Who decides the valuations and who can say which level is reasonable? I think, if stocks are giving better returns compared with competitive investment avenues then why I should withdraw my investment from equity. Yes, earnings may moderate from their higher levels.
I am not worried about corrections. We have seen the market growing from 3000 points to 14500 points in the last four years. Certainly, Sensex will not be 60000 by 2010. It cannot. I think these type of doubts [that valuations are stretched] are in mind and they not in reality.
The India story is irreversible. Whatever the risks, they can at most cause delays. I think nothing can change India's growth prospects. If the market has managed to rise from 3000 to 14500, what is wrong if it remains in the range of 12000 to 15000 for a year?
If one wants to invest in commodities he can invest in commodity shares. I don't see a bubble in real estate. Again, who decides what is reasonable and what high level is? But, real estate prices may see some correction.
Money is there in the market. Mega issues will also get absorbed. But if you look at issues listed in the near past, most of them are trading at a discount to their issue price. This may result in a reasonable pricing of IPOs.