Does it feel like 1992? for the older investors like me? or

Does it feel like 2008 for younger investors?

Or does it feel like something new – if you have only seen the markets from 2009 to 2020..you may not know what is uncertainty. Here is a summary of what happened in the USA over the past 2 weeks…

Annie Lowrie writing in The Atlantic says “Over the weekend, the price of oil cratered 25 percent. Stock-market futures plunged so dramatically that the exchanges shut down, as did equity exchanges this morning. The entire United States Treasury yield curve fell below 1 percent for the first time ever; in layman’s terms, that means investors were paying for the privilege of lending money to the American government, due to overwhelming demand for safe assets. A fear gauge of the bond market hit its highest level since the 2008 financial crisis, maybe its highest level ever. Panic, chaos, terror, and uncertainty reigned.

So what should you do now? Just lie low. Do nothing. Tough to follow advice. The more scared ones will want to sell off the  equity and buy gold or debt funds. The more brave ones will want to invest in Indigo or Asian Paints or Clariant Chemicals. Or in shares which have crashed like Vedanta, or Nippon Asset management. Sure if you understand what you are doing great go ahead. However buying a share JUST BECAUSE it has gone down is foolish. If you have been researching say Nippon Asset Mgt and are bullish on it over a 10 year period, go ahead and buy. Any equity share does not become a great buy  just because the price has gone from Rs. 165 to 95. That is a poor decision. Don’t do that.

Then use the Corona Virus warning. Don’t go to crowded places, do not shake hands with strangers, do not touch your stocks, sit tight. Build your strength. Exercise, Run, Cycle.

It looks very tempting to buy (for the optimist) saying “now is the time to buy – and Warren Buffett is buying. However if the mortality rates go up, the markets could crash. A lot of oil companies and airlines are going to default in their banking payments. Entertainment, travel and tour companies may need governmental support. Weak banks who have a lot of exposure to such companies are almost sure to default.

No. Life is not so easy. What happens if the market tanks to 30,000 and stays there for 3 years? We are hardly ready for such eventualities. What if it happens that way? would the same shares not be available for half the price or thereabouts?

Sitting passively doing nothing is an amazingly reactive Vipassana kind of activity…do it for a few months…