What will not change?

“Everything material is changing all the time and is temporary, so for lasting happiness, we should change our focus from what is temporary to what is eternal” said our broker friend Jigneshbhai as we met for our weekend coffee yesterday.

Swami and I were stumped seeing him in such a philosophical, almost spiritual mood, specially coming from someone from the world of investing. He went on to explain that he had returned from a spiritual retreat where his teacher had made such a statement, and he was reading from his notes from that retreat.

“Of course everything is changing” said Swami, but it didn’t look like he was on the same plane of ‘consciousness’ (isn’t that the word used by spiritual leaders?) as our broker friend seemed to be.

The difference in their ‘planes of consciousness’ was evident as Swami continued.

“A few months back everyone was saying NDA is out, and now everyone is saying Modi will be back. Last year they said don’t go near small caps and midcaps, and now they are saying the next bull market rally will be led by them. The ‘Mahagathbandhan’ seemed like the in-thing then, and now it seems to have changed.”

This probably brought Jigneshbhai back to the ‘mundane plane of consciousness’ as he looked up from his spiritual notes on hearing Swami, and smiled.

“My investments are changing everyday based on all these material changes, so how can I not focus on them?” revolted Swami, having got Jigneshbhai’s attention.

There was a slight silence as usual while Swami and I waited for our broker friend to speak.

“Well – even in investments, it is better to focus not on the temporary but on the eternal – not exactly eternal, but at least things that are a bit more permanent” Jigneshbhai started explaining, though it wasn’t quite still at our ‘plane of consciousness’.

Looking at our blank faces, he rightly thought this needed more explanation.

“Who is in power is temporary, what people feel about markets keeps changing, political alignments are temporary and so are changes in people’s tastes and moods, and hence prices of businesses. Better not to focus on the temporary but on the permanent.” our broker friend continued, now talking things that made some sense.

“But what is permanent?” Swami was ready with his question.

After a silent pause, Jigneshbhai said, “Well, 10 years from now, young Indians will still aspire for a better life. That won’t change. There will still be Indian businessmen who will identify markets and build profitable businesses – for India and the world. That won’t change. And these entrepreneurs and their shareholders won’t settle for bank interest rate kind of returns. That also won’t change.”

He looked at us and saw that Swami and I had started getting what he was saying.

“So, while not quite permanent – even that is temporary – but irrespective of who is in power or what happens across the border or in the world, these probably won’t change.”

Jigneshbhai said with a deep sense of confidence and faith. The need for human progress is built-in, Swami and I thought. That need is unlikely to change, and human enterprise for progress more or less guarantees a set of new and old profitable businesses being built over time.

Even though they may be temporary at our broker friend’s new found ‘higher plane of consciousness’, Swami and I thought, looking at each other, that they will work at our plane.

As we were further musing on the temporary and permanent (nah – eternal as per Jigneshbhai) things in investments, the wealthy man in the sprawling bungalow who had been listening to our conversation walked to our table. And today we were pleasantly surprised as he wasn’t as cryptic as he normally is, when he gave us some direct advice.

“Focusing on the unchanging over a few decades is as eternal as you can get in the world of business. Jeff Bezos built Amazon based on what he thought will not change. You must also build your investments based on what you think will not change.”

Four Legs and a टेढ़ी Tail

“Abraham Lincoln once posed the question: ‘If you call a dog’s tail a leg, how many legs does it have?’ and then answered his own query: ‘Four, because calling a tail a leg doesn’t make it one,'” Buffett writes.

Our broker friend Jigneshbhai was reading from Warren Buffett’s latest annual letter to his shareholders. He continued as he read further.

“Buffett then sarcastically adds: “Abe would have felt lonely on Wall Street.””

The lazy skeptic in our broker friend seemed to have loved this. I saw that he had a wide grin on his face as he looked up at us after reading this.

Swami and I were just digesting this leg-tail business when our broker friend continued.

“Not just on Wall Street, Lincoln would have felt lonely at so many places, with so many bent on calling a tail a leg, isn’t it?” Jigneshbhai asked, with, maybe, a slight sense of resignation.

“No wonder Lincoln is said to be one of their greatest Presidents. While everyone saw their version of reality, he saw reality as it was,” our broker continued, still excited about what he had read.

Swami and I were wondering which tails and legs and their ‘mis-calling’ was our broker friend referring to.

Swami was the first to ask, as usual.

“Buffett is probably referring to the accounting shenanigans that so many companies indulge in – when they don’t call some expenses as expenses. I read his latest letter” he remarked proudly.

Jigneshbhai was pleasantly surprised with Swami’s comment.

“Indeed. Reality doesn’t change when you call it something else” he said, and then after a few moments of silence, added, “All that you manage is an illusion.”

Swami looked at me and wondered if our broker friend was talking about expenses or something else.

Swami was definitely thinking about only accounting. “You need to be careful about such companies and such managements. The ones who regularly indulge in calling a tail a leg. Expenses need to be represented correctly to shareholders,” he proclaimed confidently.

He was probably right about being careful of managements that do such misrepresentation. But Jigneshbhai was probably talking about misrepresentations of reality by some other entities.

“If you don’t see and accept reality as it is, and keep calling it something else, reality itself doesn’t change, isn’t it?” he continued again.

“And that’s true of not just companies and managements, but also of people, political parties and even countries, of late, isn’t it? If you repeatedly call a tail, a leg, it doesn’t become a leg.”

“It is better to maintain some distance from them – because anyone who repeatedly calls a tail a leg will hardly change that habit. And actually start believing it.”

“After a while, even you can forget that what you call a leg is actually a tail.”

Jigneshbhai stopped and looked at us with a sigh. Swami and I started thinking about what our broker friend had just said – perhaps Lincoln’s statement applied not just to accounting, we thought.

But Swami was still not sure what to do and how to deal with those who call a tail a leg, repeatedly (though our broker friend had advised a safe distance!)

Just as we were thinking about it, the wealthy man in the sprawling bungalow, who had been listening to our conversation, came across to our table. Jigneshbhai smiled at him as he saw him coming.

And as we finished our coffee, the wealthy man looked at Swami and said “कुत्ते की दुम टेढ़ी की टेढ़ी – कभी सीधी नहीं होती. You must deal with them assuming this!”

Nonstop Nonsense

“Charlie Chaplin once said ‘I remain just one thing, and one thing only — and that is a clown. It places me on a far higher plane than any politician'” said Jigneshbhai, my broker friend as we met for our weekend coffee. He was musing over the happenings of the past few days apparently.

charlieclown

“But it’s getting increasingly difficult to differentiate between a clown and a politician nowadays” he smiled, looking at Swami and me. For a change this week, he had started talking and we were the ones silently sipping our coffee.

