Here are three pieces of news/information that I've seen over the last few days, juxtaposing which has been interesting. Firstly, there have been a set of news items about what an awful week it has been for the stock market. Apparently, the Sensex and the Nifty fell more last week than they have done for three years. Or something--I didn't check this carefully. Other items said something similar about many of the equity markets around the world. The decline of oil--otherwise celebrated in India--is also said to be part of the same trend.
The second exhibit I have is a little graphic someone sent me pointing out that the BSE Sensex was at 100 in 1979, it touched 600 in 1989, 3,600 in 1999, and 21,600 in 2008. In other words, it has been 6X per decade over a long time. There has been a huge diversity and massive volatility in what happened during each decade, the nature of Indian business changed beyond all recognition, and yet the upward march continued. And the third exhibit is a recent tweet from Nassim Nicholas Taleb where he wrote "News is to information what cancer is to a regular cell".
I'm sure you can see where I'm going with this. All around us, a lot of breath has been expended on what the equity markets have been doing. Have they run ahead of themselves, and when will rates fall and when will 'reforms' start and then when will growth return and whether there is too much optimism and whether there is too much pessimism and so on and so forth. When you read such news, think of what Taleb says. And think of what happens on decade-long scales of time.
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