LILLANEY

Using Market Capitalization / GDP as a Valuation Metric

IF IN A COUNTRY LIKE INDIA IF GDP IS GOING TO GROW AT 7 TO 9% MARKET CAPITALIZATION WILL HAVE TO FACTOR INTO THIS GROWTH PLUS INFLATION(4-6%) AND IT IS ALWAYS FOUND THAT IN EUPHORIA MARKE DISCOUNTS THE FUTURE EARNINGS AND HENCE IT IS POSSIBLE FOR THE MARKET CAPITALIZATION TO BE MORE THAN GDP BY A WIDE MARGIN OF 20 TO 25% AS IT HAPPENED IN 2007 WHEN HOUSING BUBBLE BURST IN U.S.