Jigneshbhai and Swami

Chutki Mein Chipkaye? Government’s Fevikwik!: Jigneshbhai and Swami

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“Do you remember that fishing rod ad where a serious looking businessman, who has almost given up on finding any fish, is sitting holding his rod patiently, and then a local fisherman comes, applies 4 drops of Fevikwik and runs away with the fish?” asked Jigneshbhai, as we were sipping our weekend coffee. Both Swami … Read more

Of Quotes and Learnings, From Investors and Hindi Movies: Jigneshbhai and Swami

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“The problem with famous people and their quotes is that I don’t understand which one to apply when.” Swami remarked, as he walked in for our coffee meeting with a disappointed, confused face. He had a book of quotes with him.

“Is India a leaky boat?” he asked suddenly. Surprised, I looked up to my broker friend for a reply, as I did not understand the question.

But Swami continued. “I read in this book that Warren Buffett once said that if you perennially find yourself in a leaky boat constantly fixing patches, it is better if you devote energy to changing the boat rather than fixing the patches. So I was wondering with all our problems currently, is India a leaky boat?”

Jigneshbhai, my broker friend, maintained a studied silence.

On getting no response, Swami peeped into his book and read out. “He also said that when a management with a good reputation joins a bad business, it is the reputation of the business that stays. So is India a bad business?”

Again, Jigneshbhai maintained a studied silence, perhaps not quite sure what to say.

Meanwhile, Swami was in his own world of quotes and learnings.

He continued. “But he also says that we only attempt to be greedy when others are fearful, and fearful when others are greedy. So is it time for me to be greedy or fearful?”

Swami’s questions were relentless. Jigneshbhai’s silence was unending. Swami continued.

“And there is also a quote where he says that it is better to buy a wonderful company at a fair price, rather than a fair company at a wonderful price. So in the current situation, which one is India and its companies? I am getting confused.”

laugh2He was just not stopping and Jigneshbhai was just not speaking. His studious silence was not making things easy for Swami.

Just then, I noticed that the wealthy man in the palatial bungalow who lived next to me was also sitting in the coffee shop. He must have heard our conversation – actually Swami’s monologue – for a while. We had known from earlier interactions that he speaks little, and whenever he does it is cryptic.

He had probably finished his coffee, and while leaving, he walked up to Swami and smiled.

“अब इन्हें दवा की नहीं दुआ की ज़रूरत है. So wait for the miracle.”

As he walked away, I could see that the wealthy man and Jigneshbhai were looking at each other and sharing a smile.

Business or Profession, Customer or Client: The Faint Line of Trust: Jigneshbhai and Swami

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The problem with making a business out of a profession is that a client becomes a customer. And when that happens, the professional becomes a businessman.

The other day my friend Swami was asking me this. “Am I a patient or am I a customer when I visit a hospital?” I did not have a clear answer, and neither did my broker friend. He was similarly puzzled. “I am not sure” he said. “I treat my investor clients as patients, not customers. That’s all I know.”

trust_me_im_a_financial_advisorI remembered my experience with the barber a few months back. That’s when I had realized that the simple barber next door had become a hair and beauty services provider. I guess the doctor has also become a health care service provider, and the financial adviser has become the financial service provider. May be the lawyer has become the legal service provider. And the accountant became the accounting service provider or something like that. A few days back, I saw a board outside a dentist’s clinic saying Smile Dental Hygiene Services. Schools should perhaps be called teaching and educational development services.

“Is it good to be a client or a customer?” My friend Swami asked.

I could see my wise broker friend warming up a bit. “Well, it depends. I don’t know whether it is good or bad. Good in part, bad in part” he remarked.

I don’t know why so many of Swami’s questions have ‘may be’ or ‘depends’ as answers.

“Again you are giving me your usual answers” Swami remarked, now quite used to Jigneshbhai’s answers.

“Hmm. Well, unless you become the customer, you won’t get the facilities and quality of treatment. So it is good for that. But what if you knew that the doctor treating you has revenue targets? So it is bad for that” my broker friend clarified.

trust-me-im-a-doctorPerhaps it is bad for the client as well as the professional. But perhaps, it is good for the business. And the professional needs the businessman.

It is not easy to run a profession as if the money does not matter. And it is not possible to run a business without the profits happening. And when the businessman meets the professional, it works for both. At least till they get into a tussle. Whether it works for the person availing the service is anybody’s guess.

While I was thinking about it, Swami’s next question came up. “So the surgeons have targets?”

My broker friend replied “May be not sacrosanct targets. But I am quite sure that a good surgeon not making much money is less preferable to the somewhat reasonable surgeon who brings in the money for the health care services business.”

Well, looks like that may be true. So what if one come across someone for whom a treatment is not strictly required, but taking it won’t hurt things anyway? And he can afford it? A procedure or diagnostic here or there, or a small addition of a stock that doesn’t impact the portfolio much, or a legal advice that isn’t going to change much. But provides the fees.

Well, that, perhaps, is the faint balancing line between a profession and a business. The balancing line between what’s good for the profession and what’s good for the business. Between being a client and being a customer. The faint line of trust. That line is fading fast.

Tragedy in Close-up, Comedy in Long-shot: A Matter of Perspective: Jigneshbhai and Swami

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infycrash“Is Infosys closing down?” asked my friend Swami as we met for our weekend coffee today.

I had heard of nothing like that, and so obviously was all ears to him. Not sure why he asked, even my broker friend Jigneshbhai said, “What nonsense? Where did you hear that?”

