Top memories of 2008 – Part – I

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Top memories of 2008 – Part – I

31 December 2008 495 views 4 Comments

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The scary fall of BSE Sensex

MEMORY # 1 (Or should we say what we should forget quickly?)

A memory of 2008 will not be complete without seeing this scary graph. You have to just print this graph and see it upside down to see how it was in 2007. The best performer of all markets in the period between 2003 to 2007, year 2008 saw Indian stock markets became the worst performer in the world. Fall of the markets made several investors lose money and sell everything that they owned. People who had multi-bagger dreams all of a sudden became multi-beggers.

One important take away from this fall? Do not believe the experts. They don’t know anything about the market behaviour. When the market was at its peak, what was the prediction from the experts? See the image below for one such prediction.

Experts are people who know more and more about less and less

MEMORY # 2 (The luck of a man with ambitions – Mr. Anil Ambani)

The Gods must be really crazy. If the Almighty destined that millions of people should go with less money “power”, He also destined that one man (Mr. Anil Ambani) will take the “powerful” route to get even more money power. And when the God designs something no one can stop it. Not even campaigns on email and orchestrated “expert” views about the steep price fixed for the IPO of Reliance Power Limited could taste any success.

With the market crash just around the corner, the Reliance Power issue opened and greed of investors saw it getting oversubscribed multiple times. You might think the Company had fantastic fundamentals to warrant such a response from the public with their hard earned and easy borrowed money. Financial record and fundamentals? You must be crazy. These words seemed banned from the dictionary of investors who cared two hoots about the Company having no financial track record and nothing to show in the profit and loss account. It was enough for them that few power projects will be operational for the Company in 2012 and 2015 and will light up the power starved India.