But Swami was least interested in the political circus and was waiting with his questions.

“I love Charlie Chaplin. But honestly, there’s been so much happening over the past few months, that there’s been more to worry than talking about comedy” he said, quite satirically unlike his regular style.

“Oil prices have been fluctuating, the populist budget is done, the RBI has reduced interest rates a bit as inflation is down but then maybe so is growth. And now we have the worst terror attack on our paramilitary and talks of war. Plus there is a US-China trade war. And there are elections coming up in a few weeks, and we aren’t even sure if the current government will be back!!” Swami was clearly exasperated by the set of events over the last few months and understandably, perturbed about what seemed like a fairly uncertain time for an investor.

He paused for some breath, and I looked towards our broker friend to say something.

“After Charlie Chaplin, there was another clown who made me laugh. Do you remember that slapstick guy in Didi’s comedy show?” Jigneshbhai asked, still stuck in his comic musings. Almost on second thought, he added, “But our new age clowns and Didi’s can’t be matched” he continued, looking at us with a wink in his eye and a wide smile.

But his smile quickly went away when he saw Swami stare at him, clearly not amused.

Here he was talking about all the important happenings impacting his investments, and Jigneshbhai was smiling thinking about his comic stars, old and new.

Realizing the mood difference, our broker friend acknowledged Swami’s concern, but didn’t take it seriously. There was a slight longish silence as usual, while we waited.

“Of course, there’s been a lot happening. But eventually all of this won’t matter – for your investments. You will hardly remember this after a decade or two,” Jigneshbhai assured us, always talking in time frames which put Swami off.

“Who knows who will be alive at that time? I want to know what I should do now, or the next few months at best?” Swami revolted, despite our broker friend’s long-term assurance.

“Well – that’s true, but then on that, I don’t have any answers for you” said Jigneshbhai, his mood turning from a cheerful one to slightly pensive. Thinking about Chaplin and Didi surely got him more laughter than this talk of recent happenings for sure.

While Swami, I and our broker friend were sitting silently sipping our coffee, the wealthy man in the sprawling bungalow came across to our table. Apparently, he had been listening to our conversation.

Though admittedly, our conversation today was more like Jigneshbhai’s monologue on his comic heroes and Swami’s rambling on unsettling happenings of recent times.

So the wealthy man quietly sat with us for a few seconds, and just as we were getting ready to leave, he left us thinking with what he said. “Charlie Chaplin said that life is a tragedy when seen in close-up, but a comedy in long-shot. For your investments, all of this, after a few years, will seem like Nonstop Nonsense!”

Of Artificial Intelligence, Natural Stupidity and a Higher Wisdom

“Artificial Intelligence is going to completely change investing” said Swami excitedly as we met for our coffee. Jigneshbhai did not react, and continued sipping his black coffee, as usual. Swami was not the one to be discouraged by that, at least immediately. So he continued with even more enthusiasm.

“Machines will be reading through stock prices and market movements and predicting what’s going to happen next!” he proclaimed.

Still seeing no response from our broker friend, Swami turned to me and said “With Artificial Intelligence technology, humans are going to be redundant.”

I gave him a polite nod, while trying not to take sides. He quickly realized I had no idea about this AI and investing stuff, so he turned impatiently back to Jigneshbhai.

“So are you going to say something or just stay silent?” Swami asked, with a tinge of protest.

Jigneshbhai looked up and finally said, “Yeah, machines are getting smarter.”

Happy that he had finally got some response, Swami slowly got ready for what he thought was going to be a long argument with Jigneshbhai.

“I read that AI programs will read through earnings reports and identify trends. And AI will also track social media and measure sentiment about a company.” Swami happily boasted of his new-found knowledge.

He wasn’t done yet though. “And so many news reports on a company or a sector come out every day. AI will go through all these things and predict how it will impact prices in real-time.”

I nodded at Swami in appreciation, making him feel good about his knowledge and that he had a receptive audience, though I was a relatively easy audience to impress.

Jigneshbhai though didn’t seem too impressed. Turning to him, Swami confidently said, “So with all this analysis and real-time prediction, this artificial intelligence is going to change the face of investing!”

Swami seemed done with his side of the argument, now expecting Jigneshbhai to start. But all that our broker friend nonchalantly said was “Maybe, but more likely not.”

Obviously this wasn’t acceptable for Swami, and even I expected a more elaborate response. So we waited for Jigneshbhai to say more.

After a longish period of silence waiting for him to speak, our broker friend finally said, “Investors don’t need to increase artificial intelligence. All they need is to reduce natural stupidity.”

Swami and I looked at each other confused. Swami had read so much on AI, and the whole world was gung-ho on how AI was going to impact everything, and here was our broker friend more worried about natural stupidity! Before I could say anything, Swami was ready with his question.

“What do you mean? AI is not going to change investing?” he asked.

Again he got a smile from Jigneshbhai. Again we waited for him to speak. Again there was a longish silence.

Jigneshbhai finally spoke.

“Well, it may change trading. They anyway look for so many variables like MACD and moving averages and global cues and what not! Now they can add trends from news and earnings reports and social media sentiments to that mix if it suits them. Someone I am sure will come up with software to do it and sell it.”

He said this with a sense of wry despair. Swami and I were thinking about what he said, and thought perhaps he wasn’t wrong. It looked like Swami was also beginning to question his recently acquired knowledge.

Meanwhile, our broker friend continued.

“But for investing, all you need is to avoid natural stupidity. I hope they come up with some AI technology to detect that!” he said, and laughed loudly.

Just as he was laughing, Swami and I saw the wealthy man from the sprawling bungalow sitting at the table next to us. It looked like he had been listening to our talk on AI and investing all along.

As we were getting ready to leave, he tapped Jigneshbhai on his shoulder and said, “To avoid natural stupidity in investing, no AI can help. You need a higher wisdom!”

Where have you been?

“Where have you been?” asked my friend Swami to Jigneshbhai, as we met for our weekend coffee after a really, really long time.

Indeed when I checked, it was over a year since we had last met, and some of our coffee house friends had also started asking me why we had stopped meeting.

“I was on some quests. I was climbing mountains and diving deep into the seas” said my broker friend to Swami.

Swami and I looked at each other wondering whether Jigneshbhai was serious about what he was saying or pulling a fast one, with some cryptic clues on his whereabouts over the past year. Be that as it may, with no further clarification forthcoming from our broker friend even after the usual confused looks on our faces, we just let things be without delving further.

But then Swami, as usual, could not control his curiosity and was the first to ask. “So what kind of mountains and quests? Have you left investing in the markets?”

