"Mother of All Bull Markets"
A country’s journey from a $2Trillion economy to $5Trillion has historically marked the biggest and longest bull market in that nation.
Digital transformation and a rapidly growing middle class are expected to drive India's growth - the economy is expected to more than double to $7.3 trillion by 2030, from $3.5 trillion in 2022. This will put India, only behind the US and China, and it will overtake Germany and Japan to become the third-largest economy in the world. These numbers are no mere speculations; they are the result of a strong and consistent growth pattern that the country has been experiencing.
No wonder there is so much capital inflow and excitement about India. Global peers reach out with curiosity about how things are, there are Indians abroad who want to leave their BigTech jobs and start a company in India. And, everyone is gungho about it being India’s decade - which is apparent with the investments landscape.
Personally, as a public and private markets investor and a capital allocator, this is perhaps the most exciting phase to be in India. The reason is embedded in a little bit of history that I wanted to write about today.
A country’s journey from a $2Trillion economy to $5Trillion has historically marked the biggest and longest bull market in that nation. This monumental leap has only been witnessed by three other nations: China, the USA, and Japan.
China's Meteoric Rise: China achieved this feat in just five years from 2004 to 2009. During this period, China's Hang Seng index surged from 8500 to an astonishing 32000, marking a gain of 4 times. This rapid economic growth and stock market surge underscore the potential of a burgeoning economy.
USA's Steady Climb: The United States took 11 years from 1977 to 1988 to transition from a 2 trillion USD economy to 5 trillion USD. The Dow Jones Industrial Average, a barometer of the US stock market, mirrored this growth by soaring from 700 levels to 12000, translating to a gain of 15 times. This demonstrates the resilience and potential of a well-established economy.
Japan's Dynamic Transformation: Japan, too, experienced a similar transformation, taking 8.5 years from 1978 to 1986 to reach the 5 trillion USD mark. The Japanese stock market during this period surged from 2000 to an astounding 37000, marking a gain of 14 times. This historical precedent shows that the transition to a 5 trillion USD economy is often accompanied by a vigorous bull market.
It's a known fact that a bull market is typically witnessed when a nation's economic growth occurs without significant hindrances. The progress is not stymied by obstacles, and the economy is allowed to flourish. This is precisely what we are seeing in India today. The government's policies, structural reforms, and the nation's entrepreneurial spirit have created a conducive environment for sustained growth.
As the nation paves its way to a brighter economic future, it offers a multitude of opportunities for investors and businesses alike. The mother of all bull markets is in the making - so, watch India closely, for it's on the cusp of an economic transformation that will make waves across the world.
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