I was browsing through morning newspaper when the following headlines caught my eye –
And another similar optimistic one was present in the online edition of the same newspaper –
“2014 to be a hot year for equities” (source- Economic Times).
The first thought which crossed my mind after seeing such eye-catching headlines was that everybody is turning bullish these days. So by being cautious as usual, was I being stupid?
And to tell you the truth, I have personally observed that during last 6 months or so, people have become more comfortable, or rather more ‘confident’ talking about investing and ‘making-money’ in stock markets. So is it that just because everyone else one has started talking about it, and business channels are discussing number like 25,000 for Sensex and 7500 for Nifty, does it mean that 2014 would a good year for stock markets? To be brutally honest with you, I don’t know. And please understand that in this world, Nobody can predict anything with 100% confidence.
But remember, there is a very thin line between confidence and over-confidence. And one generally does not realize when one crosses that line.
And with current PE close to 18.5 (Market PE details), the Indian markets are not very cheap. There may be some sectors which might be actually cheap. But overall large cap space is not that cheap as the headlines may make it appear like. So take a sensible call, weigh your options and your risk appetite. There are some big newsflow scheduled for 2014 (general elections, new banking license). Keep a sensible head on your shoulders and be greedy when others are fearful.