The global stock market landscape has become increasingly complex, shaped by macroeconomic uncertainty, geopolitical risks, and shifting liquidity conditions. Yet, amid this volatility, timeless investing principles, such as those advocated by Joel Greenblatt offer a structured lens to interpret market behavior and identify opportunities.

A Market Driven by Noise, Not Always Value

Global equities today are influenced as much by sentiment as by fundamentals. Short-term movements are often erratic, driven by interest rate expectations, geopolitical tensions, and capital flows. As Joel Greenblatt highlighted in his bestselling book “The Little Book That Beats the Market.”, stock prices can fluctuate wildly in the short run without a corresponding change in the underlying business value .

This disconnect is particularly visible in current global markets:

US markets remain sensitive to monetary policy shifts and inflation data.

European equities face energy price volatility and growth concerns.
Emerging markets, including India, are navigating capital inflows alongside currency pressures.

Such conditions reinforce the idea that markets behave irrationally in the short term but tend toward efficiency over the long term.

The Rise of Factor-Based and Value Investing

In an environment where macro signals dominate headlines, investors are increasingly turning toward systematic strategies. Greenblatt’s Magic Formula, built on earnings yield (value) and return on capital (quality), offers a disciplined approach to stock selection.This framework aligns well with the current global scenario:

Earnings yield helps identify stocks that are undervalued relative to their earnings potential.
As global markets oscillate between growth and value cycles, such factor-based investing has gained traction among institutional and retail investors alike.

Mispricing Opportunities in a Fragmented Market

One of the defining characteristics of today’s global market is dispersion, while some sectors are richly valued, others remain overlooked. Greenblatt’s philosophy is rooted in identifying these inefficiencies.

Markets often misprice stocks due to emotional reactions and short-term narratives. This creates opportunities to buy good businesses at bargain prices, a principle also echoed by Warren Buffett.

In the current cycle:

Technology and AI-driven stocks may appear expensive but continue to command premium valuations.
Cyclical sectors like metals, energy, and financials often swing between undervaluation and sharp rallies.
Mid- and small-cap stocks globally present pockets of mispricing due to liquidity constraints and risk aversion.

Patience and Time Horizon: The Missing Edge

A key takeaway from Greenblatt’s approach is that even the best strategies can underperform in the short term. He emphasizes that lack of patience is one of the primary reasons investors fail to benefit from sound investment frameworks .

This insight is particularly relevant today:

Markets are reacting quickly to news, leading to frequent corrections and rallies.
Investors often chase momentum, abandoning long-term strategies prematurely.

In contrast, disciplined investors who stay invested across cycles are better positioned to capture long-term alpha.

Diversification and Risk Management in a Global Context

Global investing today demands diversification, not just across stocks, but across geographies and sectors. Greenblatt underscores diversification as essential to withstand adverse periods and allow a sound process to deliver results over time .

Given current uncertainties:

A diversified portfolio can balance developed and emerging market exposure.
Sectoral diversification helps mitigate risks from commodity cycles or policy changes.

India in the Global Equation

India continues to stand out as a relatively resilient market, supported by domestic demand, structural reforms, and earnings visibility. However, it is not immune to global shocks:

Foreign institutional flows remain sensitive to global liquidity.
Valuations in certain segments appear stretched, increasing the importance of selective investing.

Applying a disciplined approach can help Indian investors navigate this environment by focusing on quality businesses available at reasonable valuations.

Back to Basics in a Complex World

The global stock market may be entering a phase where macro uncertainties persist, but the core principles of investing remain unchanged. Greenblatt’s Magic Formula reinforces a simple yet powerful idea:

Successful investing lies in systematically identifying strong businesses trading at attractive prices, and having the patience to stay invested.

In a world dominated by noise, algorithms, and rapid capital flows, returning to such fundamental, value-driven frameworks may well be the most effective way to generate consistent long-term returns.

Mumbai: Banks have raised funds through certificates of deposit (CDs) at near two-year highs, reflecting intensified competition for resources and sustained pressure on liquidity, with policy rates remaining steady.

Data from the Clearing Corporation of India showed CSB Bank offered the highest rate at 8.32% for 91 days, followed by Ujjivan Small Finance Bank and Equitas Small Finance Bank, which raised funds at 8.25% for 366 days and 356 days, respectively. Other lenders such as HDFC Bank and IDBI Bank paid 7.6% for 33-day funds.

“While some firming is typical at year-end as banks shore up their balance sheets, this spike goes beyond seasonality,” said VRC Reddy of Karur Vysya Bank. “CD rates have moved to elevated levels, signalling deeper funding pressures rather than just a year-end phenomenon.”

HDFC Bank, the country’s most valuable lender, which has been under investor scrutiny following the sudden exit of chairman Atanu Chakraborty, raised funds at 7.6% for 33 days on March 27, mobilising ₹4,300 crore. Punjab National Bank raised ₹1,175 crore at 7.5% for the same tenor. These rates are well above the 3.25% banks typically pay retail depositors for 30- to 45-day deposits. Most banks pay around 6.25% to 7% for one-year deposits.

“The CD rates do appear high when compared with retail deposit rates or the card rates published by banks, largely because deposit growth has lagged credit growth,” said Anil Gupta, co-group head for financial sector ratings at ICRA.
Overall, HDFC Bank raised ₹23,090 crore during the last fortnight across tenors ranging from 33 to 327 days, paying interest rates between 7.3% and 7.6%. Data showed Axis Bank raised ₹3,500 crore at 7.6% for 92 days, IndusInd Bank raised ₹2,075 crore at around 7.5% for tenors ranging from 91 to 94 days, while Bandhan Bank paid 7.85% for 186 days on a ₹125 crore CD.During the fortnight ended March 31, banks issued ₹1.07 lakh crore of CDs, broadly in line with issuance in the corresponding fortnight last year.

CD rates had earlier climbed sharply during periods of tight liquidity, peaking at about 8.15% between February and March 2024, according to historical data.

Reddy said elevated CD rates reflect a combination of tight systemic liquidity, pressures linked to liquidity coverage ratio requirements, and tactical balance-sheet management amid weak deposit mobilisation.

“In this backdrop, banks have prioritised certainty over cost, relying on CDs and other bulk funding to secure immediate and assured resources,” he said.

ICRA’s Gupta said while CD rates are high, such issuances are typically used to plug short-term mismatches in asset-liability flows. “Certificates of deposit account for only 2.6% of overall bank deposits and do not materially increase the overall cost of deposits,” he said.

Union Bank of India raised ₹24,060 crore, while Punjab National Bank mobilised ₹12,450 crore in the last fortnight of March, offering rates ranging between 6.9% and 7.5%, the data showed.

Banks paid higher rates for shorter-tenor CDs than for longer maturities.

Reddy said CD rates may ease from the March-end spike but are unlikely to soften meaningfully in FY27. “The underlying drivers – tight liquidity conditions, a persistent credit-deposit mismatch and pressure on deposit mobilisation – are structural rather than transient,” he said.

Brazil, Japan, Mexico, South Africa and the US have stopped importing Spanish pork. Other countries, such as EU members, China and the UK, have taken a more localised approach, only banning pork that originates in the affected area of north-eastern Spain.