It is at times like these that money is made

The Sensex is close to 24,500, substantially below fair value. Markets are volatile, but cheap. People who have invested money in the market over the last two years are almost all losing money, and there is a sense of gloom. Not surprisingly, the question I get asked most often is "Is it a good time to invest?"

Yes. This is a great time to invest money, and it gets better as markets fall further. It will be a rare, once in a decade event affording a special opportunity to make extraordinary returns if we are lucky enough to see a 20% further crash from here. At that level, below 20,000, I would borrow and invest in the market.

When the Sensex rises , and touches 40,000, and is substantially above fair value and expensive. When people who have invested recently are sitting with double their money and there is a sense of euphoria and a belief that good times are here to stay. That is when nobody asks me whether they should invest in the market. They just go ahead and do it.

Actually, that is the worst time to invest in the market. That is the time when I advice people to take their money and sit tight. And I can tell you very few people ask the right questions.