Ashwini Agarwal on why Buffett Indicator of market cap to GDP may not apply to India

economictimes.indiatimes.com:

Ashwini Agarwal, Founder, Demeter Advisors, says the market is kind of ignoring the elections which is always a very dangerous thing to do. You may be right that the market is kind of discounting a good outcome for the BJP and that may or may not happen. So, yes, that is an issue. But, having said that, even if there is a little bit of a shakeup, history tells us that state elections and central elections are very different things and so to extrapolate what happens at the state level as an outcome for the general elections in the middle of next year might be a mistake.”
So far so good. A party which started just before Diwali, looks like it still has got some more legs left.
I agree with you. The party looks likely to continue for the simple reason that market has been climbing a wall of worry and if we turn the clock back a couple of months, the worry was on the interest rate environment, on inflation and slower growth and suddenly the narrative seems to have changed that inflation is moderating, interest rates have come off in the US if 10-year government bond yields are to be observed.

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Now there is a narrative building up that the US might actually be heading for a soft landing which was seen as a very difficult outcome. So, a lot of money that was waiting for a correction, is now being forced back in. That’s how I see it. Earnings season has been reasonably good. So, yes, that is what is driving things right now.
Having said this, one also has to be cognisant that