We will see some old and historical market trends
Various bear and bull cycles discussion
Returns markets have given over long term
Equities vs Real Estate discussion
2. www.nooreshtech.co.in
Equities and Questions
• CAGR returns of Indian Markets ?
• Inflation is at 10% so how much should you expect
from equities or any other asset?
• Should you buy direct equities or Mutual Funds/ETFs or
ULIPS.
• Time in the Market is important or timing the market is
important.
• What is the long term outlook of Indian Equity Markets
?
• Should Real Estate and FD be 99.5% of your networth.
6. www.nooreshtech.co.in
Buy Real Estate, Buy Loans, Spend
Money and if you have money left
make some FDs and buy some
Gold.
For some fun trade equities !! For
more thrill trade derivatives.
7. www.nooreshtech.co.in
Real Returns
• Will your Salary Increase equivalent to the Inflation
forever ?
• Will Inflation go down in India ?
• Will you get a Lottery ?
• If you think any of that is not going to happen you
would need Equity Investment. How much as part
of portfolio ? ( For that Jagoinvestor)
8. www.nooreshtech.co.in
Equity Markets are Scary
• In Bear Markets Nifty/Sensex drop by 55-60% and
story stocks by 90% ( example DLF / Unitech /
Suzlon from 2007 )
• In Bull Markets Nifty/Sensex go up by 3-8 times and
stocks 10-50-100x.
• But it is the downside which scares everyone as
people enter when there is euphoria.
• Nobody likes Temporary Loss for Long Term Gain.
14. www.nooreshtech.co.in
The ride wont be easy but neither is a job or a
business which gives you money at the end of
the year.
If you get ill you search the right doctor and go
to him. If you want to stay healthy you walk
or you go to the gym
But in equities if you are coming for a thrill, you
don’t need any one. But if you are serious find
a good advisor , trainer or learn it yourself .
17. www.nooreshtech.co.in
Sensex/Nifty CAGR Returns
16th Feb 1996
Sensex 3500
16th Feb
2016
Sensex 23381
16th Feb 1996
Nifty 1023
16th Feb 2016
Nifty 7108
Equities give a return of 15%
right over long term ( 20 yrs
is long enough ) ?
Your Mutual Fund , Financial
Planner , Market Gurus ,
Books say so right ?
19. www.nooreshtech.co.in
Then how does 16-17% come on Sensex
• In the period of 1979-1992 – Sensex went up by 40
times. In 4 years from 1988 to 1992 it went up 11
times.
• Were exchanges accessible to all investors across
India in the early 1980s ?
• How many mutual funds were present ? ( 0 private
mutual fund )
• How many companies closed shop ( delisted) for
every Infosys/Wipro/Dr Reddys and so on.
20. www.nooreshtech.co.in
But NSE ne bola 16%
• View from Money Life ( www.moneylife.in )
• NSE has taken a convenient 10-year period when Nifty has indeed delivered
an annualized return of 16%. What about the other 10-year periods? We
have analyzed the 10-year returns of the Nifty from March 1991 to
September 2013, with a six month frequency. Out of the 26 periods, the
Nifty delivered a return of 16% or greater in just seven periods, i.e. just
27% of the time. Much of the returns came in the massive bull-run
witnessed between 2003 to 2007. Had one invested in Sensex in 1992,
investors would have even faced negative returns after 10 years. Nifty was
not around in 1992 but the returns would have been similar. The 10-year
period from March 1992 to March 2002 would have resulted in a loss of 1%.
The investor would have had to sell his scooter and settle for bus rides. For
the 10-year periods ending September 2001 to March 2005, investors
would have had to settle for a return of less than 10%. The average of the
26 ten-year periods works out to 12%. NSE has chosen to present a
misleading picture of returns but arbitrarily choosing a start date and an
end date, all in the “investors’ interest”.
21. www.nooreshtech.co.in
Sensex – Its never been Better for equities in Last
10 -20-30 years.
• Although we see a lot of buzz about new highs on Sensex. This is after 6 years. Returns
of 6 years 0%. A 10 yr return is 14.8% ( this had a period of 2004-2007 bull market). A 20
year return is a just 9% ( this does not beat the fixed deposit return).
