Recently I have been inundated by mails, sms, calls asking for the head of a person who had done a story on how FD returns were better than equity returns over a 20 year period.
Now doing data driven stories in India is JUST NOT POSSIBLE. Not possible at all.
Why this sweeping statement? Simply because there is no data source available to ask for data in various forms, granular and well organised.
For example there is no site where I can go and ask ‘What is the return that I would have got in Colgate ASSUMING that I re-invested all the dividends back into equity shares of Colgate, kept all the bonuses and rights?’
If I cannot get this information, how the hell can I calculate the CAGR of a single scrip?
If I cannot calculate this for one single scrip, how the hell can I calculate this for the indices?
Similarly it is customary to say ‘to simplify the transaction we have ignored costs and taxes’ – this is again stupid, because there was a point in time when everybody paid an entry load.
Fixed deposits are disadvantaged because of the tax structure – and ignoring taxes hurts equity return calculations post 1992-3 (when dividends were made tax free). HOWEVER when you ignore tax, YOU ARE STILL HIT BY THE DIVIDEND DISTRIBUTION TAX.
Frankly the people who think about all this and also associated with the media are about 4-5 of them. They are most of the time pulling their hair about the quality of data that they have to deal with. The women are better off, they have hair to pull. One of the guys has such thin hair, he cannot pull it.
The other worry is even if such data is available it is with some media companies – and its OWN people do not know how to use it.
Of course some of the ‘so called media experts’ today do not even think of data driven stories. In case I ask them to do such a data driven story, I will have to do the story, edit it and send it to them.
They are very fair these days. They do not edit it. Out of respect for me, love for me or sheer laziness, I know not.
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