We are 8 Years into this Bull Market.
It’s been the slowest ever in pace of returns.
Corrections are insignificant in the longer run
It’s been a very hesitant one.
Sensex can triple in next 5 Years. So just stay put. Don’t try to time this.
How much Sensex falls : Drawdown effect
94% of days you were down. That’s why equities generate premium. Every 5% correction tests your character. And if you pass that test — Superior returns awaits you.
Liquidity is all hearsay. As for every buyer there is a seller.
Liquidity is the force of the bid. If Markets are gaining there is more force in the bid. If Markets are falling force is in the offer.
Markets are Trading at 18 times forward earnings.
Markets are a forward looking animal.
PE is not a good metric to judge.
Price to book multiple is a good method to value .
India’s range is 2-5.5
We are at 3 right now — In the middle.
Valuations have usefulness at extremes. We are not there right now.
Valuations are relative.
10 year bond is at 6.5%
Bonds are available at 16 year earnings whereas equities are available at 18 Years.
Now bonds will expire in 10 years whereas equities will continue their earnings.
Timing vs Time
Since 1995 5556 days Markets traded.
Index gained 900% but best 100 days have 600% of that Returns and if you somehow avoided those days because of trying to time the market then your returns would have fallen to just 300% from 900%
Source – Morningstar conference