Views on Life & on Equity Investing

Wonder, Wealth & Abundance

MCAP / GDP

with 5 comments

On this link there are two mistakes from Ramdeo.

http://alphaideas.in/2018/02/26/rakesh-jhunjhunwala-questions-raamdeo-agrawal/

India MCAP/GDP is 100% not 80%.

Source: https://www.bloombergquint.com/business/2018/01/24/chart-indias-market-cap-to-gdp-ratio-above-100

Second US comparison of 160% MCAP / GDP does not take into account the fact that 25% of US corporate profits come from outside USA, not so much for India.

Also, the activity outside the publicly  sector needs to be factored in.

Bangladesh has 25% MCAP / GDP for the past 5 years because most of the corportae activity is in non publicly listed sector.

Written by amitdipsite

February 26, 2018 at 2:21 am

Posted in Uncategorized

5 Responses

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  1. Dear Amit
    What is the inference? How to decode this ratio in a meaningful way? Pl enlighten us.

    Karthik

    February 26, 2018 at 8:29 am

    • Dear Karthik

      Not a very meaningful ratio for developing, under developed, emerging countries.

      Useful for only comparing a country to itself over a course of few years. Like comparing USA to USA between 2005-2010.

      Definitely a meaningless ratio to compare USA to New Zealand or to another country.

      Almost useless for frontier markets.

      Best regards
      Amit

      amitdipsite

      February 27, 2018 at 12:48 am

  2. […] Even big people overlook details sometimes (Life and Equities) […]

  3. I Came across this interesting question on Quora. You might like it.
    Does the stock market work like a Ponzi scheme because the early adopters benefit the most? https://www.quora.com/Does-the-stock-market-work-like-a-Ponzi-scheme-because-the-early-adopters-benefit-the-most/answer/T-Liu-5?share=c279ee45&srid=SWF8

    abhims2

    March 3, 2018 at 4:35 am

  4. Hi Amit,
    Pls share your views regarding GIC housing?. Growing GNPA big concern?

    BJ

    March 10, 2018 at 3:15 am


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