Swami and I waited for an answer. It drew a blank, for a while at least. After a rather long silence, finally Jigneshbhai said, “A lot of famous people go away on these kind of retreats and come back refreshed. They climb mountains or go to foreign lands and come back with new perspectives, I hear. So I thought let me try that too.”

Swami was quickly ready with his next question. “So did you come up with some solutions to the falling markets? Or just had fun?” he asked rather bluntly.

Jigneshbhai had a wry smile on his face and replied, “When you come back from such retreats, you generally see problems, not solutions. Everything looks better in the places you have been too, and worse where you come back.” And he further asked, “and the problems you see around you when you are back can spark off a chain of frustrating thoughts, isn’t it?”

Swami and I listened to our broker friend, and couldn’t quite get what he was saying. Seeing our confused faces, he explained, “Don’t you come back from a foreign trip and then everything in India seems so bad for the first few days? And then that sparks a chain of complaints on our airports, roads and traffic for a few days, isn’t it?”

“Yes – so?” asked Swami indignantly, “So you are also finding problems after your retreat from wherever – mountains and deep seas – you went on a quest to?”

“Hmm” said Jigneshbhai. “Well, they are not real problems, mostly imaginations.”

“And when your mind imagines problems, it starts looking around for data or some aspects of reality to justify it, and that sparks a wildfire of thoughts. And then you think the problem is real.”

Swami and I were starting to understand a little bit of what Jigneshbhai was trying to say now, but not yet quite fully. As we were musing about it, he further continued.

“So if I am corporate employee back from such trips, I imagine problems with my job, my boss and commute. If I am an investor, I imagine problems with my shares, my mutual funds and markets. And if I am a politician, specially an opposition one, I imagine problems with the government. And yes, as these sparks ignite thoughts, some parts of reality do surface to justify them, and it can become quite a wildfire.”

Swami and I now understood what our broker friend was referring to. We smiled at each other happy that, for once, we had some clue of his tacit talk. Meanwhile, he continued.

“And then there are so many ‘amplifiers’ to spread the wildfire – maybe your thoughts or other people in your company, or other market participants and all the media especially, which is always looking for sparks with a potential.”

“But then, after a while, I always wonder – what started the wildfire? Did the imagination come first or did the aspect of reality come first? Or did the imagination and some aspect of reality combine on a fertile ground to start it?”

Swami and I found ourselves nodding in agreement with Jigneshbhai. So often in investing had we found that a rumor causes prices to drop and then some other news comes, and then there is further fact-driven amplification, and then it becomes a wildfire. But what came first? It is hard to say.

And then in politics too, so many allegations start and then some news comes, and then some data to fuel the imagination by the amplifiers, till it becomes a wildfire. But did the imagination come first or the data and amplification? Tough to say.

While Swami and I were thinking about this, Jigneshbhai confidently remarked, “But one thing is certain – whatever started it, there’s always someone taking advantage of these sparks, specially if they are in politics.”

This broke Swami’s and my chain of thought. While we were still thinking whether imagination or aspects of reality cause these sparks, our broker friend was almost suggesting that it doesn’t matter eventually.

Swami asked, “So you mean that someone engineers these fires?”

With a wry smile, Jigneshbhai, seemingly happy that we were asking the right question, said, “Well, it may or may not be true. But what is true almost always is that after it is sparked, someone, who is the same or different, is definitely taking advantage of it.”

Finally he confidently asserted, “For someone, these sparks or wildfires, fuelled by imagination or some aspects of reality, are always an opportunity – self-made or godsent.”

Just as he was saying this, I saw the wealthy man in the sprawling bungalow (who always speaks cryptically) at the table next to us.

He had been listening to this coffee talk between us. Before Swami and I could ask him where he had been, he looked at our broker friend Jigneshbhai, and, like Thakur from Sholay, in a solid baritone voice, said “लोहा गरम है मार दो हथौड़ा!”

social-media-lessons-from-sholay-6-638

Saboot aur Gawaah

“Tamam gawahon ke bayaanat aur sabooton ko madde nazar rakhte hue” started Jigneshbhai in a very filmy mood when we met this weekend for coffee. “Isn’t that how that dialogue went in the old Hindi movies?”

Swami, a big fan of Hindi movies completed the dialogue that my broker friend had started. “Yeh adalat is natije pe pohochi hain ki, Mulzim bekasoor hain. Lehaza Mulzim ko ba-izzat bari kiya jaata hain.”

And we had a big hearty laugh remembering the troubled judge banging “Order, Order!” in God knows how many old Hindi movies.

proof

My broker friend said “One of my friends, an ardent non-believer in God, has this habit of asking for evidence every time any of us remotely talks about anything suggestive of religious, spiritual or ritualistic things.”

Jigneshbhai seemed to be in his story telling mode today, so Swami and I were all ears. Specially when it comes to proof and evidence, Swami is always attentive.

“And as you know, no one has been able to conclusively prove the existence of God so far.”

“So every time after presentation of tamam gawaah aur saboot, the ‘mulzim’ gets baizzat buried!!” Our broker friend broke into a laugh.

Swami and I were not quite sure why he was laughing so much, specially about touchy matters like proof of God.

After a while, realizing that he was laughing all alone, he stopped.

With a twinkle in his eye, he said “By the way, we believe in God with no evidence, but nowadays, ask for evidence about everything else, right?”

Swami and I got an inkling that Jigneshbhai was probably referring to the demands of proof for the surgical strikes that the Indian Army had done a few days back.

All government actions require documentation and process.

We have to submit proof of identity, proof of residence, proof of domicile, proof of income for so many things like Aadhaar card, admission to government colleges, loan applications, etc. Even to get bills passed in parliament, there is ‘kanooni process’. Audits happen to establish ‘saboot’ of corruption happening or not happening.

So it is natural that in a country that goes so much by ‘gawaah aur saboot’, the Army also needs to provide proof of a surgical strike it performed on the enemy.

I wonder whether it would have been a good idea for our Army to have submitted all the right documents at all the government offices and followed all processes, before performing the surgical strikes.

Maybe that would have left ‘tamaam gawaah aur saboot’.

While we were lost in figuring out what would be the best documentation to ensure that there is enough proof before the next surgical strike by the Army, Jigneshbhai broke that chain of thought.

“So we ask for proof from the Army, but where there is proof and ‘after tamaam gawaah aur saboot’, the judge has given his verdict, we don’t follow it, and evoke emotion!”

Swami and I were again left wondering what Jigneshbhai was talking about, but quickly realized that he was probably referring to the verdicts in the Cauvery Water case and the BCCI Lodha committee.

