It was all Roses, not long ago, 22k,25k all seemed possible. Most of the experts spoke about India's great economic development, India as a superpower. Decoupling theory, was the latest fad. Everyone spoke about Decoupling effect and how India was insulated from the rest of the world particularly the US. Reasons were given to the people to Justify the BULL RUN which the market was then.

Cut to present and the markets have corrected by more than 35% and now most of the experts are attributing it to Rising Crude, Weakness in Global Makets, US economic slowdonwn. Dunno how suddenly India has got Coupled again. Rupee is hitting lows after lows and suddenly everything looks bleak and experts are warning us for Tough times and a bear market.

Well, Anyone who has been following these experts on a daily basis will now mostly be in a mentally unstable condition. Politicians pale in comparison when it comes to speaking in different voices. General Public must be very confused.

So what is actually the reality and what can be expected?

Here is my analysis( Oops ppl must have got fed up of this word) or take on this whole thing.

To Begin with, Yes India is indeed decoupled to a great extent from the rest of the world and it is not like a China or a Taiwan or for that matter even a Japan all of which are export dependent, India has got a huge middle class consumer population which is 30 million strong. Add to this the fact that Rural population has not yet developed, if they are provided with a platform to grow into even Middle Class,India would have a Colossally big Domestic Market.

It is also true that India is growing and growing at quite a pace.

However India's Stock Markets are not decoupled from the rest of the World. For that markets Indian Stock Markets is Decoupled from Indians. Yes, thats the truth with around 70% of India' s household savings lying in Banks in the Form of Fixed Deposits and Savings and only around 5% in the Stock Markets, our own market is actually decoupled from us.

Add to this the fact that Pension funds are also not allowed to Invest in Equity markets, we have a scenario, where our economy to a great extent is dependent on Ourselves, but our markets are not. FIIs hold the remote for our market and the market dances as per their tune.

FIIs had loads and loads of money ( thanks to Fed ) to play with (thnks to P-Notes, which allowed and encouraged them) and they took the markets to dizzying heights in a jiffy, Cometh Sub Prime crisis, cometh Liquidity crunch and they are now selling left, right and centre to shore up their balance sheets, which are in a state of Hemorrhage.

Reuters report puts the current losses at 400 Billion Dollars US and this is just half of he problem, add all the Personal Loan defaults and other consumer loan defaults that we can expect it to be in touching distance of a Trillion Dollars!!!!

Now our analysts are saying abt Crude, Inflation and other stuff, If i remember correctly when Sensex was at 21k Crude was more than 100 even then and RBI was warning of potential Inflation, Yet no one cared.

Now they have started again, Most of the Analysts are painting an all gloom report again.

Hmm, the way i see it, India is all set to grow, Favorable Demographics, Educated and skilled workforce and a huge Consumer Base, means that we have all the Ingredients ready. But this growth of 8+% on a consistent basis is not going to possible unless we sort out a few things(on which is going to be my next article). Till these things are sorted out, India will grow Despite the System and not because of the System, but one thing Growth is for sure and with the Economy growing can the Markets be far behind??

However as Bufet said " Markets are like Voting machine in the short term and Weighing machine in the long term", So have a long term perspective (2+ years advisable) and set ur goals( i have already written on this) and Happy Investing :)