In my view Black Monday means little to a genuine investor as opposed to a speculator, who to me is a person who invests without the knowledge and mental strength to stand by his judgment for at least 3 years. A poorly thought out reaction to the political scenario was one of the main causes of the fall of 330 points on the Friday before last.
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| The political posturing of various parties was misread as a statement of government intent. Black Monday brought with it a 200-point slip in the first few minutes, which then triggered panic selling by small-time speculators, which in turn caused a hands-off attitude among buyers, which then triggered off various technical and risk containment measures.
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| These factors mean little to an investor and we mutual funds have seen them displaying a remarkable level of maturity.
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| There have been no panic redemptions. Considering the fact that our funds are largely held by high-net worth individuals and corporates, this is indeed a barometer of educated decision-making and not of an Ostrich syndrome or the inability to deal with something unpleasant.
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| Lets analyse the quality of logic underlying Black Monday. An unexpected government and a suspect ideology? Not really. Politicians of all hues have spoken of the common man and the farmer, but in the last decade, they have all walked the path of reform.
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| In fact, the most vociferous ones have not necessarily been any more successful in implementing progressive measures, than the other kind.
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| The common minimum program alone should give doomsday prophets a pause. On the one hand it speaks of the repeal of the electricity reforms and on the other, of private and foreign investment in the electricity business; of privatising only loss making PSUs and of allowing all PSUs to approach the capital market for equity; of increasing cheap credit to farmers and reducing fiscal deficit.
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| If the common man had a Sensex, I am sure it would have mirrored our own. In fact, within the confines of a political statement suspect only because it has been put together by former socialists with the consent of the communists, I am surprised at how much progressive thought has been smuggled in.
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| The proof of intent will emerge only as the government shifts into top gear, after the garlands dry up and the victory marches are over. The budget will be the first real milestone to look out for.
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| Yet if this government is sensible it will not use the budget to jump-start the Sensex. Learning from the mistakes of the past, I would rather that they went about it softly, and knowing of the three gentlemen at the helm (lets not forget President A P J Kalam), let us expect them to do business without drumbeats.
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The Sensex is like the Doomsday clock; the clock can
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