Saturday, June 18, 2022

Bigger things yet to come

 *Bigger things yet to come*

Slightly long message. Took some time to compile. Do read !!

FII sold 7819 cr (1 billion $) yesterday (17 June)

DII bought 6087 cr yesterday (17 June)

Continued DII buying is one of the major reason as to why indian markets are still holding on & has been able to withstand global liquidity tightening with more than 2.25 lac cr of FII selling since Oct 21. 

A decade ago nobody would have imagined such an equation of strength for DIIs..

Nifty trailing PE during Covid lows was 17.2 times when Nifty touched 7610. Those times were uncertain & being doubtful was natural. Investors who understood the risk & reward went all in. Honestly there were very few. Even the most savvy came in when Nifty went up again to 9000 odd. Nifty trailing PE was then around 19 times. Current Nifty trailing PE is already below 19. So valuations are already in comfortable zone. Remember everyone wanted to invest at 29 times PE when Nifty was near 18500 😀😀

Can the Nifty fall further 10% from current levels ?? Nobody knows 🤔🤔

10 years from here. Certainly higher & upwards 🚀🚀

Times like these, Investors should shift focus to what all can happen over a decade instead of worrying about days & months. 

*Bigger things yet to come*

Relatively we are still the fastest growing economy in the world even at 6% to 7% GDP growth. By the end of this decade, India will certainly be the 3rd largest economy in the world. 

Think of times when EPFO raises equity limit from 15% currently to 25% for investment of its retrial funds corpus. This may happen sooner then later. And may be even higher during later years.

Mutual fund investors count grows from 13 cr (end of May 22) to probably 100 cr plus count a decade from now..

Now comes the most interesting part. Since we all need anchor to support our bets going forward !! 

*Consider this*

60 equity mutual fund schemes to have completed 10 year track record as on 31st Dec 2021 delivered average 21.57% CAGR returns during the decade (best scheme delivered 33.80% & worst delivered 9.21% CAGR)

210 equity mutual fund schemes (including the 60 above) with a 10 years track record as on Dec 2021 delivered average 17.19% CAGR return from 1st Jan 2012 till 31st Dec 21. Best scheme having delivered 27.48% & worst being 8.29% CAGR.

Next 10 years can equity mutual funds deliver average 12% return. Be it past returns or future growth. On both accounts this looks achievable. This number of 12% is just equivalent to nominal GDP growth: Real GDP 6-7% plus inflation of 5-6%. Good companies should be able to grow earnings atleast at nominal GDP growth rate if not better.

If yes, then this is all that matters. Don’t wait for the bottom. 

One more interesting observation. During both the decades, even the worst equity scheme outperformed average 10 year FD returns of that decade 😀😀

So where is the risk ?? 

In investing or not investing ??

Yesterday I shared a chart named Mera wala NFO..


One can also invest in that for the horizon of 5-10 years.



Sampark Online Finserv LLP


#samparkonline #learnb4uearn #sip #dildostidimag 


Disclaimer: The views are for the education purpose only and some or all the texts/datas may be copied from different sources


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Refit said...
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