half knowledge

Let me talk to you on something that affects most of us. We look a lot in the past and our decisions for the future are a lot based on them.

Looking at the past, knowing ones history is extremely important – but looking at a selective phase in the past can be highly dangerous.

And when it is about your investments, especially in the stock markets, it is even more dangerous.

Let me share some examples with you:

Example 1:

knowledge

Example 2:

knowledge

Example 3:

knowledge

Why do I share these examples with you?

The reason is extremely simple. We are currently undergoing a tough phase in the markets with a lot of them out there predicting worse times ahead. But, one must understand that this is surely not the end of the India Growth Story. We have in the past witnessed tough times and for people who have invested in times like that instead of getting fearful are the ones who have made merry in the stock markets.

Let us relive the times of the tech bubble crisis in 2000 when the Nifty had crossed 1,700 levels and then came crashing down to almost 900 levels in 2002. It stayed in a flat to slightly positive range for a few months after that. Did you invest then? Or stayed out because of fear? We all know what happened to investors who jumped in at that time.

The Nifty peaked above the 6,100 levels in 2008. Yes, 6 times in 6 years.

Wasn’t it a similar story 2008 onwards?

History does have some answers of what’s going to come. Every time the markets have taken a hit due to short term sentiments, they have bounced back even stronger in the years to come.

With the kind of reforms carried out by the government over the past few years – short term hit isn’t a big surprise, but, thinking of this to be a permanent feature, would surely be a big mistake.

And hence, I end this by only saying a very famous saying – Half Knowledge Is An Extremely Dangerous Thing.