What are the factors that go into making a market call?
Rakesh Jhunjhunwala: Market booms and dooms are created by a set of economic circumstances. The markets always tend to exaggerate those sets of circumstances. But eventually, they return to some base valuations. One very good indicator of where the market is headed is the price of cats and dogs. I have bought stocks at 60paise and sold them for Rs14. Today the valuations that we see reflect a crisis of confidence in India. In this crisis of confidence itself you could get an opportunity. CIO: What you think about derivatives as an alternative to the badla system? Rakesh Jhunjhunwala: I personally feel that we should eventually have only derivatives in India. But we should have allowed the badla system to continue parallel to derivatives and then allowed the derivatives to gradually take over trading volumes. CIO: Now that you have only derivatives An alternative margin system essential Rakesh Jhunjhunwala: I think there will be a problem if you deal with only derivatives. You’ve got to
