This is the way of the markets and that's the reason why we believe one should not mistake this for a reversal. The market is still bearish and we are going to retest the lows sometime in next quarter, which is not too far away. Most of the positives are already factored in and therefore one should not become bullish based on them.
In an otherwise dull market, Satyam drama was one of the most intriguing ones from the capital market perspective. What were the Rajus thinking when they decided to use Satyam cash to buy their stakes in group companies? They have been fairly capital market savvy, and so it's hard to believe that they underestimated the market reaction. Perhaps it was personal greed that clouded their judgement. And god knows what their Board and Advisors were doing when this decision was taken unanimously!! It takes several years to build a reputation and very little time to ruin it. A good lesson for the others though!!
The markets are finding it hard to go up from the current levels despite several positive developments. So it is possible that we have seen the peak of this particular rally. Though we will see a bounce but it seems unlikely that we will cross it. We stand by our timeline of 10th January 2009 as a possible turning point where the ongoing rally will reverse. A solid bottom will be formed in the next fall.
Vivek Bhargava
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