Fatigued ! 26. August 2011 Rahul value investing (0) Fatigued, in one word captures what market participants around the world are feeling, especially in India. The Indian market peaked in October 2010 and has been on a downward trajectory since then. The markets have endured every imaginable kind of bad news during this period. August was marked with extreme volatility in markets globally, with the Dow swinging by 4% intraday consecutively for an entire week. Indian markets outperformed the Dow and S&P on most down days. This was because selling in the Indian markets has completely dried up. The irony is that although the Dow and S&P have stabilized, Indian markets continue to remain listless because buying has completely dried up as well. Participation in the markets has plummeted and cash market volumes are making new lows. I’ve learned from my own experience and from the experience of many market veterans that markets like these are symptomatic of (most often) major bottoms rather than major tops. That does not mean that markets will just pick up and start rising from here. It means that the potential risk to potential reward ratio in the markets is extremely attractive. For patient capital looking to protect itself from the imminent debasement of currencies, Indian equities offer an attractive opportunity.