The news trails behind us.
From India comes word that the Sensex index has topped 20,000.
We recall the words of our local analyst:
“India is a long-term buy, but maybe not a short-term buy. There is plenty of room for growth. The inflation rate is about 6%. And the economy is growing at 9%. So, you could get 15% growth just by keeping up with everyone else. We tell our investors to expect 20%…because we think we can add another 5% by choosing shares carefully.”
American readers might be interested to know – the rupee is actually stronger than the dollar. So dollar-based investors might pick up a point or two there too.
15%…20%…25% per year? Not bad. Unlike China, India does not depend on US consumers…nor on a banking sector controlled by communists. Both circumstances are bound to cause trouble for China, we believe. And whatever trouble comes to the world economy, India could get through it relatively easily.
We have no news from Australia, which we just left yesterday…but the news from the commodities sector is bullish. And when commodities go up, so do Australia’s profits.
Meanwhile, it’s too bad about the gold price. A nice correction – down to, say, US$750 – would have given us a welcome opportunity to buy. You know the drill, now, dear reader: sell stocks on rallies, buy gold on dips. Trouble is, we haven’t had much of a dip. Should we wait? Or buy now? We wish we knew. Personally, we’re buying . Not because we think this is the best price we can get, but simply because we have a little money and can’t think of anything better to do with it.
The Daily Reckoning Australia