On Easy money policy by central banks : The asset purchases by these major global central banks - the US Federal Reserve (US Fed), Bank of Japan (BoJ), European Central Bank (ECB) and the Bank of England (BoE) - have been increasing overtime, though the US Fed has stopped now. My view is that the asset purchases by BoJ and the ECB will not stop. The balance sheet of the major central banks increased 16 times between 1998 and 2015. So why can't it go up another 20 or 100 times? Money printing is an unlimited action, until the system breaks down.

What is your reading of the developments across Europe and the economic data from China? Today, Britain is completely irrelevant for the world economy. It contributes less than 4% of the global GDP and is a very small manufacturer. What is relevant for the world are growth rates in China and India. A number of analysts fail to understand that if India gets its act together, then it could have a growth rate of maybe 5% per annum.

What are the factors working in favour of India as an investment destination? Everyone is watching the reform process of the Modi-led government carefully, and whether he is able to reduce the incredible bureaucracy that India has. This, I think, is an important factor. That apart, investors will also look at industrial production and corporate profits. If corporate profits rise and industrial production picks up, especially the capital spending that has been disappointing thus far, investors will favour India.

On Sectors worth investing: Overtime, the Indian consumer will become increasingly important. But then, the valuation of consumer stocks in India is quite rich. If I were an Indian, I would buy property / real estate in resource areas like breaches etc. The one thing that will happen in India I that the domestic story will increase rapidly. As more and more people take vacations, tourism and tourist related investments, particularly in real estate will do very well.

So for the Indian stock market investor, is there money to be made in the next one year? The last few years, active fund managers, by and large, have been playing a lottery. Some have done well, and some haven't. In general, active fund management has suffered badly at the expense of indexing. I believe, we are moving into a period where small investors have a huge opportunity to make money, as they have a window to capitalise and take advantage of market inefficiency. Index funds mostly buy large companies. As a result, it leads to undervaluation of smaller companies, and that's where I see an opportunity for the individual investors.

But are investors going to make money? This depends on the sectors they invest in. And most importantly, it depends on the price they pay for assets. Some of the consumer goods companies in India are trading at 40 - 50x earnings. These companies are unlikely to make investors rich. They may return 5 - 10% per annum, but their valuation is such that it will take a lot of time for investors to really make a lot of money. So one needs to evaluate which stocks are expensive and which ones are inexpensive. Overall, there was very negative sentiment about emerging economies until the end of last year. Between 2011 and 2015, emerging economies grossly underperformed the US. If one was to put a gun on my head and tell me to put all my money either in India or in the US, I would choose India. Over the next 10 years, one would make more money in India. 

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