"Couples are wholes and not wholes, what agrees disagrees, the
concordant is discordant. From all things one and from one all things."
—– Heraclitus
(Greek, 544-483BC)
Word
for the day
Portmanteau (n)
A word made by putting together parts of other words, as motel, made from motor and hotel, brunch, from breakfast
and lunch, or guesstimate, from guess and estimate.
Malice
towards none
The blame of loss lies on
whose shoulders?--------
(a) If BJP losses
(b) If SP-Cong alliance
losses.
(c) If BSP's vote shares
falls below 18%.
First random
thought this morning
What is the role of media of in the business of elections.
Is it an influencer, trying to mold public opinion in favor of or
against a particular party or candidate?
Is it a reporter, just reporting the events occurring on the
ground?
Is it a mediator trying to bring parties together or creating rift
in them?
Is it an agent that brings political parties closer to people and
their issues?
Then the question remains - what should ideally be media's role in
the business of election, if at all there should be one?
If they fail, well...they fail
A very senior government official,
who retired recently, argued that it is time to invest in public sector stocks.
His argument was rather simple - the level of corruption is diminishing fast,
level of professionalism is improving and transparency is much better now to
provide comfort to investors.
He strongly felt that these changes are remarkable, sustainable
and should lead to much better growth in these mostly large companies, with
huge asset base.
I am somehow not convinced. I continue to believe that owning a
miniscule stake in the businesses in which majority stake is owned by the
president of India does not make much business sense.
My argument is simple. Like any other corporate house, the
businesses of PSUs could be divided into two categories - (a) core businesses
and (b) non-core businesses.
The core business of government of a democratic welfare state
could only be the socio-economic welfare of the people. Making profit is
usually incidental and mostly undesirable in these businesses. Running these
businesses in an professional, efficient, and transparent way should ideally
not add to the profitability of these businesses.
The non-core businesses of a democratic welfare state is an
anomaly. The government has no business in doing such businesses. Why would an
investors, who obviously invests for making money, should be investing in
non-core business of a confused entrepreneur.
With 5% teledensity, Department of Telecommunication was a social
venture. With close to 100% teledensity, BSNL, MTNL are non-core businesses for
the Government. They should be looking for a closure to this business, with
satisfaction that its objectives have been fully achieved. Trying to perpetuate
this business and compete with private enterprises is not a good idea for the
government.
Same is true with banking, civil aviation, power, capital
equipment, and roads etc.
The Rail Minister wants us to buy minority stake in a company that
runs business of railway ticket booking and catering food to rail passengers.
He should answer, why government should at all be doing this business.
No matter how much transparent, non-corrupt and professional the
manager of a PSU be, the fact is, and it would remain, that the majority owner
does not care a dime for the minority shareholders. The regulator has so far
not shown any teeth, insofar as the protection of minority shareholders' interest
in PSUs is concerned.
For example, PSU banks have been burdened with the cost of
servicing the Jan Dhan accounts. Could you raise a voice against it in the AGM.
The most inefficient employees of PSUs are automatically entitled to the
benefits of 7th pay commission award.
In my view, for investment the PSUs should be evaluated like any
other private enterprises. If they fail corporate governance criteria, well
they fail.
While I do not hold any brief for the momentum traders, to
investors, PSUs have rarely made money.
And for those who are excited about the superlative performance of
PSUs in the current market context, the following data point could be useful.
The current bull market started from last week of August 2013,
with the government taking definitive steps to correct the problems of twin
deficits and inflation.
In the last 42months period, Nifty has gained 47% and PSUs have
gained around 22% (PSU Nifty, data available from march 2014). The worst
underperformer IT sector has also registered similar gains. Metals and
infrastructure have done only marginally better.
The current bull market had been about inflation and interest
rates.
Auto and banks have clearly led the rally, and appear tired.
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