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What to do now? Markets crashing like anything! Seems to be the question everyone is searching an answer for.

My advice, breathe easy. Nothing; really nothing has changed with the world.

People will still wake up every morning, brush and shave, and shower. They will still read newspapers printed on paper, sipping tea with sugar in it. People will still drive bikes and cars and suvs to work. They will still need electricity, and oil and roads and bridges. And companies which build them will still need steel and cement. People will still goto banks for deposits and loans. And those banks will still need software to run. People will still buy TV and Refrigerators and Music systems and other consumer goods. And they will still need medicines when they are not well.

It takes thirty years to build rock solid companies like Seimens, Reliance, M&M, SBI, ITC, Hero Honda etc. Can the fundamentals really change in just a weeks time?

Do what you have been doing before. Play with your kids. Spend time with family. Talk to your friends. Give your best to your workplace. Enjoy life. If you have made your buying decisions right, you can sleep sound.

Unless the dollar crashes or unless you are leveraged beyond your limits, you have nothing to worry. And if any of that happens to be true, then also you don't have to worry. Because then you are royally screwed up, and worrying won't change that.

Personally I find Investing to be very much like Rock Climbing. You need intelligence + risk apetite. If you are not intelligent, you won't find the way to the top of the mountain. If you are intelligent, but don't have the risk apetite, then that is more dangerous. You will climb up the cliff, but at the slightest movement of a stone beneath your feet you will look down, and fall off to death.

Unrelated: Incidentally both investing and rock climbing are my overriding passions. Though I haven't got time to do much of the latter recently. 😦

Update: Someone pointed out that if I have made my biggest call on derivatives, am I not over-leveraging? Answer is, No. Coz that biggest call is still just a single-digit percentage of my stock portfolio. That means I am way under the point you can term over. I can pay off my obligations any day, which is what every leveraged player must keep in mind.

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Butchery. Savage Massacre. And today, raw Blood on the Streets.

Charles Dickens starts A Tale of Two Cities with. 'It was the Best of times. It was the Worst of times.' He was certainly not referring to India 2006.

Sensex crashed a mind-numbing nerve-rattling stomach-wrenching 887 pts in preclose trade to create the biggest fall in the 130 years history of Indian stock markets.

Nothing expresses it better than this Live Mkt Data, I captured on my laptop. ALL Nifty in Red!
Biggest Fall

Rediff lists the 10 biggest falls in the history of Sensex. I have some interesting observations,

  1. Todays fall eclipsed the previous record fall of 507 pts by a big margin. Then it was a huge Eleven Thousand Crore Harshad-Mehta scam, the biggest till then. This time its a host of international factors – the commodities bubble, the pressure on Fed rates, rising crude, and currency manipulations.
  2. Of the 10 biggest falls, three (yes, that's right, THREE) have taken place in last one month! The biggest today, and the 4th biggest just 3 days back. We are surely living in the most turbulent era of Indian mkts. Read Charles Dickens quoted in the start of this post. You know what I mean. If we have seen the pink of Hedge Funds flocking to India like never before, we must suffer the blue as well.
  3. And now, the most startling observation. April and May are omnious. Nine of the ten falls occurred in these months. Actually all 10, if you notice that Mar 31st, 1997 was just a day before April. What's with Indian May and April?

I was listening to Fanaa all day long, as I witnessed history unfold before my eyes. And I think I can hear the Market singing to us,

Ye jo iraadey bata doon tumko,.. sharmaa hi jaaogi tum.
Dhadkaney jo suna doon tumko,.. ghabra hi jaaogi tum.


Btw, does that last line means its NOT over, yet.

My Personal Call –

What did I do today? Over the last few days I've particularily been very active in Derivatives. And it led me to building my biggest position till date on Tuesday. So, did I pare it today? No, I have further increased it. Its a big call. I'm generally a very confident, clear-thinking level-headed investor.

Now, if things move in favor, I'll shoot through the roof. No, make that 'I will go through the stratosphere'. If not, you can fish me out alongside Titanic or somewhere near Maraina's Trench.

Btw, Do Do Do positively grab a print edition of Indian Express and TOI tomorrow morning. Even if you have no interest in stock markets at all, you can save them as a collectible or even gift it to me later. 🙂

NSE alone has Thirty One Lakh Crore of public money at stake with it. I wonder how much of it went 'fanaa' today? Waiting for the EOD stats to come out. Till yesterday, Fanaa was about Aamir and Kajol. Today, its about my romance with the markets.

Subhaan Alaa.. subhaan allaah..
Sharmo haya key pardey gira key.. karni hain humko khata..
Jid hain ab to khud ko mitaana,.. hona hain tummein fanaa..

Humming along..

Update: If you haven't yet tuned into Chand Sifarish from Fanaa, its time to do so. The post makes more sense after you have listened to the song 🙂 Plus, its an absolutely wonderful song.

mktbear2.jpg 11:30 ish AM – Sensex dives another 460 pts! Nifty down 140 pts!

