Safe Isles In Rough Waves

Globally, we are in a ferocious bull market. The excessive valuations in the markets and the possibility of a major crash have become talking points. Many market gurus have sounded warnings about the froth in the market. Highly respected voices like Ray Dalio, Michel Burry, Jeremy Grantham, and Stanley Druckenmiller have warned that the frothy valuations are unsustainable and, therefore, a crash is on the cards. The Reserve Bank of India too, in its 2020-21 Annual Report, warned about a stock market bubble. There is a near consensus that valuations are excessive. The famous Buffett Indicator Market Cap to GDP (Gross Domestic Product) at 205 per cent is way ahead of the historical average. The PE (Price-to-Earnings) ratio for S&P 500 at 46 is excessive compared to the average of 16. So, the mother market of the US is ripe for correction, but no one knows when the crash will come....