The Hindu Business Line : Is this a good time to invest?

Bidyut (an economics professor) and Mack (an American expat working in India) are seated in the professor’s car, enjoying vanilla ice cream from a roadside vendor near the beach in Chennai when they overhear the seller talking with some customers about the global liquidity crunch and sub-prime. In the face of the assault on their ears, their resolve to stay away from the topic – something they deal with every day in their respective professions – melts faster that the vanilla in Chennai heat.

Bidyut: Well, just about everyone is talking

about it now.

Mack: (Chuckles) Ya, seems most people know more

about sub-prime that we do.

Bidyut: If it goes on this way, we could be out of jobs.

[They did not notice Jogin (an economics student)

sneaking up on them after switching off his motorbike]

Jogin: I hope things improve sometime soon.

A lot of people – small-time investors – are

in trouble in India.

Mack: Ha! You wish. With the Sensex below 10K,

not many would want to throw in money in to bear pit.

Bidyut: Theoretically this is a good time to buy.

But purchases now must be looked at as medium-to-

long-term investments for best results. It would be

better to accumulate stocks in small quantities.

[Divya (a journalist) walks in]

Divya: Hi everyone. Jogin, want some ice-cream?

I will pay.

Jogin: Would I dare say no?

Divya: But Bidyut, what if the markets fall further.

Then this would not be such a good time to buy.

Bidyut: True, but I hope things will improve soon.

Divya: I agree. Wipro & TCS are set to come out with

their quarterly results next week. If their earnings

are good, it could kick-up the market sentiments.

Jogin: But you think the crisis has not affected them.

Bidyut: I would bet that if at all they are going to be

affected, it would be in the next quarter.

Mack: There is logic in what Bidyut is saying.

Most companies would be seriously considering or just

implementing cost–cutting measures in IT. Even if we

discount the outlook, the current earnings should

fuel the Sensex.

Divya: If it would make you happy, more companies

are also announcing quarterly results the coming week.

JP Associates, Idea, Jet, MRF, Federal Bank, Titan,

Ashok Leyland, Hero Honda and not to mention

RNRL and Reliance Petroleum.

Jogin: Speaking of Reliance, RIL has lost big recently.

The stock has poised technically at critical level.

Divya: By the way, RBI is meeting on October 24.

Markets are abuzz that the bank might cut repo rate

by 50 basis points.

Jogin: Hey, how have things been next-door,

at Pakistan?

Divya: Not too good financially, according to

some reports.

Jogin: (Chuckles) I hope the financial stability is better

than their political stability.

Mack: Well, what I am hoping is that the worst of the

crisis is over for India.

The four sigh almost simultaneously but the drama of

the moment was downed by rumblings of thunder and

dark clouds fast approaching from the horizon. They

decided to end their chit-chat and try to reach their

homes before it rains.

Jogin: (With a grin as he mounts his two-wheeler)

Well, at least we can be rest assured of some respite

from the heat for some time.

Ram with input from Bad

Blog at http://MarketChat.blogspot.com