A live example of rank doubletalk by HSBC
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Abhinav Choudhry
Feb 4, 2012, 2:23:49 AM2/4/12
to Confluence of Intellect
http://www.moneycontrol.com/news/fii-view/don39t-worry-you39ve-not-missed-outthe-mkt-rally_662329.html#toptag
15% rise in the benchmark indices and there is an absolute change of
sentiment. We have Rakesh Patel, MD & Head of Equity Sales and Sales-
Trading, HSBC giving a perfect example of doublethink (for those who
have read Orwell's 1984) i.e two contradictory points of view at the
same time. He is very bullish on the Sensex but in Page 2 he says the
Sensex has reached its prive target. Neither the heading of the
moneycontrol article nor the first page(which is indisputably the most
or even the only page read) talks about this contradiction. It is one
of those cunning news articles to influence investor psychology.
The bigger joke of course is his claim that India is trading at 12
times. He does not specify 12 times what, so that he can justify
himself later, not that investors ask for justifications. At the
current Sensex level of 17600, this translates to a forward EPS of
1467. Cool, considering that we have just crossed 1000 and may close
FY12, if quite lucky, at 1050. I wonder how many years forward he is
taking. If he is assuming 18% CAGR for the Sensex, then the figure
will be achieved in FY14 i.e two years later. 18% of course is a fairy
tale number in itself. In December, estimates were of 8-15% growth and
lower.
I have written a new article on my blog on the recent rise of the
Sensex and its parallels with earlier years.
http://abhinavchoudhry.wordpress.com
Please send in your views on the group and the blog.
15% rise in the benchmark indices and there is an absolute change of
sentiment. We have Rakesh Patel, MD & Head of Equity Sales and Sales-
Trading, HSBC giving a perfect example of doublethink (for those who
have read Orwell's 1984) i.e two contradictory points of view at the
same time. He is very bullish on the Sensex but in Page 2 he says the
Sensex has reached its prive target. Neither the heading of the
moneycontrol article nor the first page(which is indisputably the most
or even the only page read) talks about this contradiction. It is one
of those cunning news articles to influence investor psychology.
The bigger joke of course is his claim that India is trading at 12
times. He does not specify 12 times what, so that he can justify
himself later, not that investors ask for justifications. At the
current Sensex level of 17600, this translates to a forward EPS of
1467. Cool, considering that we have just crossed 1000 and may close
FY12, if quite lucky, at 1050. I wonder how many years forward he is
taking. If he is assuming 18% CAGR for the Sensex, then the figure
will be achieved in FY14 i.e two years later. 18% of course is a fairy
tale number in itself. In December, estimates were of 8-15% growth and
lower.
I have written a new article on my blog on the recent rise of the
Sensex and its parallels with earlier years.
http://abhinavchoudhry.wordpress.com
Please send in your views on the group and the blog.
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