"Emerging India' - shortSTORY Part2
Part 2 .....
It was lunch time now and we were given the necessary lunch coupons. During lunch, we had a couple of more participants in discussion and the discussion directed towards the present investing scenario. Kunal was providing some good fundamental data, some of it out of the last presentation and the listeners seemed quite pleased with words like GDP growth, de-coupling , infrastructure spending , the telecom revolution etc.
At this point I pointed out “ Kunal , I think along with the fundamentals, you need to also see the technical picture of the market. Prices movements are important advance indicators and my experience tells me that prices usually go ahead of fundamentals”
The other two new ‘friends’ as also Rameshbhai were not convinced at all. Rameshbhai said “Oh you mean the technical analysts? Oh they use such technical jargons that we don’t understand. I don’t think price analysis can help in any way”
“But Rameshbhai , price is one of the most important indicators. As an investor you cannot ignore it”
“Oh but I am an investor , not a trader. So for me looking at price movements is unnecessary”
I realised that the discussion was not going to find a common ground and hence I let go the topic. I observed that Kunal seemed to think that I was right to some extent.
The post lunch – the most awaited session – started. Inspite of a tasty five-star hotel lunch , the participants seemed as fresh as in the morning- the magic effect of the coming speaker.
As Nirmish Seth stood up for his presentation, the participants clapped aloud. The celebrity speaker seemed like a religious guru having a hundred and twenty disciples.
Suddenly there was pin-drop silence as the speaker adjusted the mike.
“Good afternoon ladies and gentlemen. It seems that I have a tough task ahead of me as most of what I wanted to say has been covered by earlier speakers. But what I want to tell you one thing very strongly- all of us are lucky to be in the middle of a structural bull market. The India growth story has never been so strong. The government of India it seems is being conservative in estimating that the Indian economy will grow by 7-8% a year. Let me tell you friends, we are set to grow much more than that for the next decade. I have been talking to a lot of Institutional investors recently and they have only added to my confidence in the Indian economy. Yes we have our set of problems , but then which country does not have problems? Yes the world economy is in trouble with the US and the European economies faltering. But then for us Indians this will turn out to be a great time because investments flow where there is growth and India as a destination has too less a competition. Yes our inflation figures are not encouraging – but then let me remind you the simple economic theory , that inflation to some extent is good as it induces producers to produce. Yes, we have various scams popping up every other week – but then these are necessary evils in the path of growth. The data which you see on the screen tells you that we have a demographic advantage. Earlier India was criticized for having a large population and today that very fact has made it attractive. The next few weeks, months and years are some of the best times to be in equities. So don’t you miss out of this opportunity. . . .”
As someone had pointed out in the morning , Nirmish seth seemed to be an encyclopedia of data as he rolled out one after the other data on the screen taking a few moments to explain each in brief. The mesmerising lecture went on for almost one and half hour and it seemed everyone in the hall will rush to their brokers on Monday morning to get their share of emerging India.
Rameshbhai, in the mean time, was on his last page of his note pad and I even offered mine; which ,to Rameshbhai’s astonishment – or disappointment, was blank!
By the time Nirmish Seth concluded, it was almost tea time. He received a standing ovation and many participants rushed to meet him and shake hands with him. I could see Rameshbhai too. I guessed that Nirmish Seth had a fan following which even Film Actors and politicians could be jealous of. May be someday he may think of joining politics, I pondered.
During Tea break, with exotic cups in our hands, we again assembled for discussions. It was Rameshbhai who started the conversation. “You see, My daughter is due to get married in six to eight months time and I have kept aside about five – seven lacs for her marriage. After listening to what Nirmish Seth has said, I think I will invest this in the Stock Market for six months and out of the returns, may be gift my daughter a foreign holiday. Which stocks do you think should I buy ? Nirmish Seth was quite bullish on Infrastructure.” His question was being addressed to all of us.
I attempted a reply “Rameshbhai, I think you should not invest money kept for your daughter’s marriage in the stock market. Better keep it in a Bank FD”
“Oh , did you not hear Nirmish Seth? This is an opportunity not to be missed!”
It seemed the others around me too seemed to agree with Rameshbhai. It reminded me of a dialogue from the movie ‘2012’ where the protagonist tells his wife ‘When they say everything’s fine, that’s when you run’ . But in the current circumstances, the best I could do was pray for Rameshbhai and hope that something changes his mind.
The day-long seminar concluded and it seemed all the stakeholders were happy and satisfied at the outcome. I anticipated that the sponsors and the co-sponsors will surely get their ROI (return on investment) in the coming months with more clients getting added. And I expect that Rameshbhai and other participants too will now watch and read about Nirmish more than ever. The organizers too were already thinking of another such blockbuster seminar in the next month. As they say ‘All’s well that ends well.’
****
Five months slipped by since the event. Meanwhile, the Sensex did rise from 19000 to 21000 before falling about 20% to the current 15000 points. We were now stuck in the range of 14000 and 16000. My price analysis in fact told me since the day of the event, that the peak was nearby and it was time to exit. But who, other than lesser mortals like me, cared? The investors of a seemingly vibrant economy were scrambling for shares then.
Today morning, while glancing through one of the sections of the financial newspaper, I read a small article titled ‘Due to bearish markets Top executives of financial firms on holiday. Most preferred destination is Europe’
I wondered whether Nirmish Seth too was on Holiday in Europe- most likely he was. And he may have easily spent more than Rs Ten lacs for the trip, and most of that could have also been a perquisite. While in Bullish markets, they get extra fame and money, in bearish markets they make it point to disappear from the scene, while still getting huge salaries and bonuses , irrespective of whether investors earn or lose money.
And then again, I wondered about the fate of Rameshbhai’s Seven lac rupees . What would have become of them? I reckoned that if he had invested in Infrastructure, which he (and Nirmish Seth) were so bullish on, his portfolio would be down by about 50%. If that was the situation he may well have to finance his daughter’s marriage out of personal loans from friends and relatives and it may take him a couple of years, or may be more, to repay them. The gift of a foreign holiday will have to wait another few years.
I was deeply saddened by the two extreme likely outcomes. And I still wonder in what time and age , will investors comprehend the need to educate and upgrade themselves? When, if at all, will they learn that what they read in newspapers and listen on TV is yesterday’s news and is just information. When will they try to develop skills and learn to decide on their own?. And when will they really know that ‘Price is King’?
God Bless emerging India!
CA Rajiv D Khatlawala
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