What’s the latest on the India stock market? Glad you asked.
“We’re buying…we’re finding a lot of value,” says our new friend, Ajit Dayal. From his office in Mumbai, Ajit runs a mutual fund focusing on Indian shares. “The Index is very high. You look at it and you think Indian shares are too expensive. But the index is not very representative. It includes only a handful of very large cap corporations. And they are too expensive. But overall, stocks in India sell for only 14 times earnings. And they’re growing earnings at more than 20% per year. You’d have a hard time finding those numbers anywhere else in the world.”
Ajit is bullish on India. There are not many things we are bullish on, here at the Daily Reckoning. And about none of them are we bullish without reservations. Our reservation about the Indian market is that it is too far away…both in distance and in culture. We don’t think we could ever understand it.
“Useful information declines by the square of the distance from its source,” we recall.
We’re a long way from Mumbai.
Of course, we’re a long way from Tokyo too…and we’re bullish (with reservations) on Japan.
The Daily Reckoning Australia
Source : http://www.dailyreckoning.com.au