A few months ago, several retail investors had entered panic mode as the markets were correcting very sharply. I remember how certain people further fuelled the panic by making comments of absolute doom. Now once again markets have bounced back since then, and we have people making comments of absolute bliss. At that time I suggested people not to sell in a panic and study the fundamentals of the companies they had invested in.

Now I am telling people to not simply be carried away by hype and not to invest blindly. Irrespective of where the market is, our job as an investor is to study the fundamentals of the business we are investing in. We can’t really predict where the market is going to be. Some businesses are less affected by global financial crisis, while others are more affected. A bank which is involved with the West when it comes to certain credit instruments might be more affected than say a company selling milk products and daily consumer goods to retail consumers in India.

Nothing could be worse than following ideas and myths about absolute doom and absolute bliss. The world is going to face some challenging times due to what has happened in the West – though it is not permanent. I feel over time we will come to know the insides of the problem.

However most businesses, which are based in India and are focused on the Indian consumption and growth story, will surely reward investors in the long run. India according to me is still at a point where say a country like China was during the 1980s or say Japan was during the 1950s and 1960s. Of course we have a lot of differences and it wouldn’t be fair to compare India to any other country. But what I am trying to say is that still growth has not saturated and there is a long way to go.

Sometimes stock markets will portray this and at other times stock markets will discount this. Let us say tomorrow the stock markets correct, does that mean the country stops growing? Similarly let us say because of stock manipulations or aggressive buying the Sensex goes to 40,000 in the next one year, does that mean the economy too is growing that fast?

In the long run, lot of money is going to come to India. I have been interacting with a lot of big investors in the Middle East, who seem to get richer and richer by the day due to their oil wealth. We can all see oil prices rising. This means more money coming into the Middle East. Many of them want to invest in India now. They aren’t too happy with the West and feel it is much better to get into India now as compared to China.

There is lot of money that is waiting to come into India, however there is also the risk of some money going out in the short term due to problems in the West. As investors we can either worry about such things, or simply mind our own business and look at the businesses we have invested in.

In case you are a market watcher. Do remember that it makes more sense to not bother too much about each bit of news as compared to constantly scrambling and running behind information, which might not be needed. If you remember the Sensex was 100 on 1st April 1979. Today we are around 17,000 on 29th April 2008. Not too bad, is it? Imagine what all happened over this time. We had scams, economic problems, the License Raj and all sorts of challenges, still things are not really that bad now, are they?

No wonder people who continue thinking for the long term believing in the India story do end up much more than what they started out with. Never let the market control you, rather be the one who is in control of yourself.

We need to spread this way of thinking and mindset to millions of more people. It will happen.

Keep smiling and happy wealth creation!

- Yogesh Chabria

The author is an investor and bestselling author. You can read about him not letting the markets control him and much more in his latest book Invest The Happionaire™ Way which is available at major bookstores across the country. You can find out more by visiting www.happionaire.com. You can write to him at yogesh.chabria@moneycontrol.com

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