• We hear a lot of jazz about 15-19% CAGR on Sensex by every financial expert who
suggests buy and hold for long term. This data is not reliable because of the big run in
1980s. ( It went up 40 times in 1979-1992). We wont get a period ever in decades to
come? Also how many mutual funds were present in 1980s ? How many companies
closed shop for every Infosys/Wipro/Dr Reddys.
• So essentially CAGR growth in equities has been terrible over last 20 years. Its been
pathetic over the last 8-10 years. The conclusion in this case is the adage – Time in the
market is more important than timing the market is being tested for investors. Also the
15-17% CAGR of Sensex is unreliable.
• Statistically we believe the best times for investors are when 5-10-20 year CAGR returns
do not beat fixed returns and vice versa.
22. www.nooreshtech.co.in
You should buy at bottoms !!
Bottom after
Harshad Mehta
Scam 28th April
1993
Sensex 2100
16th Feb 2016
Sensex 23381
28th October
2008
Sensex 8500
16th Feb
2016
Sensex 23381
CAGR =
11.05%
CAGR =
12.7%
If you buy at 10k your
CAGR shifts to 12.7 %
23. www.nooreshtech.co.in
Sensex at 5725 in Feb 2000 Sensex in 2020
@ 10% CAGR for 20 years 38515
@12% CAGR for 20 years 55225
@15% CAGR for 20 years 93698
@ 16 % CAGR for 20 years Not writing it
Sensex at 16in Feb 2010 Sensex in 2020
@ 10% CAGR for 10 years 42086
@12% CAGR for 10 years 50395
@15% CAGR for 10 years 65643
@ 16 % CAGR for 10 years 71579
If you take from 21000 in
2008 to 2020. Even at 7%
CAGR it has to be 47000.
For how many years does it
hurt to buy at wrong times
24. www.nooreshtech.co.in
Why its not 2008 again ?
• 1992 – Harshad Mehta – Markets down 55-60%
• 2000 – Ketan Parekh – Markets down 55-60%
• 2008 - Financial Crisis – Markets down 55-60% .
Ramalingam Raju in jail.
• 2016 – No broad based run up or sectoral craziness
in 2012-2015.
• It could be a 8 yr cycle of fraud ? So which corporate
or individual goes to jail ?
26. www.nooreshtech.co.in
Wow Facts
• Out of the Top 20 stocks in 2007 only 10 remain in 2015 in the Top 20
weights.
• Out of top 20 in 2007 there are 4 stocks which are not part of Nifty. ( RPL
got merged in RIL ). This constituted 11.67% of Nifty.
• Out of the Top 10 weights in Nifty only 3 remain in Top 10 of 2015. These 3
constitutred 20.03% of Nifty and are now only constituting 14.95% of Nifty.
• The top 4 weights of 2015 Infosys/ hdfc bank / hdfc / itc now command a
weight of 28.85% but used to command only a weight of 9.95% in 2007 !! -
------------- ( WOW )
• Reliance Industries and Reliance Petroleum i.e RIL an RPL had a combined
weight of 14.56% and now its only Reliance with a weight of 5.91% --------
---------- ( WOW)
• Rcom was the 7th largest weightage in Nifty is no more part of it. Even
Unitech was at the 16th place.
• ONGC the 2nd largest weightage on Nifty is now at the 21st place. From
7.13% to 1.56%.
37. www.nooreshtech.co.in
Nifty – Quick Take on P-E
• Fy16 estimated EPS – 400-420
• FY 17 estimated EPS – 460-500. ( Now nobody gets this
right).
• Good P-E to buy 14-17 times Trailing.
• 5750-7000 is the range.
• With Ebidta margins/ROE at 20 year lows things can get
better from here and not worse in next 3-5 years.
• With a 25% drop from top and coming into decent
multiples. Risk-Reward favorable. Back to modi prices
with crude at 30$
39. www.nooreshtech.co.in
P-E of Real Estate
• When we look into equities Nifty at 22-28 P-E is
very expensive . Average at 14-18 P-E. Cheap at 10-
14 P-E. Rough Estimates.
Real Estate – 2
Bhk at 2 crores
in Mumbai
Monthly Rent =
50 k.
Annual Rent = 6
lakhs
Hassles for 2nd
Home =
Maintenance,
Tenants,
Brokerage and
so on.
