Either I am a cruel guy, a misogynist, a cynic or something must be wrong with me.

When I read the following news item, I refused to be moved. If a person goes and invests all his money (or a substantial portion) in ONE asset class in a company controlled by Jignesh Shah, I cannot feel sorry for him/her.

Why do people not realise that a company which pays 13% interest per annum and says it is RISK FREE is committing fraud. Risk free (largely default risk free is what we mean) is State Bank of India Fixed deposit.

If the SBI fd is at 8% p.a. and somebody is paying you 13% p.a. (and allegedly 5% brokerage to our illustrious listed brokerage houses who were busy ‘selling’ it to their non regular customers, something is obviously WRONG, WRONG, WRONG with your understanding or risk.

If you trust these Brokers – the big listed ones, again, something is completely wrong with you. See their overheads and other expenses, they NEED TO mis-sell and that they have done well. So, God bless!

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  1. Uneducated ppl invest in Ponzi Chit funds (there are also many gud reputed ones but pays less). Educated (or over Financial educated)ppl invest in NSEL.

    May be it also depends how close you are to the exchange. I think much of the NSEL marketing is done to customers in North India. I didn’t find anyone protesting from south India (or the media not covered it)

  2. Those who invested in NSEL were just greedy and nothing else,they all are educated with enough resources and big sum of money but its there greed which took over.Had they made good returns they would have not said anything even though they were having 5 times leverage.

  3. Subra Sir,
    Why do you think SBI FD @ 8% is riskfree? Is it being lowest in the marketplace makes it least risky thing?


  4. this one was the best: “…invested around Rs 82 lakh for over a year on behalf of his 69-year-old wife…we are not HNIs… we are just middle class people…” – i wonder which bank would NOT consider them as HNI!!!
    most of the cases seem to be well calculated betting that has gone wrong, and expecting govt to compensate seems ridiculous…

  5. i have invested in muthoot debentures/bonds offering 13 p.a. should i exit? but they have been around for past so many years.

  6. Now all this Tax-free bonds issued by Government of india companies
    the pretax yield for high tax bracket investor is around 12%.
    Is it risk-free or risky?

  7. @ C.J.Gopinath

    Tax-free bonds get issued at 50-55bps lesser than long term G-sec rates. 12% is just financial jugglery and it is not the real rate.

    Better get some decent bond funds till you understand the bond markets, and then learn about bond laddering to get the best use out of bonds.

  8. Subra sir,

    can you write something on NCDs,these days there are so many secured NCDS and TAX free Bonds with good ROR is it wise to invest in these compared to Bank Deposit?And if they score any better over Corporate deposits/NBFC in terms of risk and return?

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