Kandu Kandu Kondangirikkum Investment Bankugale Kandilannu Varuthunnathum Bhavan
Son: Papa, what do you do for a living?
Papa: I am an investment banker
Son: John, the accountant tells me that you are like Simon’s dad?
Papa: Rubbish. How dare he say that? Simon’s dad was a notorious burglar and look at me ….I earn 7 digit salary and I work in the number one investment bank in the world. Screw the guy.
Son: But dad, John says so because he thought both you and Simons dad swindled people and robbed them off their wealth.
The current economic crisis is to a large extent the cause of misuse of MBS (Mortgage Backed Securities), a financial tool introduced by a handful of leading Wall Street investment banks. Ironically most of the financial wizards who came out with this technique have made truckloads of money and have gracefully retired. But the unregulated and uncontrolled use of MBS have messed up the balance sheet of most financial system participants. Year after year, quarter after quarter they showed rising profits and awarded their Harward and Dharward (he he he…..no difference…as even the best messed up things)….educated executives with multi million bonus payments not realizing that they were sitting on a ticking time bomb. Well along with the numerous blasts in Iraq, Afghanistan and India , there was a blast in Wall Street as well in the form of Lehman Brothers. Had the poet-sage Poonthanam been around he would have sung
Kandu Kandu Kondangirikkum Investment Bankugale Kandilannu Varuthunnathum Bhavan
What followed was pain, pain and more pain. The icing on the cake was the burst of couple of fraud schemes in US and India amounting to a miniscule $52 bn dollars ( not much considering the trillion dollar loss related to toxic investments)…A great day for India as we managed a swift entry into the top ten corporate frauds in the last 25 years. I profusely thank Raju and Co for their dogged pursuance of excellence and for making us proud.
Layoffs, pay cuts, quarterly and annual losses, massive one time write-offs, bailouts, defaults, mergers, acquisitions, distress sales – these defined the last 6-8 months.
Its been one hell of a time. Yours truly sitting in India is shit scared about his job thanks to the doings and greed of the f*** who started this shady scheme. Hope I get to tell the future generation that I lived through this World War-3 and that I escaped unscathed (both mentally and financially)
May god almighty help all of us overcome this difficult period without any major problems.I find solace in works of my master Sri Sathya Sai Baba , Mata Amritanandamayi etc and also watching inspiring movies like Pursuit of Happyness, Shawshank Redemption etc . I also turn to mallu classics like Kilukkam, Chithram, Godfather et al to keep myself cheerful. Lalettan, Innocent, Jagathy we love you especially during times of recession
(Impact of Slowdown in Kerala: Heard from a trusted source that the valuation of investment bankers in the Kerala matrimony market has taken a serious hit, closely followed by IT folks. But am delighted to know that the ‘poor cousins of I-bankers’ – a tribe called equity analysts have not been downgraded as much as the former. So all ya mallu equity analysts, make hay while the sun shines)…
Tuesday, January 20, 2009
Tuesday, January 13, 2009
Watch Out Folks
This blog marks my late entry into the world of blogging. I intend to use this blog to voice out my opinion and thoughts on various issues. The way the stock market has tanked in the recent past describes it the best - irrational, chaotic and unpredictable. Working in an industry the fortunes of which fluctuates to a large extend with the swings in stock market has made me take an interest in the sock market situation (….by the way …I have been given me the fancy title of an equity analyst …and no I don’t recommend stocks in case anyone intends to swear at me having invested in stocks depending on what Mr X who comes regularly in channel XXX with a black tie said or Mr. y of the prestigious zzzz investments said and have seen their value deplete by more than half…..). On the brighter side I have been spared from the stock market fall, not because I am smarter than the average Joe who invests in the market or that I have invested based on a quantitative model that spurts out a probable stock value as if it is the medium through which almighty helps the i-bankers and analysts to make more money at the expense of the uninitiated and the gullible- it is just because I have not been able to cough up adequate resources to take the market by storm !!!.
Leaving my sad tale aside, I wonder at the plight of the common man who got carried away by the news of ‘Indian Growth Story’ translated into wonderful performance of the sensex. Suddenly sensex became the buzzword. CEO’s and autowallahs alike were talking of sensex and you would be considered straight out of Mars or Venus if you have not heard of RNRL or DLF. We had to be contented with colleagues whose sole purpose of existence was to watch the NSE site interspersed with hurrays and loud abuses. India is the happening place and yes things were happening at frantic pace all around me. Way to go Sensex I thought!!!…The learned men with fancy ties who is ready to face the camera as early as 8 a.m in the morning gave wisdom to the common man. A recreation of the Gurukula system of the yore where the seer imparts knowledge and the disciples sit around him and grasp the wealth of knowledge the guru has passed on. The Menons, the guptas and the Dsouzas were impressed by them and thus we had a NFO (New Fund Offer) almost every week and every IPO was oversubscribed. Pardon me if you are familiar with the following terms (…I bet it would figure a great deal in the daily vocabulary of investors who regularly listen to the modern day ’sages’ …)
a) Market is yet to peak…..( thus spoke the wise ones gazing into the crystal ball esp when we are in a bull market…)
b) Market is yet to bottom out…( stated with a sigh and a brooding face hardly after a week after the aforementioned comment..)
