Completely in contrast to February last year, the markets have been in a positive mood this year.
The benchmark indices have moved up over 5.5% over the past 45 days or an even better almost 7.5% over the past 30 odd days.
And as soon as such up swings happen, the “experts” in the market all start jumping around with their new estimates of where the markets are headed.
Allow us to share a bit of history with you and also explain on why I do so.
What does this table mean?
If we see the growth story of the Indian economy from $2 Trillion to $2.6 Trillion which is a 32% growth in the economy over the past 5 years, the markets have gone up by around 62%.
With a lot of government & private agencies talking about India reaching a $5 Trillion economy over the next 7-8 years, one can only imagine where the markets would be heading.
And that’s exactly the only reason we said, if Sensex is at 40,000, so what?
We are not looking for short term upsides or short term blips. Similarly, we do not even bother for short term falls.
We know that India as an economy is probably the fastest growing economy and short term movements or short term rumours, positive or negative, will not hamper its growth prospects.
Let me add another column to the table:
The added column tells you the complete story.
If you are invested in well researched & fundamentally rock solid businesses, you will not just beat the returns given by the broad indices, but beat them by a BIG MARGIN.
So, before we conclude, let us give you a chance to do a small exercise. Just fill up the numbers in the below table and send it across to us on firstname.lastname@example.org. It’ll be amazing to understand the views of fellow long term investors:
We look forward to hearing from you.