S. Naren, the CIO of ICICI Prudential AMC, has stated these words in an interview given to The Economic Times. He said it in the context of the latest high performance of the Indian market.
He stated that people are in blind investing hoping that these fortunes will last long. They do not see the macro or business cycle. They only see equity, they don’t see risk, and work on their greed. This trend led to many problems in the US market in 2020.
Naren then continued that this trend will continue. Just like in each valuation cycle to break, there is a necessity of a trigger to do so. This time such a trigger should and will come globally.
But its source might not be an all-powerful one. The global economy right now is going through a crisis, from price hikes to inflation.
Thus, the global market has to work in a way the market has not been prepared for. This could be the trigger. And then the market falls as a consequence.
Another problem the market will face is that there is no mean revert in sight, as the global economy wants it to push up the market.
When it comes to energy issues, there is no straight answer for it. There is green development needed for the world’s sustenance. The world is striving for net-zero, but it faces many challenges.
Green development should have occurred simultaneously when we are freeing ourselves of reliance on non-renewable energy sources. But it has not.
The present energy crisis is evidence for the fact that we are still dependent on fossil fuels for energy needs. We have also failed to raise energy out of renewable sources to the level of the former.
This unforeseen exclusion of fossil fuels without adequate substitution from renewable sources is the cause of the present energy crisis.
But there is a solution to every problem. As of now, researchers around the world are trying to find a cheaper and efficient way to transition the energy sector to a completely renewable source. From the government’s side, they are doing everything to discourage its use.
But the answer to the question about how to stop this fossil fuel fixation is still elusive, especially in the case of India. A question that is not answered, the answer everyone is looking for, the answer everyone wishes.
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