Alice in Wonderland

It has often crossed my mind that it is perhaps, the Goddess alone, who knows which way the stock market will swing over a given time-period. Sure, it’s a no-brainer that a sub-prime hit in the US market, will hurt the Asian (including Indian) markets hard the next day.

But a week later? A fortnight later?

The exceptions to the many boring moments that I endured while doing a three-month stint as a market expert on a TV show for a high profile start-up channel in 2006, came in the immediate aftermath of the infamous vertical nosedive that the Indian stock market took in May 2006. I was tickled pink with the replies that some of “worthies” who parade as “experts” doled out. (Just an aside, the TV channels must be smarter, because unlike viewers who are led to believe that they are “experts”, the former refer to them merely as “guests”).

My memories of May 2006 were rekindled last month (August 2007) when the markets hit an air-pocket and ran into rough weather. Almost immediately, viewers were inundated with brain-dead discussions on whether the stock market bull-run had ended. And yes, some of the same “worthies” I referred to earlier were the usual suspects, doing what they did, affording me much mirth during the above mentioned TV stint.

Just before the US sub-prime woes hit markets worldwide in August 2007, the BSE Sensex stood within striking range of the 16,000-points mark and even pink papers had joined the party predicting that it was just a matter of time. Just a week later, even as a virulent correction had set in one was informed that it was merely an overpriced market correcting itself.

A week thereafter and with no sign of the correction abating, the “worthies” started predicting doomsday was ahead triggering ‘intellectually stimulating’ discussions on the proverbial possibility of the bear finally having slain the bull. Yawn! I, for one, had heard this drivel from close quarters in May 2006. While my team has a standing joke about some of these ‘worthies’ and their incredible track record of calling the market direction wrongly, 9 times out of 10, the viewers alas, do not have that luxury.

So, how about a transparent system whereby the recent recommendation track record of an “expert” on TV is flashed alongside their current views (like a tabulation of a cricketers statistics over the last five matches played)? Perhaps then, only genuine “worthies” will queue up to have their visages flashed frequently. Food for thought, SEBI?

I thus cant help wondering again, do we (Indian market participants) really have the stomach for equity and its inherent risks and upheavals. The answer to that, I know, unlike the question regarding the direction that the market would take.
That perhaps, only the Goddess can tell.

(Ashok Kumar heads Lotus Knowlwealth)