Plan your investment strategy well. And keep your eyes on the lesson that Hanna and other storms have taught us: Be prepared to duck the strong winds of a direct hit. But be equally prepared to surf the waves that are caused by a rising tide of a hurricane that makes landfall somewhere else.

History, said Henry Ford, is more or less bunk. And so we stand here looking at the charts of the BSE-30 Index and wondering what will happen next. A few weeks ago, the Index was at 12,000. On its way – said the technical chartists – to 9,000. Well, it may have missed a few turns and misread the signs – the Index now stands at the 15,000 levels.

For today; for now. The chartists may be right. The Index could head south and break through the 12,000 barrier and slip to 9,000.
Maybe. Maybe not. There is nothing in the rule book that says share prices must fall in a straight line.

We turned to our review of the fundamentals of a company. The things that tell us what businesses are worth, how much the businesses can earn, what are the various costs of the various raw materials, and what sort of selling prices a business can get for its products or services.

The fundamentals tell us that the companies are undervalued. Not all the companies are in the Index. But many companies are undervalued. According to the fundamental analysis the share prices of these companies should be higher. Should be. Could be.

There is nothing in the rule book that says share prices go up in straight line. Obsessed with the future, we turn to history. Can the past be a guide for the future?

And there is only one other topic – like finance – that is regularly broadcast on TV stations. Where sound bytes are constantly bombarded which, ultimately, may not tell us much. And that topic is the art of the weather forecast. Predicting the direction of the stock markets is probably as difficult – and embarrassing – as predicting the weather for tomorrow in many parts of the world.

Sunny Florida
Florida is one state in the USA where forecasting weather patterns is a challenge. The state is less than 150 miles wide in most places. It has the Atlantic Ocean on its eastern coast and the Gulf of Mexico on the western coast.

While India has its monsoons, Florida has its hurricane season. Winds are formed somewhere between the continents of Africa and South America. These winds move in a north-westerly direction towards Florida. As they pass over the warm ocean waters, they gain in strength and can form a Tropical Storm (wind speeds of 39 to 73 miles per hour). These storms can turn nasty and become hurricanes with wind speeds of 74 miles per hour (a category 1 hurricane) to wind speeds of 156 miles per hour (a category 5 hurricane).

The good thing about hurricanes is that you know they are coming. Earthquakes just happen – you can’t really do much about it. You can plan for an evacuation long before a hurricane comes your way. An earthquake? Just stay in a safe place and pray.

So tropical storm Hanna is on its way to Florida. The National Hurricane Center has projected a path of where the storm is likely to make landfall. The colour of the hurricane “dot” indicates the speed of the winds.

Tropical Storm Five Day Forecast Map By the looks of this map, Hanna will make landfall somewhere in South Carolina. Then turn north east towards New York before it heads over to Canada and back into the cooler waters near the North Pole where it will fade. This map was prepared at 11 pm USA time on September 3. What did the projected path of Hanna look like before this update? On September 2nd it was a different story.

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