The recent performance of equity markets worldwide brings back memories of the nursery rhyme--Humpty Dumpty Sat on a Wall.
It goes something like this
Humpty Dumpty sat on a wall,
Humpty Dumpty had a great fall,
All the King's horses and all the King's men,
Couldn't put Humpty back together again.
Now just substitute select words with the following:
Humpty Dumpty = Capital Markets
King = Fed
His Horses = CEOs, CIOs, CxO's
His Men = Bernanke
Wall = Wall Street
How much ever our CEOs, CIOs and CxO's try... I cannot see them putting back this Humpty Dumpty (capital markets) back together again in the next 3-4 years (which is a lifetime in the financial arena).
Today the Indian Humpty Dumpty fell around 875 points. Yesterday it fell by 1408 or so. Mr. Chidambaram called a protocol meeting (finally) and told the retail investors not to worry.
Many people would advise this is the right time to buy, hence the market shall rise again. I feel the market might dip more based on more US recession news/data. Who knows--I may be wrong, I am not a Warren Buffet or a Harry Potter.
When I had landed in B'bay in mid-april '07, Sensex was trading at a "paltry" 13,000 pts. Didn't pay much attention to the news ticker which runs at the bottom of the TV screen as I was more interested in the Abhi-Aish wedding bash. How time flies.... My ex-VP has been investing in the markets ever since it was in its mid-2,000's way back in the early 1990's.
The main question here is... can our markets sustain the 20k+ limit? Are our stocks overvalued? Is Reliance the culprit? Is our market still immature? Can I turn back time to when my ex-VP had invested his first salary in the markets?
I throw the floor open to you.