Who's winning? The Bulls or the Bears?

Today was another wild wild day in the Stock Market. After plunging little over 800 points in the morning it recovered to close just 208 points in the negative… some recovery…. In fact it has crossed over into 18000 territory to close at 18152. That’s the round up, now for the not so great news. There is a very, and I mean VERY, strong chance that Mr. Y.V. Reddy is not going to come out with anything more notable that a minor repo rate cut. That’s basically not going to do anything other than give out a signal that the RBI will in time reduce rates. If you have the time, check out this article
[http://www.myiris.com/newsCentre/newsPopup.php?fileR=20080128141617170&dir=2008/01/28&secID=livenews]
So we could see the markets, especially the banking, and auto sectors do a belly flop tomorrow when the promised rate cut does not come through.
If you really want to frighten yourself with regards to the American market and its recession check out this particular blog
[http://investmentpostcards.wordpress.com/]
It has some extremely disturbing data on the fate of American bond insurers.
The markets are beginning to resemble a cowboy rodeo. I wonder what will happen if the Bull is replaced with a Whale or an Elephant, something more stable that doesn’t buck so much. Perhaps that’ll stop these wild swings. After all expecting the Fed to sacrifice the erring banks and clean up the system is expecting a tad too much.
It’s really funny how people never learn. Every few years the same thing happens. The market goes up, people get optimistic, the market goes up some more, people get euphoric, the market goes up even more, small caps become darlings of the market turning into multi-baggers overnight. Then one fine day something gives and everything comes crashing down. The market loses trillions of rupees, investors (traders really) see vast amounts of their money wiped out, margin calls left right and centre, the finance minister comes on the tele waxing eloquent about the strong domestic growth and GDP at 9%. Then barely a month after asserting that nothing could stop the market, the very same people insist that the markets are done for and nothing can help them recover. The bear market has begun!!! Then of course the market starts to recover, people cheer up, the market goes higher, people get a little more optimistic and the cycle continues. What’s the difference between a bear market and a correction? A correction today lasts a few days; a bear market lasts a few months. In today’s fast paced world the time span for everything has reduced. Maybe someone should start looking at valuations for a change and stop discounting two years forward growth today. Two years is a long time, margins contract, competition comes in, top management leave, growth slows, government’s change, policies change… a lot can happen in two years.
It’s a pity there aren’t any full time bears left in the market. The bulls have stampeded long enough.