A commodities meltdown on LME causes another Black Monday in India – can the world be more networked!?

Wonder how many traders got margin calls today, and were forced to pare down their positions further adding to the slide.

But when the sanity returns, the markets will have only one direction to go – North! 🙂

markets_crash4.gif markets_crash.gifToday was the biggest intraday fall for both Sensex and Nifty since,… since May 17, 2004. Coincidence?

Sensex nosedived 463 pts at close. Nifty145 pts.
All stocks in Sensex and Nifty closed in red. (Very rare indeed!)

All indices in red. Midcap and Smallcap down 3%, IT down 2.5%, Bankex down 2.7%, Metal down 11%, FMCG, Oil & Gas, CapGoods and Pharma down 4%.

All emerging markets in red. Indonesia -6%, Russia -3.5%, Dubai -7%, Poland -3%, Thailand -2%, Philippines -3%

All major World markets in red. DOW down 120, Nasdaq down 29, Nikkei down 114 pts, HANGSENG down 407 pts, Kospi down 100 pts. FTSE down 129 pts.

Little wonder then, that Nifty and Sensex also crashed. The wonder really is the huge amount by which they have fallen. Are we in a bear mkt now?

International cues are all negative. Rising crude, falling commodities, Fed hikes, USD gaining Vs Euro etc.. Local cues are also all negative. Left getting a stronger foothold, cement under pressure, under-recoveries in oil, metals under pressure and most importantly a real-estate bubble etc..

But still I think, no. We're in a short-term bear phase, with long term story still intact. And based on that I have taken my biggest exposure till date on the Futures. I am Long on it.

Now, let's see now what happens.

Update 1: Someone emailed me an additional piece of info – http://del.icio.us was acquired in Dec 2005, eight months after they got venture funded. And it had just nine employees then. Backtrack eight months and it looks like they got funded sometime in May 2005. I will find out the exact dates, when del.icio.us was founded, and when work actually began on it, once I am through with the promo and get some free time.

But just a thought – if I assume it to be one-and-a-half years of work, (which is long time in internet business esp for social community sites like Delicious), before they got funded, then that makes it somewhere around Dec 2003.

Ok. Now I feel even more dejected. 😦 WorthALook (read the post below) was started in Christmas of Dec 2003. This is one coincidence that I am not able to feel happy about.

Update 2: Tomorrow is a BIG day. We will be seeing the results of our promotion. The stage is set. We don't know how much public will turn up. 100. 200. Maybe 300. Or maybe 500! Let's see. But since we've invited the C.O. I don't think there should be any security or administrative issues even if the turnout is huge. 🙂

We're running a promo on Apr 23, two days from now. And my mind which is already clogged with events, details and todos (which don't seem to end whatever you do), has suddenly started throwing up Web2.0 ideas! Retail and Web2.0 don't go hand in hand. I know, it is very necessary for me to either shut it down, or find a way out.

I'm feeling strange today. If you know an adjective which correctly describes "overloaded + excited + dejected + angry + hopeful + good", then please let me know, because that is how I am feeling right now. Its strange how thoughts link up. And where they can lead you to. This is how it went.

Arjun Singh had recently announced an increase in reservation for SC/ST/OBCs in educational institutes from 22.5% to 49.5%. Now I won't be discussing that here (there is another post for that). But I have written to Indian Express and the PMO about my concerns.

Now reservation is a topic I feel very strongly about, and I intended to write about it to a friend in Kansas who runs a newspaper there. It has been 2 years since I left US and had any interaction with him, naturally I had forgotten his email id. So I searched my mail archives of 2003-2004, and there he was. Just curiously I went through some of the old conversations we had. (TIP: Its fun to go through your archives, some really old emails., old friends, old issues. And see how the feelings sweep over you. How the world has changed. Try it if you have not done it yet. Its a really wonderful experience to 'live' once again)

Among the numerous email exchanges we had, I found the first email that he had written to me. (Friday Jan 16, 2004)

"Hi Animesh

I stumbled upon your group and the contents are indeed great. Great achievements. I have just started a four page Newspaper for Indians in Kansas City area – is it possible for you to contribute any material for the same? I will definitely give you due credit. I am not looking for more than a few lines and then we can refer them to your group. If you wish, we can also create a free ad-free group on my site – a little later on.

Thanks!
Ravindra Reddy"

This innocent email had surprised me then. I seriously found it hard to believe that anyone would be interested in what I had to write. And today, this same email took me by surprise once again. It reminded me of a Yahoo Group (the first line in his mail is referring to that Yahoo Group only) that I had started somewhere in December 2003. And the group mail to which Ravindra had written back was this (I got nostalgic when I read it again today.)