“Sharing water and establishing corruption and shady cricket deals where there is ‘tamaam gawaahon ke bayanaat aur saboot’, we invoke emotion, and from the Army, where we need a bit of faith, we ask for proof.” Jigneshbhai clarified.

Clearly, in a rational world, evidence and data are paramount, Swami and I thought. But our broker friend was perhaps right in suggesting that there is a place for rationality and there is a place for faith.

While we were musing over this, the wealthy man in the sprawling bungalow, who had been listening to our talk (mainly Jigneshbhai’s today), walked over to our table. He sat for a while today and left us with more food for thought.

“For the Army and government, it is rational to not provide “gawaah aur saboot”. And for the enemy and politicians, it is rational to demand for it. For you, it is wise to determine who to place your faith on! Because Koi saboot nahi, toh Koi gunehgaar nahi!”

A Plan for a Punch and a Bitten Ear

“What should we do now?” asked Swami, as my broker friend Jigneshbhai sipped his coffee when we had our first meet of the New Year this weekend.

“Now that markets are back to their levels before our PM Modi came in, all my long term investment plans seem to be back to square one. So what’s the plan now?” Swami was unusually less aggressive today with my broker friend, specially given that markets were down so much, almost pleading for this attention.

As usual, Jigneshbhai kept reading – this time he was reading a sports magazine. Looking up at me and Swami, he smiled and read out. “When Mike Tyson was asked by a reporter whether he was worried about Evander Holyfield and his fight plan he answered; “Everyone has a plan until they get punched in the mouth.”

tyson

“And the market is punching us in the mouth” Swami cried out.

“It is almost 20% down from the top of last year, and they are giving all kinds of reasons from Oil to China to Europe to whatever. So what’s the plan now?” he continued with his question.

I watched as my broker friend kept listening while he sipped his coffee.

“Those are all punches that the market is giving you. You can avoid them or get out of the way only for some time. Eventually they will get you” said Jigneshbhai non-chalantly.

Swami was in an irritable mood. Falling markets have this effect on him. Earlier he used to get angry. This time he did not seem angry, but still looked dismayed, as if he was helpless. And here my broker friend wasn’t even pretending to offer any comfort or solace.

“All that is fine – punches and all. But people are saying it is like 2008 again. That’s not a punch, it’s a knockout!” Swami responded in dismay, on the one hand worried in thought if that happens, but on the other hand, almost happy with himself that he had spoken in Jigneshbhai’s language.

My broker friend was also surprised and looked up in amusement.

Almost sensing that he had got Jigneshbhai’s attention due to his metaphor, Swami repeated his question, “So is it going to be a knockout? What’s the plan then?” this time with a mischievous twinkle in his eye.

“I have no idea what’s in store” insisted Jigneshbhai, and then also said “But you better have a plan.” After this brief talk, he got back to his nonchalance, his coffee and his magazine.

In fact, he read out from his sports article. He said “You should read what Tyson said a few years later when asked why he said that.”

Jigneshbhai continued reading from his sports article.

“People were asking me [before a fight], ‘What’s going to happen?,’ ” Tyson said. “They were talking about his style. ‘He’s going to give you a lot of lateral movement. He’s going to move, he’s going to dance. He’s going to do this, do that.’ I said, “Everybody has a plan until they get hit. Then, like a rat, they stop in fear and freeze.’ ”

No sureshot answers irritate Swami no end. “Why does your friend change the topic?” he asked me in dismay. I had no clue and looked back trying to figure out what’s next.

Just as Swami was almost ‘getting ready to get angry’, I noticed that the wealthy man in the sprawling bungalow had come in and was sitting on the table next to us listening.

As we finished our coffee, the wealthy man walked to me and Swami, took the sports magazine from Jigneshbhai, and left us with some words on what looked like boxing, but left us wondering nevertheless.

“Whether it is a knockout is up to you. But if you have a planned for a few punches on your mouth and keep going even as you may end up with an unplanned bitten ear, who knows – you could still end up winning the fight – twice – like Holyfield eventually did!”

सोने पे सुहागा?

“As if all the fixed deposits and mutual funds and shares and gold funds weren’t enough, I also have to think about this gold deposits now” complained Swami, as we met this weekend over our customary cup of coffee. He looked at my broker friend Jigneshbhai, and asked “So should I invest in this new gold deposit scheme?”

My broker friend silently looked up from his coffee at Swami and said, “It is worth considering, but it depends.”

“Why can’t you just answer Yes or No?” asked Swami in a irritated tone. And then he looked at me and as if I was responsible for it, he asked me, “Why doesn’t your friend give straight answers and talk like this to me?”

I just waited for Jigneshbhai to speak, as I was equally eager to figure out what to do about this new gold scheme.

Swami and I waited, half expecting our broker friend to speak up. But Jigneshbhai kept sipping his coffee. After a couple of minutes, Swami lost his patience as usual and insisted, “So what? Should I go for it or not?”

Finally my broker friend spoke. “If you have black money in gold, you won’t even look at it.”

Of course, we don’t, otherwise we won’t be here, thought Swami and I. Perhaps our broker friend realized that, when we looked blankly at him, as if saying “Not applicable.”

He then continued. “If you or your wife like jewellery, you won’t look at it. Because you are going to lose it.”

On hearing that, Swami’s interest was piqued. “There is so much jewellery at home. It is not always used anyway. I hope I can convince my wife to part with some of it.”

Jigneshbhai gave a wry smile on hearing that. Can we really part with that jewellery? Swami and I were thinking.

Our broker friend continued smiling while we were thinking.

Swami finally confessed that maybe he could part with some of his jewellery. “But I am going to need the gold a few years later. Maybe for my daughter’s wedding, maybe for my retirement.”

Jigneshbhai stayed silent for a while when he heard that.

As we waited for further inputs, he finally said with some semblance of clarity. “Well, gold is honestly not the best way to plan for that, but if you insist on buying or holding gold, then the gold deposit scheme is worth considering.”

That made Swami slightly happy but still unclear. The ‘worth considering’ was still there.

Meanwhile our broker friend now started opening up a bit. He started explaining the details.

“Well, for the gold deposit scheme, they take your gold at today’s rate, and you get it back after a few years at the gold rate then, plus they give you interest for that period. Plus they have said no income tax on interest, and no capital gains tax on finishing the deposit.”

While we were absorbing what our broker friend had said, he continued speaking.

“And for the gold bond scheme, you put fresh money into a gold bond at today’s rate – like a gold mutual fund. But in addition to tracking gold rate, they also pay you interest. But in this case, interest and capital gains is taxable”

Jigneshbhai finished talking and went back to his last few sips of coffee, while Swami and I were trying to understand what he said. We looked at each other, and the deposit scheme did seem like a decent way to get interest on unused gold lying with us. And gold bonds did seem like a decent way to invest in gold.

