Archive for August 6th, 2015

Grass or Oak – What characteristics does your equity fund have?

August 6, 2015

Nice article on Quantum Fund Blog.

It compares a fund to that of an oak and grass. In bad weather, both grass and oak survive. But strategies differ. Grass is more flexible and changes direction as per the wind. Oak remains rooted and does not change at all. The question is which is better? One which  adjusts as per the situation or the other that remains firm? The logic is extended to mutual funds as well:

(more…)

Advertisements

Tirupati Balaji opens a demat account!

August 6, 2015

The temple surely knows how to manage its finances (without much external advice). When India was going through a crisis in 2013, someone said that FM should appeal to the mighty temple for help.

And now this bit of news on the almighty temple opening a demat account. For what? So that it can receive donations in shares as well!

(more…)

Silent SEBI vs. Raucous RBI

August 6, 2015

Let us start with a story. There were two children in an Indian household. One was “perceived” as this really brilliant type who was really liked by relatives & friends (both in India and abroad). The other was this silent type who was relatively ignored by one and all. As the first one was highly popular, the parents were also pushed into thinking highly of the kid. This constant adulation also led to continuous pressure on the parents to meet first one’s demands and this led to certain frictions as well. But beyond that, it was all hunky and dory. The first one got constant tutoring even from abroad over the years. The second one was nearly ignored barring ensuring the basics but it never really created any trouble over this favoritism.

Years of such thinking and adulation passed. The parents were highly busy and did not have much time to check the performances of the two kids. Based on expectations and hype, they assumed the first one would be doing really well and didn’t think much of the second one. The parents also learnt that the brilliant one is now only targeting performance in math which they found weird. They thought it is overall score/GPA which matters. On being asked, first one said that this is what her friends/cousins were doing in foreign shores. She was even thinking of making a committee of such friends to advise him how best to maximize her math scores. She also asked for independence from parents as she could now decide what was in her interests. The parents were both puzzled and hurt but did not question the apparent wisdom of the progeny.

Then one day, the parents suddenly stumbled onto report cards of the two children and all hells broke loose.  The first one’s performance was no where compared to all the attention she had got over these years. And the second one had surpassed not just expectations but even beat his elder sibling in many an areas. Over the years, the first one was just creating noise whereas second one was all poise. This ofcourse set the parents wondering why this was so?

This in many ways is the story of RBI and SEBI, Finance Ministry’s two children. Not to forget the Ministry has many more such silent performing children but not discussing them here. It is amazing to note how much hype and attention goes to central bank and there is virtual ignorance of the capital market regulator. This is even more bizarre when one thinks how much equity markets have contributed to Indian economy which has been managed by silent SEBI over all these years.

(more…)


%d bloggers like this: