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Imagine It’s September 2007

Imagine it’s September 2007. The world seems safer, for we have not seen much of Donald Trump or Kim Jong Un. We have an opportunity to trademark brands like Uber, WhatsApp, Quora and Instagram as they do not even exist. Twitter and iPhone are less than a year old. Steve Jobs, Robin Williams, and Michael Jackson still walk the planet.

Imagine it’s September 2007. Bear Stearns and Lehman Brothers are still in business. Ramalinga Raju, along with his accountants, is still creating fictitious cash at Satyam. The market caps of Eicher Motors and Page Industries are less than 2% of what they would be ten years later. And those of DLF and Suzlon are 6x and 24x respectively of what they will be when you are ten years older. The BSE-Sensex is just four months away from peaking before crashing by 50%, though it is still 50% of what it will be after ten years.

When I imagine it’s September 2007, I am ten years younger, and stupider. I am busy writing stock recommendation reports for my employer, whom I am going to leave in another three years. The idea of Safal Niveshak does not exist in my, or anyone else’s, mind. Nobody knows me or trolls me (wow!).

Cut your imagination now and come back to 2017. But wait just a minute! Imagine how difficult it is to imagine yourself and the world as it existed ten years earlier. Imagine how hard it is to imagine things that we now know with certainty – because they have already happened – because we think we always knew about them before they happened.

“I knew the stock market was about to crash in January 2008!” is a common refrain I have heard over the years, and the accompanying regret, “Why didn’t I sell out then?”

“I knew the stock market was at its bottom in March 2009!” is another phrase I have heard over the years, and the accompanying regret, “Why didn’t I sell my house and buy stocks then?”

You see, imagination is a powerful tool that nature has bestowed upon us.


In 1929, poet and journalist George Sylvester Viereck managed to get an interview with an initially reluctant superstar physicist. He asked him, “How do you account for your discoveries? Through intuition or inspiration?”

The physicist, Albert Einstein, replied, “Both. I sometimes feel I am right, but do not know it. When two expeditions of scientists went to test my theory, I was convinced they would confirm my theory. I wasn’t surprised when the results confirmed my intuition, but I would have been surprised had I been wrong. I’m enough of an artist to draw freely on my imagination, which I think is more important than knowledge. Knowledge is limited. Imagination encircles the world.”

Here’s one of the world’s most knowledgeable minds talking about the limits of knowledge and the expanse of imagination!

Anyways, for most of us adults, imagining is what we are not supposed to do. It’s hard, like you may have found out imagining September 2007 in the exercise above minus what happened after that time. That period looks more like reality than imagination. You already knew what was about to transpire.

So, imagination is difficult. It’s difficult to imagine that the stock market, as of now, looks like that of September 2007 (I am not saying it looks like September 2007, just suggesting how difficult it is to imagine this way).

But we easily fantasize. Like in 2007, it’s easy for us to fantasize in 2017 the outsized return that we will continue to make by buying anything and everything – businesses we understand and those we don’t, stocks that are cheap (for a reason) and those that aren’t, and managements that are clean and ones that aren’t.

With the benefit of hindsight, it’s easy for us to fantasize about the next Eicher or Page in our portfolios, but not imagine the next DLF and Suzlon that may also lie there. And with the same benefit of hindsight, I can tell you this is a dangerous way to invest or make any decisions in life – by fantasizing about a bright future without imagining what may go wrong.

Lest you fall into this trap again, I would suggest you do this exercise now.

An Exercise in Imagination

  1. Imagine September 2017 is September 2007.
  2. You know (like you knew in September 2007) the stock market is a few months away from its peak and the crash is imminent (just imagine).
  3. You know all your stocks – good or bad – will also fall in the coming crash (hard, but please imagine). Though the good ones will again rise like Phoenix and the bad ones will continue to lose for the next ten years (yes, imagine the next ten years).
  4. Imagining this future you already know about, what should you be doing now, in September 2017…I mean, September 2007?
  5. Imagining that may lose a lot of money (some of it permanently) over the next few months, and also over the next ten years (again, some of it permanently), how would you position your portfolio so that you don’t lose much, and in fact gain a lot given that you also know the broader market is going to double over the next ten years?
  6. Check your existing portfolio, sell all your stocks mentally, and then look at each stock and answer this question – “If this stock was not in my portfolio already, would I buy it today…especially when I know what’s coming in the next few months?” If the answer is no, question what that stock is doing in your portfolio?

One rule of the above exercise is that, even with the benefit of hindsight, you cannot time the market i.e., sell everything four months later and buy again in March 2019 (as if it was March 2009). You just don’t know when that peak and bottom would appear, only that it would all happen in the next eighteen months.

