At the end of the year, I generally write
about how the returns of the various categories of mutual funds and other
investments have been during the year. However, this year I’m not so sure
whether anyone would have all that much enthusiasm for such an exercise for
2011. It’s been a most forgettable year and everyone who has any kind of
market-linked investment knows very well what they have lost and would like to
put that behind them as soon as possible. My putting some percentages to the
pain will probably be neither interesting nor useful.
Unfortunately, most people seem to see as
many problems looking forward as they do when they look back. It’s hard to
recall a time when the general mood among investors and businessmen was of such
pessimism. So much so that one has to wonder how much of this actually makes
sense on any rational basis. Remember the phrase ‘irrational exuberance’ that
was used to describe the heady days of 2003-2007? Now, it might just be the
opposite. We could well be in an ‘irrational pessimism’ or an ‘irrational
melancholy’ phase. We could be in a negative bubble (if you could visualize
such a thing) and which is as hard to see from inside as the normal sort of
bubbles are.
It’s not hard to trot out a litany of
economic catastrophes that could hit us. However, the mental weightage that we
assign to them could be excessive. The problem is that some of these
catastrophes could be self-fulfilling prophecies. If a whole lot of businesses
don’t invest in their future, well then the investments won’t be justified. And
that’s the same for the investment markets. The irrational exuberance was not
justifiable, but I think some rational exuberance may be in order.
(Courtesy: - www.valueresearchonline.com)
No comments:
Post a Comment