But Swami had his doubts as always, and finally asked, “But the interest is only 2.75% or 2.5% or something? Why not 7-8% like FD in banks? Why should I go for it then?”

Our broker friend got visibly irritated at that question, and shot back. “Well – because it is a gold deposit, not a fixed deposit. You are getting your gold back at the end of it – that’s why. And I didn’t say go for it – all I said is if you want to invest in gold, then among jewellery and gold funds, the deposits and bonds are worth considering.”

The ‘worth considering’ came back, and so did Swami’s discomfort. He liked being clearly told yes or no, and my broker friend didn’t provide that, and insisted that he decide.

Just then, my old, rich neighbour, the wealthy man in the sprawling bungalow, who had been listening to our conversation for a while, walked up to our table. He always spoke cryptically and only Jigneshbhai seemed to understand him. When he spoke, he often left Jigneshbhai smiling, and Swami and I scratching our heads.

Today too, he had a twinkle in his eye and a smile on his face. As we paid the bill and were leaving after finishing our coffee, he left us wondering when he said,

“Cakes, especially in excess quantity, aren’t good for health. But sometimes you can have your cake and eat it too, and this cake of gold also has icing on it. The gold deposits and bond schemes are indeed सोने पे सुहागा.”

The Return of Returns

It was a long, long time after which my friend Swami and I met my broker friend Jigneshbhai over coffee yesterday. Like always, it was Swami who started while Jigneshbhai and I were sipping our coffee.

“This Modi sarkar is useless. It only talks. Nothing has changed on the ground.”

I looked at Jigneshbhai to check if he will say something. But my broker friend kept sipping his coffee. Again like always, Swami continued.

“He just keeps visiting countries around the world, and announcing schemes. And his party keeps bungling up over useless things here.”

Again I looked at Jigneshbhai. But my broker friend continued sipping on his coffee. Nothing provokes Swami more than no response from Jigneshbhai. So he continued even louder this time.

“Even your markets have stopped going anywhere since the last six months. This government stopped working for business also it seems!”

Jigneshbhai looked up from his coffee and smiled at Swami and I. Finally he was ready to say something.

“You are so unhappy with Modi and his government. So are you going to return something in protest?” he asked.

If Jigneshbhai’s silence was not provocation enough, this question was enough to get Swami started.

“You seem to be still supporting him. He promised roads, infrastructure, development. He promised governance. I don’t see any of that. Why shouldn’t I protest?” Swami argued, with full vigour.

Jigneshbhai went back to sipping his coffee non-chalantly again.

And Swami continued.

“On top of that, his party and his people keep talking up cultural stuff. Why shouldn’t I protest?”

Swami seemed to be in a bad mood today. I hadn’t seen him this way for a long time. Earlier when we used to meet when the UPA govt was in power, almost every coffee meeting started with Swami’s complaints. For the last year or two, Swami was generally in a good mood when we met. So today seemed like he had got back to his old ways.

The tide seemed to have turned. My broker friend probably also observed the change in his mood.

So after a barrage of ‘why shouldn’t I protest’ questions from Swami, Jigneshbhai finally spoke up – little and with a subtle smile, as always.

“Why not? A couple of years back you were exuberant without reason, and now you are despairing without reason. So you should protest. But what are you going to return, as a mark of protest?” Jigneshbhai asked sarcastically.

So here were two of my friends – one arguing vehemently and the other making brief laconic comments.

So Swami apparently took note of Jigneshbhai’s sarcasm. He finally said in dismay. “I had so much expectation from Modi. But his govt has left me with nothing to return.” And with a twinkle in his eye, he continued, “Else I would have joined the protests and returned something.”

Just then, the wealthy man in the sprawling bungalow, who had been hearing our conversation for a while from the adjoining table, came up to us.

As we were getting ready to leave after finishing our coffee, he left us wondering when he said, “May you should return the 50% plus returns that the markets gave you over the past couple of years, before they go away. The return of returns will be a good mark of protest.”

A Case for Boredom

“I have learned that the capacity to endure boredom without looking for excitement is one of the foremost requirements to succeed in investing” said my broker friend Jigneshbhai as we sipped our coffee last weekend.

We were meeting after a long time and my broker friend was reading from a speech he had heard in a seminar a few weeks back. This speech was given by a well-known investor who had completed 50 years of successful investing.

Jigneshbhai continued reading from the speech, as we listened sipping our cup of coffee.

“Bertrand Russell wrote a book on this in which he said that the capacity to endure a more or less monotonous life is one which should be acquired in childhood. The question is what kind of monotony are you willing to endure?”

My broker friend Jigneshbhai was basking in those words and smiling as he read him.

Meanwhile Swami and I were looking at each other wondering whether we were about to be hit by a bout of the same boredom that our broker friend was talking about.

But my broker friend continued. He was carrying the book ‘Conquest of Happiness’ by Russell and was referring to the chapter ‘Boredom and Excitement’ that the speech was quoting from.

“Here it says ‘I do not mean that monotony has any merits of its own; I mean only that certain good things are not possible except where there is a certain degree of monotony’.”

Visibly impressed by what he read, Jigneshbhai was engrossed in the speech and the book it quoted from.

“And here it says ‘We are less bored than our ancestors were, but we are more afraid of boredom. We have come to know, or rather to believe, that boredom is not part of the natural lot of man, but can be avoided by a sufficiently vigorous pursuit of excitement. Boredom as a factor in human behavior has received, in my opinion, far less attention than it deserves.'”

My broker friend nodded in agreement and smiled with contentment like we do when we hear a beautiful song. He looked up and exclaimed, “How wonderful and how right, isn’t it?”

But when he turned to Swami and I, he could only see blank faces that seemed to be slowly approaching boredom.

Obviously with no ability to tolerate such boredom and not the one to stay silent, Swami spoke up rather curtly specially given my broker friend’s excitement (about boredom!).

“But what’s boredom got to do with investing? Investing is about making money and that should be exciting!” he proclaimed dispelling all of my broker friend’s notions.

The last couple of years had been good for Swami, so I could make out that he was in quite a good mood.

On hearing Swami, my broker friend did not quite know how to react. He was all into passionately explaining what he was reading, and Swami had more or less poured cold water over it. It did seem like it was not the right time to preach boredom to an excited investor like Swami. Nevertheless, my broker friend tried.

“Well, I think it has a lot to do with it” Jigneshbhai tried to explain. “If you can’t endure boredom, you will end up getting distracted and taking some action.”

Swami intercepted him again. “That’s the idea I thought. The markets are open every day, and there is so much money to be made in the action. I have seen that in the last few months. So where is the space for boredom?”