Is your head spinning already? When I was going through this exercise over the last few weeks, mine was. Not because this exercise was something difficult to do, but just for the amazing insights it left me with after I finished it off. And a few action points – I ended up reducing allocation in a couple of stocks and increasing allocation in a couple of others that were already in my portfolio. Fortunately, I had nothing to sell in terms of bad business quality.

Imagining the future left my reflective brain overheated for some time. Imagine a steam locomotive working at its full speed, to understand how my brain felt. But the entire process was satisfying, and that was what I was looking for.

“Imagination rules the world,” said Napoleon Bonaparte. Obi-Wan Kenobi warned Darth Vader in the first Star Wars movie nearly 40 years ago, “If you strike me down, I shall become more powerful than you can possibly imagine.”

As investors or decision makers, perhaps we need to expand our imagination a little as we contemplate where the businesses (and thus the stocks) we have invested in or are looking to invest in may be 10 or 20 years down the line (either way, up or down).

In fact, apart from observation and deduction, if there’s an important skill that an investor or analyst must bring to the table while making investment decisions, it is imagination. It is, after all, imagination that helps us make relevant connections that are not entirely obvious, between data or information about a business that may appear disparate at first.

And of course, we must imagine directed by reality and power of our knowledge. Else it would be a mere fantasy.

What do you say?

Share in the Comments section of this post what you were doing with your portfolio in September 2007, and what you plan to do now imagining we are in September 2007 again. Try it, for it will be an interesting thought experiment, and may leave you with some insights to act upon now.

P.S. Watch John Lennon’s Imagine, the best-selling single of his solo career. Its lyrics encourage the listener to imagine a world at peace without the barriers of borders or the divisions of religion and nationality, and to consider the possibility that the whole of humanity would live unattached to material possessions.

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About the Author

Vishal Khandelwal is the founder of Safal Niveshak. He works with small investors to help them become smart and independent in their stock market investing decisions. He is a SEBI registered Research Analyst. Connect with Vishal on Twitter.


  1. Harish Mittal says:

    No one can predict the market. Any year may become a 2008.
    My views are : (Only for Medium term or long term investors.)
    1. Everyone should be able to digest their food without any purchase/sell everyday. Don’t pick an inappropriate stock and try to make your mind fall on it. Let your mind decide in a unbiased way.
    2. Never put your whole money into this dead game. Even from the portion of money you have decided to put in, keep a substantial portion side away so that you can enjoy the falling moment too or a situation like that of March 2009.
    3. Check your existing portfolio, sell all your stocks mentally. – It’s an brilliant idea mentioned by Vishal Sir.
    4. If you have decided to buy let’s say 100 shares, buy only 20-25% first. Let the price confirm that you are right, then complete your desire by buying more of it.
    5. Do consider the recommendations from reliable source but get the stock name only from it. Don’t dare to see the target price and stop loss recommended (Not even reason). Pickup the stock name, do your own unbiased research. Never try to make your mind fall on your decision forcefully.
    6. Try to make a stoploss on support level basis before buying (Not % basis). I think, you may drop the idea of buying knowing the huge difference between support or CMP. Hehe..
    7. Last but not least, Decide STOP LOSS, STOP LOSS, STOP LOSS before buying | Follow Strictly | If stop loss touched, squire off by a mkt order immediately. (Don’t try to put a limit order on your price).
    Thank you
    (I am a too novice in this field. All I have written is from my own experience. It may or may not fit to you. Analyse wisely. Hehe..)

  2. Jim Caserta says:

    The greatest imagination needed in Sept 2007 was ‘what happens if home prices go down’. That was a ‘it’ll never happen’ thing that wasn’t too hard to understand. One thing I definitely avoided was buying real estate in FL, although I probably should have in 2009-2010.

    I avoided borrowing to buy assets, and kept a healthy level of liquidity (rainy day fund). You don’t want to be in a position where you have to sell assets when their prices are depressed.

  3. Martin Wright says:

    Good food for thought. Will do.

  4. very good.history repeats itself because we don’t learn from our mistake.

  5. Shall we all imagine and go to September 2027?

  6. Extremely well thought and imagines article . Great mind food.

    All said I was sitting on a decent returns of close to 50 percent plus on my portfolio , date to the last 2 months and I just decided and exited 50 percent of my portfolio.

    Markets may go up further , but index valuations are close to 21 times . On euphoria , it may go up further , but I have been cautious .

    It’s much needed to re-examine each stock in our portfolio and do the needed work to either hold or exit.

    This articles just reiterated my belief in valuation. At the current valuations am not game for buying or adding stocks into my portfolio.

    Thanks for the wonderful write up dear Vishal !!

    Cheers !!

  7. Charanjeev Singh says:

    Very well written Vishal.
    Although all our investment decisions are futuristic, the element of Imagination is often forgetten. Proactive exercise shall help.
    I shall do one tonight.


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