Fooling All People All The Time.....!!!

If you take "financial experts" on "business channels" seriously then you are not taking your money seriously....
O Ashuji

Accepting Ignorance in market is a great and first step towards a successful trader/investor. There are no rules in markets because human emotions are not driven by rules and that is precisely the reason if mind is not adaptable, money will not be made consistently. However, here we have some comedians who consistently apply same methodology all the time, expecting same results. Concepts like Average P/E, historical P/E, Relative Valuation, etc are applied all the time depending on the mood of these so called experts. When nothing works for rationalization, say cheese with liquidity. I will say Time and Again....reading and understanding the way price behave is far more important than understanding the reasoning of its movement. Idea is to make money and not intellectual masturbation.
Most experts on business channels intentionally or unintentionally believe in "FOOLING ALL PEOPLE ALL THE TIME". These guys have absolutely no accountability of their views. Just like cautionary warning with  smoking, expert views should have disclaimer "listening to these experts is injurious to wealth, listen at your own risk"
Below I will just give one glaring example of one such expert....and point how just because price damage happened explanation changed
For Further on Uselessness of Fundamental Analysis....
 http://speculationanart.blogspot.in/2013/03/analyzing-price-moves-fundamentally-is.html

Sanju Verma sees Sensex at 22K by Mar 2013, suggests bets (12 Dec 2012, CNBC)

Q: Is this an opportunity to buy into the dip after Friday’s cut or are you getting a bit cautious on trade?

A: We are not cautious as yet. We are looking at the market inching towards our fiscal year-end target of 22,000 by end of March 2013. Given that we have rallied 20 percent plus in dollar terms this calendar year, having roped in more than USD 21 billion by way of FII flows, one easily starts thinking that maybe the liquidity driven rally has run its course, so has the valuation based rally The market, on trailing earnings, is not looking cheap. Assuming an EPS of Rs 1,400 for FY14, the market is trading at about 15.5-16 times, mid-cycle valuations.

I think the second quarter FY13 numbers clearly told one story. While top-line growth may have come down from 20 percent plus, which we have been used to seeing over the last one year to a dismal 14 percent, the more important and optimistic scenario was thrown up at the EBITDA level.

BSE Sensex (Indian Market) was then at 19255...and this expert believed at about 15.5-16x, it was mid cycle valuations. 

Fast Forward.....3 Months down the line which is long term for these experts....comedy circus begins...

Indian equities overvalued; focus on rupee: Sanju Verma (4 April 2013, CNBC)

3 MONTHS BACK TARGET WAS 22000 BY MARCH 2013....WE ARE IN APRIL 2013 AND MARKET IS FOUND EXPENSIVE AT 18500....BEST PART IS THERE IS REASONING FOR BOTH CALLS.....!!!

Q: Do you think we are headed for a big waterfall slide in the market and if yes what could the extent of the correction be?

A: We need to take a hard call and look at fundamentals on the ground before we decide to be bullish or otherwise (sorry I was flying on air on 24th Dec 2012). The screen is screaming red at this point in time. It is a sea of red. I may be called a brave heart to give a bullish call.

The macro scenario is certainly not looking rosy. The only reason S&P 500 has moved up at today’s levels is because the S&P is trading at something like 16 times giving an earnings yield of 6.25. Given that the risk free rate in the US is just about one percent or even lower, it basically means that the equity risk premium for the S&P 500 set of companies is just about 5.25.

This indirectly means that equities in the US are grossly under-valued because the higher the equity risk premium, the more under-valued the equities class for that given geography. If I use the S&P 500 rally as a benchmark and extrapolate the workings into the Indian context today at sub-19000, the market on one year forward, assuming that the EPS for FY14 will be in the region Rs 1300 or Rs 1325, the PE works out to something like 13.5-14 times which gives an earnings yield of just about 7 percent.

If I were to compare the 7 percent earnings yield with our risk free rate which is the government securities (G-Sec) rate which is close to 8 percent, then the equity risk premium for the Nifty set of companies is actually a negative 0.86. This means that equities as a class in India are grossly overvalued.

WOW......What can I say....

It needs to first get into the positive territory with respect to equity risk premium even before calling for a buy on Indian equities as an asset class. That’s the absolute bearish view which takes into account all the negatives; be it with respect to the current account deficit (CAD), poor earnings trajectory and a macro which seems to be flip-flopping between the good and the bad.

However, I am of the firm belief that USD 25 billion that we made through FII inflows last year had nothing to do with macro. It had even lesser to do with earnings. What it had to do with was just liquidity and liquidity alone fueled the 20 percent plus rise in dollar terms that we saw in the broader indices. So, the question that we should be asking is will liquidity continue to flow in or will there be a stop there for good.

We have pulled in on the equities front more than USD 8 billion in this calendar year. Will it continue? I think rather than getting carried away by the stock market, one should look at the currency market. I have always maintained that currency markets are nimble footed and a precursor of things to come in the stock markets. I am surprised that despite a 6.7 percent CAD number for the December quarter, the rupee has by and large been steadfast. Even in the non-deliverable forward market, rupee is trading at just about 55.25/USD or 55.35/USD at the worst. I think that is a positive.

Over the last one year, on a year-on-year (Y-o-Y) basis, rupee has depreciated all the way from 50/USD to 54/USD which is a depreciation of 7 percent. Over the last two years, rupee has perhaps depreciated by more than 20 percent but the point is that despite huge amount of negative news on the forex front, the rupee has held steady which means that there is something that you and me don’t know.

It is so scary to follow these guys because they have explanation for everything without an iota of responsibility/accountability.....