There are many many articles in the media which are accurate, perfect and have no takeaways. Look at some of the articles that I have written…
‘Conflict of Interest’ – this was regarding the structuring of the mutual fund and life insurance businesses. Or if I make a statement like “none of the mutual funds have beaten the sensex over the past 22 years on a Total Return Index’ comparison. Or Pattabiraman Murari makes a statement ‘there is more to investing than equity’ or when Vivek Kaul writes an article ‘In 6 years the equity markets have gone nowhere’. Deepak Shenoy writing in Capital mind has shown that SIP returns over 5 years..or something like that has not yielded good results…ALL ARE TRUE…and none of them has a sensible take away.
Then there are articles which say “Invest like WB” or “Invest like Mukesh Ambani” – search on the net and you will find such articles. The sad part is you CANNOT. I cannot buy a full company, take it private and then comeback to the public. I can see Reliance now trying to almost revamp CNBC. They will do the same with East India Hotels. Can you?
Some of these articles are good, some are very good, but it may not have a take away for you. Yes Hdfc Mutual fund did a front running in some shares. Their internal audit, compliance and Trustees did not find out. A fine was levied and a couple of low down guys were sacked. What is the take away? Redeem all Hdfc holdings? That such a thing is not happening in other funds, or worse it will NOT repeat in Hdfc itself? I honestly do not have an answer to that also.
Sadly to read articles (and blogs like mine) one has to have a nice deep understanding. Understanding to know whether to react.
Let me give you an example. Whenever my wife and I went to the school PTA we were always told “your daughter is very talkative”. To me it was an observation (nothing to do) and for my wife it was panic situation as though we had to cut off her tongue. Actually at the end of the year we would also be told that ‘she takes part in all activities…blah blah…’. Maybe she will be a lawyer, investment banker, CA, teacher, Professor – all talking professions? I have no clue. Clearly no take away.
How are people supposed to react? Should people stop investing in equities?
Should people invest ONLY through a SIP? should people never invest in direct equity?
What do I do when I read such articles? Nothing. Many of these articles have no take away for me. Generally none.
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