Why Invest In India?

HI FRIENDS

DO U ALL KNOW....

WHY TO INVEST IN INDIA ?

India has had robust economic growth since 1991 when the government reversed its socialist-inspired policy of a large public sector with extensive controls on the private sector and began to liberalize the economy. The economy has responded well by posting strong growth in many sectors. A 2003 report by Goldman Sachs predicts that India's economy would be the third largest by 2050.

With over 20 million shareholders, India has the third largest investor base in the world after the USA and Japan. Over 9,000 companies are listed on the stock exchanges, which are serviced by approximately 7,500 stockbrokers. The Indian capital market is significant in terms of the degree of development, volume of trading and its tremendous growth potential.

India's market capitalization was amongst the highest among the emerging markets. Total market capitalisation of the BSE as on July 31, 1997 was Rs 5573.07 billion growing by 18 percent over a period of twelve months and as of April 2000 was over $300 billion. As of end-March 2000, the assets under management by the Indian MF industry stood at a staggering Rs 1,13,005 crore.

There is a large presence of FIIs in the Indian capital market with over 451 FIIs and 38 foreign brokers registered with SEBI. The cumulative investment of FIIs in the Indian stock market stood at US$ 6.59 billion in July 1996 and US $12 billion in April 2000.

ROUNAK

More I listen to economists and financial gurus, my belief about their stupidity gets confirmed. Over a period of time they have tried to make these subjects pure mathematics, they even tried chaos theory to explain behavior in stock market but it could not be. Economics and markets are more of common sense rather than rocket science which these people try to make, they will constantly feed u and you will believe , whatever they say. Who could forget two noble laureates theory about derivative trading and busting of LTCM. Simple truth is markets can not be predicted even than I am amazed to see people asking technical analyists about level in market. It is fear and greed which forces us to make irrational decision . look at these analysts , since 6000
level they are crying for dooms day now it has come at level of 12000 level so these people are saying t told you. If markets are rising it has to fall some day or if markets are falling it has to rise some day and if u consistently take one position u are going to be correct some time. Once I also out of my greed belived amar akabar a tech analyst at money control and bought silicon valley where he had predicted it to go up to the level of 35. Truth is in financial markets there are too many variables which can not be mathematically modeled. The biggest variable is emotions which can not be modeled at all . Still these gurus try to to do analysis based on a model which would have made certain assumptions, in real lilfe u will never find a situation when all these assumptions would be satisfied. So any prediction on basis of these models may or may not true. Take a small example in a normal market there is a share X whose prices are neither rising nor falling, one fine day it announces big expansion plan or bonus or some good news. Now tell me which technical analysis can predict the movement of this share x, it simply can not be. So please do not run after people asking question how market will behave in future, some would say it will fall further , some would say it will find support at this level, but none would satisfy u . you have to find solution yourselves based on you risk profile. In long run only fundamentals of our economy are going to decide which way market will move. In my opinion we are in transition to developed economy. It will at least take 15 to 20 years to reach that level. Money can be made in this transition phase . next generation is not going to forgive u if u loose this opportunity. The reason for this is the demographic profile of our country where 65% of population is between 25-40 years. this is bound to increase consumption and will result in growth of manufacturing and services. So sale of bikes would keep on increasing if bajaj auto performs well its prices will increase if not somebody else will fill the vacuumed but sales of bikes would not fall till demographic profile or taste changes. Who will benefit from this depend on management and your job is to find such management and promoters. Similar things will happen in other sectors too. We have just started our growth journey don’t miss it . There may be short blips but long-term future is bright. Look at china for last two years it is trying to soft-land its economy but failed. If India continues to grow these FIIs have to come back. So believe in u and demography of you country don’t run after advices. I am not an expert and these thoughts are based on rational thinking.