I wrote this article a few days ago. However the tense is the only thing that has gone wrong…so here it is…
Soon a budget will be announced and the media will be all excited. There will be discussions, articles, chats, views on the budget.
One such program was on air a few days ago on Cnbc, awaaz. 2 of the speakers were Mr. Anand Rathi and Mr. Nirmal Jain of Anand Rathi Securities and Indiainfoline. Very clearly both are brokers and make their income from ‘activity’ by customers.
One of the biggest reasons why people lose money in equity markets is ‘too much activity’ (the other 3 being thinking short term, Overconfidence and believing the financial media).
The suggestions that both these gentlemen were making were as follows:
1. Removal of securities trading tax in the F&O segment.
2. Reduction of Short term capital gains from 15% to 10%.
3. Reduction of STT on the deliveries segment.
4. Zero tax on people who do not take delivery at all (not even 10% as suggested by the other person)
And what would happen if all this was done?
1. The market would go up by at least 25-30% in one year
2. Volumes would go up dramatically as it has happened in Singapore (I am quoting, I have no clue about its veracity)
I heard all this and was more impressed by my long term conclusions:
1. If you think you can learn ‘investing’ by watching television, you need a psychatrist. The media is for entertainment so you should treat all of us who appear on TV as buffons who do what the director tells us to do.
2. Every speaker should be asked to wear a Tee-shirt saying “I fill my lungs with air, and say all this on TV but my money is in an index fund with the lowest asset management charges” so please hear me out but do not believe me.
3. The best channel to watch if you are a serious investor is either Animal Planet or Discovery, surely not a business channel.
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