Look before you leap
Looking at the current momentum of the markets, various analysts and investment bankers have started giving rosy forecasts for the Sensex to test levels as high as 23000 by the end of 2013. I wonder whether investors should believe them or be more careful, especially if the recent track record of most of these analysts is considered, as was witnessed in the case of Infosys, when most of them were way off in their outlooks in predicting the quarterly earnings for such a highly tracked and researched stock.
Most predictions about the Sensex today are made on the premise that the reforms momentum will continue, and that the Reserve Bank of India will in go for aggressive rate cuts and that domestic liquidity will continue to remain comfortable. But none of this is guaranteed since political support for tough reforms is less likely with the general elections due in a little over a year. The RBI still considers inflation to be its top concern and the Government is yet to provide credible proof of its fiscal discipline….Read More