The stock markets were carrying this eerie fear through the months of January and February. We knew that things were not going well with the economy. The crony capitalist Industrialists of India with dreams way beyond their means, helped by friends in the right places, had technically gone bankrupt. Most of the equity of their companies, if not all of it, had been wiped out. Technically, only the bankers had claim to their companies. These companies were also defaulting on their secondary debt-money taken from mutual fund debt schemes. The panic in the mutual fund debt industry was giving a lot of people sleepless nights. The March quarter numbers were dreaded by the markets right from the time the calendar year was born. The fear was growing, ripening and gripping investors’ minds. It is in this milieu that the results for the March quarter kept coming. Through April and mostly in late May, companies came out with actual numbers. The verdict is predictable. Investors expected the worst. What they got was much better than what they expected. Things were not as bad as they thought. Now, this leads them to think the numbers are actually good. When expectations run low, ordinary outcomes can be seen as good. Markets are in the mood to see only the silver lining. The monsoon clouds are now gathering colour. Even their darkness would look like silver to our markets. This is the season to see light in darkness.
When change happens slowly, it is not capital but patience that we find ourselves woefully short of.
