Liquidity has the power to intoxicate. The combination of negative interest rates and liquidity is a potion whose impact we don’t know. There is no precedent of how it will work. This is the perfect setting to reimagine conventional economics. The top down club feels that it is inevitable for valuations to remain high. The bottom up club gladly accepts this premise as a TINA factor. So, with both schools of equity investing converging on higher valuations as an inescapable necessity of our times, the focus shifts to which market will be preferred. India is a Nation on a slow, protracted recovery. But, the stock market seems to reflect an emerging resurgence. The lack of global alternatives is a reality that won’t change anytime soon. Investing in a more ebullient market mood requires a balanced approach. One can’t ignore the lack of alternatives. One must not get too carried away. The need of the hour is the right balance between optimism and caution. That is hardly easy.
You never get the high and you never get the low- Walter Schloss.