The In thing to do in the Financial services business is to talk about financial literacy. Regulators, politicians, media, investors, venture capitalists……all of them love it!

However, the following para (extracted from a book) is worth reading

“Financial literacy is a sick joke Wall Street plays with investors and politicians. Even best-of-intentions programs never work because they’re designed by and biased in favor of Wall Street as research by Nobel economist Daniel Kahneman and his disciples proves. Literacy advocates assume, erroneously, the human brain can retrain itself to make rational decisions about money. Wrong. Wall Street is a casino, Main Street always loses.”

What is the problem in the financial service industry? and of main line politics?

Special-interest dominated politics will never “rethink economics.”

How about “redesign global governance?” No chance. Conservatives demand less oversight, free markets, a Reaganomics revival. It’d be un American to lose the dollar’s reserve-currency status.

“Rediscover soul?” Never in today’s rigid hate-filled ideological-divided political wars.

Nor will Wall Street ever surrender its right to keep manipulating “financial literacy” programs to their advantage.

What has happened in Wall street?

Moreover, since 2008 Wall Street has further hardened its monopoly over the American economy and government, while further degrading capitalism, democracy and the rest of America.

Now translate all this to the Indian scenario. The common man has been ripped off by the life insurance industry, the mutual fund industry and been scorched by the brokerage business! Given the hidden charges by the banking industry – which part of the BFSI space can he trust? Search me.

If he has left the investing space (and gone to gold and real estate) can we blame him? No.

Should he come back? are we at the pits? Search me!

Not only do we not have FII buying, we also have FII selling. Mutual funds and life insurance sales are just not enough to take the markets up. Mutual funds want to create charts, graphs, etc. to show how if  you buy today over the next 5 years you will make super duper returns.

Hey Prashant Jain said that at every fall – and he will be proved right only when the sensex is at 30,000 or make it 35,000 – to pay for the charges!

  1. luckily I stopped praying for PJ last month. talk of forward PE and growth story has become too repetitive and boring. too big to move is an underlying problem too. With no stable govt with vision and backbone in sight for the next 2-3 years… Stop saving so none can loot you (including the govt) live life like a king and enjoy or save like a king in gold or real estate… LOL. What financial literacy sir, even the miniscule number of personal finance bloggers are quitting their service for lack of viewers/ motivation.

  2. as the size of the financial service industry reduces, as the no. of pers fin bloggers go down….its going to be better for the investors. Pray it happens soon!

  3. I beg to disagree.This is too cynical a view. Take PJ for instance, the funds he managed or for that matter any other fund from a long standing MF house have delivered when looked at from a 10-15 year timeframe even when the current market NAVs are languishing at lower PE levels. And whts wrong when someone says keep investing irrespective of the market trend cause one can never predict the market and in the long term the market is bound to get to higher levels. A 5-6% sustainable growth base is still gud enuf to keep faith in long term growth. Ya, its boring and heart wrenching to see the last year MF investments showing a 10-20% de-growth, but one is not investing for immediate returns, right?

  4. Dear shiv

    When I started my sip 5years back my 25% investment was in 2 funds of pj. With time these 2 funds became almost a mirror image and hence I quit one over a year back. Still continued. with he second which was supposed to be a midcap leader. Slowly he moved this fund to a largecap fund and is under performing both largecap and midcap Indices…

    His defenition of funds he faltered
    He is underperforming for over 3 years
    If I am to take the challenge of invesing in risky midcap why he shift to large cap- indicate his disbelief in the category. ..
    Defenition of long term keep on increasing from 3yr+, 5yr+, which now is 7yr+ which soon will be 10yr+…
    His funds became too big and remain his biggest problem in the tough market is fact.
    PE growth story is a loose talk so long as the govt and central bank is determined to kill it with other priorities. Please check his own commentary for 5 years and will understand.
    Finally why I should believe him who have been outperformed by many for over 3 years.

  5. “in the long term the market is bound to get to higher levels”

    Hearing this from past 6 years!!!! & an entire industry is making it’s living selling this 🙂

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