Zerodha’s Nikhil Kamath tells when to buy stocks, shares Buffett formula to find the right time
时间:2024-06-26 14:23:51 阅读(143)
Indian equity markets were trading firmly in green on Wednesday. While Sensex reclaimed 60,000, Nifty 50 climbed above 17,900. Amid the recent rally, investors are looking to enter the stock market to take advantage of the bull momentum. For all those who are confused when to buy stocks, Zerodha co-founder Nikhil Kamath shared some advice on Twitter. The entrepreneur told people looking for stock tips to follow the Buffett Indicator – the ratio of the GDP to the US stock market market cap.
The so-called Buffett indicator is often used to assess the valuations of stock markets of a country. The formula for this indicator is made in a way that it may be used for any nation, and Kamath wants people to use it in order to decide when to buy stocks in India. It may be noted that Warren Buffett himself said that no single formula is enough to time the stock market.
Also Read: Global fund managers no longer ‘apocalyptically bearish’, increase stock allocation, trim cash
What Buffett indicator is telling about India’s stock market valuation
Nikhil Kamath tweeted, “To the people looking for stock tips, wait for the Blue zone and buy anything; stick to nifty constituents… Everything is cyclical.” According to the Motilal Oswal chart shared in the tweet, India’s market cap to GDP ratio for FY23 stands at 103%, which indicates that the market is now overvalued. The chart also demonstrates that the market remained materially undervalued in FY09, and in FY20, during which the country was severely affected by the coronavirus epidemic. Since FY20 however, the market has remained overvalued. Note that while the Buffett indicator might be a good way for investors to analyse when is the right time to buy stocks, according to Nikhil Kamath, there are several analysts and experts which believe that this indicator is not a good measure of the Indian stock market.
Also Read: Dalal Street may stay range-bound until US Fed turns dovish; high earnings downgrades on cards
Does the Buffett indicator always work?
Some analysts have even said that the Buffett indicator has already become less relevant in the case of Indian markets because it takes into account publicly-trading companies only, and completely ignores the rise in private equity investments that contribute significantly to the GDP. Another criticism of this indicator has been that it focuses only on equity markets and ignores other asset classes like bank fixed deposits, real estate, and debt markets. Hence, it is not a true representative of the market value of all assets. Analysts have also said that there are many domestic companies with significant overseas operations that contribute to the GDP by exports. Hence, their growth at valuations exceeding GDP growth is not counted in the Buffet Indicator.
猜你喜欢
- Shaping India’s Healthcare Future- Trends in 2024
- Share Market Highlights- Nifty settles over 19440, Sensex over 64970; Bank Nifty sheds 79 points
- SBI, Blue Star among 126 BSE stocks to hit 52-week highs, 14 fall to 52-week lows
- European shares edge higher on boost from upbeat earnings, miners
- SBI, Axis Bank hike deposit rates
- Sebi extends suspension of derivatives trade in 7 agricultural commodities for 1 year
- Equities best asset class to beat inflation, here’s why; Do not ignore these 7 rules while investing
- Edible oil imports surge as global prices drop sharply
- ESAF Small Finance Bank IPO opens, GMP rises over 36%; should you subscribe to the issue-