Jigneshbhai wanted to remind Swami of the long period of boredom before the last few months, but refrained from doing so. One hears what one wants to hear, he reckoned.

“Well, so be it. There is a time for boredom and that is what you must prepare for. As that time will eventually come” proclaimed Jigneshbhai, almost giving up on convincing Swami.

This kind of talk got Swami a bit irritated. He looked at me and said “See your broker friend is always the show spoiler. He is talking of boredom when there is excitement in the air.”

Jigneshbhai watched and listened silently as Swami was complaining to me.

Just then, the wealthy man in the sprawling bungalow dropped by and sat near our table. He was listening to our conversation on boredom and excitement with attention.

He spoke rarely but this time he did.

“Perhaps some element of boredom is a necessary ingredient in life and in investing. A wish to escape from boredom is natural, but the ability to endure it is vital. Because most of the time in your investing lifetime, there is nothing to do and the best thing to do is also nothing. And if you can’t endure that boredom, you won’t be able to do what you should most of the time, which is nothing.”

And while Swami and I were trying to absorb what he had said, Jigneshbhai smiled.

As we were leaving after finishing our coffee, the wealthy man in the sprawling bungalow looked at my broker friend and with a rare twinkle in his eye said, “There is definitely a case for enduring boredom for success in investing.”

Of Black and White and Shades of Grey

“Thank God for the Supreme Court – now the government has to catch all the black money holders with Swiss Bank accounts” exclaimed my friend Swami while we were having our coffee this week.

My broker friend Jigneshbhai was unmoved and kept sipping his coffee waiting for Swami to continue.

As usual, nothing irritates Swami more than my broker friend’s silence in response to his exasperation. So his questions were bound to come.

“So on this at least, you must agree with me, isn’t it?”

My broker friend was listening, but was silent for a while.

“Well, it is making a mountain out of a molehill. A disproportionate waste of energy” he finally spoke.

Nothing confuses Swami more than my broker friend’s speech. Very often, after goading Jigneshbhai to speak, Swami has often wondered if his silence was better. This occasion was no different.

“What do you mean? Aren’t you interested in getting back the black money that the rich crooks put in their swiss bank accounts?” protested Swami.

“I am told it will add 10% to our foreign exchange reserves” he boasted. “And here you are saying it is a waste. As if you know more than everyone else” Swami continued, now almost impolite.

I looked at Jigneshbhai to check if he was perturbed after this onslaught of brashness from Swami. But my broker friend was quietly sipping his coffee. There was an eerie silence as I waited for something to happen.

My broker friend finally broke his silence.

“Well, I said it is a disproportionate waste, not a total waste. There are better things to do for the government” Jigneshbhai asserted this time. “It is not as if black money is stored in mattresses or transferred in suitcases like the olden times, and all you have to do is simply raid their houses and seize it.”

Swami was a bit surprised on hearing this. His tone got less aggressive but he was a bit confused with my broker friend’s nonchalance. As usual he demanded an explanation.

“It may not be as simple. But we have to get the black money back. The government promised it” Swami argued.

Jigneshbhai now looked up and decided to talk.

“First of all, not everyone having a foreign account is a criminal on paper” he started.

“That is fine. But for the ones who are criminals, we have to get the money back from their Swiss accounts” Swami protested, not yet ready to give up.

“Secondly, the crime can be simply tax avoidance on well-earned money, or it could be ill-gotten hidden income through corruption or illegal methods” my broker friend clarified.

“Ok. So what? It is still money on which tax is evaded” Swami said, still not convinced.

“Thirdly, the ones who really want to evade big-time tax are likely to use structures and methods that are smart enough to either go undetected or uncharged.”

“Hmm..” mused Swami, getting a bit of the complexity of what my broker friend was saying.

“Finally” continued Jigneshbhai, “for the ones who will end up being charged, the process of proving their crime and recovering the money is likely to be long drawn in the courts.”

Now, Swami and I were listening intently, more or less understanding the difficulties.

“At the end of it, there will be political posturing, media discussions and lots of legal tangling and efforts, and the money eventually India gets, if at all, may really not be worth it” claimed Jigneshbhai.

We felt that perhaps our broker friend’s views may not be fully misplaced. But Swami was still not ready to give up.

“Well but we have to do something about the black money lying abroad!” he exclaimed, by now clearly frustrated.

“Well – yes, we have to, to a certain extent. But we have to do much more about the black money lying right here, under our feet in India” retorted my broker friend. “Most people don’t pay taxes on their incomes, and those who do, convert their white to black by investing it in gold and property, and selling in cash” asserted Jigneshbhai confidently.

Swami looked at me to check if I had given up on him. But I was a spectator as usual, watching my friends argue.

“So what’s the problem? We have to get the black money abroad, and we also have to get the black money here!” Swami was incensed now, sounding almost like the TV anchors demanding an answer.

“Well, the problem is most of these people vote” said my broker friend with a sly smile on his face.

Things were clearly not simple, when it came to black money.

Just as we were trying to digest all of what our broker friend had said, we noticed that the wealthy man in the sprawling bungalow was sitting at the table next to us. He had been hearing our conversation, and walked up to us.

While we walked out finishing our coffee, he had words of wisdom for us. “In matters of money, specially big money, things are almost never black or white. There are many shades of grey.”

An Opinion on Everything, A Country of Experts

“Yeh PSPO nahi jaanta!” Remember that old ad for – I think – Orient fans? In which a customer gets mocked for not knowing what is PSPO?

That was the kind of look my broker friend Jigneshbhai got from Swami when he said ‘No Idea!’ in response to Swami’s question on ‘where are the markets headed?’

“See he is not answering properly” complained Swami to me. I had a blank look wondering why my broker friend wasn’t answering as he was the expert. In anticipation, I stared at him.

But he did not budge. He continued reading and sipping his coffee.

Swami then turned to me. “Ok – so what do you think? Should we go for deep value cyclicals or safe defensives?”

I just stumbled from my chair at this question, and was still trying to decipher what Swami was saying. Like in conferences, when you don’t understand a question that someone asks, you say ‘Good question’ and buy some time to think? I was thinking of doing that. While the other part of my mind was wondering how Swami had done so much homework and from where he had got so much expertise.

But before that thought ended, his next question came up.

“Ok – this one is in your area” he pointed his look towards me. “You work in the hi-tech industry, so you should know. So do you think Infosys is in for good times now that Vishal Sikka is at the helm?”

I stopped just short of saying ‘No Idea’ like my broker friend. Swami’s questions were not ending. At the same time, the answers were not starting. It was but natural that he was losing patience.

