Love Hate Aur Dhoka

“Indians have a love hate relationship with stock markets” said the CEO of the Bombay Stock Exchange a few months back. And he goes on to add “We have a market that is not safe for investors to a large extent.” Further he adds “Only 2% of India i.e. 20-25 Million people invest in shares or mutual funds.”

My broker friend was reading out from a magazine as we met for our coffee this weekend. Swami and I were wondering what he was getting at. But he continued, this time from another article.

“SIP inflows are now about 3000 crore monthly as against 2500 crore six months back.” “FII inflows till date are about 22000 crores this year against 60000 crores last year.”

Swami and I were thinking that our broker friend will now tell us what he was getting at. But he continued again. This time with even more exclamation.

“Quess IPO was oversubscribed 147 times, L&T Infotech IPO was oversubscribed 12 times, Thyrocare was oversubscribed 62 times, and Ujjivan was oversubscribed 41 times. And I am sure there are more to come.”

Finally he looked up at us, smiled and said, “Looks like we are falling in love again.”

Swami and I looked at each other kind of wondering “What’s love got to do with it?”

“The hate of the past few years is gone. The love was cooking, now it seems it is served.”

Swami and I still confused. Love, Hate, Cooking and Investing. We just weren’t getting it.

Finally Swami had just one question “So?” Our confused state of mind was amply clear to our broker friend from the question itself. He finally obliged with some explanation.

“Well – it does look like there is increased participation in the markets from individual investors now. Which is great. But I hope it is not out of love.”

We were finally getting some of what Jigneshbhai was trying to say.

The quotes he was reading from did seem to indicate that individual investors were putting in money in the markets faster and in greater amounts than earlier. More money in SIPs, more money in IPOs, and lesser impact of foreigners’ money seemed to suggest that.

As we were musing over the apprehensions of our broker friend, he continued speaking.

“Because even if you love the markets, it won’t love you back. This kind of love can quickly turn into hate with the slightest mishap.”

That got Swami and I thinking about our broker friend’s skepticism.

The old man in the sprawling bungalow who was listening to our conversation walked over to our table. He always spoke cryptically, and this time was no different, albeit a bit clearer.

“Don’t love the markets. If there’s no love, there’s no hate. And if there’s no hate, there’s no dhokha. Go by your long-term plan, love it and stick to it, so that there is no love, hate or dhokha with the markets.”

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