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The Sensex can rise by 50%, or it can fall by 50%

“See I told you that the markets are going to rise,” was what the anchor’s face suggested as he read through his Friday market update on the business channel.

And why not, given that the BSE-Sensex’s 6.1% rise during the week gone by has raised hopes that what we saw during the past few weeks was just a passing phase of correction in stock prices, or so it seems.

“All is well!” the anchor said.

The expert on the other side of the table was confused whether he had just heard a statement or was it a question.

Anyways, he was called on the programme to give his views, so he said, “Well, I would say that things are definitely looking better now. And if people don’t buy shares now, they will regret after 18 months!”

“Hmmm,” said the anchor as if he understood whatever the expert was saying, which is rare.

“Yeah, the market has shown a lot of courage, though we see a lot of uncertainty over the next 12-15 months.”

“You mean the markets will continue to remain volatile over the next 12-15 months?”

“Yes, I was just coming to that. I think the world looks very messy now.”

My mind wandered to Messi who was playing in India for the first time ever, but I tried concentrating back on what the expert was saying about the stock markets, as this seemed more entertaining.

“So I think the world economy looks a very bad place as of now. The US and Europe are in big trouble. BRIC economies are not doing any better. Africa is anyways struggling as always. The Middle East is burning. South Americans are spending more time on football and less on working to improve their GDP.

“Oops!” the anchor’s face turned sad.

“Yeah, so what remains is Japan, on which my team of strategists has lost all hope. And then Australia, it anyways doesn’t play a major role in the global economy. So that’s it.”

“And what’s your view on the Indian markets?”

“As I just said, people will regret after 18 months if they don’t invest in Indian stocks now.”

“With so much bad news everywhere, what makes you think so?”

“You see one of the biggest reasons India was underperforming recently was due to high corruption. Now, after the Anna Hazare fasting, I think we are very close to solving this problem, so that’s great.”

“Hey you went to Anna’s show at the Ramlila Ground?”

“No, I missed that. I was in the US that time, on a road show to raise money for an Indian company through our investment banking division.”

“I was there, fasting along with Anna, and it was such a great feeling,” the anchor said with pride in his voice.

“Anyways, coming back to India, I think things look great here.”

“But what’s your view on interest rates and inflation? Both are rising.”

“Yeah, but I believe these issues will get over in the next few months. One good monsoon in India, and we will see inflation coming down.”

“Great, so what’s your overall view on the Sensex?”

“We have a target of 24,500 for the Sensex for the next 18 months, but…”

“But what?” the anchor interrupted.

“But you see, we also think there’s a risk that the markets can fall by 50% from here on.”

“You mean the Sensex can rise by 50% or it can fall by 50%?”

“I think so. This is my view after a detailed analysis done by my research team.”

“We’ll see you after the break…” the anchor announced.

I managed to catch the expert wink at the anchor, as we moved into the break.

Anyways, I couldn’t watch the rest of the entertainment because my wife wanted to catch up on the repeat telecast of her favourite soap opera.

“I wish I could get a break from my wife as well,” I muttered under my breath while sitting down to write this post with a heavy head.

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About the Author

Vishal Khandelwal is the founder of Safal Niveshak. He works with small investors to help them become smart and independent in their stock market investing decisions. He is a SEBI registered Research Analyst. Connect with Vishal on Twitter.

Comments

  1. Hi,

    These shows happen every day on every business news channel. No need to talk about stock predictions by the self decalred Stock Analyst

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