Long ago I used to know a bunch of Heart docs – surgeon/ physicians…they were part of a big hospital. Over tea one of the docs told me “Subra we laugh at patients who do not know the difference between gas and heart attack, but every year or 2 years..one of the heart doc dies of a heart attack – and we realize that he had ignored heart condition thinking it was gas”.

Let me decipher some of the talk:

  1. I am a long term investor: used when a share they bought for Rs.30 goes to Rs. 200, and then falls to Rs. 100. It also happens at the bottom of the equity market. One more fall, and they sell out!
  2. It is not overvaluation, it is priced at knowing what this app can deliver: Venture capitalist who hopes to change the world – one app at a time.
  3. Biotech? Omg bubble! Emerging markets? Bubble! how long can it keep going up? Oil? Can never go up, it is doomed! Gold? wow..it will reach 6000$ soon!! bubble and really doing welcome
  4. This is not a bubble at all. What happened in 2008 was a bubble.
  5. I am an index investor. Always. Means? “I started in a bull market and lost my shirt in small cap stocks”
  6. To create alpha I do not need to know how the market works, as long as my analysis is good (over believing Lynch)
  7. Even Warren Buffet says diversification is for fools. Meaning: I do not understand what this means in his portfolio.
  8. Active Investment managers: Yes we know we have under performed the index this year, next year we will create alpha for you. Meaning: If we are around and people keep giving us money, we may create alpha with some Jugaad.
  9. Bull: there is a lot of money waiting in the sides for being invested. What a guess! Just cannot put a number to this.
  10. Bear: Market is gone up too fast, it will correct soon. Meaning: we now have no guts to buy put options, please help NOW!!!
  11. Bull: Did you see Rakesh Jhunjhunwala predict Sensex 100,000?
  12. Bear: Did you see Shankar Sharma predict Sensex at 6000?
  13. Strategist: If earnings grow at a consistent rate forever into the future (!!)  and you put a P/E ratio of 16 on the market we think stocks will rise 8-10% this year. (Meaning: Stocks are up 2 out of every 3 years so if I keep predicting this I’m bound to be right eventually – if not in 2016 in 2018…so can take that chance)

MOST IMPORTANT: if you did not understand any or all of the above, relax. Continue your SIP and keep selling when you need the money. Relax.


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