Market
is scaling every day. Investors are after Reliance. On the other side of the
coin i.e. apart from 15/16 stocks there is no significant movement about other
nifty stocks, forget about Mid Cap and Small Cap.
There
is lesson to be learnt from history here…, in
1990s, the Imperial Palace in Tokyo of the Japanese Emperor was worth more than
all combined real estate in California. It told you that Japanese real estate
was extremely overvalued. Similarly, in 1999, Infosys NSE 0.47 % was worth more
than the entire market cap of the cement and steel sector in 1999. Wipro NSE
-1.11 % was worth more than the market cap of the entire cement and steel sector. In 2007, DLF was worth more than the market cap of the entire
pharma sector. Today, for example, FANGMAN stocks (Facebook, Apple, Google,
NVIDIA, Microsoft, Amazon and Netflix) are worth more than the GDP of different
countries, put together. We all know what happened next. Markets would be
behaving in unexpected way going forward for at least another two quarters.
Asset allocation should be the mantra including
debt and Gold. The gap between the yield to maturity of credit funds and the
repo, reverse repo rate of the Indian market is at its highest. This indicates
that credit risk funds are at their lowest valuation making it one of the most
interesting categories to invest in lump sum for the long term.
The generic SIP is all season investment vehicle
should be pursued very strongly segregating between different class of asset depending
upon the investment horizon and risk appetite.
