My investing blunders..continued

The number of posts that I have written about my investing blunders keeps me wondering how or what kept me going at all!

This blunder is perhaps the biggest of them all. A quick recap of my life and timelines is necessary for this. In 1986 I qualified as a CA and got into practise. I got a fantastic practise from a known brilliant CA and lawyer who was going to start his own business. However in 1988 I became a sub-broker with a conservative broker and started a crudely run PMS and a sub-broking outfit. In 1991-3 one company in south India (Viswapriya Financial Services) started broking operations in the BSE by taking on ‘rent’ one membership. This firm became my ‘main broker’ – why I chose them becomes a little hazy, but I did. In 1993 this firm got cheated by a set of companies in Gujarat (they gave fake shares as delivery and collected the money) and I lost my networth. Completely wiped out. Ok, started again thanks to the boom could set up a NSE membership and got out of the rat race in 1999. When you get out of the race, you learn to live on less cheese.

So eating lesser cheese meant better health…and that is good is it not?

This blunder cost me upwards of Rs. 15 lakhs – because though the broker did not pay me, I paid my clients (so foolish!!). To a few of my clients it would not have mattered – perhaps. However if your clientele is from friends and relatives, defaulting is not a honourable option is it?

If I were a manager handling people’s money….ha I could have lived with it saying “My company defaulted, I am an individual” but when you are the company for all practical purposes, this excuse was lost.

… worst mistake, clearly was in choosing on the basis of an IIT, IIM graduate…guess what is his name? No names please..but he started Subhiksha later on…!!

Learning: Make professional decisions. I have been cheated the most by people of my community (Tambram, educated, Iyer and Iyengars equally). Choose your advisors carefully….nothing is more important.

Case in point: my equity broker and doctor have a 30 year relationship with me…and I am happy with the relationship. Have I even stopped to see how much they charge me? No. Not at all.

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11 Responses to “My investing blunders..continued”

  1. While everyone talks about their success stories and hides the failures, this post is educating the readers by openly talking about mistakes made. Sincere thank you.

  2. Subra

    Nice article , Its good to see you sharing your mistakes here . We can all learn from it and benefit . Keep going .


  3. abe Manish..keep going matlab kya? Khatam ho gayen mistakes :). Now I cannot afford more mistakes. I met Ranjan @ the book reading session @ new delhi Book fair. Funny we are neighbors @ Navi Mumbai. LOL.

  4. when you say out of race means financially free , well this is a dream & goal for many of us,hopefully it may fulfill in next coming crash

    one more query -how much investing vs trading contributions in your financial enlightment

  5. Ravinder Makhaik on February 8th, 2010 at 5:19 pm

    In other words, even in investing the game is all about relationships, trust and not worrying about being charges commission’s while leaving the rest to the market.

    It is appreciable that you cut yourself out different and paid up your debts even though worldly sense may disapprove of it in today’s times.

  6. Hi Got the book today. Read the preface . I am sure we will all like it

  7. Thanks for Sharing.
    Great to know that though you were cheated by someone, you did not cheat your clients and honored your obligations.
    I salute you.

  8. Hello Subramanyam,
    All of us, at some point of time make an investment/trust based judgement that then proceeds to spectacularly blow up on our face! The alternative to avoiding this would be to engage in “analysis paralysis”. Forsooth, life doesn’t give us the liberty for indulging in that pastime often :-/. So, sometimes, we put our faith in the mysterious forces of the Universe and our own personal force behind the venture. You win some (yay!) and you lose some (damn!) 😉 but most people (me included) are very shy of laying it out in full as you chose to do so.

    When the name “Vishwapriya” came up, bells were ringing in my head immediately for I remembered reading it in “Stay Hungry, Stay Foolish” first :-). Then the retail chain name popped up later and confirmed my suspicion. Hats off to you for choosing to honour all your obligations to your clients! That is THE personal takeaway for me in this post. Financial Integrity raaaaks! No, seriously! The Universe is a great leveller alright, as evinced by the retail chain’s cup of woes so far, he he…

    One very interesting observation. This “community cannibalisation” is a sad and poignant one. Even more so, considering the there are many communities (Marwari, Parsi, Sindhi, etc.) helping their own kind progressively in such a spectacular fashion! Lastly, thanks for the iconoclastic pot shot at IIT/IIM. We Indians need it in massive doses from time to time. 😉


    P.S: Loved your reply to Manish. Wit and wisdom combo!

    P.P.S: Must…..curb….long….replies….in…future…. D’oh! 😉

  9. hi Doc,

    thinking about the Universe being a great leveler is actually an energy sapping exercise. Makes no sense. You go about living your life, and let God do his work :). Any negative thought – even for an enemy (enemity itself too!) is an energy reducing activity. If your friends and relatives are your clients…unless you commit suicide or migrate – and not wanting to see the same people again – default is not REALLY an option. Phaps in movies….not in real life..Community I brought it up to show that guys who cheat do not spare their own community too 🙂 Look at Madoff he cheated Jewish charities 🙂 LOL

  10. Hi Subramanyam,
    Indeed you are very right about thoughts on levelling and energy sap. Whatever I said is actually “Hindsight is 20/20” really! It is more correlation rather than causation. But the human mind likes to see it as “poetic justice and all that”. Ooops. 😕 Thank you for setting me right. 🙂

    Whether you did what you did under duress or by virtue of being good, it is something that any of us should aim to strive for, at the end.

    Oh dear! How could I forget Madhoff. And they are also one of the communities in pop culture that always look out for each other. 8-)So, only yardstick for prefessionals is professionalism and professional standards. Lesson well learnt.


  11. What DOC says in his reply & your rejoinder to his reply summrizes my feelings too.

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