c) Fundamentals are sound ( when market is going up..) and fundamentals have worsened when the reverse happens.
d) Resistance / support for the markets at XXXXX levels with a zzzz % probability ( sorry..forgot to introduce this specimen called ‘ technical analysts’ who are paid hefty sums to sit and stare at charts and to make some sense out of it ( if their counterparts are good at jargons and in dishing out technical terms these guys are a step ahead of them……they do not speak English or French or Chinese…..I mean they speak only in technical language ….that is why they are known as technical analysts……if you ever understood what these guys spoke, file a nomination for an entry in Guinness book of records…)
e) Last but not the least, ‘Global Cues’…..not clues i repeat it is cues …..a refined and jargonized way of passing the buck….If you cant make sense of the stock market movements blame it on some global happening and save your ass…..oil prices, fed rate, inflation, increase in the reproduction rate in china , alarming growth rate of mosquitoes in cochin…………….need to admit one thing…these guys never give up………..trust them to invent a reason however unrelated it might be ….wrap it around with buzzzzwords and jargons….throw in some charts and numbers and there you have a one hour programme with an equity analyst
The point I want to make is that never should an investor be lured beyond a certain extent by the actions and tips of your uncles wife’s second cousin or your best friends father in law. Do a basic research on the company and the take a call. If you have access to reuters or bloomberg see the consensus view on the company which would be helpful in ‘ informed decision making’. I am not telling that such a move will always end up in us raking in huge profits , but atleast it is what I call an ‘informed or rational decision making’ rather than being a victim of herd mentality. In the next post I will list out some sites ( not paid ones ..of course…) that can be used by wannabe investors. Good luck
Leaving my sad tale aside, I wonder at the plight of the common man who got carried away by the news of ‘Indian Growth Story’ translated into wonderful performance of the sensex. Suddenly sensex became the buzzword. CEO’s and autowallahs alike were talking of sensex and you would be considered straight out of Mars or Venus if you have not heard of RNRL or DLF. We had to be contented with colleagues whose sole purpose of existence was to watch the NSE site interspersed with hurrays and loud abuses. India is the happening place and yes things were happening at frantic pace all around me. Way to go Sensex I thought!!!…The learned men with fancy ties who is ready to face the camera as early as 8 a.m in the morning gave wisdom to the common man. A recreation of the Gurukula system of the yore where the seer imparts knowledge and the disciples sit around him and grasp the wealth of knowledge the guru has passed on. The Menons, the guptas and the Dsouzas were impressed by them and thus we had a NFO (New Fund Offer) almost every week and every IPO was oversubscribed. Pardon me if you are familiar with the following terms (…I bet it would figure a great deal in the daily vocabulary of investors who regularly listen to the modern day ’sages’ …)
a) Market is yet to peak…..( thus spoke the wise ones gazing into the crystal ball esp when we are in a bull market…)
b) Market is yet to bottom out…( stated with a sigh and a brooding face hardly after a week after the aforementioned comment..)
c) Fundamentals are sound ( when market is going up..) and fundamentals have worsened when the reverse happens.
d) Resistance / support for the markets at XXXXX levels with a zzzz % probability ( sorry..forgot to introduce this specimen called ‘ technical analysts’ who are paid hefty sums to sit and stare at charts and to make some sense out of it ( if their counterparts are good at jargons and in dishing out technical terms these guys are a step ahead of them……they do not speak English or French or Chinese…..I mean they speak only in technical language ….that is why they are known as technical analysts……if you ever understood what these guys spoke, file a nomination for an entry in Guinness book of records…)
e) Last but not the least, ‘Global Cues’…..not clues i repeat it is cues …..a refined and jargonized way of passing the buck….If you cant make sense of the stock market movements blame it on some global happening and save your ass…..oil prices, fed rate, inflation, increase in the reproduction rate in china , alarming growth rate of mosquitoes in cochin…………….need to admit one thing…these guys never give up………..trust them to invent a reason however unrelated it might be ….wrap it around with buzzzzwords and jargons….throw in some charts and numbers and there you have a one hour programme with an equity analyst
The point I want to make is that never should an investor be lured beyond a certain extent by the actions and tips of your uncles wife’s second cousin or your best friends father in law. Do a basic research on the company and the take a call. If you have access to reuters or bloomberg see the consensus view on the company which would be helpful in ‘ informed decision making’. I am not telling that such a move will always end up in us raking in huge profits , but atleast it is what I call an ‘informed or rational decision making’ rather than being a victim of herd mentality. In the next post I will list out some sites ( not paid ones ..of course…) that can be used by wannabe investors. Good luck
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