Don Quixotes of Economics

Who does not like the stock market these days, in fact who does not like any asset class market these days? Commodities, equity, real estate all four look so very pretty.
The liquidity is just as abundant as siddhuisms. B-schools are raking up record revenues as placement fees (yes, they charge recruiters).Every game, every player, all the rockstars are rocking!!

What is this perfect time for? Yes, right answer party time. But there is another right answer, it is the time when doomsayers come out of their shells & forewarn us about a long, painful recession that is about to come. In the recent weeks more than one popular magazine have put on their covers the predictions about the looming economic crisis.

Isn’t it a good thing, those nice chaps are ensuring that the naïve-and-optimistic investors
don’t have to become naïve-and-bankrupt investors. No, it is not.
Why not? Because the basic theme these predictions are based on are that markets are growing way-too fast or that the present Bull Run in all asset classes are too-good-to-be-true. And that Mr.Watson, is an argument no one on baker street, let alone wall street should heed to. I recall first global CEO Shankar Sharma making similar prophecy when sensex was at 7500. He talked of correction & PE values being at their highest levels ever in India. Those unfortunate-and-cautious investors who listened to him rather than Mr. Rakesh Jhunjhunwala (who seemed way too optimistic while talking about sensex levels of 10,000) would tell you more on that.

An investor needs to be prudent but believing in an imminent fall just because markets have been up too long is idiotic.

I am not an expert on stock market (hence markets may just start crashing right after I put this post) and I do believe in the theory of business cycles, but I also believe that you cannot predict the turn of a business cycle. Those who claim to do so are in league with black magic practitioner, technical analysis experts & other crap producing organisms.

The alarm raised about the end of Bull Run is just as meaningful as Don Quixote’s war cry against the windmills calling them monsters