With the bulls raging at Dalal Street and Sensex within a kissing distance from the giddy height of 16000, i want to reproduce one of the classic gems from Warren Buffet...
Buffet says that "The line separating investment and speculation, which is never bright and clear, becomes blurred still further when most market participants have recently enjoyed triumphs. Nothing sedates rationality like large doses of effortless money."
After a heady experience of that kind, normally sensible people drift into behavior akin to that of Cinderella at the ball. These sensible investors know the cost of overstaying the festivities -- that is, continuing to speculate in companies that have gigantic valuations relative to the cash they are likely to generate in the future -- will eventually bring on pumpkins and mice.
But they nevertheless hate to miss a single minute of what is one helluva party. Therefore, the giddy participants all plan to leave just seconds before midnight. There's a problem, though: They are dancing in a room in which the clocks have no hands...
