Ridham Desai, MD of Morgan Stanley India, has been appearing on the financial networks lately talking about the Sensex correcting by 50% form their peak levels of 21000. If that is true we still have another 30% to go…ouch. Over the past 4 months he is one of the few guys setting realistic expectations for the equity markets and his candor is surprising since he’s from a bulge bracket investment bank.
However in the past two weeks more and more people are saying the same thing – “sell into the rally.” Not good to hear but the reality is the financial markets are going through a painful re-rating and re-pricing exercise.
The bright side is Indian stocks are still doing well when compared to the US which is experiencing multi year lows for many stocks: GE, Countrywide, Fannie Mae, GM, etc…or complete destruction like Bear Sterns.