My first stock market investment was
in year 1992 when my dad gave me some 100 shares of indo gulf fertilizers and I
remember it was a bad trade as I traded all my life savings of Rs 17000 in a
savings account to the then market price of those 100 shares that was Rs 7600.
in year 1992 when my dad gave me some 100 shares of indo gulf fertilizers and I
remember it was a bad trade as I traded all my life savings of Rs 17000 in a
savings account to the then market price of those 100 shares that was Rs 7600.
But laissez-faire prevailed and I got a share
certificate with a green transfer form attached to it. I still felt nice and
confident because I saw an opportunity to learn the nuances of stock markets at
17 and make sense of those 2 pieces of paper.
certificate with a green transfer form attached to it. I still felt nice and
confident because I saw an opportunity to learn the nuances of stock markets at
17 and make sense of those 2 pieces of paper.
How those 100 shares panned out in
life is a matter of another piece at a different point of time but for the
record that and all additions of life earnings added to timely systemic investments as
on date have returned 17.8% CAGR since 1992.
life is a matter of another piece at a different point of time but for the
record that and all additions of life earnings added to timely systemic investments as
on date have returned 17.8% CAGR since 1992.
Someone tried hard to sell me thePortfolio Management Scheme of MotilalOswal
12 months ago claiming that they have consistently returned 38% to their
investors since inception. Financial advisors and relationship managers have a
unique ability to make muppets out of gullible investors
for whom a marginal delta in comparison to the AAA rated securities means the
world and 38% is as good as it can get.
More amusing was, that, my research
revealed that Warren Buffet’s life to date CAGR has been close to 20% and
Motilal and its agents claimed a CAGR of 38%. I closed my eyes and visualised
Buffet serving tea to Mr. RaamDeo Agrawal and Mr. Motilal Oswal if they have consistently
been able to beat the Buffet hurdle.
revealed that Warren Buffet’s life to date CAGR has been close to 20% and
Motilal and its agents claimed a CAGR of 38%. I closed my eyes and visualised
Buffet serving tea to Mr. RaamDeo Agrawal and Mr. Motilal Oswal if they have consistently
been able to beat the Buffet hurdle.
Of course I never invested in Motilal
or any of its alleged schemes but did keep a track on their presumptions and in
July 2016 when they came out with a public research report on a share
called manpasand beverages and a follow up report reiterating their
stand in May 2017 and eventually in Jan 2018, I bought some shares
only to follow and keep track. Look at these reports and you would have wanted
to sell your house and invest in their recommendation.
or any of its alleged schemes but did keep a track on their presumptions and in
July 2016 when they came out with a public research report on a share
called manpasand beverages and a follow up report reiterating their
stand in May 2017 and eventually in Jan 2018, I bought some shares
only to follow and keep track. Look at these reports and you would have wanted
to sell your house and invest in their recommendation.
Cut to May 2018, Manpasand Beverages is down 72% from its price, has eroded an ocean of
investor wealth and small gullible investors are left holding their MTM losses
in the hopeless world of being treated as muppets.
investor wealth and small gullible investors are left holding their MTM losses
in the hopeless world of being treated as muppets.
Recently I was invited to join a
concall addressed by the same Mr. Raamdeo Agarwal as he was opining on Crude
Oil prices. I thought WTF….. How can anyone opine on crude prices when even the
King of Saudi Arabia might be clueless on the same. In a VUCA world where a tweet by
trump can make DOW rise or fall by 2% or take crude prices thru the roof, where
a posturing by Kim where Kim fires a useless missile – roils the world markets
– oh by the way I am talking of Kim Jong
Un of Korea and not Kim Kardashian, here is an Indian commentator
commenting on the crude oil prices.
concall addressed by the same Mr. Raamdeo Agarwal as he was opining on Crude
Oil prices. I thought WTF….. How can anyone opine on crude prices when even the
King of Saudi Arabia might be clueless on the same. In a VUCA world where a tweet by
trump can make DOW rise or fall by 2% or take crude prices thru the roof, where
a posturing by Kim where Kim fires a useless missile – roils the world markets
– oh by the way I am talking of Kim Jong
Un of Korea and not Kim Kardashian, here is an Indian commentator
commenting on the crude oil prices.
So when I asked him whats his
accountability on Manpasand, because I invested my entire bonus and savings on
the basis of his company’s research report, he was flustered and advised me
that the concall was on Crude, refused to take ownership of his company’s recommendation
and gave me the contact of his head of research Gautam Duggad. (GD)
accountability on Manpasand, because I invested my entire bonus and savings on
the basis of his company’s research report, he was flustered and advised me
that the concall was on Crude, refused to take ownership of his company’s recommendation
and gave me the contact of his head of research Gautam Duggad. (GD)
Pronto – I called Mr. Duggad for some
insight as I wanted a word of solace and advice as to the way forward to an
investment that eroded approx. 75% of my wealth entirely on his and his company’s
recommendation.
insight as I wanted a word of solace and advice as to the way forward to an
investment that eroded approx. 75% of my wealth entirely on his and his company’s
recommendation.
