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Investors smelling bull going berserk

Over the past one year the trends are shifting remarkably as the analysts are valuing companies in the traditional cyclical sectors like auto as well as auto ancillaries ,logistics and cement as they are tweaking their business models in line with the domestic consumption theme. There is high earning, grand balance sheets, remarkable expansions of their capacities and great expansions of product line is very convincing for us to value highly these companies such as Maruti Suzuki , Motherson, sumi, Gati and Ultratec cement as consumption companies and this implies that price to earnings is multiple of these companies would eventually increase and thereby would offer more value for investors. 

These companies are catching the attention of potential investors to play next domestic consumption theme of India. Moreover the S&P 500 is expected to climb higher up from its current levels .And there is just a little hitch is the valuation which is holding the investors’ enthusiasm .

At the moment the markets are fairly valued and  not excessively expensive .If S&P 500 earns $125 by 2014 .Its as simple as that if the economy grows at the rate of mere 3% during the remaining months of the financial year and the inflation rate is at 2% than the growth rate is expected to be at just around a fair 5% and if the productivity increases consistently and share buy backs so the S&P 500 would show improvement up to 7% .As there is good cash on corporate’s balance sheets the share buy backs will continue triggering the gun and setting the bull go on rampage .