It’s been a couple of days to remember (or forget) for the stock markets. It takes me back almost 10 years to 1998, when the Asian financial crisis unfolded. I clearly remember that I was in Chennai at that time and was watching the live quotes of the Indonesian Rupaiah on CNBC and watching the freefall of the currencies and the stock indices. The feeling was similar yesterday and today. There was no other topic of conversation throughout the day in the office.
Luckily for me and my group of friends, we never did venture into the market when it was playing at the 20K+ levels, our investments were made at much lower levels. Of course, we've seen our profits vanish, but it's nothing compared to the thousands who were seduced by the media to begin investing, misled into thinking that the market could only go up and up and are now left without the shirt on their backs. It's happened before in 92, 95, 2000 and will happen again in the future.
One silver lining is that many stocks are so far off their highs that they make very sensible investment decisions. Take IT for instance, you've now got Infosys and TCS available for 15-16x FY08 earnings and 12-13 times FY09 earnings. These are extremely profitable companies generating 1000s of crores of cash each year and yet the market is totally ignoring them. I think it is a very smart decision to buy into them right now. I would, if only I hadn't fallen for the hype and put so much money into the Reliance Power IPO:-(