"Jan 13, 2004

Indian Army as an Agent of Development – Link Submitted by Animesh Srivastava

All it took was a watermill, a social scientist and one enterprising Army officer. And the remote Arunanchal Pradesh got lighted up! The first setup was done in none other than our Menchukha circle. And the cost of this hydel power station? Guess!
http://www.indianexpress.com/full_story.php?content_id=38193
Keywords: [Indian Army, Assam Rifles, Arunanchal, Uttaranchal, Electricity, Power Generation, watermill, Hydel]

Designed to Succeed – Link Submitted by Animesh Srivastava

Launched 1997
Starting Capital Rs 20,000 + an old 386 computer.
Current Turnover Rs 6 crore
Name of the Company Esign
Recipe for Success No Guts, No Glory

"At 25, with a promising career ahead of her on the creative teams of advertising majors such as Contract and Mudra, Sonia Manchanda chose to walk away to set up Esign, a design hotshop. Ask her why?" Newly wed and a fresh graduate, she decided to take on her own in the world of business. Recipe for success – sheer guts! Meet your entrepreneur at
http://www.outlookmoney.com/scripts/IIH021C1.asp?sectionid=10&categoryid=48&articleid=4454
Keywords: [Entrepreneurship, Esign, Bangalore, Fashion Design, NID, NIFT, newly wed, old computer]

Found something interesting? Share it at
http://groups.yahoo.com/group/worthalook
"

This group which I had launched in Christmas of 2003, was named WorthALook. It was barely 3 weeks old then. We had few members, mostly my close friends from IITK. They followed it and were happy about my efforts. Also, I happened to come in touch with some nice people through it; including Ravindra, the owner of the Kansas City newspaper mentioned above. But eventually, the group didn't go anywhere. I couldn't take it anywhere. I didn't intend to. Work at Bank of America and other personal projects were enough to keep me busy through the night and the day. Two months later I got a mail from Yahoo that the group will be closed, and I thought 'Okay'.

But reading that group post today made me something more than nostalgic. I suggest you read it again. Does it says something like 'link sharing', 'keywords' and 'submitted by'? Does that ring bells anywhere? Hell it does to me. It was there! Web 2.0 was there. Del.icio.us was there! And I had been there. The group description was something like –

"Everyday we browse the web, come across articles, pieces of news, tidbits of information etc that we find interesting enough to share with other people. Now instead of copy-pasting the whole article and flooding our inboxes (and in the process also violating copyrights of the websites), we would just be sharing the URL. And to allow people to search we will tag the links with keywords. Found something interesting? Share it at http://groups.yahoo.com/group/worthalook"

Doesn't all that sounds familiar? Pretty bad, I myself wrote the manifesto, and I myself failed to recognize its potential.

So again, how do I feel like? As if a mind juggling around with Retail and Web2.0 ideas were not enough, this is the new feeling that I will have to sleep with tonight.

Overloaded – with ideas (and work also).
Excited – about the countless opportunities and the untapped market.
Dejected – I had been there before. How did I miss it? Why didn't I give it a shot? Delicious, Yahoo acquisition, first taste of success, wow factor! See, how easy it is to extrapolate when you are not involved yourself 🙂 And honestly, far more difficult to actually build up a 'good' business.
Angry – at Arjun Singh. What are you taking my country to?
Hopeful – Missed Del.icio.us. But hopeful of future. There are always ideas. Actually there are "many" right now, more than I can handle given my Retail committments 😦

Lesson: Don't strifle your ideas. Let them develop. For all you know, they might be turn out to be worth more than what you thought. Would I have succeeded? I don't know. The truth is I didn't play the game. Maybe I would have won. Or maybe I would have lost. But the more important thing was to play. The West didn't know how rich India was unless Vasco landed here. Ideas are vast unexplored oceans. Set sail aforth. And play the Game. Fuckin do play the game!

So, if you were the CEO of one of the largest mobile phone company in the country, how would you gain customers? Let me guess. Invest in latest technology, scale up operations, agressive marketing, best services, lowest tarrifs, value-added services blah blah – yes, yes, I know all that. Most of us would have done the same.

Well, this is what happened around here. An 11KV High-Tension line fell on the transmission tower of a reputed mobile company. No winds, no rains, no storms – nothing. The line just fell! And it happened just a few days after another major mobile company (a competitor) entered the market, and started providing services in this region. Pure coincidence? Eh!

The other day I was negotiating prices with one of our vendors here. This guy has recently taken up the distributorship of this new mobile phone company for this region. And just to confirm my doubts, I heard one line of a conversation that was going on there. “BSNL par line gira diya.” We dropped the line on BSNL, someone told him. Our vendor (the newly appointed distributor) smiled.

BSNL is the largest telephone company in India and one of its towers near Farukabad was hit by an 11KV line recently. What with latest technology, agressive marketing, best services, lowest tarrifs and value-added services? How do you beat that!! An 11,000V live wire falling on one of your transmission towers, and your services getting disrupted for days! Customers waste no time in switching providers if they can’t call up their loved ones on your line.

As they say, “All is fair in love and war”. Rural business in India is no less than a war!

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