So today the market went up by 400 points – many financial services companies went up by a huge number. Hdfc which was Rs. 3000 pre-split opened at Rs. 610…now it is at Rs. 655.

So as is wont….you ask…and they say ‘The financial services industry is booming’.

If you have been in the industry long enough you ask around a little more…..so you talk to HR, Sales, – normally the guys who know what is happening.

Hmmmmm not very encouraging. Distributors are not even picking up calls from sales managers of mutual funds. Life insurance downsizing is to be seen to be believed. People who have not been sacked know they have been LUCKY not SKILLED – and survival is just by fluke. It could have been them. They could have been on the list.

Banks – less said the better. Speak to 4 relationship managers, and 5 CVs land up in your inbox, even if you said you did not do placement. Sadly recruitment, training are all seen as HR functions. So if there is a CV it comes to my mailbox. Sad, I do not open them….

So why is the market up? I do not know…

Can you not see the boom in the financial services industry? Sorry I cannot (I am partially blind I think)

The mutual fund industry is here to stay (well if you have already lost about Rs. 600 crores that is even better) – so you have people trying to talk up the industry. Well..cannot deny the sincerity …God Bless…

Don Quixote any one?

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  1. Dear Sir,

    Mutual Fund industry will definitely stay.

    People like us are willing to sacrifice short term gains for long term benefits for clients, AMCs and us.

    Trail commission is the umblical chord which connects the advisors, the AMCs and the clients.

    Directly charging the clients,usually 1% per annum (the percentage would decrease as the asset size increase) of the assets managed as in some foreign countries, would take lot of time to catch up in India.

    So if trail is taken away by the regulator, then we would all perish. What you say will happen then.

    I hope that does not happen and I would like to share what one advisor has written passionately.

    h ttp://wisewe althadvisors.com/2010/09/13/i-care-for-mutual-funds/

    People like her, us and many other sincere advisors, would survive, until the last nail in the coffin is also nailed in the form of removal of trail commission.

    Regards
    Muthu

    D.Muthukrishnan
    CFP

  2. I don’t know whether you share individual opinion on shares. I personally feel IDFC is a next best bet in the Financial services.

    Infact at the last AGM in Chennai one investor who would be in his late fifties or early sixties asked Mr.Deepak Pareskh that HDFC made wealth for him, HDFC Bank for his son and asked what Mr.Parekh has to say about IDFC for which he is the non executive chairman.He said that IDFC is the best gift he can give for his grandson.

    He also said that (seconded by Dr.Rajiv Lal,CEO) the balance sheet of IDFC woud triple in next 3 years.

    Another dark horse, one can look at is Karuturi Global. If they are able to manage the geogrophical, political and execution risks well, this stock would go places.

    There is a margin of safety in IDFC which is not there in Karturi Global.

    Disclaimer: I hold significant quantity of both IDFC (@Rs.50)and Karuturi Global (@Rs.6) purchased during November 2008 panic.

  3. I refuse to edit any comment. Anybody buying IDFC and Karturi Global are buying at their own risk.

    Disclaimer: I have never had and never will have both these shares in my portfolio.

    This is the last post that I am posting on any specific share…there are enough sites offering advice on which shares to buy. I have been in the business now for 31 years. Equity advisers tickle me. Amen.

  4. Subra none of the commentators have go the humour in your column! I remember you had somewhere mentioned the Wimbeldon effect. Thanks to the Don Quixote that the SEBI has appointed the general Indian public is not participating in the so called boom. In case of ULIPs many advisors are asking them to remain in debt – to reduce risk – as some esteemed anchor once said.

    This means it is the FII and a few HNIs who are benefitting from the boom from 9k to 19k. The retail guy will come in at 21k..saying “Ha the previous top has been crossed NOW THERE IS NO RISK IN THE MARKET” – perhaps (perhaps) that will be the point at which the market will decide to test 15,500 ??

    Wimbeldon effect: the matches are played in UK but an Englishman cannot even hope of winning it

    Sensex effect: Happens in India….beneficiaries are funds in the US and UK 🙂

  5. If what you say is true, that you refuse to edit any comment, what is preventing you from approving my comments on your article

    I do not think a big man with 31 years of experience like you would be worried by opinions of a obscure person like me. Allow people to read them.

    As human beings, we are paradoxical. You’re no exception. Search your webportal you would find your earlier reference about Karuturi Global.

    Today only you spoke about Tata Motors.

    Nobody can decide what you should write in your blog. All I want to point out is your inconsistency saying that you do not write about shares.

    I’m reading your blogs regularly. They are informative. But you always sound negative or harsh about anything and everything so that you attract people, as negative news sells faster.

  6. One more thing. You may remove the ‘log in’ option under the ‘Meta’ in your web portal and use it from back end as an administrator.

    That’s how I’ve done in my website.

    I’ve heard about misuse of this ‘log in’ option.

    Why provide an opportunity to a miscreant?

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