Marc Faber had recently predicted that Indian equities alongwith a host of other emerging markets and commodities were over-valued and are likely to correct by as much as 30 per cent. Well, he was bang on with his prediction. Equities and commodities across-the-globe did witnessed significant selling pressure in the last one month. In India, both the Sensex and the Nifty are down by 25 per cent each. Some of the stocks in the mid-cap pack witnessed a sharper decline (around 50-70 per cent).
In his investment report for June 2006, Marc Faber recommends selling investments at any pull-back rallies during the next few months. He expects a further 30 per cent slide in many of the emerging markets. Read the full report here.
Btw, the decline did throw open some good buying opportunities on Thursday. I picked up CREW BOS Products and Reliance Comm. Ventures Ltd. They went up 20% each on Friday. I think I am going to be trading mostly (something I dont do....!!) in these markets to take advantage of extreme reactions.
Trivia: Will markets resume their journey downsouth or will it consolidate next week or will it claw-back above the 10,000 mark?