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.”


Nothing is Impossible

“What’s up? Where have you been?” asked Swami, when we finally met after a long gap over coffee last weekend. It was indeed a long time since we had met our broker friend Jigneshbhai. “So many things have happened, and you have disappeared!” Swami repeated while sipping his coffee.

Our broker friend had a sly smile as he looked up from his coffee at Swami and I. “Indeed, the more things change, the more they remain the same” he said in typical nonchalant style.

“How can you say that?” Swami revolted as usual, waiting for our broker friend to react. But all he did was keep sipping his coffee. So Swami continued.

“So many things have happened in the past few months. The Fed increased rates, Modi government finished two years, our RBI governor left, Europe got bombed so many times, Britain exited the EU – so many things, and you say they remain the same?” Swami clearly had gone through the newspapers of the past six months in detail as he listed the significant events of 2016.

Jigneshbhai and I were quite pleasantly surprised by Swami’s listing. But he wasn’t done.

“And then PSU banks wrote off so much debt, Oil prices and gold prices rose again, BJP won in the state elections, a good monsoon is happening, new policies and a cabinet expansion were announced, and Trump may actually become US president!! So much has happened, we had so much to do, and you have disappeared for the past few months!”

That was indeed quite a list of happenings, I thought. I looked at my broker friend, and he was smiling too. I wasn’t sure whether it was because of the scale of events itself, or because Swami actually managed to list them out. But beyond the smile, he wasn’t speaking much as usual. After a brief silence waiting, Swami finally spoke again.

“We have missed doing the right things in the past six months. So what should we do now? Are we on the cusp of a new bull market? Is it time to get into the thick of action?” he asked excitedly, waiting for our broker friend to answer.


After a couple more sips of coffee, finally Jigneshbhai said “I don’t know. Ideally do nothing.”

That left Swami dumbstruck. He looked at me as if to ask “what’s wrong with your broker friend?” How can he say ‘do nothing’? Isn’t it time to act? And how does he – supposedly an expert – say I don’t know? Does he really ‘not know’? Maybe he doesn’t want to share his secrets. Those were the lines of Swami’s thoughts.

I was equally surprised. Both of us looked at our broker friend waiting for him to elaborate. After waiting in silence for a few sips of coffee, Jigneshbhai seemed to have sensed our discomfort at his answer and finally relented.

“That’s the reason I disappeared. I had nothing new to say”, he said with a sense of resignation. “Honestly, why say anything if you have nothing to say? And moreover, in response to all of those events you listed, my answer was still the same. Stay Put and Do nothing. Nothing to say and nothing to do. How can I say ‘nothing to say, stay put and do nothing’ in different ways?”

Swami and I looked at each other in mute surprise on hearing Jigneshbhai’s explanation. Swami was probably thinking whether our broker friend had ‘lost his edge’. He was probably wondering what’s the point in meeting for these coffee’s if the advice from our broker friend essentially remains the same – nothing to say, stay put, do nothing. If the advice doesn’t change, probably change the advisor. Maybe that’s what Swami was thinking.

Just as we were sitting in silence (actually doing nothing!), the old man in the sprawling bungalow (who always spoke cryptically) was listening to our brief exchange from the adjoining table, and came over to our table. As we finished our coffee, he spoke and left Swami and me in further confusion, and our broker friend Jigneshbhai with a grin on his face.

“Your broker friend has told you the secret. It is (doing) nothing. Nothing is impossible, but I do nothing every day!”

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.”


“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.”

A Plan for Expected Surprises

“Expect a Surprise” said my broker friend Jigneshbhai as we ordered a fresh new flavored cold coffee this time, when we met over the last weekend.

“Is it a surprise or should I expect it?” asked a confused Swami. “If I expect it, it is no longer a surprise, and if it is a surprise, how can I expect it?” Swami clarified thoroughly, demonstrating his expertise over the English language.

Swami had asked my broker friend a series of questions about where he should invest now, and to his last question “What’s next for the markets?” instead of staying silent or saying “I have no idea” as usual, Jigneshbhai had said this time “Expect a Surprise”.

Like most other times, such unclear answers annoyed Swami no end. He was eager to put his money to work in the markets and expected his broker to provide him with ‘clear advice’.

But the problem with advice is that as much as the giver has to be capable of giving it, the receiver also has to be ready to receive it. My broker friend had realized that, specially in such times when it comes to investing advice, those who really need advice aren’t quite ready to take it. So was the case with Swami.

His typical question went like this: “So what do you think about Asian Paints?” To which Jigneshbhai would say “It is a good business but tad expensive. But what’s your plan?”

Next in line was “Should I invest in the recently launched small micro-cap fund? What about MIC Electronics?” To which my broker friend said “Well it is cheap but avoidable – but what’s your plan?”

That was followed by “Are bonds a good bet – better than equity at this point?” To which Jigneshbhai said “Maybe – but what’s your plan?”

A barrage of questions from Swami followed by a set of unclear answers with my broker friend ending every answer with “What’s your plan?”

This ‘plan’ business irritated Swami no end. “What is this plan, plan every time? I don’t want a plan. I just want you to tell me what I should invest in? I am asking a simple investing question and you keep asking me what’s your plan?” An agitated Swami blasted.

I thought Jigneshbhai was going to walk out at this, and as usual, I will need to settle this fight between my friends. But my broker friend was nonchalant. He only smiled and said “That is because, my dear friend, Investing is a plan.”

Swami and I stared at each other. As usual, we weren’t clear what our broker friend was saying. Our confused faces were enough to let our broker friend speak up.

“Yes, investing is a plan to get from point A to point B. Like a journey on a road. And what you are asking me without telling me your destination is which is a good vehicle or what road should I take?” Jigneshbhai tried to explain.

Swami and I weren’t quite expecting a discussion on roads and vehicles when all he had asked is which stock he should put his money in! But our broker friend had put us on the path of further confusion for sure.

“Well, how is investing a plan?” asked Swami finally after a period of silence.

“Isn’t it a means of getting you financially from point A to B? Like planning a trip from Mumbai to Bangalore. There are many ways of getting there, but first you must know where you want to go, by when, by which route and at what cost. Then I can tell you if you should take the train, flight, bus or car, and what route, isn’t it?” explained Jigneshbhai.

Now a bit amused by his own metaphors, my broker friend smiled and continued, “All you ask me is how is Udyan Express or is Jet Airways good or is a diesel car good? What can I tell you? What is your plan?”

Swami and I were starting to appreciate what our broker friend was trying to say. We had never thought of investing in this manner. The complete 24 by 7 barrage of analysis of the investing routes and the vehicles had perhaps put us in a dizzy, and we had forgotten about the journey.

Jigneshbhai saw from my face that there was a bit of understanding reaching my muddled up brain.

But Swami was still lost in thought.

An amused Jigneshbhai looked at him and said “And this guy also asks me which way will the path go! So I said expect a lot of surprises on the way!!”

“A journey to nowhere with a vehicle for no reason on a path not known – what else would you tell such a traveler, but to expect surprises?!!” And he started laughing loudly.

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