Earnings = 6 lakhs.
Price = 2 cr.
P- E Multiple =
Price / Earnings=
20000000/600000
= 33.3
Is Real Estate
Undervalued ?
Do you need
diversification ?
40. www.nooreshtech.co.in
Compounding and Real Estate Myths
• Real Estate Doubles in 3 years = 26 % CAGR
• Real Estate Doubles in 5 years = 15% CAGR
The magic of real estate returns is not in the Real
Estate but in the leveraging of loans.
If you believe double in 3 years. A 2 cr flat would be
worth 20 cr in next 10 years and 200 cr in 20 years.
If you believe double in 5 years. It would be worth 8 cr
in next 10 years. 32 crores in 20 years.
41. www.nooreshtech.co.in
The Real Questions to Ask
• Will your Real Estate grow at 15% CAGR and 25% CAGR or at 5% or
10% or go down by 20% over next few years?
• Your Home Loan will remain at 10% ?
• Will your income grow at 15% and 25% for next 10/20/30 years.
• Will FD returns remain at 9-10% or go down to 4-7% in next 5-10
years.
• Equities have large drawdown's ( remember 60% fall in 2008) but
they do have large upsides ( remember 2004-2007). Do all your
assets have similar risk-rewards ? Do you need to think about your
equity exposure.
• If you want to prosper in equities think not of what you can do in
next 1 month but in next 10 years. Learn today to prosper
tomorrow.
• Learn fundamentals , technicals both and above all common
sense and statistics.
42. www.nooreshtech.co.in
Strategy
• In Equities now it does not matter how much returns
you make but what will matter what is the % of equities
in your networth.
• People get worried about 5 lakhs of equity going down
by 20% but have 20 lakhs in current and savings
account.
• We believe over the next 3-6-12 months Investors
should increase conviction and allocate more funds to
long term/medium term investments in direct
equities/mutual funds.
• This can happen only if you work hard , learn and stay
convinced to ride the good trend and be alert for
opportunities and risks.
43. www.nooreshtech.co.in
Selection is not as Important as
Allocation
• Random Portfolio Presentation in last year.
• Real Estate / Gold / Bonds
• So today is the time to allocate as much as possible
to equity.
• Beg Borrow Steal and Invest ---------- That’s my
personal view !! I can be totally wrong do ur
research
44. www.nooreshtech.co.in
Team Analyse India
Nooresh Merani
CEO - Analyse India
Cell: +91-9819225396
e-mail: nooreshtech@analyseindia.com
Ankit Chaudhary
Technical Analyst and Derivative Strategist - Analyse India
Cell: +91-9899899989
e-mail: ankit@analyseindia.com
45. www.nooreshtech.co.in
Disclaimer
As investment & trading consultants, Promoters, owners, families, relatives, friends and clients of www.nooreshtech.co.in maybe
having positions in stocks / securities mentioned on the web site
All recommendations in this website are based on subject of Technical Analysis and do not reflect the fundamental validity of the
stocks / securities. Authors / owners of Technical View by Nooresh will not be held responsible for any losses, financial or otherwise,
incurred. To clarify, a ‘user’ is defined as anybody that visitshttp://www.nooreshtech.co.in, regardless of whether or not the have
registered as a member of the website. ‘Site’ and the ‘community’ and‘www.nooreshtech.co.in’ are used interchangeably and refer
to the URL http://www.nooreshtech.co.in and all sub-domains. The administrators and owners ofhttp://www.nooreshtech.co.in do
not guarantee the reliability or completeness of any information provided on our site or in any hyperlink appearing on our site. Any
advice or information presented on the site has not been verified by http://www.nooreshtech.co.in and does not represent the
opinions of the same. Users of the site should not rely on the accuracy of any content on the site or assume any information they
read on the site to be factual.http://www.nooreshtech.co.in, its administrators or owners will not be liable for any loss or damage
caused by a user’s reliance on any information obtained from our site, or from a hyperlink found on our site. Members remain
responsible for their own investments and should always conduct their own independent research before making independent
investment decisions. If you choose to trade on the information, including but not limited to opinions or stock picks found
on http://www.nooreshtech.co.in or any hyperlinks found on the site, then you have made a conscious, willing, free and personal
decision to do so, and http://www.nooreshtech.co.in does not take any responsibility for this action.
