoots are showing. Take note soon enough.