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Benign Rain Gods and Our Exit Strategy - Views on News from Equitymaster

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The Equitymaster Research Digest

Benign Rain Gods and Our Exit Strategy
Apr 26, 2016

  • Analysts or weather forecasters?
  • Exit strategy for a twice-recommended Hidden Treasure
  • Equitymaster steps into its third decade

Have you tuned into the business channels lately? It's quite amusing...

So called market experts and brokerage house chiefs are explaining the nuances of a good monsoon ahead. That too with much confidence. Market analysts have become weather forecasters.

Of course...it suits them to do so.

Investors have lost hope of quick economic reforms, and earnings season is unlikely to be encouraging. So the only scope for luring investors is to proclaim the benignity of the Rain Gods. Predictions of a good monsoon have made stocks of companies that are closely...and remotely...connected to India's agri fortunes investor favourites.

Sectors connected to the rural economy languished over the past two years. But now they have now come into the limelight. And the brokerages have enough stories to sell you and plenty monsoon tips to offer.

The track record and credibility of brokerages in predicting macro trends is as questionable as the Indian Meteorological Department's (IMD) forecasts. Yet, investor greed allows them to cash in.

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