While most funds were getting rid of their assets in the Indian market, George Soros (billionaire and one of the most successful investors in the world) on the contrary, was buying some Indian stocks, Nick Wardi says. He offers to purchase those equities that have recently lost most of its value.
In his program called Global Bull Market Alert he offers to follow George Soros’s steps and invest in Wisdom Tree India Earnings.
According to the newspaper called Times of India, George Soros, the owner of the Quantum fund, has recently started massive purchases of Indian stocks, spending on it about $140 million.
Why did the Indian stock market become one of the worst markets in the world?
· Institutionary traders withdrew over $7B from the Indian economy through the massive sales of Indian stocks after the collapse of Bombay’s stock exchange (BSE) Sensex by 7400 points or 35% down from the peak of 20 873pts (Jan 8th 2011). Some other reasons for the withdrawal were the overall weakness and instability seen in the global markets, expensive crude oil and rapid inflation growth in India.
· Numerous broking companies and investment banks feel negative about the situation in India. The inflation rate increase is almost 12%. In May 2008 the volume of manufacturing production grew by 3.8% - the lowest increase for the previous 6 years. In May 2011 India’s production growth declined down to 3.9%.
· According to Lipper Analytics, 3 India-oriented investment funds are among the 10 outsiders in terms of May’s investment results. The talks about India’s skillful outsourcing completely disappeared from the world media in a couple of days.
Every professional trader knows that it is better to buy during a crisis or recession after the markets have collapsed. According to the experts of , George Soros named the recent crisis the most considerable one since the Great Depression. Probably the collapse seen in the Indian stock market was enough for Mr. Soros to invest in India.
It is obvious, that numerous investors will follow Soros’s example and buy Wisdom Tree India Earnings ETF (EPI), as it gives access to a wide range of Indian stocks, including the shares of such companies as Reliance Industries, Oil and Natural Gas Corporation, Infuses, Bharti Airte, ICICI Bank etc.
Market Leader and would appreciate if you could share your opinion on the matter. Please, visit the Academy’s forum for traders and investors and answer the question below:
Was George Soros right when applying his investment strategy to the Indian stock market?
· Yes, he was right.
· He was partially right. The strategy may fail.
· He was absolutely wrong as in the foreseeable future the Indian stock market won’t start recovering.
