A rookie fund analyst called his senior to discuss their portfolio. Of course the CIO does not know about this conversation.
Rookie: Sir I think we should sell of our AbC Ltd. shares.
Senior: Why? I thought at a lower price earning ratio this share was a good buy, maybe we should try averaging.
Rookie: No sir, the SFIO is likely to look at the company because of the auditor’s qualifications regarding conflicting numbers.
Senior: This is all media hogwash. Do not worry – the CIO is in touch with the promoter. You know a lot of his money is in our liquid and equity funds do you not?
Rookie: Sir other mutual funds have all sold this share and we are the only one still holding this share apart from a couple of PSU mutual funds. Also our closeness to the management is well known to the world…
Senior: Arre the distributors love our flagship funds so our one or two mistakes will all be glossed over. After all we are a real big fund with a fantastic track record – you know that.
Rookie: Sir if our numbers in one business is being questioned (in a business that is closely monitored) what about our other businesses?
Senior: Do not worry about the public reaction to our other businesses. Public memory is short. Look at our NFOs. We are perhaps the best in the business as far as NFO timing is concerned. Also we can swing some big deals from small companies – and such deals will ensure a fantastic outperformance.
Rookie: It is still scary sir…
Senior: Like you, I also used to be scared. However I have realised the mindset of the investor. He will believe whatever the media tells him, and the media will tell him what we as the biggest advertiser in the financial space tell him. Do not worry.
Rookie: Sounds reassuring sir…I just got a call from UBS, they are setting up an AMC, should I go for an interview?
Senior: Who is the placement agency?
Rookie: Sunil…is the person who called me, I will give you his mobile number..998760….
Senior: Hey thanks, better to be safe rather than sorry!
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