What a flood of confusing inputs for investors! It's the kind of time when you can build just about any hypothesis and find enough evidence to support it. Let me count off some of the major ones. In India, corporate results are better, but on a low base. The Reserve Bank of India (RBI) is going to tighten up credit because inflation is becoming a problem. But inflation won't respond to these measures. But the recovery has been robust. But credit off-take is slowing down. But the markets have spent a lot of time at these levels. But some sectors have run ahead of their real numbers. But the PSU IPOs are great opportunities. But the PSU IPOs will suck money out of the secondary markets. But gold prices indicate a deeper problem. But all asset prices are inflated by the enormous gobs of liquidity that governments have dumped into their economies. But the global economy is through the worst. But there's a second wave of problems building up on the horizon - there was Dubai, now there will be Greece.
And that's not a comprehensive list by any means. As I said, there's enough evidence here to support just about any hypothesis. If you want to decide your course of action as an investor, then depending on who you are talking to, completely opposite things can be shown to be absolutely certain. However, it's the kind of time when, instead of getting confused by conflicting inputs, you should take the view that they are all wrong. Or rather, some random set of factors out of all these will turn out to be more important, but you won't know which ones till you can look back at them with 20-20 hindsight.
It would be much better to step aside and recognise that while all this is of great relevance to the talking heads and the editorial writers, the only reasonable course of action for investors would be something that doesn't involve dealing with this overload of information that falls well short if being useful. If you look back upon the last few years, it becomes absolutely self-evident that it's a complete waste of time trying to peer into this floating mess of tea leaves and try to predict the overall direction of the investment markets. However, what is not a waste of time for investors is to figure out which businesses are worth investing in.
Even if you had invested at the worst of times - say early in January, 2008 - but the investment itself was well-chosen, you would be fine today. Still a little down, but with no reason to be pessimistic. The converse is not true. And that's something that investors should take to heart. This vast fog of news is of little practical relevance, what really matters is choosing the right investments.