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The Delusion of “Acche Din”

“Acche din aa gaye hain! (Good days are here)” exclaimed my friend Ravi as he visited me after a long time.

“Why, what happened?” I asked in my usual state of confusion.

“Arrey, haven’t you see the stock market?” he said, “How fast it is rising!”

“Oh great!”

“And I have made tonnes of money in this rise!” he said with the best smile I ever saw on his face for a long time.

“Wow!” I exclaimed to show how I shared his happiness. “So, happy days are here again?”

“Yes!” Ravi replied.

Happy Days are Here Again!
Happy Days Are Here Again” is a song copyrighted in 1929 by Milton Ager (music) and Jack Yellen. The song featured in the 1930 film Chasing Rainbows, and is probably best remembered as the campaign song for Franklin Delano Roosevelt’s successful 1932 presidential campaign in the US.

According to TIME magazine, it gained prominence after a spontaneous decision by Roosevelt’s advisers to play it at the 1932 Democratic National Convention, and went on to become the Democratic Party’s “unofficial theme song for years to come”.

Here are the lyrics of that song…

Happy days are here again
The skies above are clear again
Let us sing a song of cheer again
Happy days are here again
Altogether shout it now!
There’s no one who can doubt it now
So let’s tell the world about it now
Happy days are here again
Your cares and troubles are gone;
There’ll be no more from now on
Happy days are here again
The skies above are clear again
So let us sing a song of happycheer again
Happy happy happy days are here again

I remembered this song when Ravi mentioned “Acche din aa gaye hain! (Good days are here)”. Then, I saw this clip from a book “It Was a Very Good Year: Extraordinary Moments in Stock Market History”, which a friend posted on Facebook…

I find a lot of people these days singing this “acche din” song, expecting the future to be brighter than the past. Even I am an eternal optimist as far as my future and that of India is concerned.

But then, my experience also says that eternal optimism can be dangerous when it comes to stock market investing.

Especially when the number of people in the stock market who believe “it’s a bull market and those stupid old bears just don’t get it” outnumber those who “don’t understand what is going on” (the confused ones like me), it is time to get cautious.

It’s fascinating how investors come to forget that markets move in cycles and not in perpetual diagonal lines. As the legendary Howard Marks wrote in his amazing book, The Most Important Thing

Rule number one: most things will prove to be cyclical. Rule number two: some of the greatest opportunities for gain and loss come when other people forget rule number one.

Amidst all the unknowables all around, if there is one thing that I believe we can truly “know”, it is that long-term future returns from stocks are based on the valuations in place when you invest.

The relationships between long-term valuations and returns are fundamental in nature.

And if valuations continue to rise like they are rising now, “acche din” (good days) will be “bure din” (bad days) for long term investors who wish to accumulate stocks for the long term.

What is more, if you have a 3-5 years time horizon, get ready to be very disappointed unless you have some methodology to deal with the risk of a significant market downturn.

Of course, you have to be in the market to participate in the returns, but please do not take the undue risk of overpaying for “acche din” as that can hurt you big time if those “acche din” do not come…like they did not come for almost 20 years after FDR said – “Happy Days are Here Again!”

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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. Thanks a lot Vishal. Another good one from you !! While I am happy to see my stocks go up everyday, it worries me as well, if they are move up very fast and I how should I deal with it.

    Please share some more thoughts on how do great value investors deal with their stocks during such times. How do they assess if they should continue to hold (some or all their stocks) or sell (some or all their stocks)?

  2. Here is a poem in Hindustani that I wrote on the day of Modi’s swearing in ceremony…hope you find interesting
    अच्छे दिन आने वाले है, अब की बार
    क्या सच्चे दिन आएंगे अब की बार?

    जहाँ डाल-डाल पर बैठेगी २४ कैरट की चिड़िया
    वहाँ की दुनिया होगी बहुत ही बढ़िया
    क्या ऐसी चिड़िया चाहते हो अब की बार?

    जिस खेत में उगले चांदी-सोना, मोती-हीरे
    उस दुनिया में कैसी भूख होगी रे
    क्या ऐसे खेत चाहते हो अब की बार?

    जहाँ सेन्सेक्स चले रॉकेट की चाल
    वहाँ गिने-चुने लोग होंगे मालामाल
    क्या ऐसी चाल चाहते हो अब की बार?

    जहाँ के रास्तें हो जैसे हेमा के गाल
    वहाँ टोल वाले बनाएंगे मोटा माल
    क्या ऐसा रास्ता चाहते हो अब की बार?

    जहां सब कुछ मिलता हो जैसे जादू की छड़ी से
    वहाँ मास्टरजी क्या करेंगे सच की छड़ी से
    कैसी छड़ी चाहते हो अब की बार?

    जहां आराम की रोटी तोडना चाहते है लोग
    वहाँ मेहनत का मज़ा कैसे जानेंगे लोग
    क्या आराम की सज़ा चाहते हो अब की बार?

    अगर सच्चा फल चाहते हो अब की बार
    मत करो कच्चा कर्म अब की बार
    कैसा फल चाहते हो अब की बार?

    जब आप सच्चे कर्म करोगे अब की बार
    तब ही अच्छे दिन आएंगे अब की बार

  3. Harshad Parulekar says:

    Just loved this sentence ” when the number of people in the stock market who believe “it’s a bull market and those stupid old bears just don’t get it” outnumber those who “don’t understand what is going on”

  4. Shailesh says:

    Understanding cycles and market structural inefficiency in key to making profit from any asset class .
    Today Indian equity market still is structurally inefficient . Knowledge of stock market investing is unfavorably skewed to small percentage of people and they too don’t follow the rules and principles they advocate .

    So while market is moving historically high suddenly some or other sectors often gets ignored and under owned presenting opportunities .

    Now on Acche din …
    1932 US DOW was around 40 if I am not wrong and by 1937 it went up to 190 ie almost 5 times for an index which is pretty steep . So happy days did come for US stock holders and if not for war they might have had better economic results too .
    It was period when economic power shifted from Europe to US and right time to bet on US market such that DOW moved to 1000 by 1970s ( 250 times of 1932 levels ) . IS india at that threshold . If yes then we cannot be out of market . Yes value investors get sudden jolt when markets goes up old value investors move out and new come in like that made Ben Graham move out in 1956 and warren buffet start his partnership around same time .

  5. Dear Vishal, the markets are heated and many companies have already become multibaggers. But, if we find a good performing company, neglected in the current market scenario, with a p/e of 5-6, high ROE and market leader, should we buy now itself or it will be prudent to wait for a market correction and scoop this stock at further lower valuations?

  6. People have a strong inclination to hold on to anchors. New highs, 100% gains, and vividness and recency obviously creates its own trouble. See here.

  7. By this time,we would have seen most of the stocks have corrected and the so called profits have vanished in thin air. Assuming this bull market happens again in next month (In August 2014), don’t wait. Start selling little by little. Always SELL REGRET, SELL REGRET, SELL REGRET. You cannot “always”buy at the bottom and sell at the top. I have done that during the so called short lived bull market.

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