I have lived through three bubbles – the Indian stock markets in the early 1990’s, the dot-com a few years later and more recently, real estate in Dubai. Nobody saw these bubbles for what they actually were – optimism and stupidity on a mass scale.
In the early 1990’s India was supposed to be different, a turnaround scrip. Dot com, the experts said, was different; normal valuations did not apply, a New Economy was being created. Dubai, one heard, couldn’t be compared with Singapore or London or New York. Safe haven effect and a totally different demand dynamic. I got burnt in all three bubbles, along with thousands of other investors. We didn’t exit with an obscene profit. We wanted more.
Now I have some real estate assets in Delhi. I have profited handsomely. But everyone tells me not to sell. There are plenty of plausible theories to explain why prices will always rise.
I think I will hang on to my investments. Delhi after all is different.
I first published this post on 30th of September, last year. I am now convinced that new bubbles are building up around the world, thanks to lax monetary policies and indiscriminate printing of money by Central Banks. Be very careful of equity in general, tech stocks in USA and real estate in BRIC economies.