GD was flustered and angrily asked me who my
relationship manager was. I asked him – ‘how is that relevant. Did your
research report mention as a disclaimer that Motilal is answerable to only
those people who reveal the names of their relationship managers when the shit
hits the roof’.
relationship manager was. I asked him – ‘how is that relevant. Did your
research report mention as a disclaimer that Motilal is answerable to only
those people who reveal the names of their relationship managers when the shit
hits the roof’.
And Mr. Duggad banged the fone down
on me. I became a complete full-circle muppet. Or at least was treated like
one.
on me. I became a complete full-circle muppet. Or at least was treated like
one.
Whats the point…….
- Any financial advisor
claiming to outperform the Buffet hurdle is making a Charlie out of you. - If you are able to beat
the returns offered by bonds issued by central banks of your respective
countries – without taking a risk – you are doing fine. - Keep investing your
surplus and believe in the power of compounding rather than relying on specious
research reports by companies finding and feeding their army of muppets with
erroneous asymmetric
information. - Invest in the quality of
management rather than the sweetness or sexiness of companies like manpasand. - Capital protection is far
more important that elusive returns on investments. - Endeavouring to marginally
beat the returns offered by robust central banks will hold you in far better
stead than endeavouring to beat the inflation rates of Zimbabwe and Venezuela. - Be patient in markets –
they can be irrational on either side for prolonged periods of time. If your
holding period isn’t forever then you shouldn’t be in markets even for 10
minutes. - Don’t follow any stock
advisor blindly – Do your research and it takes no rocket science to identify
stable well managed companies. - A boring company that is
debt free, out of market favour, consistently giving dividends and growing at
about 10% YOY and definitely not recommended by analysts on CNBC on a daily
basis, is likely to give you a far better return than the sexed up companies
finding the favour of analysts on TV channels, who are themselves mostly doing the
opposite of what they are recommending on the TV. - And lastly why should you
pay 3-4% as management fees to your fund managers (who don’t even guarantee a
prevailing bank rate for fixed deposits and who play the markets on your money)
– only to lose your capital and then hear them blame the systemic issues of
markets.
Human beings have short memory and
people are afraid to acknowledge disastrous consequences of the bias of cognitive dissonance in the face of
questionable advice on business channels.
people are afraid to acknowledge disastrous consequences of the bias of cognitive dissonance in the face of
questionable advice on business channels.
Vakrangee, PC jewellers, Gitanjali Gems and Manpasand (these can be all googled and enough information can be found online about the dubious managements of these companies) have been recommended by some of the well known stalwarts of the market and just these 4 companies have eroded close to 35 billion UD Dollars of shareholders wealth in less than last 90 days.
Try doing exactly opposite to what
the commentators recommend on the television. You are likely to make more money
than by following their advice.
the commentators recommend on the television. You are likely to make more money
than by following their advice.
Someone needs to be eventually hanged
for this. Whether it’s the fraudulent promoters or the overzealous self-serving
analysts.
for this. Whether it’s the fraudulent promoters or the overzealous self-serving
analysts.
The decision entirely rests with the muppets.
Manu also writes for The Huffington
Post and can be contacted on mrg45@hotmail.com
Post and can be contacted on mrg45@hotmail.com
Lovely Article as always you hit the nail on the head
Good article as always Manu. Any suggestions on companies one should look at that fit your criteria?
Great to read you again. Keep writing on this topic as there is a world of financial disinformation out there.
Manu Bhai. Well written. I forwarded it to my investment consultant.
Once my mentor (who is a heading a PE) told me that, if any one is offering you even 1% more return than the Government Bonds, then it is not a risk free investment. Rather risk comes free with it.
His logic was simple. If any fund house /PMS offered so called consistent returns then the entire world’s money should be flowing to this PMS. They would not be coming to you to sell their product.
As you rightly elaborated where a man worth USD $85 Billion would be serving tea to Mr. Agrawal & Mr. Oswal and would have invested his billions through them.
Many PMSs have visited me to sell their product. One thing was always consistent, their product was always No.1 supported by statistics with 3 Months, 6 Months, 1yr, 3yr, 5yr statistics. However when confronted by the data of other PMSs says otherwise they had ready answers.
One thing that I have learnt is “Not to put all eggs in one basket”. One basket may fall and break, while eggs in another may not hatch at all and one of the baskets may give you golden chicks 😊
Someone needs to be eventually hanged for this. Whether it’s the fraudulent promoters or the overzealous self-serving analysts.
The decision entirely rests with the muppets.
Hahahaha hahaha….for a purveyor of "use and throw"…and screwing your friends.. over the greater good of your monthly paycheck and the deepthroating required for passing the XL game..I love your chutzpah..
For a parvenu immigrant your doing a amazing job ..more power to you
Bcc..
As promised
I like the way you tied all the information together. You certainly touched on some key points.
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