After reaching a Bear market low in March 2009, Bombay Stock Exchange's SENSEX Index has now risen over 110% in about a year.  New money that had been on the sidelines for too long is rapidly flowing into the market to get some of the action.  As more and more speculators enter the market to make a quick buck, the markets will start to hit new "highs". Neither the market nor the future can be predicted or controlled by the speculator, yet success is largely dependent upon them both.

I am a 21-year  and my experience in investing for the past 6-7  years says that  most of the time the market discounts the performance of companies.The potential  remains largely unappreciated.The phenomenon is more visible in mid and small cap companies. My experience of investing in bharti telecom is one of the glaring examples of valuation of the company not reflecting the true potential of the business. The company at that time was very aggressively building up the network in the country.Globally,mobile telephony has been established as a big business,whereas in India,its potential was completely untapped. The market was so pessimistic that by January 03 the stock fell to as low as Rs 20 and its book value was Rs 25. Hence the price to book value was 0.8x for a company which was building up India's largest cellular network.