On getting no reply, his disappointment knew no end. “You guys are deliberately hiding your expertise from me” he continued complaining. “You are hiding all your secrets from me.”

“There is no secret” asserted Jigneshbhai now. It reminded me of the dialogue from Kung Fu Panda. My broker friend repeated that he genuinely had “No Idea”.

This wasn’t well accepted by Swami, and he suddenly seemed to have lost respect for my broker friend. “Even I have a view on it, and how can you have no idea?” he seemed to be thinking.

The acceptance of having ‘No idea’ is not a well-accepted thing nowadays, where everyone is expected to have an opinion on, well, almost everything. With google and wikipedia and 24×7 TV, irrespective of the topic and your background, you have to have an opinion. And in this case, Jigneshbhai was an expert anyway.

Having an opinion on things that you have no reason to know much about is the new normal, so saying ‘No idea’ on a topic that you are supposed to be an expert on is truly atrocious. So thought Swami.

He turned his attention to me. “Take any topic of discussion today, sports, politics or business – there are always experts who have an opinion. And here I ask your broker friend for his opinion, and he says he has no idea. I am sure he isn’t willing to share his secrets” provoked Swami, with a tinge of sarcasm.

Swami then told me about his son (who was at-least 6 years away from getting anywhere close to engineering), but despite that how he was an expert on cars and had a clear view on which car they must buy next. “He nonchalantly rattles out figures on BHP and torque and ground clearance as if he has been driving cars since the age of 2″ Swami boasted.

“And even my wife tells me that her patients know so much about medicines and have a view on her prescriptions nowadays.”

My mind wondered to the opinions of my morning walker friends that I had heard for the past few weeks.

Each of them had convincingly told me about their opinion on what works best for weight loss. While one shared his view on the importance of cardio exercise, another had said weight training was the most critical piece, and a third one had dismissed both the others saying just watch what you eat.

Our society committee has a range of experts with clear opinions on how to run security, housekeeping, accounting and everything else required to run an apartment. My gorkha watchman is an expert on Chinese border issues, and when the PM hosted the Chinese premier, he subtly warned me “yeh China se door rehna chahiye.” A few days back, after the Mars mission, all of us became experts in space research and while I had no clue on the rules of boxing, last week, I became an expert in boxing.

We were surely a country of experts, having an opinion on a range of topics around, well, almost everything.

“This is too much, Jigneshbhai. Don’t just sit silent. Tell us your secret opinion on what to do next in the markets!” Swami exclaimed.

The coffee was getting cold as Swami and I waited for our broker friend to speak. But that was not to be. Now Swami was starting to give my broker friend the ‘yeh PSPO nahi jaanta’ look once again. ‘How can he not have an opinion on this?’ he still wondered.

Just then the wealthy man in the sprawling bungalow (who always spoke cryptically), and who had been listening to our conversation since a while back walked up to us.

What he left us with still keeps Swami and I wondering.

“Experts are either people who know more and more about less and less, until they know everything about nothing; or people who know less and less about more and more, until they know nothing about everything. In my opinion, it is better to form your own opinion.”

Talk is Cheap: The Art of Sounding Credible while Lying

“So someone sent me a joke yesterday of an HR Manager who is asked to choose between Heaven and Hell at the Pearly Gates by St Peter”, said Jigneshbhai, as we sipped our coffee last weekend.

Swami and I were busy reading up on the stock markets, as they were getting interesting by the day. We looked up to listen to Jigneshbhai’s joke.

“The HR manager – who had hired many while alive – is given an introduction of a much-better-than-expected fun-filled day in Hell, followed by a somewhat quiet, peaceful but subdued day in Heaven, and then asked to choose. She is so pleasantly surprised by how good Hell was (what with all the luxuries and the company of her colleagues and even a friendly Satan), that she is convinced that her suspicions were unfounded and has no doubts in choosing Hell.”

“It is only after reaching there, that she sees the real Hell and protests on realizing she has been conned. To which St Peter remorselessly says – yesterday we were recruiting you, today you are staff.”

Jigneshbhai completed narrating the joke, and laughed heartily. Swami and I had heard this one before, so weren’t amused but smiled, just to be polite. We continued looking down our pink papers.

Looking at our somewhat subdued response, Jigneshbhai sipped his coffee.

After a brief period of silence, he said, “You are being recruited – by fund managers, by the media, by the markets. Like the HR Manager did while he was alive, and St Peter did to the HR Manager at the gates of Heaven, they are simply doing their job.”

That got our attention. Swami and I looked up this time. As usual, this intriguing statement caught Swami first. He looked up with his usual questioning mind to my broker friend – not quite sure what he meant.

Jigneshbhai was smiling, and continued talking.

“Yes – this is like politicians before the elections. Time to make promises. Because the voter wants to be given dreams. So Fund Managers also sell dreams.”

Swami got further confused with this. It was enough for the question to pop up.

“Please make your mind up first. HR jokes or politician’s promises or fund managers’ dreams? Don’t blabber in all directions” he warned.

beforeafterelection

My broker friend smiled. “They are all the same. They show you dreams till you get on board. And most of them dump you after that. And they are very good at that.”

“They increase their pitches when you are ready. And eventually they will get you. It is a new set of recruits every time. This is not the first time.”

I could sense a tone of lament in my broker friend’s voice. Swami and I looked at each other, wondering what was going on. We were getting a bit of what my friend was saying but not in entirety.

We waited for more. While Swami and I were hunting for investment options in the pink papers, the thought could not escape my mind – to wonder whether we were the hunters or the hunted.

While we were lost in that thought, Jigneshbhai continued.

“It is interesting how history repeats itself, and how short our memories can be. Every few years, fund managers recruit retail investors – like HR recruits job seekers and politicians recruit voters. All that is needed is promises and dreams. Talk is cheap, isn’t it?”

My broker friend was positively cynical this time. And Swami and I had got it.

But we weren’t sure what it meant. As usual, Swami’s mind was restless to ask questions.

And just as he was about to ask my broker friend, the wealthy man in the sprawling bungalow (who always spoke cryptically!) walked over from the table next to us.

Jigneshbhai was enthused when the wealthy man came closer and waited for him to speak.

But as we had our last coffee sip, he paid our bill too, and stepped out. Looking at Swami and I, he warned,

“Yes – talk is cheap, but if you act based on that, you might have to foot the bill. Mr Market’s predators are out on the prowl with their weapon – the art of sounding credible while lying. Beware. Tell them ‘no ullu banaving’.”

ज़ोर का झटका…धीरे से लगे

“What is the difference between retrospective and retroactive?” asked my broker friend Jigneshbhai, as we met over coffee last weekend after a long time.

