Warren Buffett, one of the World’s greatest investors, once remarked: “What the wise do in the beginning, fools do in the end.”
Clairvoyant investors like Ramesh Damani, Raamdeo Agrawal and Madhusudan Kela have learnt the hard way that it is an exercise in futility to predict the direction of the market.
Even Rakesh Jhunjhunwala, the Badshah of Dalal Street, conceded defeat by admitting that the “Markets are like women, always commanding, always mysterious, always volatile”.
In fact, if you approach any of the legends for an opinion on the direction of the market, they will rebuff you with a stern “Boss, we don’t know and we will not even hazard a guess”.
However, Saurabh Mukherjea and the other whiz-kids at Ambit Capital, have still to learn the lesson. They enjoy projecting targets for the Nifty and the Sensex. The practice gives them a feeling of superiority that they know more about the markets than the hoi polloi.
Just a few days ago (31st May 2016), Saurabh was strutting about claiming that the “overall market is not worth buying into”.
“On March 15, 2015 we turned bearish on the Sensex and then in August 15, we ramped up the level of our bearishness. The March 15 the Sensex was somewhere around 30,000 and August 15 when we turned bearish on the Sensex, it was around 27,000 roughly where it is today. We are continuing with our circumspection with our bearishness on the market as a whole. Our view is that the economy is still not showing any clear signs of pickup. We do not buy these ideas that there is some green shoots of recovery. I have been hearing about green shoots of recovery for the last two years and I do not see them” Saurabh said with a gloomy look and in a grim tone.
He also added “Take market’s exit opportunity with both hands” as “Sensex is likely to touch 22,000 mark by the end of this year”.
To everyone’s shock and surprise, just a couple of days later, Saurabh has staged a complete somersault. He now says that the “crises has been taken off the table” and that the revised Sensex target is 29,500 from 22,000.
This means that in the space of a few days, Ambit has changed its prediction from a crash of 17% in the Sensex (26,635 to 22,000) to a surge of about 10% (26,635 to 29,500).
Now, it is obvious that this sort of buffoonery will not appeal to novice investors because for them the exercise is not an academic one of moving targets across the table but of losing real money.
“The worst company in market and the worst brokerage Ambit is a total joke” josese111, a Platinum Member at MMB fumed.
“totally changes colours as market behave no real reserch team dumb people and this channel called them experts hahaha biggest joke” vimal111-2015 added.
“Is that guy still with Ambit? first 30000, then 22000 now 29000. Bring down the market so that they can buy… and media applauds him” saysme, a Silver Member, mocked.
quark was also irked “Yes. They screwed up big time. Feel sorry for the investors who trusted them and media houses which brought him on ever so frequently to drum up their hypothesis” he said.
Holla. S was also not impressed. “Oh this has gone as per my assessment of ambits sensex 22000 target vehemently thrown at us at various occasions by ambit And now comes the question of their credibility from a down target of 22000 they are suddenly going for an upward target of 29500 and these guys are to be trusted and followed time for ambit s management to pull up that guy who vehemently called for sensex target of 22000 looks very shameful for them”.
Somebody called ‘Guest’ was also furious: “The market may go up, it may also go down. Wow – very sound strategic call. Even God cannot save us from such idiots.”
“These analysts and TV ans are hand in glove speculators and because of their vested interest commentary the retail clients suffers the most The TV ans are the voice of the speculators who wants the markets to behave based on their positions” rajivekedia mourned.
The important aspect is that while novice investors are distraught at the volte-face, even knowledgeable investors mocked Ambit.
Ambit Volte Face again.
Flips straight from 22000 to 29500 Sensex
Should we get wary now!
— sandip sabharwal (@sandipsabharwal) June 10, 2016
What a 20% rally from lows can do to your Index Targets..
Ambit revises Sensex Targets for FY17 frm 22k to 29.5k 😛 pic.twitter.com/TeASBUMh1E
— Ankit Chaudhary (@entrepreneur987) June 10, 2016
Some investors also recalled the earlier buffoonery that had happened when Saurabh Mukherjea predicted that the Sensex would crash to new lows even while Andrew Holland, his colleague at Ambit, had predicted that the Nifty would surge to new highs (See MMB Punters Roast Ace Stock Picker Saurabh Mukherjea For Doomsday Call Of 22,000 On Sensex Even As Andrew Holland Predicts Nifty Boom Level Of 10,000)
“How does Ambit reconcile when Andrew Holland and Mukherhea take opposing views. What does house view mean?” an astute investor demanded to know.
How does Ambit reconcile when Andrew Holland and Mukherhea take opposing views. What does house view mean?
— Sunil Arora (@moneybloke) June 7, 2016
The kind of ridicule that Ambit Capital’s projections are subject to can be gauged from the fact that Neil Parikh, the boss man of PPFAS Mutual Fund, called it a “Friday morning laugh”:
My friday morning laugh courtesy this article https://t.co/OmaTg1fv4M
— NEIL PARIKH (@npparikh6) June 10, 2016
Fund managers normally keep a stiff upper lip and don’t comment on each other’s opinion unless things have gone beyond redemption.
Now, in this sorry state of affairs, Saurabh Mukherjea and his team at Ambit should permanently renounce the futile practice of predicting the Sensex & Nifty levels and stick to recommending specific stocks. A couple of multibagger stock ideas will win them back the respect and affection of novice investors!