[warrioraks]

Originally Posted by PearlJam

Articles like "Is the Sensex bubble about to burst?" always makes me cringe.

The market is always forward looking. Nobody in the world will know with certainty, at what point a bubble is reached

Although I agree with you on analysts’ (lack of) capability in predicting bubbles but not sure why you called the article cringeworthy. If you don’t mind, what sections of the article did you find un-palatable?

[PearlJam]

Originally Posted by warrioraks

Although I agree with you on analysts’ (lack of) capability in predicting bubbles but not sure why you called the article cringeworthy. If you don’t mind, what sections of the article did you find un-palatable?

SSAA is definitely one of the better authors, and I love most of his articles. However, the mentioned article is not one of his best.

I called it cringe-worthy because we have been seeing countless articles on exactly this topic, in the last few months, from various authors. In the meantime, the Sensex/Nifty have been making merry, ignoring all so called reasoning (of course, we don't know what will happen tomorrow. Nobody knows for sure). Sorry in case you were offended.

In the mentioned article, he tries to cover himself both ways. Examples:

1. "Yes, it is a bubble. But it may last some time since ...<snip>... No policy reversal is imminent, so the bubble is not about to burst" - So how much is "some time"? 1 week? 1 month? 1 year? 2 years? P/E has been quite high for more than 5 years now (if we leave out the temporary Covid related crash), compared to long term averages.
2. And then, he compares this with 2013. "Will this happen again? Optimists believe that, learning from experience, the Fed will give ample notice of any future rise in interest rates, avoiding any panicky tantrum. If so, rather than bursting, the emerging markets balloon may deflate gradually. Nonetheless deflation means a big reverse flow of dollars back to the US and other safe havens.". Again, pick one!
3. He says that P/E ratios are high. Then he says that some economists believe that the high P/Es are justified.

Notice how he plays it both ways in each of the above. Ofcourse, he won't stick his neck out too much, since he knows that nobody can really predict the timeline. Nor are we asking him to.

In the end, he says "I see merit in both sides of the argument. On balance I side with the pessimists." - see how narrow the final gap is between the two sides? To give him credit, at least he picked a side!

I would have summarized the whole thing into this: Question: "Is the Sensex bubble about to burst?". Answer: "I don't know"

[warrioraks]

Originally Posted by PearlJam

Sorry in case you were offended.

No sir, not at all. I was just inquisitive.

In the mentioned article, he tries to cover himself both ways.

In the end, he says "I see merit in both sides of the argument. On balance I side with the pessimists." - see how narrow the final gap is between the two sides? To give him credit, at least he picked a side!

For some reason, this is the exact reason I liked the article and called it balanced in the initial post. Rather than hammering his opinion, he summarised both sides of the coin and has kept it open ended. Let the reader judge and decide.

I would have summarized the whole thing into this: Question: "Is the Sensex bubble about to burst?". Answer: "I don't know"

Maybe I get it now, the title of the article does suggest there is an answer inside

[Old_Salt]

Started investing slowly over the past one year, as and when the FDs matured and realised after listening to countless experts, that “ They Know Nothing, Jon Snow”.

Since May, Everyone kept saying, “ Winter is coming”, winter aaye aur chali bhi gaye and here we are at 50k.
But i do understand this , that the economy should be in a state to support this rise in the Sensex, which I doubt.
Waiting for the budget day, kyonki picture abhi baaki hain, mere dost.

[alpha1]

Originally Posted by Old_Salt

Started investing slowly over the past one year, as and when the FDs matured and realised after listening to countless experts, that “ They Know Nothing, Jon Snow”.

Since May, Everyone kept saying, “ Winter is coming”, winter aaye aur chali bhi gaye and here we are at 50k.
But i do understand this , that the economy should be in a state to support this rise in the Sensex, which I doubt.
Waiting for the budget day, kyonki picture abhi baaki hain, mere dost.

Any move by US Fed or ECB to increase interest rates will see our stock market crashing fast. Keep a tab on them.

[Achalchoukhany]

Originally Posted by alpha1

Any move by US Fed or ECB to increase interest rates will see our stock market crashing fast. Keep a tab on them.

This is just so true. This surge in stock markets all across the globe is due to easily availability of liquidity. Once the interest rates are increased, FII's will withdraw.

[KGS]

Sensex at 50k is indeed a milestone for the share market of India but not a very special one for which so much of noise need to be created as if we all have done something really special.

Share market will run its normal course and there is no need to make it a big event. There will always be bull and bear cycles. Alas our media is more focused on creating some hype and buzz to gain the TRP. Everything is like an event for these Event management companies fondly known as new channels.

Due to the recent pandemic, there was a great surge in new number of demat accounts opened. Also with increased penetration of internet and low cost online demat service providers, it has become easy for anyone to participate in this growth rally of Indian Share market. March 2020 also gave optimists a great chance to jump in this bandwagon and within 6-10 months earn a hefty profit.

When someone tastes success in share market it provokes the person to invest more and look for even more returns. For some it may turn true but for some naive , ill-informed people it will crash sooner rather than later.

So, my personal opinion in this present scenario of Sensex and Nifty reaching new heights, we need to be cautious with putting large amount in market at this stage, rather book some profit, rebalance your portfolio and wait for 2-3 months to see where this market is going. Current PE value of Nifty and Sensex is too high to sustain.

[amitkuch]

Just like "Fill it and forget it" I have been following a golden rule for investment, "invest and forget".
My investment are into mutual funds and I am siting at 30% XIRR in those investments and this amount is locked for at least 10 years.
Basically, in the long term, these ups and downs don't matter. My investments were in negative in March when covid19 hit us. I consistently continued my SIPs in those hard times.