It was November 2008. A headline in an issue of Economic Times read, "Don't buy a burger, buy a blue-chip instead." This summed up the state of our stock markets those days, following the collapse of Lehman Brothers.
Most of the market analysts were literally competing with each other, in predicting the next bottom for our stock markets. None of such prophecies came true, and I don't recall reading any suggestion to dive in the stock markets with eyes closed.
Somehow, I summed up the courage to dive in, and after a year, was complimenting myself for my bravado. 😀
Stock markets today, are not at the same levels of that time, though there is certainly lack of enough confidence to dive in. Another Lehman moment is highly unlikely though not impossible. All eyes are on Credit Suisse right now.
Yes, amazing turnarounds are highly likely, which can change the direction of the world economy in no time. China has brokered diplomatic relations between Iran and Saudi Arabia. This should keep oil prices in check, assuming higher supply of oil.
Another diplomatic coup could be in terms of détente between Iran and the US, which is quite likely as US might like to use this to corner Russia, by allowing free flow of oil and natural gas from Iran in return for a quid-pro-quo from Iran in terms of a strategic alliance. This would translate into a rally in the stock markets following further drop in oil and natural gas prices.
And finally, coming to the "elephant in the room" which is hardening of interest rates by Fed etc. If some news reports are to be believed, the genesis of SVB crisis lies in the hardening of interest rates, which led to "funding winter' for some start-ups, which in turn triggered a run on its deposits as such start-ups badly needed funds to survive. That the SVB parked most of its deposits in long-term bonds is another story.
It is now reasonable to expect that the US Fed has taken the alarm signals from SVB crisis seriously, and would signal an end to sustained increase in the interest rates. Why administer a cure for inflation, which is worse than the disease?
Net net, odds are highly in favor of a rally in stock markets, and a sustained global recovery by Q3 of FY 24.
So, it's the right time to take long-term positions in the stock markets, by focusing on fundamentally sound companies with visible earnings in the next few years. Yes, one needs to be like "Rip Van Winkle" till March 2024 at least, after taking such positions. 😊
Most of the market analysts were literally competing with each other, in predicting the next bottom for our stock markets. None of such prophecies came true, and I don't recall reading any suggestion to dive in the stock markets with eyes closed.
Somehow, I summed up the courage to dive in, and after a year, was complimenting myself for my bravado. 😀
Stock markets today, are not at the same levels of that time, though there is certainly lack of enough confidence to dive in. Another Lehman moment is highly unlikely though not impossible. All eyes are on Credit Suisse right now.
Yes, amazing turnarounds are highly likely, which can change the direction of the world economy in no time. China has brokered diplomatic relations between Iran and Saudi Arabia. This should keep oil prices in check, assuming higher supply of oil.
Another diplomatic coup could be in terms of détente between Iran and the US, which is quite likely as US might like to use this to corner Russia, by allowing free flow of oil and natural gas from Iran in return for a quid-pro-quo from Iran in terms of a strategic alliance. This would translate into a rally in the stock markets following further drop in oil and natural gas prices.
And finally, coming to the "elephant in the room" which is hardening of interest rates by Fed etc. If some news reports are to be believed, the genesis of SVB crisis lies in the hardening of interest rates, which led to "funding winter' for some start-ups, which in turn triggered a run on its deposits as such start-ups badly needed funds to survive. That the SVB parked most of its deposits in long-term bonds is another story.
It is now reasonable to expect that the US Fed has taken the alarm signals from SVB crisis seriously, and would signal an end to sustained increase in the interest rates. Why administer a cure for inflation, which is worse than the disease?
Net net, odds are highly in favor of a rally in stock markets, and a sustained global recovery by Q3 of FY 24.
So, it's the right time to take long-term positions in the stock markets, by focusing on fundamentally sound companies with visible earnings in the next few years. Yes, one needs to be like "Rip Van Winkle" till March 2024 at least, after taking such positions. 😊
