While all doomsayers on Indian equities have indeed pretty much written off our stock market in 2012 citing amongst all; expensive relative valuation, earnings downgrade, sluggish macro and continued & persistent inflation etc., the markets YTD (since Jan 2, 2012) now returns around 4.9% and not bad for a beginning, I might add.
The earnings season kicks off tomorrow with the Infosys Technologies reporting and looks like it would be a cracker of an earnings season. What everybody is really paranoid about is the future earnings and outlook for the markets; but sometimes it is human psyche that in the penchant for looking ahead and at opportunities we miss out on what we have today, also forget to collect the hanging fruit which could have been easily savored.
Anyways, on the session that happened today; I must admit that am sure that the naysayers would be wanted it desperately for the markets to drift down, but with every passing hour the market powered it’s way up and the bulls would be happy and the doomsayers wanting to forget the session. The real wonder would happen if over the course of the earnings season (over the next couple of weeks) we drift upwards and close January 2012 by double digit returns. In that event, the question that could come up is – does it really set the tone for the year ahead?
Just to recall, 2011 was just the kind of start we did not want; with the market tanking around 11% in a single month and post that we all know what had happened, so for all those who say that equities are stupid asset class, are just for punting and you always lose money, it could be a golden opportunity to make a killing.
Early days still; since December 2012 is far away. For now it appears that we could close January 2012 with decent gains.
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