A few days ago I wrote about the Delhi rape case. Speaking of safety precautions, there is really nothing to blame, but still things did go wrong. In retrospect we can say she should not have taken a private bus, right?

Hey, private buses are a way of life in Delhi – everybody does it…so? bad luck perhaps.

The purpose of this post is not to dwell on that, but to see how an investor can or SHOULD protect himself.

1. Stick to simple products – credit card, health and term insurance, savings bank account, car loan, housing mortgage, demat account, index fund, ppf, etc.

2.  Beyond these products, say NO. If it is stressful to say no, say ‘I read in Subramoney that ULIPs are bad’. Blame somebody else – hardly matters who.

3. When a salesman speaks mumbo jumbo, he is bluffing – a.k.a Madoff.

4. Ask, ask, ask, ask. I know 2-3 journalists whose IMMEDIATE family never asks them. The whole world thinks they know everything…these girls and boys are smart to know what they do not know. However, they have stupid investment mistakes in their OWN HOUSES.

5. Training NEVER works, LEARNING always works. The desire to learn, know and understand HAS to come from within. I see kids buying wrong and unsuitable products – without stopping to learn what they are doing. I cannot be ‘forcing’ myself on kids through a lecture!

6. The only way a girl can protect herself is by learning self defense – Judo and Karate? But what happens if there are 5 guys and they are armed? Well again, bad luck, but at least there was some level of preparation.

7. It is not as though a person who knows a lot of things about investment CANNOT make mistakes – he/she can and will. This is called bias. Being carried away with the crowd, information bias, confirmation bias, ….zillions of bias about which I have written earlier will all have an impact on the portfolio.

However, the main punchline still remains ” The only protection that an investor can/ should seek is learning’…

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  1. Now the government suddenly woke up and try to make correct noises. After allowing the inflation to run amok through the country for the past 3-4 years, virtually spoiling all the economic parameters government is now trying to do damage control.

    up to 20% fare hike in railways.
    There will be huge hike in diesel ( That is what they say, finally if it comes 2-3 Rupees, we mango people will he happy, they knew that)

    Now coming back to our favorite doomsday scenario, I see increasing symptoms for crash now:

    1. Car sales growth is down to 2008-2009 level. Since this time, the slowdown is much more broad based I am sure it will go to negative in 2013. Some of the car companies may shut shop and go out from India.

    2. IT companies are not doing any mass campus hiring like previous years and planning to do some namesake campus hiring only. Pipeline of business is not too great.

    3.Since government is trying to augment resources at every level, ( tax hikes are possible) people will not spend much.

    4. Real estate brokers ( brokers includes banks) cannot expect robust growth this year. I think 2013 may be the bust year for real estate

    5. Stock market is gonna to crash which will bring real estate down with this. This year it would be interesting to see the sellers only market without any buyers both in shares and real estate. Stocks are already showing initial signs of reversal.

    6. With Rupee at 55 against USD, if rate cut comes, it is not gonna to do any good to the government or RBI’s reputation. Let RBI takes a decision. But for doomsday scenario whether rate cut or not, doomsday is gonna to come

    7. With no new job openings, with no new avenues to make money ( we sold all natural resources already), and without any wage hikes how can we float ponzai schemes such as real estate etc?

  2. Subra Sir,

    Another very big problem is people are afraid to share or discuss about personal finance even in general terms,es them feel they know far far more than they actually do.

    This normally is a very big killer for good investment decisions.

  3. I used to tell my colleagues to calculate how much are they losing and yet to lose in endowment policy. Explained how to make the comparisons, they hear everything but not ready to spend time to do that. They again buy the policy from their relatives, don’t know how to help them …

  4. 1. Car sales growth is down to 2008-2009 level. Since this time, the slowdown is much more broad based I am sure it will go to negative in 2013. Some of the car companies may shut shop and go out from India.

    My take – Pride of ownership missing – Even my plumber has a car. Car is now like closeup or surf excel. Once it wont run, just sell it and get another.Also most dealership treat buyers like crap – after sales is like crap on bullshit.

    2. IT companies are not doing any mass campus hiring like previous years and planning to do some namesake campus hiring only. Pipeline of business is not too great.

    The glorified data entry job era is over. Knowledge based works still see recruitment. A move towards product based solution is seen. Service based and custom build software seems to be doing less and less

    3.Since government is trying to augment resources at every level, ( tax hikes are possible) people will not spend much.

    People are people. Especially younger people! Some even dont know what 80C is – Some say it is for people who are born before 80 – LOL! 🙂

    4. Real estate brokers ( brokers includes banks) cannot expect robust growth this year. I think 2013 may be the bust year for real estate

    Not seeing anything like that even after residex is down 38% in Kochi. Either Residex is flawed or buyers dont care!

    5. Stock market is gonna to crash which will bring real estate down with this. This year it would be interesting to see the sellers only market without any buyers both in shares and real estate. Stocks are already showing initial signs of reversal.

    Possible! After all some systems suggest the same for next 8-10 quarters! But still, my SIP`s in MF goes on.

    6. With Rupee at 55 against USD, if rate cut comes, it is not gonna to do any good to the government or RBI’s reputation. Let RBI takes a decision. But for doomsday scenario whether rate cut or not, doomsday is gonna to come

    No idea – Exchange rates today are just based on information. The best bluffer wins!

    7. With no new job openings, with no new avenues to make money ( we sold all natural resources already), and without any wage hikes how can we float ponzai schemes such as real estate etc?

    We sell unreal assets – Spectrum was one. Leasing of deserts, leasing for exploration, leasing for historic exploration, allowing private trains, private ports, private army, private police…. Wow! Government is a great business with end less oppurtunities!!! 🙂

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