These are the words of Philip Lynch, the chief executive officer of Nomura Asia Holding, who talked to Economic Times.
India is the ‘place to be’ for long-term investors, believes Lynch. “Just cheer up… it’s not so bad out here,” is his advice. As he says:
“Not everything is bad… to list a few positives, corporates are in good shape, leverage is low and corporate cash balances are high. I don’t think governments will allow asset prices to decline beyond a point. Quantitative easing might be coming to an end, but governments will make sure there is enough liquidity and fiscal support. I am not saying that next year or year after that will be particularly smooth sailing for Asian countries. But then, if you want long-term opportunities, Asia, in general, and India, in particular, are the places to be.”
Dear Mr. Lynch, when governments do not allow asset prices to decline beyond a point, what they are really doing is creating an artificial bottom for prices of assets like stocks.
Such artificial bottoms, you would know, have been the root cause of all financial & economic crises the world has seen in the past.
So Safal Niveshak doesn’t agree that governments supporting asset prices is a good thing for investors. In fact, doing this is like laying the foundation for the next big crisis.
Anyways, here is Lynch’s view on the Indian markets:
“…Indian market should touch 22,100 by end of this year. We’re expecting a rally from here.”
We fail to understand why people are always trying to predict the future of stock markets, especially when probability suggests that they are bound to fail in their prediction.
But then, Warren Buffett was so right when he said, “We’ve long felt that the only value of stock forecasters is to make fortune tellers look good. Even now, Charlie (Buffett’s business partner) and I continue to believe that short-term market forecasts are poison and should be kept locked up in a safe place, away from children and also from grown-ups who behave in the market like children.”
The general mood of people around me (friends, colleagues, wellwishers) is – Real estate prices always go up. Even my barber has investment advice for me – invest in properties. People seem greedy now for real estate, so I am being fearful about it. Just yesterday I overheard somebody in my workplace – 55% of the new residential properties in Gurgaon are unoccupied.
Wanted to know, your take on current situation of inflated prices in the residential real estate. Of course my questions seems like I am asking you for another forecast but I am not. I am guessing, you must have spent some time thinking about this topic in your “leisure thinking hours” 🙂 – curious to know your point of view.