In a world filled with uncertainties and rapid changes, one thing remains constant: the persistence of human ingenuity and innovation. The adage “the world does not end, and equities never die” serves as a reminder of our ability to adapt, evolve, and find new opportunities even in the face of adversity.
A Resilient World
“The world does not end” is a statement that reflects the undeniable fact that no matter how dire circumstances may seem, humanity has a remarkable capacity to endure and persevere. Throughout history, we have faced numerous challenges, from wars and economic crises to natural disasters and pandemics. Yet, each time, we have emerged from these trials stronger and more resilient than before.
The global economy, for instance, has weathered its fair share of crises, from the Great Depression of the 1930s to the financial turmoil of 2008. In each case, the world did not come to an end. Instead, it adapted and rebuilt, demonstrating the remarkable resilience of human society.
“Equities never die” refers to the enduring value of assets and investments, especially in the context of financial markets. It emphasizes that, despite market fluctuations and temporary setbacks, long-term investments have historically shown an ability to recover and grow over time.
This concept is particularly relevant in the world of stocks. While stock markets can experience volatility and sharp declines, history has consistently demonstrated their capacity to rebound and reach new heights. This is a reflection of the underlying strength of the Indian economy and the potential for equities to provide substantial returns over extended periods.
Every crisis in the past has been followed by a recovery and further upside. Sensex (1980-till date):A
India outperformed despite following crises, events and volatility:
Episodes of Domestic Political Uncertainty
8 coalition governments
3 different governments between 1996 and 1998
A government that lasted only 13 days in 1996
Prime Ministers that many have not heard of: H.D. Deve Gowda; I.K. Gujral
17% fall in market in a day due to surprise change of govt in 2004
Other India Specific Events from 1998 to 2015
US sanctions after India’s nuclear tests, May 1998
Limited war with Pakistan in Kargil in 1999
Serious stock market scandal in 2001
Terrorist attack on Indian parliament in2001
26/11 terrorist attacks in Mumbai
Corruption cases & arrest of billionaires/ministers /senior bureaucrats in 2011/12
Back-to-back drought years in 2014 and 2015
Global Market Crashes and Crises since 1997
Asian Crisis in 1997
Russian crisis in 1998 (India has had historically strong trading ties with Russia)
Bursting of technology bubble in 2000
9/11
Global Financial Crisis in 2008
Tech sell off, end of QE and rising inflation(since 2022)
Recent Key Events Since 2016
Demonetization (2016)
NBFC Crises (2018/2019)
COVID (2020-2022)
Lockdowns (2020-2022)
Rate hikes globally
There is always a reason not to buy Equities. Yet despite several intermittent crises, Indian Equities have gone up over the long run mirroring earnings growth:
Despite challenges and uncertainties, the Indian stock market continues to evolve and grow. Investors who approach the market with a long-term perspective, diversification, and a thorough understanding of the regulatory landscape can find opportunities amidst the volatility.
India’s resilience in the face of crises has been stark, and the clean-up and reforms alongside various crises have set the stage for India to outperform over the coming decades.
