21000 to 8500 ……….. the saga of Indian Stock Markets.
recently i spoke to one of my clients who was disappointed on investing in equity markets and now stands on portfolio with a NOTIONAL LOSS of 50 %. It made me somewhat guilty and had me thinking on whether i am in the right profession or not.
after long hours of reading and thinking i finally had some answers to my questions. I think the profession of making money for others is as noble as that of a doctor or a lawyer. The difference is whether you want to play 20-20 or a test match. i would always prefer the latter although the temptation to make easy money is more in the former choice but is that true?…. i guess no.
Financial Advisory is a great profession and for me it has two pillars….Noble intention and proficiency. Either of them missing………..no client can create wealth. Noble intention to make your client earn out of his investments is the foundation of any advisory and proficiency to understand the risk associated with the decisions you take for the client is a pre-requisite.
The recent fall has shaken beliefs of lot many people regarding the strength of equity investment. people think stocks wont rise again and have called it dooms-day. I think we ourselves need to find answers.
The other day i was traveling in DELHI METRO from C.P. to Chawri Bazaar. The train was cramped for space and it was difficult even to stand. when i got down i spoke to one of the officials who told me that soon they will have more trains for same route and by the end of 2009 further new routes will be started. This would take the revenues up 3 times by 2010 and remember there are advertisements on the train and as well on the METRO stations. The revenue keeps piling and i really am waiting that DELHI METRO lists on the BSE SENSEX someday so that i too can enjoy the profits.
Another example……somebody told me that VOLTAS has got contracts for the new airports been built in India for Air Conditioning. Voltas managed 11 out of 13 contracts. Can you believe that the company will shut the doors or fail to grow from here? …………think about GMR Infrastructure Ltd. who is building these airports…….the kind of manpower and capital required. If businesses grow they will need capital and people who provide this either in the form of loans (by banks) or by equity (when we buy them) will also stand to benefit. There could some businesses that will fade or collapse but thats life and therefore Mutual Funds are still the answer as they would diversify the risk of being exposed to a single business or company.
Necessity is the mother of all inventions and all inventions require INVESTMENTS. India is in growing need of INVESTMENTS to support the much needed Infrastructure growth. The money will come from various avenues…..Banks, FDI’s, Government, etc. Indian Growth story is not gonna be stopped by a Global Financial Crisis. We are taking a pause and gearing up for the next LAP. We might see more tough times but i see this as an opportunity for people who kept thinking in 2002, 2004 and 2005 that “LET IT DROP BEFORE WE ENTER THE MARKETS”……………baabu ye gaadi kisi ke liye nahi rukegi………jhatkey maregi aur bhagegi.
The current pause in the markets is an opportunity for you and me to re look our strategy again so that we don’t land up again in a CATCH 22 situation…………lets just do it right the next time.
DON’T DISCARD EQUITY…………DON’T OVER EXPOSE………..ENJOY THE GROWTH RIDE !!!
Anil Budhraja (anilbudhraja@yahoo.com)
