It’s late on the evening of Saturday, May 10th as I’m writing this column. India’s longest election campaign--which has lately attracted the adjective ‘exhausting’ more than any other--has come to an end just a few hours ago. The campaign lasted eight months, counting from the day when it really began, when Narendra Modi was anointed BJP’s Prime Ministerial candidate. However, I didn’t find it exhausting at all. In fact, in my living memory, it was the most useful election campaign ever. I learned far more than I ever had in any previous campaign about parties, leaders, the whole political process. I also learnt a lot about the nature of political coverage in the Indian media, though hardly ever to the latter’s credit. Generally speaking, people who were pretending to be something other than what they really were, couldn’t sustain the pretense for such a long period of time.
Interestingly, from an investor’s perspective, the post elections action has already begun somewhat prematurely. On Friday, there was a sharp rally of stock prices which, according to rumour, was triggered by a leak of exit poll results. It’s hard to tell whether this makes any sense and we’ll know for sure only on the coming Friday. However, it’s interesting to remember that in the last two elections, the stock markets’ initial idea of what the results meant turned out to be completely mistaken. The equity markets took the 2004 results badly when it became clear that the communists would be partners in the government. But the years that followed were great for investors. In 2009, the markets reacted with unbridled joy at five more years of Manmohan Singh, and look where that got us.
Of course, the past is only a rough guide to the future. The election of 2014 has very little resemblance with past ones. And it’s not just about the elections. The equity markets are hardly known for sticking to predictable patterns. The past is a very imperfect guide to the future. As are most things.