Friday's fall: Are we still in a bull market? All you need to know

The foundation of a robust bull market is hopelessness, says the author

As the calls of ‘Weychi ne nikarvu?’ (Sell and exit?) mounted last week, I wrote these lines for personal clarity. 

• If the market can be expressed through the prism of emotion, then permit me to say that we encountered a near-terminal emotion last Friday — panic. 
• The tension (when will the decline happen?) is over. It has been happening in mid-caps through January, translating into a huge sell-off last week. 
• A complete cycle will bring us to the point where we will want to stop seeing the quotes/papers just like we wanted to plug into the Moneycontrol app to check portfolio values every nine minutes even though we told everyone “we are in this only for the long term”. 
• Soon everyone will begin to say “things look bad: See the by-election results, economic slowness, rising oil prices, the widening fiscal deficit, weak tax collections and next year’s elections” — the time to enter. 
• The financial papers will start referring to every 300-point Sensex decline as a “crash”. 
• There will be people who need your shoulder, only to say “we lost all our gains in 12 days”.   
• Attention will gradually turn from “how much will the stock go up by?” to “how much is the company likely to earn?” 
• The readings were everywhere: The pink paper headlines indicated an overpriced market, Uday Kotak kept saying “watch out” as politely as he could, value-seekers kept saying “neevra” (idle) when you asked what they were up to and cousins began to call seeking “Kai levanu bataavo to…” advice (tell us what to buy). 
• Broker calls will now go answered (“Baad me keejiyega. Abhi masroof hain”)
• Forecasts will be reversed: Target prices will be lower than existing market prices. 
• Everyone who insisted that ‘Market looks good, Budget even better’ just a fortnight ago will start cautioning ‘Bhai kai kehva jevu natthi’ (Brother, there is nothing to say). 
• Is this still a bull market? Nobody knows. 
• The foundation of a robust bull market is hopelessness. When you know that nothing can go right might be the time to buy. 
• Markets don’t just react; they over-react (which creates the opportunity). 
• A bull market usually contains junctures when you are convinced about the value in some counters, except that they won’t move for so long that you might just be tempted into dumping. 
• In the depths of winter lie the seed for a roaring summer. 
• The champion is one who works over-time appraising value when stocks have flattened out. 
• The champion compares bargains from stock to stock, sector to sector and is in a state of hyper-excitement (only to find nobody listening to him). 
• India’s growing population will consume more – the basis of the country’s long-term bull market. 
• Markets presage the economy by a couple of quarters, which is not really a happy way to end this column. 
• If you are in the game for the long term (as you say), why bother?
• She who masters her mind masters the market. If only I could read my own column, I might get richer.

The author is a stock market writer, tracking corporate earnings and investor psychology to gauge where markets are not headed