Analysis as why we can have golden years and gold for foreign companies as well and PE GRAPH FOR NIFTY OVER LAST 12 YEARS...

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From: goeldinesh24@gmail.com Date: Wed, 7 Apr 2010 17:54:50 To: anindya banerjee<anindya1979@gmail.com>

Subject: Re: PE GRAPH FOR NIFTY OVER LAST 12 YEARS...

The underlying trend and compulsions are against the pe chart. This time it is one sided story, I can agree to your analysis on corrections and profit booking linked to again artificial increase in commodity prices. This fall will not be like of great depression and 2008. Players have become cautious.

Flow of money , increase in ppp and disposable surplus and retail capital creation will lead to purchasing by large masses. Eventually leading to revival of the corporate earnings., appreciation in rupee, the only danger will be trade deficit and current account deficit. This will be difficult to manage as more of dollar inflows without dollar earnings will be there. Ours will become dollar and euro based economy in next five years and under pressure government will allow profit repatriation as india is not china and even china has changed its policy. Contrary possibilities which can neutralise this is reduced dependence on imports of crude, which is likely in next 5 years.

Other way of looking at the same thought is the fact that india will gain in terms of reserves, appreciation in rupee though will make india goods a bit less competitive but will have to be compared with yuan and other sea currencies.

Major things that shall help achieve overall objective of self reliance etc
1. Top 3 position in at least 20 industries
2. Large debt padding with international lenders lending for 15 yrs and more
3.Trading of corporate debt in india and international markets with rules of capital account convertibility with restriction on tenor of more than 15 years. Diversified DSRA and international trade guarantee fund for rated and disclosure papers can take care of the issues and address some of critical issues.

Securitization of individual receivables just like corporate , agri and retail assets through PTC's is another big business opportunity.

To conclude, it is important to give wheitage that there are industries based on technologies that will outperform and also education and health care which will through open next wave.

Technology is still have to come in defence and security.

So, with marginal corrections, trend , as has been written in the past three years, is for long term bull run due to core, infra, retail, automobile, next wave retail loans etc and after 10 years we should bother about bubble in india just like in west of 2008.

Happy Investing!
Personal views with diclaimer of no risk and laibility!
Dinesh Goel