Why Indian Market Will Keep on Going Up, Up and Up?

August 29, 2014

Why Indian Market Will Keep on Going Up, Up and Up?

Greetings from Hitesh! Today is the most aupisious day of Ganesh Chaturthy. May Lord Ganesh gives you and your family – Riddhi and Siddhi and keep you and your family away from all obstacles.

Why Market Goes Up?

There are countless studies to prove various points why market is going up or down. In fact, if some one is smart enough, he can take particular kind of data to prove his logic!! I believe Lies, Dammed Lies and Statistics are same. I always rely on commonsense data which can be understood by all and sundry.

What Is My Logic?

In a typical life time of an individual – his income is small in youth / high in middle age and small or non existent in retirement. At the start of the career – youth borrows (education loan / marriage + honeymoon loan + housing loan + car loan)/ in middle age he invests in equity+bonds+ real estate and uses the same fund for his retirements.

Isn’t it a common sense? Now let us extend this logic further. Young means consumption+production and Middle age means production + investments.

When you have high proportion of young and middle age population in your total population – chances of your progress are high!! Moreover, when the young population is more educated then just young – it becomes asset then liability.

Don’t you think – above two conditions can take your economy and market to new and new highs?

What is a Study of Last 100 Years by YALE University says?

In August 2002, Cowels Foundation, Yale University published a study named – Demography and Long Run Predictability of the Stock Market. You can read the total study by clicking on this link - http://cowles.econ.yale.edu/P/cd/d13b/d1380.pdf

It is a must read 31 page study. However, if you can not read 31 pages – just go to 26^th page – they have given a chart showing you a relationship between P/E ratio and Ratio of Middle and Young (MY) Population  between 1910 to 2000.

P/E ratio has gone up with the increase in MY ratio in last 90 years.

Now let us look at India’s Population break up:-

As per Census 2011 – We have 8.7% population between ages 20 to 24 / 27.6% population between ages 25 to 44 / 13.5% population between ages 45 to 64.

So, MY population is around 45% of the total population. In other words, close to half of our population is contributing productively in Indian Economy.

MY ratio was 32% in USA in the year 2000. We have 45% in 2011!! Just think – can Indian market come down???

Moreover, as per the census literacy rates are increasing. In 1971 – 34.5% of the population was literate while in 2011 it has increased to 73%.

Just see the progress of India from 1971 to till date. It will become self explanatory that this is the time to be in Indian market.

Thanks to the young population – a CM has become a PM now!! If CM can become PM, how much positive changes this population can bring to our country and market? Just think.

My Observation:-

I have observed that a typically uneducated family goes to USA from India and in 5 years they have lot of money!! The reason – everybody in family is doing some or the other odd jobs!! All are adding to the income of the family.

Now, same is happening in India – but the difference is educated family is working and they are not doing petty job of USD 7- 14 per hour.......they are earning in lakhs. So, the saving and investment potential is very high in India at this moment of time.

My Personal Call:-

I have no doubt that Indian market has a long way to go up, up and up. It is up to you to take part or not to take part.

In 2007, Anthony Robbins told me that – your decision decides your destiny. But he was silent on why people are not able to decide right thing for them? But when I referred to the Asto Science of great Rishis – they said – taking a decision is also a part of DESTINY.

So, if you are not able to join the party or follow Hitesh Parikh – do not blame anybody. May be you are destined for the same.

You can prove me wrong by joining the party. It’s a challenge.

Follow me on Twitter @hiteshmparikh Or on Whatsapp - +91-9869425399.

Live With Passion…Invest With Passion.

Hitesh Parikh.