The future of the market

Just last month, I dwelt extensively on the overvaluation building up in the main indices. Besides the details given in that article, there were other indicators, which were building up and visible to real-time trackers, like this columnist, but could not be talked about because as they were happening, it was just an opinion, but once it has happened, it turns into a fact. For one, remember what Adam Smith said a long time back, "Markets will so compose their affairs, as to rob most of the people of most of their money." In spirit, it's a beautiful quote and you would do well to keep it in mind for your future safety. Another good quote is: "The market is a killing machine, a seesaw that's going to go down when the maximum number of people are loaded onto one side of the consensus." Just a few days back, we were pretty sanguine that 'nothing could go wrong' and this bull run was, what, for the next 50 years (yes, I heard this on TV). At 27 times earnings, we had an earnings yield of around 3 per cent, while bonds are yielding 7.5 per cent. The LTCG impost is toothless, because its very announcement may have set the top of the market for maybe one-two years. Thanks to the grandfathering clause, the government only collects the tax if

This article was originally published on April 06, 2018.