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.
…..my 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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