Play both sides?

It is very difficult to be in the PMS (Portfolio Management Services), Mutual fund business, Broking, Investment banking, …at some stage there is a conflict. There is a conflict between pricing an issue for the IPO and for the customer. What do you do when the promoter of a small company asks you to handle his IPO as well as handle his PMS?

This is the reason why I prefer a couple of PMS players who do nothing except handle other people’s money. These firms are not under any pressure to fill up an IPO, or hold prices for an FPO. In such cases one gets scary – will my PMS money get mismanaged to help somebody else?

It gets worse when you are part of an industry and take an anti-industry pro-investor stand. And tell the whole world that the industry is bad, they are overpaid,….etc. but you continue to invest in them.

Take my own case – I know that ITC spreads cancer – but I do hold the shares. I hold shares of companies where the Chairman is a great manipulator of the political, and legislative process. I am guilty of holding shares of M&M group companies knowing that K M was Chairman in the Union Carbide ….

But if your name is Warren Buffet, I guess it is embarrassing to tell the world he is not responsible for what happened at Moody’s because:

a) he did not pay attention to what was happening and/ or b) did not understand what was happening.

Not long ago he was defending Goldman Sachs. Of course almost a decade ago he bailed out Salmon Brothers. It is worth reading the interviews of people who have left Moodys and S&P….and WB says competition will not improve quality…tough to believe Mr. Buffet

BOTH are difficult to believe….read on…the world is watching and reading Mr. Buffet!

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2 Responses to “Play both sides?”

  1. Dear Subra,
    would that be possible to disclose that PMS player’s names?
    Thanks & Regards

  2. No way. They are doing too well, they do not need my endorsement. And they may not like it.

    However it should not be difficult to trace them if u go the sebi website. They stand out as doing nothing else 🙂

    I still belong to the old thought. A CA, a doctor a fund manager – are only felt, not seen or heard.

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