Do it yourself

Have you recently met any of your relatives or close friends who had a new birth in their household? There are decent chances that you were asked to suggest a good name for the child! The chances are even higher that the parents had already decided on a name for the child and your suggestions were not considered at all. Nonetheless, the parents and grandparents rhetorically toss this “Naam Batao” (Suggest a good name) inquisition at everyone visiting their home to bless the child. Something similar is the situation with the household investors. They tend to show their investment portfolios to everyone remotely connected with the financial world and seek suggestions for restructuring/rebalancing. The problem most of the time is that they have no intention to follow the suggestions. Usually, they are just seeking validation for their investing actions or boasting about their investing acumen. I understood this Naam Batao game a long time ago and stopped taking the bait. However, as ...

The past 5 weeks have been most horrific period for investors in financial since the five week period in September-October 2008. A colossal destruction of investors' wealth has already taken place. There is an argument that this destruction is only a notional mark to market (MTM) loss if the investors' continue to hold the securities, as the prices will certainly recover as soon as the COVID-19 is contained; may be in 3-6 months. The proponents of this view are cautioning the investors that selling the securities at this point in time will convert the temporary MTM losses into permanent erosion in wealth. Some readers have asked about my view on this argument. I have already expressed my views on this issue multiple times in past few months. Nonetheless, I do not mind a reiteration. I believe that the market cycle in India that started from 2013 has definitely ended. Historically, the sectors and stocks that lead a particular market cycle, are not found...