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Our thoughts on the current financial crisis

Right now it feels like the financial world is coming to an end…markets are collapsing, companies are defaulting on loans, lay offs are happening….but this does not mean that things will stay bad and we are doomed.

We are not political at all, but the truth is that India is still shining! What is getting ignored is that our GDP will still grow at 6%. Compare this to western countries where there is zero or negative growth. India still needs 1,000s of kilometres of roads, 100s of power stations, millions of new residential homes for the new families being formed, cars for aspiring middle class citizens….everywhere you look there is growth. Yes, things are a little slower than what they were twelve months ago, but the world is not coming to an end….the long-term fundamentals for India are still very strong. 6% economic growth is not a recession at all….Mr Obama would love to have 6% growth in the US right now, but too bad he has negative growth!

So, there is no need to panic in India. We are not saying that the stock market recovery is just around the corner. The truth is we don’t know…we are not fortune-tellers. But what we are saying is that in the long run (and that means at least 5-10 years) things are going to be just fine. Sometimes markets have to go through a cleansing process to work out the excesses before a more favourable trend emerges. We are in the middle of a correction process, from which we will come out stronger and better prepared for the future.

So, think positive. Just like when we were kids and our parents told as to think long-term towards our future, we need to be doing the same today. Think long term, and look at the whole bunch of new opportunities that times of crisis throw up.

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