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03 July 2008


I went for my triweekly haircut to the barber and while waiting for my turn I sat browsing through a pink paper. And as is the wont of the tribe of barbers(hairstylists?) he struck up a conversation with me using the pink paper as an opening gambit. "There was a lot of money to be made in the stock markets but that time is past. Now if one enters the market, one does so with the specific intent of losing ones money! For I dont see any other reason for doing so."On the way back it stuck me that such was an opinion voiced by all and sundry; be they on the boob tube or in the street or even in the papers.

Within six months had we gone from being the destination of choice for global money to being an economic equivalent of 'Ramu Ki Aag'? Was our economic ecosystem so fragile as to collapse under the weight of rising inflation (spurred by the rise in commodity prices incl oil)?Being the eternal optimist I do not agree with this hypothesis. However optimisim without the support of reason is irrational exhubarence. So what is my rationale for the optimisim?

The demographics of India itself can sustain many a sector. The low levels of penetrationshould be seen to be believed. Teledensity - less than .1%. Two wheelers - less than .05%. Education, energy, clean drinking water, roads, healthcare, governance.......I could go on and on. We all know of these ills. Let us look at them as opportunities. The opportunity is there but there arnt many who are taking advantage - for varying reasons (more of that later). So we need to perhaps sift a little more closely here - looking for gems which could help us ride this downturn and take us closer to the crest in the next wave. I bet on water and healthcare. I bet on life itself. Like the Oracle of Omaha famously said, " People gotta eat and drink".

They also need to survive.

Meanwhile I shall follow the obverse side of the market rule of thumb - 'sell when your newspaper seller starts recommending stocks to you'.

Well, my barber tells me .....

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