By using http://www.nooreshtech.co.in you agree to be bound by the Terms and Conditions outlined below. If you don’t wish to be
bound by the Terms and Conditions then do not complete this registration, and do not usehttp://www.nooreshtech.co.in or any of
its associated services.
We (the administrators and owners of http://www.nooreshtech.co.in) reserve the right to change these terms at any time, but will
post a notice in advance on this website of any material changes. Following an update being posted, your continued use
of http://www.nooreshtech.co.inimplies acceptance of the modified terms and conditions.
All of the Content onhttp://www.nooreshtech.co.in remains the property ofhttp://www.nooreshtech.co.in. By “Content” we mean
any information or materials found onhttp://www.nooreshtech.co.in. The harvesting of data from our site via automated means of
any type, without the prior permission of http://www.nooreshtech.co.in is forbidden, as is attempting to access our site by any
means other than through the interfaces we provide for accessing the site.
46. www.nooreshtech.co.in
Disclaimer
You may make one copy of Content for your personal, non-commercial use as long as it is clearly labeled with
“Intellectual Property of http://www.nooreshtech.co.in. All rights reserved”. Any other copying, distribution, storing, or
transmission of any kind, or any commercial use of our Content, is prohibited
without http://www.nooreshtech.co.in prior written permission. You may not republish, post, transmit or distribute
Content to online bulletins or message boards, blogs, chat rooms, intranets or anywhere else without our consent.
Notwithstanding the above, when you post Content, you do not surrender your copyright. You agree
that http://www.nooreshtech.co.in a has an unlimited and perpetual license to republish the Content. However, you
retain the right to use your words, images and other copyrightable content however you wish.
We will always endeavor to ensure any content you publish is presented in context, and we’ll credit you (under your user
name) as the author. We won’t republish your content in advertising without notifying you in advance and will not
publish content in advertising if you instruct us not to.
As a member of http://www.nooreshtech.co.in , you agree to behave honestly at all times and act for the benefit of the users of the site.
You, as a user of http://www.nooreshtech.co.in must not:
Post content that is not your own, or that is harmful, irrelevant, nonsensical, obscene, abusive, solicitous, fraudulent, or defamatory.
Misrepresent your true identity, motives and opinions
Take any action that places an unreasonable strain or disrupts the functioning of the site and its services
Copy the site’s content without prior permission from http://www.nooreshtech.co.in
Violate another member’s privacy
Violate any laws or regulations while using our site
If you don’t abide by the Code of Conduct, we will cancel your membership of the site.
47. www.nooreshtech.co.in
• We collect information about who our members are and how they use our site in order to provide our members with the best experience possible.
Sometimes we may use the information to notify you of products, services, specific content, or areas of our site that we think may interest you. You can
choose whether or not to receive these notifications by altering your privacy settings at any time by contacting us at analyseindia@gmail.com
Privacy whilst using the site
When you post content onto our site, that information, along with your screen name, is visible to the public. Please remember that any information you
disclose can be collected and used by others. Other members can respond to your posts at any time but will not know your external email address or
other contact details (unless you have disclosed it).http://www.nooreshtech.co.in cannot guarantee the security of any information you transmit to us,
and you do so at your own risk. You are responsible for maintaining the secrecy of any password and/or account information. We will never ask you for
your password in an unsolicited phone call or email. If you are using a computer to which others have access, such as one in a computer lab, Internet
cafe, or public library, always remember to log out and close your browser window when leaving our site. If you follow links from our site to others, you
should be aware that you are doing business with those other sites, which have their own privacy and data collection
practices. http://www.nooreshtech.co.in has no responsibility or liability for these sites.
• Use of this site is subject to express Terms & Conditions, Code of Conduct, Privacy Policy, and Disclaimer. By continuing past this page, you agree to
abide by these terms. Any information provided onhttp://www.nooreshtech.co.in should not be construed as research, trading picks or
recommendations, or investment advice and is provided with no warrants as to its accuracy. Company names, products, services and branding cited
herein may be trademarks or registered trademarks of their respective owners. The use of trademarks or service marks of another is not a
representation that the other is affiliated with, sponsors, is sponsored by, endorses, or is endorsed by http://www.nooreshtech.co.in
Disclaimer