Monday, September 29, 2008

70% chance of a 12000 Breach.

No change in my assessment of market direction or the global / Indian economic scenario.

Here's my assessment from a couple of months back when the 15 was breached.

  • Given 15000 breach, the probability of a 12000 breach now stands at almost 70% and 10000 breach at 33%
  • No change in my outlook for India and and the globe. In a nutshell global downslide continues unabated. I believe we are still far away from a bottom. Too many factors out of sync for recovery to begin.
  • Great opportunity for the long term investors over next 12 months.

My probabilistic estimates (posted before the 15K breach) copied below for ready reference. New estimates given in paragraphs above.

My estimates suggest that Sensex likely to go up to 40K (min 25K) by Sept 2013 and 80K (min 45K) by 2016. However before it does that, it's likely to breach 15K (75% probability)– 12K (50% probability)– 10 K (25% probability)

The US bailout package, as it stands now, will have limited impact. At best it will only marginally slow down the downward slide in US financial market and the US economy. At worst, the meltdown in the US financial markets will continue unabated.