t-zAVW_utoTCRUo_lLxrx7MFn0Q

Wednesday, December 21, 2011

2011:The Year That Never Was and the Cycle of Life

I would like to forget this year in a rush.A lot of Indian Icons left us with unforgetable,watchable memories,a few songs,some great acts.....Jagjit Singh,Bhupen Hazarika,Dev Anand and a few like George Whitman,the one whom i never met but spent a hugely wonderful time surrounded by the musty,wet smell of old books in his Shakespeare and Company in Paris.

The Euro crisis did to equity markets what the Subprime issue couldn't do!Here in India we have learnt a few hard lessons that always lay somewhere over the horizon viz.without the 'Growth Story',India is simply a concoction of bad roads,corruption,economic imparity and a collection of states pulling in different directions?

The Arab Spring that brought so much hope is falling into bloodshed at the very same Tahrir square.Syria is killing itself.Iran doesnt know if the mullahs run the government or is it the politicians masquerading as mullahs?The Americans pulled out of Iraq but are threatening to walk into Iran.

China wants to control the internet,the Indian Ocean,every word that its own society writes or thinks.Its growth slowing,the mighty engine is looking for a landing that is neither soft or too hard at the moment.is the world in 2011 a more open,socially egalitarian place or are the old fault-lines window-dressed and presented as something new.

Coming back to Indian equities,I still believe that its a great time if you are an investor with approximately 150 largecap stocks hitting their lifetime lows.For a contrarian the infrastructure sector that has not performed for almost half a decade is a prime pick with some stocks at 30-40% below Book Value.The pressures of mindless expansion and borrowing through ECBs shows survival of the fittest at its best.

There are a lot of companies with good managements that made some bad decisions,will they be punished more than they have in this bear market?The jury is out there...

I would like to bore the reader with some quotes from Peter Lynch(he of One UP On Wall Street fame)

# You cant see the future through  a rearview mirror

"Whenever I am confronted with doubts and despair about the current Big Picture,I try to concentrate on  the Even Bigger Picture.The Even Bigger Picture is the one thats worth knowing about,if you want to be able to keep the faith in stocks"

So whatever issues I have mentioned will always be present in some form or the other.Its important to look at businesses that will grow,make money for the investor,pay bonuses or dividends,generate employment.

It is the Cycle of Life.