This bear market will also produce wealth creating opportunities...

Indian Government's insistence on pushing ahead with the Vodafone Tax Demand and various other investor unfriendly moves has removed our markets from the list of favorite investment destinations of global investors. This along with a slowdown of our economic growth and a general policy paralysis created by political turbulences have ensured that even the global investors who have always been bullish on India have taken a cautious view now.

 Global uncertainty caused by the failure of European Nations to arrive at a consensus for solving the Greek Impasse has only added to the market's woes. The Indian Rupee has depreciated at a deplorable rate over the past several weeks due to a combination of a general carnage on all Asian Currencies (as capital is flying back to safety) as well as retrograde policies and a weak administration of the UPA Government here. A weak currency is likely to create further pressure on fiscal deficit as import bills and thereby government expenditures will rise further.

Amidst all this gloom there is very little to cheer about. Moreover there does not seem to be any end in sight of both domestic as well as global problems. The current situation has a stark resemblance to the 1996-1999 era where there was huge political uncertainty coupled with an economic slowdown and an Asian Crisis which took away all

confidence from the emerging markets. Back then there were significant bear market rallies after the dream budget in 1997 and the dot com bubble in 1999. All these rallies did not last long but nevertheless created money making opportunities. Finally when the bear market ended in 2003, we had the best bull market ever witnessed in our

lives.

Though history need not repeat itself but we are sanguine that this bear market will also produce opportunities for creating wealth. Our advise will be to focus on a stock specific approach. Also while this bear market may also last long but at the end of this long, dark tunnel we are in all probabilities going for another multi-year bull market. Therefore for investors with no time constraint this negative environment does represent a great buying opportunity.