“No – looking at the extreme reaction to its results yesterday, it looked like everyone was selling their stock as if the company was going to either go bankrupt or close down. So I thought I will check with you, as you guys are knowledgeable about such things. Does it have a lot of unpaid debt?” explained Swami.

Jigneshbhai was ready to answer this one as I wasn’t quite so sure. “No debt. They never had any. And I don’t think they ever will take any.”

“So are they making losses? Or do they have some liabilities from customers? Or they are not getting business from customers? What’s the problem?” asked Swami, not quite sure why people were selling the stock.

“No losses. Their profit margins are almost 30%. They grew by 22% last year” the well read Jigneshbhai explained.

“So then what’s the problem?”

“Well, they did not meet profit expectations that they had promised” said Jigneshbhai. “They had promised an earning of Rs.147 and they earned some Rs.145.5 per share. And they said next year may not be great. Every one expected them to grow by 12-14%, they said it would only be 10% max. So they did not meet expectations of investors.”

“Hmm..Got it now. So they are not performing? Should I also sell it now?” Swami questioned.

“Well, I don’t know. That depends on you and what your perspective is” said Jigneshbhai, in a cryptic manner.

“I don’t understand. Why do you have to talk in riddles all the time? Tell me clearly, yes or no” demanded Swami, clueless about what perspective means.

“I cannot tell you that. I wish I had simple answers. You decide for yourself. I told you it is a matter of perspective” continued Jigneshbhai, still not ready to solve Swami’s quandary.

There was a silence for a while. I thought Swami had given up on Jigneshbhai, and vice versa.

charliechaplinBut then, my broker friend suddenly got up and said, “Charlie Chaplin had said once that life is a tragedy when seen in close-up, but a comedy in long shot. I don’t know the answer to your question. But if you think about markets like that, perhaps, you may get an answer. Specially when such so-called tragedies occur. After all, what you see is a matter of perspective.”

Leaving us perplexed, Jigneshbhai finished his coffee and walked away.

Save me Superman: The Bailout Business: Jigneshbhai and Swami

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[youtube=http://www.youtube.com/watch?v=MILArKLKUEk]”I am not normally a praying man, but if you are up there, please save me Superman” said Homer J Simpson. That was fine, but when my friend Swami sounded similar, it caught my attention.

“Jigneshbhai, I need a bailout” Swami pleaded as we were having our customary coffee over the weekend. “I have been investing in stocks of so many businesses for the past 4 years and still have losses. I also took some personal loans for a few purchases. These stocks are not recovering. I need a bailout now.”

I was a bit amused over his plea, but resisted a smile. Perhaps Swami was serious.

“I will buy your stocks at a small discount if you want, in case you need money” said my broker friend, maybe sensing an opportunity.

Not quite agreeing with it, Swami retorted “Arre no, I need more money from you to buy more stocks. Hopefully they will make money, and then I will pay you later. Maybe you can charge me interest, but then, what’s interest among friends? Isn’t that what a bailout means?”

“Good, you are learning fast my friend” my broker friend commented with a sly smile. “But I am not for these kind of bailouts. I am for the creative destruction kind of bailouts.”

Puzzled and not quite understanding it, Swami said, “But big businessmen nowadays get bailouts. Why can’t you bail me out then?”

As usual, I was watching both of them slug it out on another issue this time.

“That’s because you bought the stocks of the wrong businesses. I will buy the stocks of those businesses if I see value, but will not lend you more money to put into already failed businesses and then wait in hope. I can bail out businesses, not businessmen.” Jigneshbhai said with a tone of finality.

I realized that the discussion was taking an ugly turn now.

“But General Motors and so many US Banks also got bailed out. European banks are getting bailed out. And now they are talking of bailouts in India also. So what’s wrong with it?” questioned Swami, not quite convinced and now getting visibly angry.

Jigneshbhai was getting into one of his moods now. Getting ready for what I thought would be the next round of conversation, I was all ears.

profitloss“Hmm. You know the difference? In some of those cases, the ownership of those businesses changed. They did not find any lenders or buyers, and because their failure would have caused larger collapses that would not be in national interest – well that’s what they said at least – the government became the investor of last resort. Not the best thing to do, but it was still ok I thought, due to exceptional circumstances. And they made a killing on it, by the way later. But in your case, you are not giving me any ownership” Jigneshbhai informed Swami.

“How can I give up my ownership? That is sell my shares? What will I do then?” Swami asked, quite disturbed by now.

Jigneshbhai got up to leave and said angrily “Nothing, do something else. Businesses start and businesses fail. Your investments failed. So if you can’t see it through, give up ownership of your share, take whatever money you get and go home. Else close it down. But don’t ask for bailouts.”

Department of Internet Control: Creating Jobs by Screening Social Content: Jigneshbhai and Swami

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“Take the first left after the third signal from here” my South Indian friend Swami said to the person asking him directions in cold Delhi over hot coffee. “This is the 10th car since morning asking me for the address of the Ministry of Human Resources or Ministry of Information Technology” remarked Swami. “Looks like … Read more

Play for the Country: The Noble Intentions of our Cricketers: Jigneshbhai and Swami

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My South Indian friend Swami had just returned from Australia, and joined us directly over the weekend coffee, straight from the airport. My broker friend and I were discussing what’s in store for the markets, specially after this mass downgrade done by S&P to European nations, when Swami barged in. After a long time, Jigneshbhai … Read more

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