K-10 and U-Fool - Views on News from Equitymaster

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K-10 and U-Fool

Mar 15, 2001

As expected, India has done it again. Just as the world stock markets are losing confidence in equity investing and seeking safe havens India decides to disappoint yet again. Although India’s weight in global markets is 0.5% and, hence, the Indian stock markets can never absorb the large flow of funds that may decide to enter India, at least India would have been resilient to global trends. Fund managers around the world are looking to hide in equity markets of economies that:

  • are not linked to USA as that economy is slowing rapidly
  • have more than just TMT stocks (stay away from Nasdaq!)
  • have more than just financials and property stocks (when economies slow, bankruptcies increase and banks get hurt due to loan loss provisions)
  • have a domestic demand story and not a USA reliant export story (tigers are out, elephants are in)

And India fits that bill.

But then we have our little scamsters doing their big dirty things to fill their deep dirty pockets. Who needs an enemy beyond our borders when the enemy lies within our own borders? So we have a cast of characters comprising of stock market operators, bureaucrats, and politicians that:

  • Bred on greed will drive stock prices to crazy heights and justify it with Nasdaq madness
  • Will use our money lying with friendly fund managers to keep net worths bubbly and inflated
  • Are willing to sell the country for a commission
  • Unable to own up to their own short comings are busy raiding brokers when they should raid their own alliance partners and publish the number of times they have told UTI or LIC or GIC to buy shares to prop up the market

So, with all this madness why should most foreign investors or NRIs or domestic investors use this dip as a buying opportunity? Well, I guess a fool like me still believes that there is value and there are some great companies out there to buy and keep the stocks away for a few years.

In any case things will be forgotten and the stock markets will roll on with all the players intact and some shuffling of heads to save a lot of other heads. Things will be back to normal and the market will rise again – at least until the next A, B, C or D comes along and makes an ‘uloo’ of the people who manage the money we keep in trust with UTI, LIC, or GIC. And, yes, their pockets will still have stolen silver.

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