Vacation

Am in India on vacation. Good to be nice and warm again !

Fund managers or day traders

The Indian stock market is on a roll (as are many others around the world) but this post is not about virtues of Indian equities. Its about the useless (global) gyan that is regularly dished out by "experts" on television channels.

Sample this:
Anchor to "expert" - With the markets at 9,000 what would you advise investors to buy?
"Expert's" answer - The markets look expensive from a short term perspective but if one has a longer term view then one can buy if markets correct by around 300 points!!

Is a mere 300 point drop enough to make markets inexpensive? Just to put things in perspective, 300 points on the sensex closing of 8,951 is a mere 3.35%. If thats all that is needed to make the Indian market inexpensive then it must have very low volatility and low returns. Any person who even remotely follows Indian equities knows this is not true. Indian markets have more than tripled over the past 30 months and risen more than 35% over the course of this year. They have fallen or risen by 10% within a month more than once this year. Given this, a 3% correction should really be insignificant and definitely not enough to make the apparently expensive valuations cheap.

Either that or our "expert" must be a master at timing the market, of the order not seen in the world before. Else making statements about scalping 3%, from what he believes to be an expensive market, seems very adventurous and airing such views on a television channel (watched mostly by small time investors with limited resources), very inappropriate.

This "expert" is not alone in making cliched statements about the markets on television. But maybe, thats becase the real experts are busy trying to make money (without taking undue risk) and dont have time for regular visits to TV studios.
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P.S. This is an observation on a show aired on CNBC. I had mentioned the name of the anchor and the "expert" in my original post but removed it as advised by a cool dude friend of mine