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▪️ If Adani shares are overvalued by 85%, how much is the Indian stock market overvalued?
▪️ What keeps the bubble going?
▪️ Should you stay invested?
Long thread Warning! I hope it will be worth it.
(1/n)
▪️ What keeps the bubble going?
▪️ Should you stay invested?
Long thread Warning! I hope it will be worth it.
(1/n)
How can we estimate the size of the bubble?
BSE Sensex averaged 20,120 in FY 2013-14. NIFTY-50 averaged at 6009. In Dec-2022, Sensex hit an all-time high of 63,583 and NIFTY hit 18,887.
Sensex rose by 3.16x times and NIFTY by 3.14x in 8 years. What's wrong with this?
(2/n)
BSE Sensex averaged 20,120 in FY 2013-14. NIFTY-50 averaged at 6009. In Dec-2022, Sensex hit an all-time high of 63,583 and NIFTY hit 18,887.
Sensex rose by 3.16x times and NIFTY by 3.14x in 8 years. What's wrong with this?
(2/n)
There's nothing wrong with this if the economy also grew at the same pace. But it didn't.
GDP growth - 1.56x
Exports - 1.43x
Forex Reserves - 1.74x
It's nowhere close to Sensex growth of 3.14x. One can argue that Markets and the Economy are not linked. Fair enough.
(3/n)
GDP growth - 1.56x
Exports - 1.43x
Forex Reserves - 1.74x
It's nowhere close to Sensex growth of 3.14x. One can argue that Markets and the Economy are not linked. Fair enough.
(3/n)
