There has probably been never a time in the history of Indian Stock Market like now, with such a huge percentage of the nation’s population interested and invested in it 🙂 . Everyone and their dog is discussing about how this Mutual fund has given 60% returns last year and how the other fund has under performed with just 20% – and here I was happy with 12-13% for years :-). Now, I can’t be envious that more people are entering this once niche area – it is bound to happen in a nation that is growing at such a fast pace. In fact, I have brought in a few myself – with the disclaimer of course. I am no expert, but I have been a part of the market from 2005 investing through SIPs and silently watching its ups and downs. What makes me shudder is the complete nonchalance with which the post-covid participants seem to approach it. They believe that Sensex will go only in one direction – up and their view of market crashes are these 1000-1500 point dips that happen and recover in days, weeks or max a couple of month. I remember the 2008 crash vividly – on Oct 2007, Sensex was at 20103 and it took till Feb 2014 for it to cross 20265 and go higher. That is 6 years and 4 months of nowhere. Take some time to reflect on what it means – it is like predicting today that Sensex will be around the same 80k level or lower till Feb of 2031. No one will believe in such a prediction – even I, with all these hard-cold facts, believe that Sensex will probably cross 150k by then. That is how we are – an optimistic bunch and that is how we can be – after all we invest in a belief. So, it makes that much more sense to understand the facts, the possibilities, the history and of what could happen and be prepared in case of an event like that.
Tht title of this post is inspired by a recent book that I read, “Bulls, Bears and other Beasts”. I sure hope that the newbie retail investors have done their study and not come in after just scrolling through some YouTube videos and Insta posts. If you ask me, I would guess that they are not bulls or bears but rather rats. They were promised a pile of cheese and came running to munch on it. The moment they hear a loud bang, the first signs of true trouble in the market, they will probably scurry away – but then I might be wrong – only time and the market will tell.