Thursday, September 20, 2007

Sensex @ 16k


It is great feeling that sensex crossed 16000 level yesterday. It touched 14000 levels in August during the sub-prime crisis. It has been a great rally and bulls returned with a vengeance.

My learning from this fall and the rally thereafter is as follows:

1. Governing bodies like FED, BoE are making sure that calm returns to the financial markets. The way they pumped cash or the way FED cut the bank rate, interest rate meant
Providing timely excess liquidity,
Aggressive decision making,
Provide calm and cool to the markets at the earliest
"The big boss is always there" attitude

2. I would like to see "the big boss watching you" attitude by conducting tough audits and some punishment to the big banks for violating basic credit norms in future.

3. Bear Market would prevail only for a short term due to excessive cash flow. And, bear market would haunt only when we go for severe recession. In other words, for example, if bear market cycle comes once in 5 years, in future it would come only once in 20 years or so.

4. I dont think, US consumers would shy away from taking credit as they are already addicted to it and infact credit culture is showing signs of only spreading across the world.

Let us enjoy the bull market as of now !!!

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