• MAY 6, 2000

The heat of summer

India is being hit by 2 heat waves: the one from The Boss up there and one from the boss in New Delhi. The Boss up there sort of watches over this mad world and shrugs his shoulders: the heat wave is just another seasonal event and a function of planetary movements that are repeated in a 365 day cycle. Not much The Boss can do short of blowing a bit harder and tilting the axis of the earth so we stay away from the sun a bit. But the boss in New Delhi, he don't sound too happy. Heard him on TV the other day and read about his comments in the newspapers about the behaviour of the markets and their irrationality. And, of course, the disclaimer that the boss did not care.

The truth though is that the boss in New Delhi cares. As did other bosses who sat in the chair of the Finance Minister before him. In 1992, the then Finance Minister Manmohan Singh used the rising stock markets to defend the visionary reforms set in motion by the Congress-led Rao government. Today's bosses use the new found glory of the tech sector in India to talk about how their reforms are working. There is nothing wrong with that. Every Finance Minister needs a crutch, a carrot, a sign of good times to ram badly-needed reforms through India's debating policy-makers. The other Boss Man don't need no such barometer of well being. He says: This Is It. (Not being a patent-orientated fellow, the Boss Man got no revenues from copyright infringements when a certain multinational stole his slogan and made it into a lifestyle statement: Coke Is It. But that is another story.)

Anyway, the boss in New Delhi is livid. The markets are ruining his ability to reform. If stock markets go up and the Senseless, Mindless, and other indices set up by the new age media keep on rising what hope does any opposition party within the 23-party coalition (and any opposition party within parliament) have in scuttling the reforms by arguing that poverty is more beautiful than prosperity? So the boss is angry and irritated.

Which takes us to the fountain-head of all this madness: the NASDAQ. When this madness of valuations of tech companies began in the US in 1998 and became mainstream thought by February, 2000 no one in India was complaining. Senseless, the recently reconstituted Index of the Bombay Stock Exchange injected with companies with Mindless valuations, was running sky high and India was the next economic power. That is a good story to sell to opponents of reform. Why even Bull Clinton, the big boss of the US who during his 8 year Presidency, has presided over the world's largest bubble run, came for 5 days to India and 5 hours to Pakistan. What other proof does one need that Hindutva and mindlessness are winning over any other competing religious-eco system? And now it is all threatened by a hangover that those chaps in Wall Street are having after 7 years of partying all night.

And that is what our boss man is really worried about. You see getting fund managers in India excited over Indian stock markets is a few phone calls away and a few talks at New India conferences in global financial markets that, coincidentally, have slightly better climatic conditions right now. But how do you get Mr. John or Mr. James or Mr. Juan to keep on creating new valuation tools for justifying the prices levels of many of the NASDAQ stocks? No matter how many phone calls you make to India fund managers they don't have the money power to keep the NASDAQ bubble blowing away.

The other Boss Man has an answer, as always, to all these searches for shanti: there is a change of season and there is nothing that you can do about it. Just wait. And be patient. And be safe.

I listen to my Boss Man a lot. Maybe you should, too. So hang loose, enjoy the vacation with the kids, spend time with the family, tune off from second by second market commentaries that tell you nothing, and clean your portfolio of stocks that don't let you sleep well. Stay with investments, stay out of speculation. Let the boss man in New Delhi worry about carrots and barometers and other trivial things. You stay focused and plan for your financial future.

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