Remember two classic instances. At the peak of the real estate boom in 2007, real estate companies were being valued based on the value of their land bank. The basic question was that for a realty developer, what mattered was the demand for units and not the value of the land bank. When reality dawned, the entire real estate space crumbled like a pack of cards. Of course, those who asked this fundamental question either avoided real estate or exited from these stocks at the right time.

The second case was at the height of despair in March 2009. The basic questions to ask that point of time were numerous. Can it really get worse than this? If I was rushing to buy stocks at 6000 Nifty, should I not be buying at 2500 Nifty? And if the problem is of liquidity, should not an infusion of liquidity solve all these problems? Those who asked the last question actually struck gold. Markets are up almost four-fold from those levels. And it was all about asking that simple, fundamental question! Whether the market has corrected sharply or whether it has risen sharply, you must also ask questions if there are selling opportunities and buying opportunities.