Surprisingly, the question today was from Jigneshbhai rather than Swami.

Swami looked at my broker friend and shrugged it off. “They are the same I think. Why?”

“Well someone from the finance ministry said that the short-term tax now applicable as per this year’s budget on redemption in non-equity funds within three years is retroactive and not retrospective. And I am wondering what that means?” Jigneshbhai asserted, uncharacteristically still lost in thought.

Swami and I looked at each other wondering what that meant. We were mostly used to Jigneshbhai explaining things to us. But this time he was the one asking questions, and that too complex ones.

We gave him a puzzled look which, more or less, told him that we didn’t understand either retrospective or retroactive.

But our broker friend persisted.

“So if I sell you a product thinking its returns are going to be, more or less, tax free, and then you buy that thing thinking it is going to be, more or less, tax free, and then when it comes up for redemption, the government says it is taxable – is it retrospective or retroactive?” asked Jigneshbhai, looking up from his sheets he had with him.

As usual, Swami was the one who had to respond first.

“So what did you sell me as tax-free that I have to pay tax on now?” he asked.

“Well, I did not sell, but I advised you. I told you they were reasonably safe – like your favourite FDs but with no tax. It made sense then, didn’t it? To put money in FMPs or short-term debt funds for a bit more than a year? Now he says put it for 3 years or pay tax” retorted Jigneshbhai, almost with a tinge of bitterness that I generally associated with Swami.

Both Swami and I were a bit surprised at Jigneshbhai’s rare show of emotion in this case.

But he was not done.

“And the worst part is, debt fund holders at least have a choice of not redeeming if they can hold. FMP investors have no choice” Jigneshbhai continued, now with a tinge of anger to add to the bitterness.

“And it is not just these. You have to pay tax for any ‘within three years redemption’ on gold, international and MIP funds – all non equity oriented funds” he clarified.

We stayed silent, trying to absorb what all Jigneshbhai had said.

After a brief period of silence, my broker friend cooled down a bit. But his mood hadn’t changed much.

Swami tried to intervene. “But if I don’t sell for three years, I don’t pay tax?”

“Yes. But in FMPs, you don’t have a choice,” replied Jigneshbhai, still quite morose.

Swami almost neglected Jigneshbhai’s mood, almost like my broker friend does to Swami most of the times.

And in a state of nonchalance that I associated with my broker friend, Swami declared, “So now I got it. For FMPs, the tax is retrospective, as there is no option. For others, it is retroactive, as it relates to the past but there is an option if you hold for 3 years.”

Both Jigneshbhai and I looked at Swami, surprised at his assertion.

Perhaps he was right in the technicalities, but we were not sure. My broker friend was clearly not impressed, though he had got his definitions clarified from an unexpected source.

Grudgingly, he said, “Well, yes. Perhaps you are right. But it is still not fair. It is like changing the rules of the game after all sides have played to another set of rules.”

Just as we were having this conversation, I noticed the wealthy man from the sprawling bungalow sitting near us, listening to my broker friend’s disappointment.

He walked up to Jigneshbhai and putting his hand on my broker friend’s shoulder, he said “Yes, it is not fair. A bit like Duckworth-Lewis method forced on a match. A small rule that makes a big difference.”

As we finished our coffee, he picked up his soft drink and said, “ज़ोर का झटका…धीरे से लगे!”

The Uncertainty of a Sure Thing

My friend Swami was quite cheerful a few days back when we met. “Finally the markets are going up – now that Modi is sure to become the Prime Minister.”

“There is no such thing as a sure thing” said my broker friend Jigneshbhai, putting brakes on Swami’s enthusiasm, as he sipped coffee during our weekend meet.

Looking up from a book of poems he was reading, he said “It says here that Robert Burns the famous Scottish poet said ‘There is no such uncertainty as a sure thing’.”

“I am not saying it, great people have said it” said Jigneshbhai, with a twinkle in his eye.

There is something about Swami and Jigneshbhai that makes them want to irritate each other. And this kind of skepticism in an apparently rare good mood was enough to set them off.

“He is such a spoiler. Everyone wants Modi for PM and here is your broker friend spoiling the party.” Swami looked at me and said, as if I was responsible for it.

I gave him a confused look back.

With no clear response from me, he looked at Jigneshbhai. “So you don’t think Modi will be PM? You don’t want markets to go up?” he said, almost angrily.

Jigneshbhai looked up at Swami nonchalantly. “I did not say that. I just said there is no such thing as a sure thing.”

“You seem to be the only one not believing that. The whole country seems to be in the midst of a Modi wave, and so the markets are happy about it.” Swami said, mockingly this time.

“Well maybe that is true. But there is no such thing as a sure thing. Robert Burns said that.” Jigneshbhai responded, with even greater nonchalance this time.

“He is such a disappointment” Swami complained, again looking at me.

My broker friend looked up from his book of poems and quoted again “Robert Burns also says here ‘Suspense is worse than Disappointment.'”

That got Swami a bit more irritated. “So what are you saying now? Will Modi not become PM?” Swami finally confronted Jigneshbhai.

Without waiting for an answer, he continued, “People have already started talking of expectations from his government, who will get which cabinet berth and plum posts, FIIs have started investing again, and the US has also said how it will impact Indo-US ties, and here is your friend still not sure.”

That was a long list of people who were sure and taking action based on Modi becoming PM.

I waited for my broker or my friend to say something, but no one said anything for a while.

Finally, Swami pushed for an answer again, and my broker friend obliged.

“Well those are a lot of people counting their chickens before they are hatched, in some cases, even before they are conceived” he shrugged off.

As I watched Swami flare up and Jigneshbhai cool down, I realised this wasn’t getting anywhere, and decided to change the topic.

“So what’s happening in the IPL? Are you keeping track?” I opened up.

Almost immediately, Swami retorted, “Forget the IPL. For the first time in a long time, I am so sure of the markets, and your friend is just throwing cold water over my hopes.” Again he looked at me as if I was responsible for it.

I stayed silent, as usual caught in the cross fire between my friends.

Just then, the wealthy man in the sprawling bungalow, who had been listening to our conversation, dropped by and sat near Swami.

Almost with a saintly grin, he looked at Swami and started talking.

“Mr Market will keep getting sure of uncertain things from time to time. But if you can manage to remain unsure in the face of his exuberant moods, you are certain to be successful in investing, time and again. A healthy uncertainty is better than false certainty.”

As Swami and I were trying to grasp what the wealthy man in the sprawling bungalow had said, he got up and started leaving.

On his way out, with a twinkle in his eye, he said, “There is value in not being sure!”

Click here to read ‘The Value of Not Being Sure by Seth Klarman

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