India - Equity Markets: Adverse times => low valuations => good investments • HDFC MF

Adverse times => low valuations => good investments
• Good returns are seldom made on investments made in good times;
rather, good returns are typically made on investments made in adverse
times
• In good times when the stock markets are doing well, companies typically
trade above fair values; in adverse times when markets are not doing
well they tend to trade below fair values
• Therefore, investments made in adverse times typically yield above
average returns and vice versa
• The tables on the next page illustrate this clearly

��


• Indian economy is a long term growth economy and is likely to be the 5th largest
in the world by 2020*
• The current challenges facing us are mostly internal and the economy should do
well again, when these are overcome
• Lower crude prices and falling gold import volumes should improve current
account and fiscal deficits
• There appears to be a sense of urgency amongst policy makers to take steps
that are conducive to growth
• Low P/E’s of today represent an opportunity for the long term investor
• Key risks are spike in oil prices and lack of serious effort to curtail fiscal deficit